Search found 33 matches

by spideyocd
04 Jul 2023, 14:36
Forum: IFRS-related topics
Topic: Inventory Costs including lease under IFRS 16
Replies: 4
Views: 3426

Inventory Costs including lease under IFRS 16

Hi Marek and friends, My inventory costs consists of Factory rent which is covered under IFRS 16 Therefor should I account only Dep on ROU asset as part of Inventory or both Dep on ROU asset plus interest on lease liability since in substance the rent expense has been replaced by dep on ROU plus int...
by spideyocd
02 Apr 2022, 13:11
Forum: IFRS-related topics
Topic: IFRS 15 Revenue allocation - Loyalty program (super prize is a car)
Replies: 14
Views: 2656

Re: IFRS 15 Revenue allocation - Loyalty program (super prize is a car)

The biggest question is whether giving a chance to win is equivalent to giving an option to receive additional goods or services at less than individual SSPs Is a chance to win a prize a material right given to customers? If yes then as @marek says it would be like loyalty or options for additional ...
by spideyocd
30 Mar 2022, 11:13
Forum: IFRS-related topics
Topic: Expense accounting IFRS 15
Replies: 10
Views: 2066

Re: Expense accounting IFRS 15

When management does not expect any of the loan commitment to be utilised, the fees are expenses by the borrower over the commitment period, on a straight line basis Under what asset would the unamortized expense at the end of the year be shown? If already paid at inception completely then prepaid ...
by spideyocd
19 Mar 2022, 10:58
Forum: IFRS-related topics
Topic: Floating rate loan Accounting IFRS 9
Replies: 18
Views: 3337

Re: Floating rate loan Accounting IFRS 9

The management fee here part relates to trade facilities which may or may not be used as well as loan facility which will be used Obviously the part that relates to the loan facility is transaction cost right? Although @DJP prefers spreading the same over the period of the Loan rather than reducing ...
by spideyocd
18 Mar 2022, 15:20
Forum: IFRS-related topics
Topic: Floating rate loan Accounting IFRS 9
Replies: 18
Views: 3337

Re: Floating rate loan Accounting IFRS 9

The cost is a management fee @0.5% charged upfront
by spideyocd
18 Mar 2022, 14:02
Forum: IFRS-related topics
Topic: Floating rate loan Accounting IFRS 9
Replies: 18
Views: 3337

Re: Floating rate loan Accounting IFRS 9

Sorry about the title which was a misnomer! but I was thinking about making a new topic for this question continuing from another thread unfortunately got the title wrong So as @DJP suggested instead of reducing transaction cost in the first year in estimating future cashflows I can distribute them ...
by spideyocd
17 Mar 2022, 06:47
Forum: IFRS-related topics
Topic: Floating rate loan Accounting IFRS 9
Replies: 18
Views: 3337

Floating rate loan Accounting IFRS 9

On reading your article on Amortised Cost and Effective Interest Rate (IFRS 9) my understanding is When we take transaction costs part of the amortised costs and make a schedule of future cash flows through the expected life of the loan whereby discounting with the effective interest rate gives us e...
by spideyocd
16 Mar 2022, 16:07
Forum: IFRS-related topics
Topic: Expense accounting IFRS 15
Replies: 10
Views: 2066

Re: Expense accounting IFRS 15

Therefore a management fee charged by the bank at 0.5% of the loan amount would be booked as transaction costs as part of amortised cost or under ifrs 15 ? It is paid to the bank but not an integral part of the effective interest rate but no other fees for the loan were taken so in substance could b...
by spideyocd
16 Mar 2022, 14:40
Forum: IFRS-related topics
Topic: Expense accounting IFRS 15
Replies: 10
Views: 2066

Re: Expense accounting IFRS 15

I thought so too but which standard is this rule written ? or is it implied by the fact that its not an asset and not covered under IFRS 9 ?
by spideyocd
16 Mar 2022, 10:42
Forum: IFRS-related topics
Topic: Expense accounting IFRS 15
Replies: 10
Views: 2066

