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sure no problem

Hi All, I would like to know if there are any accounting implications that you may have encountered in case of high seas sale under IFRS 15? Usually, I have seen that in case of high seas sale, buyer sells the goods while they are in transit, and risk and rewards are transferred to the new buyer (cu...

I think since the loan term extension is of the same period, it should be treated as a substantial change. However, I am not sure that even in case of holding subsidiary transaction the effect of modification will go to Income statement and not equity. Also, if say suppose the modification is conclu...

Hi All, I have one query where I need your inputs. Company H has given a loan of $1 million, to its subsidiary Company S, on Jan 2020 for a period of 3 years. Interest rate = 1% (Below market rate) Loan term extended by H in Dec 2022 by 3 years No extension or prepayment option given in the original...

Thank you ray105 for the inputs

Thanks Leo for the detailed inputs.
Can you please also share the link of BDO guidance that you and JRSB referring.
Also if we do not value the liability at market rate i.e 10% and continue with 1%, than how the initial recognition will be concluded at FV?

Hi Leo, I believe that such instruments should be treated as compound financial instruments by the issuer. Here reference of para AG37 of IAS 32 can be drawn, wherein the non‑cumulative preference shares are to be treated as compound financial instruments with the liability component being the prese...

My bad Leo, instead of issuer i wrote lender

Yes, there are multiple other factors in this case, I have just shared a simple illustration

Ya, i also have the same view but didn't come across any such example to support it.

Please also let me know, how this transaction should be accounted by A Ltd
I believe keyman insurance policy is quite common in many organizations.

Hi All, It will be helpful if you can share your view on the below query: A Ltd. took a keyman insurance policy for its key management personnel for a period of 5 years. Insurance premium: $1 million Sum assured: $10 million (payable on death of KMP) Insurance premium will be invested in debt funds ...

Maybe, but since the equity so created does not get eliminated at consol and stay with the Company till perpetuity I thought this could be a good insight to add. Also, how the receiver of the instrument will account for it if its not under common control. In short, i think the above transaction, if ...

Thanks for the revert, can you tell me if there is specific guidance for the response to point 2
Also how the receiver of the instrument, will recognize the investments in OCD on Day 1, will the entire amount of USD 10,000 be booked as an investment, or here also the recognition should be done at PV?

I am just wondering if it's an interest-free loan / or a loan at a lower interest rate than the market, to a non-related party i.e. not under common control. Then, in that case, should we not treat it as a compound financial instrument and recognise equity (delta between PV of loan and amount receiv...

Yes you are right booking separatey

Hi All, I need your views on the below query: X Ltd issued 100 optionally convertible debentures (OCDs) to Y Ltd of USD 100 each, at an interest rate of 1% Above OCDs are redeemable to the extent of 90% of their total value over a period of 10 years, as per the payment schedule The remaining 10% is ...

Thank you all, for your inputs I believe this is a business combination at both the standalone and consolidation level, considering X ltd and Y ltd are also separate businesses. Entries in standalone of A ltd will be : Net assets of Toy Division(including investment in X Ltd)...............Debit Ban...

Toy is a division, not a legal entity

Hi All, I need your views on the below query: Entity A Ltd has acquired a business division called Toy at a bargain purchase on 1 January 2021. Toy division was holding 100% share capital of X Ltd X Ltd was holding 90% equity in Y Ltd. X Ltd and Y Ltd are in the same business as of Toy division. Aft...

Thanks Marek this is helpful

Hi, Is anyone aware of any publication / e-training / videos etc wherein good numbers of illustrations are given showing application of various concepts of IFRS 17 along with accounting flow. I have presently gone through the KPMG, EY and many other publications but none of them has illustrations an...

Hi Marek
The topic link that is shared also contains the CTA in the example.
Can we consider that example also, to see how the CTA will be adjusted in cash flow.

Hi Marek I have given only the Balance Sheet and Income statement in one table (like a TB) so that cash flow can be visualized easily. I wanted to check that where the amount of FCTR will be parked in the cash flow taking this illustration. Hi Leo, Thanks for the inputs But I think you are again ref...

It's difficult to illustrate with an example, but I have tried. Refer attachment Y is the parent entity that prepares consol financials in USD X is the subsidiary whose reporting currency is GBP and for the purpose of consolidation, its FS is converted into USD. The above conversion leads to an FCTR...

Hi
The FX difference you are talking about is only related to cash and cash equivalent and not the entire FCTR

Hi All, This is rather a generic question, which I would like to ask. When we consolidate foreign subsidiaries for consolidated financial statements, we usually get a forex difference due to translating the reporting currency of subsidiaries to the reporting currency of the holding company. We park ...

Hi Marek,
I am discussing additional disclosure in the primary financial statements and not through explanatory notes.

For ex- A Ltd a newly incorporated entity bought a business from one of its fellow subsidiary with effect from 1 June 2021. Since its a common control transaction, Management needs to disclose pre-combination information for the year 2020 (full year) and 2021 (Jan to May) for the said business, even...

Hi All, The query is related to pre-combination information, which is a concept usually applied for common control transactions under business combination, in the local GAAP requirements of some countries. In the discussion paper of IASB on the business combination for common control, this concept i...