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Hi JBFH, So if the CGU (let's say has 10 assets within it) is impaired, we only need to apply the impairment at the CGU level, in this case, we don't need to go into each of the individual asset within that CGU and apply the impairment one by one, but just recognize the credit as "accumulated i...

Hi All I have 3 questions on how to handle impairment. Question 1. I understand that that before applying the impairment loss on pro-rata basis to other components of CGU, we need to allocate it to goodwill first. My question is about corporate asset, should corporate assets be impaired second-after...

Hi JRSB, I refer to the balance sheet item. In doing cash flow statement, I usually take the movement of TB and allocate each of them to correct category. It also applies to PL too, since this relates to employees payment, it's reasonable to lump it into "payment to employee" but it also h...

What is Socie?

Hi All, when preparing the cashflow statement, I have a movement of reserve related to employee sharebase (will be equity settled). Should the movement be classified as "cash paid to employee" or "movement of capital"?

Hi there,

I wonder if asset under construction should be included in the consideration of temporary difference?
Will it give raise to temporary difference?

Hi Marek yes they do use SAP while we use different software. Every month we sed TB to them separately.. Consolidation aside. The question is if we revalue a PPE (regardless of parent or sub), should we do it from the account level or asset register level (dispose the particular asset along with the...

Hi Marek, you are right, but in my scenario, the head office wants us to recognize the fair value from our book instead that's why we did the journal to DR the PPE at the high level. In my scenario, I don't know if I need to change the fair value of that particular asset from asset register level (E...

Hello Our company is acquired and the parent company revalued one of the PPE assets, lets say assetA. The reval results new value of 100K from the carrying amount (net after depreciation) of 80K. In this case the ravl gain is 20K where I: DR PPE account 20K, CR Revaluation gain (P&L) 20K. So whe...

Hello, just want to confirm if I am doing a right approach. CompanyA (my company) is leasing an factory space to companyB (subsidiary) with contract of 5 years since 2020 to 2025. Only in Jul 2023 this year, we started to apply lease accounting while before company B only paid usual rent to company ...

Hi Ketan, yes I agree with you on "as if they were a single economic entity", but on On step 1, the sub should have recognize the correct fair value regardless whether or not the acquisition exist. So this is just the sep to make sure the book is accounted correctly. With any FV correction...

In addition to above, appreciate if you can let me know if my below hypothesis is acceptable regarding to the accounting mechanic from the group ERP. Step1: Fair value assessment and adjustment from SubCo's ledger. Take the BS or Trial balance of the SubCo and work out the fair value of each of the ...

All, in the event of business combination, we assess the BS of acquired entity to determine the fair value of its assets and liability. With all the necessary fair value adjustments, should these adjustments be done/booked from parent's book, acquiree's book, or elimination entity's book.

Hi Everyone, I had a chat with some friends the other day about Intercompany treatments (like elimination). Somehow we came across the concept of franchises, just wondering in the context of franchise model like McDonald's where it has massive control over all its franchisees, does McDonald's and ot...

Hi Everyone, I am not a tax accountant but try to understand a bit about "deferred tax method" under IFRS. Under deferred tax method, the taxable/deductible difference result from the difference between company's net carrying aset(liability) and the tax base. The difference can come from g...

Hi JRSB

Yes. When the invoice is raised, we
DR AR (or cash) and CR deferred revenue

When the service is delivered, we
DR deferred revenue, CR revenue

The deferred revenue in like our contract liability (credit balance) and contract asset (debit position).

A penny for your thought?

Hi JRSB

The CL is recognized when the client paid 50% of the work. When we deliver the service, we recognize the CA. Wouldn't it make sense to use the CL and CA on one account?

Hi Everyone

In line with ifrs 15, is it allowed to present the contract asset and contract liability on the balance sheet on net basis?

And is it part of the requirements to split the balance based on current and non current for contract asset and liability?

Hi Everyone, Let's say a company analysing an investment and it uses discounting cash flow (DCF) to assess the profitability. I understand the most common method might be using risk free rate plus risk premium. I wonder if it's common to use IBR as the discount rate for non-lease capex such as prope...

Hi, If I own 80% of companyA and this month I made $100. Should I do the journal entry to allocate out $20 from the profit and move to NCI account. Example below Dr NCI $20 (P&L account) Cr NCI $20 (equity account) Or is it more common practice to just show the breakdown from the group financial...

How about below, is that correct?

DR Equity of SmallCorp $100
CR investment in smallcorp $100
CR NCI $41
DR Goodwill $41

Hi Marek, we only need to eliminate the equity components of the subsidiary, right? If I include the asset and liability of the sub into the picture, what difference does it make?

Hi Everyone I have a question about elimination entry when involving non-controlling interest. I just want to verify my understanding about the booking model. My company invested fund into a start-up (let's call it smallcorp) and it acquires 51% of the company share. Let's say the amount invested is...

Lets say there is no transaction from previous year; the retain earning resulted from from the dividend paid

CF from operation
AR 125
AP -75
Sales -250
Expense 50

CF from financing
Loan -250
RE 100 (dividend paid)
FX loss 50

Cash itself
Cash 200
FX diff 50

Hi Marek Lets say the functional currency is AUD and the company transacts in GBP Spot rate GBP/AUD = 2 Average GBP/AUD = 2.5 Below BS is default translation by the system using spot rate Account.....Balance in GBP....Balance in AUD Cash.........100..................200 AR............50................

Sorry, after contemplating it, please let me revise above understanding (as i cannot delete nor delete my latest reply). For cashflow purpose, when translating the ledger using average rate, we translate all the account balances EXCEPT for "cash & equivalent" account (leave it as it is...

Hi Marek I had a look at the link, and let's see if I interpret it correctly. The "reconciling item" resulting from changes in fx, refers only to accounts whose functions are to show the FX differences like FX revaluation gain/loss accounts. On those accounts, we do not convert them to ave...

Hi Everyone At the moment I am working for a company that transacts a lot in foreign currencies (AUD as functionial Ccy). I understand that IAS 9 requires the cash flow statement to use transactional or at least average rate for conversation. Our system does fx revaluation every month but it only do...

JRSB wrote: ↑03 Jul 2023, 17:05 Sounds like you're buying bad debt, are you?

Yes, it's a purchase of bad debt.

Everyone, what would be the standard in IFRS that touches on booking model for debt buying, is that ifrs 9? In practice, if I buy accounts receivable (collectable less than 12 months) worth $100 for $10, what would be the booking model like? Dr accounts receivable $100 Cr $10 Cr ????? (I am supposed...