Re: Expense accounting IFRS 15

Is there anything in IAS or IFRS standards to stop deferring expenses for more than one year where a asset is not created? like a payment made for a major expense which doesn't meet the definition of asset but relates to more than a year so put in deferred revenue expenditure account For eg mortgage...
by spideyocd
16 Mar 2022, 10:36
Forum: IFRS-related topics
Topic: IFRS 15 Revenue allocation - Loyalty program (super prize is a car)
Replies: 14
Views: 2656

Re: IFRS 15 Revenue allocation - Loyalty program (super prize is a car)

I agree with marek that the car cost should be allocated but the question is how? I don't agree that it is like customer loyalty or buy get get one free option because what you are entitled by the sale is fixed in the former but in a car prize case it isn't so we have to estimate the sales and for e...
by spideyocd
16 Feb 2022, 14:26
Forum: IFRS-related topics
Topic: Expense accounting IFRS 15
Replies: 10
Views: 2066

Expense accounting IFRS 15

Should Expenses be recorded as and when performance obligation is completed under IFRS 15 by the seller/service provider ? For eg Should a management fee for a loan be amortised over the loan period for the borrower because the bank would amortise it over the same period? Should the mortgage fee be ...
by spideyocd
16 Feb 2022, 13:22
Forum: IFRS-related topics
Topic: IFRS 16
Replies: 14
Views: 2468

Re: IFRS 16 treatment for delays in payments

@marek I apologise for framing my question wrongly It should've read So as I understand it if the lease liability (discounted value) changes because of payment delay but overall consideration remains the same then the change in lease liability (after remeasurement) can be recorded as a variable leas...
by spideyocd
09 Feb 2022, 18:28
Forum: IFRS-related topics
Topic: IFRS 16
Replies: 14
Views: 2468

Re: IFRS 16

Apologies for the quoting I didn't know about the rules So as I understand it if the non discounted value changes but overall consideration remains the same then the change in lease liability (after remeasurement) is recorded as a variable lease payment And If the non discounted value consideration ...
by spideyocd
09 Feb 2022, 13:28
Forum: IFRS-related topics
Topic: IFRS 16
Replies: 14
Views: 2468

Re: IFRS 16

Doesnt Consideration refer to the present value of payments rather than the non discounted value? If because of a delay in the payments if the present value of payments (lease liability ) reduces then isn't it a concession? Because if the non discounted value changes like a rent waiver then it autom...
by spideyocd
09 Feb 2022, 10:30
Forum: IFRS-related topics
Topic: IFRS 16
Replies: 14
Views: 2468

Re: IFRS 16

When I said remeasurement effect can also be given as a variable lease payment I wasn't talking about payments depending on an index or rate but as a alternative way of treating lease concessions as given in the ifrs-16-rent-concession-educational-material https://cdn.ifrs.org/content/dam/ifrs/suppo...
by spideyocd
09 Feb 2022, 06:09
Forum: IFRS-related topics
Topic: IFRS 16 - Parking places for employees
Replies: 4
Views: 2960

Re: IFRS 16 - Parking places for employees

Initially it seemed to me that the company was being a agent for its employees because everything was recovered. However the 30 parking spaces might not be fully utilized at all times during the 7 years so the employee recovery may not be equal to what the company pays I feel the company should book...
by spideyocd
09 Feb 2022, 05:51
Forum: IFRS-related topics
Topic: IFRS 16
Replies: 14
Views: 2468

Re: IFRS 16

Yes, I guess remeasurement every year is the only plausible solution. However the treatment of the may be a modification or variable lease payment However practically it cannot be done on every difference in payment from the payment schedule in the year (unless they have a software solution enabling...
by spideyocd
05 Feb 2022, 11:13
Forum: IFRS-related topics
Topic: IFRS 16
Replies: 14
Views: 2468

Re: IFRS 16

I would go with the first approach as per your post. It doesn't really matter how both parties agreed to new payment terms (ie in writing, via email etc) As per ifrs-16-rent-concession-educational-material https://cdn.ifrs.org/content/dam/ifrs/supporting-implementation/ifrs-16/ifrs-16-rent-concessi...
by spideyocd
05 Feb 2022, 10:30
Forum: IFRS-related topics
Topic: IFRS 16
Replies: 14
Views: 2468

