Search found 887 matches

by Marek Muc
23 Oct 2020, 20:07
Forum: IFRS-related topics
Topic: Selling 50% of a level of consolidation
Replies: 6
Views: 74

Re: Selling 50% of a level of consolidation

a sale is a sale, even if you intend to continue trading with those entities under new ownership
by Marek Muc
23 Oct 2020, 19:32
Forum: IFRS-related topics
Topic: AIS 16 Useful life and cost model
Replies: 6
Views: 43

Re: AIS 16 Useful life and cost model

:lol: believe it or not, I also try to keep things simple, but it seems that I'm not trying hard enough :) but under the Commonwealth approach ;), the last year depreciation charge can be much higher than the charge from previous years! see the example from kb (no residual value): depreciation3.JPG
by Marek Muc
23 Oct 2020, 19:17
Forum: IFRS-related topics
Topic: In a operation of selling 50% of a company, where should the fees go?
Replies: 6
Views: 56

Re: In a operation of selling 50% of a company, where should the fees go?

I'm here to spice up the discussion! ;) We're in the realm of IFRS 10 here: https://ifrscommunity.com/knowledge-base/ifrs-10-consolidated-financial-statements/#link-loss-of-control "any interest retained in former subsidiary is recorded at fair value", not fair value + cost of disposing the controll...
by Marek Muc
23 Oct 2020, 18:59
Forum: IFRS-related topics
Topic: AIS 16 Useful life and cost model
Replies: 6
Views: 43

Re: AIS 16 Useful life and cost model

Interesting! But if you set the residual value to a trivial amount, and want to have a constant depreciation rate (unless you don't?), the depreciation charge for first year is disproportionately high. Modification of the first example from the kb, residual value set to 0.6 (i.e. 5% of the cost): de...
by Marek Muc
23 Oct 2020, 18:37
Forum: IFRS-related topics
Topic: AIS 16 Useful life and cost model
Replies: 6
Views: 43

Re: AIS 16 Useful life and cost model

ad. 1 what JRSB wrote + additional disclosure is encouraged in IAS 16.79b) ad 2. hmm, I'm a bit surprised by JRSB's answer, because the approach that I know is different... I've described it in the knowledge base and there are two examples there, the second one is for an asset without residual value...
by Marek Muc
23 Oct 2020, 18:31
Forum: IFRS-related topics
Topic: offsetting receivable and lease liability
Replies: 7
Views: 49

Re: offsetting receivable and lease liability

ok then general offsetting criteria apply (see the link in my previous post)
by Marek Muc
22 Oct 2020, 17:10
Forum: IFRS-related topics
Topic: IAS 2
Replies: 8
Views: 56

Re: IAS 2

You're right pub_acco! I must admit that I wasn't aware that IAS 2 even mentions cost of sales
by Marek Muc
22 Oct 2020, 14:27
Forum: IFRS-related topics
Topic: Accounting for FX spot deals
Replies: 12
Views: 76

Re: Accounting for FX spot deals

true :)

but it should be possible (in most cases at least) not recognise anything between trade date and settlement date due to immaterial impact of the valuation of such a 'derivative'
by Marek Muc
22 Oct 2020, 09:30
Forum: IFRS-related topics
Topic: IAS 2
Replies: 8
Views: 56

Re: IAS 2

yvreddy wrote: 22 Oct 2020, 06:59 as per IAS 2.
IFRS are pretty much silent on the distinction between direct costs (or COGS) and indirect costs
by Marek Muc
21 Oct 2020, 21:45
Forum: IFRS-related topics
Topic: IAS 16
Replies: 4
Views: 45

Re: IAS 16

it's true that IAS 16 does not specifically cover prepayments, but in my opinion it doesn't have to. Prepayment should not be treated as PP&E as you did not receive any physical asset yet. In other words, a prepayment does not meet the definition of PP&E: Property, plant and equipment are tangible i...
by Marek Muc
21 Oct 2020, 21:40
Forum: IFRS-related topics
Topic: Accounting for FX spot deals
Replies: 12
Views: 76

Re: Accounting for FX spot deals

ok I focused on the entries that you provided in your examples, but it's true that you said that Deloitte's example is different this indeed is confusing... when I read para. B3.1.5 it seems to clearly state that Trade date accounting refers to (a) the recognition of an asset to be received and the ...
by Marek Muc
21 Oct 2020, 20:07
Forum: IFRS-related topics
Topic: Accounting for FX spot deals
Replies: 12
Views: 76

Re: Accounting for FX spot deals

We don't need to know what kind of asset they purchased in IFRS 9 example. We know that they didn't credit cash, but recognised a financial liability. So it's a substantial difference to Deloitte's approach IMO.
by Marek Muc
21 Oct 2020, 19:39
Forum: IFRS-related topics
Topic: Accounting for FX spot deals
Replies: 12
Views: 76

Re: Accounting for FX spot deals

I'm afraid that our forum is still in an too early stage to get a wider practical perspective from other users, but let's see. In the meantime, I'm looking at an example in IFRS 9 (Guidance on implementing, par. D.2.1). In their example, you purchase a financial asset, trade date is 29 December, set...
by Marek Muc
21 Oct 2020, 18:22
Forum: IFRS-related topics
Topic: Accounting for FX spot deals
Replies: 12
Views: 76

Re: Accounting for FX spot deals

I wouldn't recognise cash on trade date... in your example, if you're buying USD and selling EUR, I would recognise this as DR Receivable (USD to be received) and CR Liability (EUR to be paid). But trade date accounting is not something I have experience with. So you're saying that Deloitte suggest ...
by Marek Muc
21 Oct 2020, 13:17
Forum: IFRS-related topics
Topic: offsetting receivable and lease liability
Replies: 7
Views: 49

