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Thanks everyone I've discussed with the team. We noted that we apply to IFRS 9B2.5 (a)" If the financial guarantee contract was issued to an unrelated party in a stand-alone arm’s length transaction, its fair value at inception is likely to equal the premium received, unless there is evidence t...

Let me clarify the adjustment amount:

1000usd (the book value of the shares)*market rate for financial guarantee, right?

Or you mean 1000usd*probably of associate's default?

Dear DJP, thanks for your assistance.

Before coming there I've discussed the issue within the team, obtained the similar view, but doubting. So we've got your opinion to support ours. Thanks again and thanks you all for great forum

Hi DJP,

The Parent is obliged to sell the shares and transfer the amount received to the bank.

The pledge amount is less than the loan liability. I assume the second parent in associate provides the greater portion of a pledge or any other guarantee to the bank.

Hi Ketan, thank you for your reply.

Yes, in case of associate's default, the Parent is obliged to sell the stake on the open market and paid off the associate's liability.

I understand , I simplified the description, it's a joint venture, so the second partner provides its pledge too.

Dear all, The parent company pledges shares of its 100% subsidiary for the bank loan received by its associate. Assume that market value and the book value of the shares is 1000 USD, and the loan liability is 5000 USD. No written agreements between the parent and its associated is signed that oblige...

Many thanks! I will check

Dear Marek, I will.

Thank you for opportunity to post questions

Dear DJP, thank you for your reply. yes, your understanding is very accurate except for p.2, as the potential customer might be a different person. An investor i benefits from increasing of the potential price. We have discussed the scenario with a team and think it would be a financial liability. D...

Dear all, A company plans to sell a digital assets to investors backed by its inventory under development. A potential investor might buy a part of that inventory in the form of a digital assets. Upon expiration date, when inventory is completed and sold out, the digital assets is redeemed at upside...

Thank you very much, Marek.

Dear all, The public company acquires a stake in an associate that is engaged in investment activities and has a significant package of own equity instruments of the acquiring company. Accordingly, the associate earns (or vice versa) also from the revaluation of such instruments. So it seems that th...

DJP wrote: ↑24 Sep 2021, 09:55 The question is the amount of revenue that you are recognising on the sale from A to B. If you are buying back some of those properties, then the revenue recognised on the sales from A to B should perhaps be adjusted to reflect that.

Thank you

no, I am saying the same as pub_acco "Usually, revenue is not recognized under IFRS 15 in such a situation because the risks and control over the products are effectively not transferred to B." Okay, but how you will recognise the gain (ie difference between the purchase price of the apar...

DJP wrote: ↑24 Sep 2021, 09:23 You don't have to have a promise to buy back, but if that's what happens in practice, that's how you should account for it.

Hi!

Do you mean I could recognize both types of revenues? From A to B and from A to local customers, right?

I'm not fully understanding the arrangement, but to me it sounds like a sort of repurchase agreements where A promises to buy back some products when selling them to B. Usually, revenue is not recognized under IFRS 15 in such a situation because the risks and control over the products are effective...

Actually, A buys rights for the apartments from B, and then sells them to final customers, yes. According to local legislation, "rights" are uncompleted apartments. If rights are still to be sold before the completion, then A becomes an owner of completed apartments and sells them as they ...

Dear members, The construction company A has the investment in associated company B. Company A provides construction services to company B to build a residential building. B sells the apartments to the customers. Company A decides to acquire some apartments in the constructed building itself and the...