Re: IFRS 16

Marek Muc wrote: 04 Feb 2022, 14:21 can you please use a more descriptive title for your post? you should be able to edit that yourself
Apologies but its not giving me the option anymore
I'll keep this point in mind in future posts
by spideyocd
04 Feb 2022, 13:33
Forum: IFRS-related topics
Topic: IFRS 16
Replies: 14
Views: 2468

IFRS 16

In an ongoing lease where In a case where a repayment schedule was given in the lease agreement and a working for lease liability and right out use asset [ROU] was made based on it then, After say the first year ,If the lessee does not adhere to the schedule which requires quarterly payments and ins...
by spideyocd
02 Feb 2022, 13:41
Forum: General accounting and financial reporting discussion
Topic: bank charges recorded as Expense vs Interest
Replies: 4
Views: 4642

bank charges recorded as Expense vs Interest

In case of bank charges I have read amongst Big 4 summaries That the customer should account for the amount charged as Interest If the banks would usually usually account for it under IFRS 9 and they should account for it as bank charges/financial charges (non interest) if the banks account for it u...
by spideyocd
02 Feb 2022, 13:05
Forum: IFRS-related topics
Topic: IFRS 15 Loyalty points
Replies: 20
Views: 4649

Re: IFRS 15 Loyalty points

the scheme is in line with IFRS 15 as to the amounts to be deferred to, and recycled from, contract liabilities - it depends on the terms of the loyalty program in question Hi marek, Thanks again, apologies for the repeated questions as to the amounts to be deferred to, and recycled from, contract ...
by spideyocd
02 Feb 2022, 11:49
Forum: IFRS-related topics
Topic: IFRS 15 Loyalty points
Replies: 20
Views: 4649

Re: IFRS 15 Loyalty points

If your entries properly reflect the substance of the loyalty program then you're good to go Hi Marek, Thanks for the reply My initial confusion was taking $10 instead of $9.1 in the below entry Entry for transfer of contract liability to revenue Contract liability Dr 9.1 [91*10/100] To Sales Cr 9....
by spideyocd
01 Feb 2022, 07:07
Forum: IFRS-related topics
Topic: IFRS 15 Loyalty points
Replies: 20
Views: 4649

Re: IFRS 15 Loyalty points

Hi Marek, This is a possible loyalty scheme Cost of goods sold (COGS)are assumed @50% of the selling price loyalty points assumed at 10% of price of goods and equivalent eligibility to redeem in $ However no further credit for redemption made through loyalty credit When the customer purchases $1000 ...
by spideyocd
31 Jan 2022, 12:16
Forum: IFRS-related topics
Topic: IFRS 15 Loyalty points
Replies: 20
Views: 4649

Re: IFRS 15 Loyalty points

Sorry Marek, I already understood about the COGS part This was about the redemption entry when the customers redeems $10 out of his eligibility of $100 (on earlier purchase of $1000) On his first purchase we had passed Cash Dr 1000 Sales Cr 909 Contract liabilities Cr 91 Therefore on redemption I ha...
by spideyocd
31 Jan 2022, 07:16
Forum: IFRS-related topics
Topic: IFRS 15 Loyalty points
Replies: 20
Views: 4649

Re: IFRS 15 Loyalty points

Thanks. Great explanation. The second entry would be if no one redeemed or the points expired for whatever reason This confirms that I understood your logic correctly and actually accept and agree with it since it seems the only logical conclusion Hopefully @Marek can confirm for both of us Looking ...
by spideyocd
29 Jan 2022, 10:30
Forum: IFRS-related topics
Topic: IFRS 15 Loyalty points
Replies: 20
Views: 4649

Re: IFRS 15 Loyalty points

Hi, I understand your question, sorry. so the same customer who for the first time of his life went to store A, purchased 1000 euros of things and got 100 euros worth of loyalty points (every 10 euros spend, equal 1 euros saved), went back to the store a few days after and purchased lets say 100 eu...
by spideyocd
29 Jan 2022, 10:29
Forum: IFRS-related topics
Topic: IFRS 15 Loyalty points
Replies: 20
Views: 4649

Re: IFRS 15 Loyalty points

the accounting entries are illustrated in these examples: https://ifrscommunity.com/knowledge-base/customer-loyalty-programmes/ COGS is recognised irrespective of loyalty points So that means even though loyalty points revenue is recognised on redemption the cost will be recognised on the sale tran...