Re: offsetting receivable and lease liability

and how did the receivable from lessor arise? is it a prepayment for future periods for the same lease?
by Marek Muc
21 Oct 2020, 12:08
Forum: IFRS-related topics
Topic: Selling 50% of a level of consolidation
Replies: 6
Views: 74

Re: Selling 50% of a level of consolidation

Leo wrote: 21 Oct 2020, 01:15 The remaining part which is the equity of those entities will stay in equity in consolidation, which will go out when the sell will happen.
do you agree with me?
Equity is not derecognised once a subsidiary is sold, just assets and liabilities
by Marek Muc
21 Oct 2020, 12:06
Forum: General accounting and financial reporting discussion
Topic: Limited recourse liability
Replies: 4
Views: 36

Re: Limited recourse liability

we're in the realm of classification and measurement of financial liabilities under IFRS 9: https://ifrscommunity.com/knowledge-base/ifrs-9-classification-of-financial-assets-and-financial-liabilities/#link-classification-of-financial-liabilities If the liability is measured at amortised cost, we ca...
by Marek Muc
21 Oct 2020, 11:20
Forum: IFRS-related topics
Topic: offsetting receivable and lease liability
Replies: 7
Views: 49

Re: offsetting receivable and lease liability

IFRS 16 doesn't have any specific requirements with regards to offsetting, so general requirements apply:
https://ifrscommunity.com/knowledge-bas ... struments/
by Marek Muc
21 Oct 2020, 11:17
Forum: IFRS-related topics
Topic: Contribution to joint operation
Replies: 20
Views: 140

Re: Contribution to joint operation

yep, looks good,

plus there will be FV changes after day 1...
by Marek Muc
21 Oct 2020, 09:49
Forum: IFRS-related topics
Topic: Contribution to joint operation
Replies: 20
Views: 140

Re: Contribution to joint operation

to keep accountants busy ;)
by Marek Muc
21 Oct 2020, 08:03
Forum: IFRS-related topics
Topic: Contribution to joint operation
Replies: 20
Views: 140

Re: Contribution to joint operation

So you had day 1 gain, right? there's a short summary here: https://ifrscommunity.com/knowledge-base/ifrs-9-scope-and-initial-recognition-of-financial-instruments/#link-day-1-gains-losses I guess it's OK to recognise the deferred amount in P/L as the proceeds exceed the amount originally lent I'm no...
by Marek Muc
20 Oct 2020, 21:43
Forum: IFRS-related topics
Topic: Selling 50% of a level of consolidation
Replies: 6
Views: 74

Re: Selling 50% of a level of consolidation

The answer to your question depends on mechanics of your consolidation. In the end, you should derecognise assets and liabilities of those 3 entities from the perspective of the consolidated financial statements of the parent. It won't necessarily equal the equity in standalone accounts of those ent...
by Marek Muc
20 Oct 2020, 21:13
Forum: IFRS-related topics
Topic: Accounting for FX spot deals
Replies: 12
Views: 76

Re: Accounting for FX spot deals

I won't address all your questions here, but let's get started :)

I would expect consistent approach to recognition of movements in cash under trade date accounting. So in your first example (USD/EUR), why do you debit cash account, but credit payables (and not cash)?
by Marek Muc
20 Oct 2020, 20:44
Forum: IFRS-related topics
Topic: Inventories at cost and NRV
Replies: 3
Views: 35

Re: Inventories at cost and NRV

you can and should reverse write-offs, obviously the carrying amount cannot exceed original cost see IAS 2.33: A new assessment is made of net realisable value in each subsequent period. When the circumstances that previously caused inventories to be written down below cost no longer exist or when t...
by Marek Muc
20 Oct 2020, 15:52
Forum: General accounting and financial reporting discussion
Topic: Limited recourse liability
Replies: 4
Views: 36

Re: Limited recourse liability

A bit more information would be useful. what are the key repayment terms of this liability when it comes to timing and amount? On each period end, all profits or losses on the PnL are allocated and recorded in this liability instead of retained earnings. I'm not sure I understand. So what happens, f...
by Marek Muc
20 Oct 2020, 10:02
Forum: IFRS-related topics
Topic: IFRS as adopted in the UK?
Replies: 6
Views: 41

Re: IFRS as adopted in the UK?

Interesting, in Poland there's no such exemption from audit, a fully owned subsidiary must be audited even if its parent is domiciled in Poland
by Marek Muc
20 Oct 2020, 09:36
Forum: IFRS-related topics
Topic: Electricity contract
Replies: 10
Views: 112

Re: Electricity contract

In the examples that you've seen for electricity contracts, how was the right to direct the use of the power plant effected by lessees?
by Marek Muc
19 Oct 2020, 20:58
Forum: IFRS-related topics
Topic: IFRS as adopted in the UK?
Replies: 6
Views: 41

Re: IFRS as adopted in the UK?

Hm, I'm not sure I follow, would you mind telling us more about this exemption from audit?
by Marek Muc
19 Oct 2020, 13:07
Forum: IFRS-related topics
Topic: IFRS as adopted in the UK?
Replies: 6
Views: 41

IFRS as adopted in the UK?

perhaps not that surprising...
https://ion.icaew.com/financialreportin ... ter-brexit

another version of IFRS to keep track of in the future :roll:
by Marek Muc
18 Oct 2020, 18:31
Forum: IFRS-related topics
Topic: Disposal of entity consolidated by equity method
Replies: 4
Views: 78

Re: Disposal of entity consolidated by equity method

Leo, first of all, subsidiaries are not accounted for using the equity method. Re. OCI, if your associate recognises something in OCI (e.g. actuarial gains), your share goes to your OCI as well re. retained interest - applies when you don't sell all your interest (e.g. when you retain 10% interest) ...