Search found 59 matches

by nauman
21 Oct 2020, 12:49
Forum: IFRS-related topics
Topic: Contribution to joint operation
Replies: 20
Views: 140

Re: Contribution to joint operation

On second thought my idea doesn't make sense. You should continue with the approach you are currently using.
by nauman
21 Oct 2020, 12:43
Forum: IFRS-related topics
Topic: Inventories at cost and NRV
Replies: 3
Views: 35

Re: Inventories at cost and NRV

Well the original cost was 100 so you should write it back up to 100, provided the NRV is at 100 or above 100.
by nauman
21 Oct 2020, 12:41
Forum: IFRS-related topics
Topic: offsetting receivable and lease liability
Replies: 7
Views: 49

Re: offsetting receivable and lease liability

What @JRSB said, it depends on whether there is a legal enforceable right to settle. Usually any receivables / prepayments on date of adoption of IFRS 16 form part of right-of-use asset as opposed to being netted off against lease liability.
by nauman
21 Oct 2020, 12:38
Forum: IFRS-related topics
Topic: Contribution to joint operation
Replies: 20
Views: 140

Re: Contribution to joint operation

I personally like to keep things simple. Why not treat it simply as an advance and treat the receipt of excess as settlement of this advance.
by nauman
21 Oct 2020, 08:43
Forum: IFRS-related topics
Topic: Selling 50% of a level of consolidation
Replies: 6
Views: 74

Re: Selling 50% of a level of consolidation

When you classify a line of business or subsidiary as held for sale you classify all its assets (current and non current) in a separate line after current assets as assets held for sale and the liabilities are classified as held for sale in a separate line after current liabilities. You could either...
by nauman
30 Sep 2020, 08:34
Forum: IFRS-related topics
Topic: Derivative transaction double entries
Replies: 12
Views: 80

Re: Derivative transaction double entries

You do not have to recognize the asset and liabilities with respect to the notional amount of the derivative. What you carry on your balance sheet is the fair value of the derivative (which is net of receive and pay legs). In absence of any hedge accounting, the fair value changes go to P&L and the ...
by nauman
16 Sep 2020, 14:52
Forum: IFRS-related topics
Topic: Best Free Resource for learning IFRS
Replies: 3
Views: 54

Re: Best Free Resource for learning IFRS

Plenty of videos available on youtube as well. Bottom line is it is not practical to get thorough understanding of all IFRSs by just reading through the text or watching videos. I would suggest targeted research in areas of IFRS which you encounter in practical life.
by nauman
16 Sep 2020, 14:49
Forum: IFRS-related topics
Topic: Practical approaches to lease term under IFRS 16
Replies: 3
Views: 169

Re: Practical approaches to lease term under IFRS 16

I think it's more a question of substance over form and that's what makes the whole thing a bit subjective. No entity would make investments in furniture, fixtures and fittings with the intention of abandoning the premises within 12 months. We generally look at the underlying useful life of assets o...
by nauman
31 Aug 2020, 15:13
Forum: IFRS-related topics
Topic: IFRS 16 Covid rent concessions
Replies: 20
Views: 197

Re: IFRS 16 Covid rent concessions

IFRS as approved by IASB.
by nauman
31 Aug 2020, 14:34
Forum: IFRS-related topics
Topic: IFRS 16 Covid rent concessions
Replies: 20
Views: 197

Re: IFRS 16 Covid rent concessions

This statement is interesting: 'Where companies use the reliefs permitted by the IFRS 16 amendment, they are expected to disclose this in the notes to their financial statements.' I thought there will rather a 'don't ask, don't tell' approach with materiality considerations in the background We pre...
by nauman
31 Aug 2020, 09:24
Forum: IFRS-related topics
Topic: IFRS 16 for small Airlines with all dry operating leases
Replies: 2
Views: 46

Re: IFRS 16 for small Airlines with all dry operating leases

Why are you using LIBOR to discount the lease rentals? IFRS 16 requires the entity to use incremental borrowing rate (if implicit rate of return is not available). I am pretty sure any entity (specially one in Pakistan and that too in aviation industry) would be able to borrow at LIBOR. Second, you ...
by nauman
03 Aug 2020, 16:39
Forum: IFRS-related topics
Topic: Impairment of subsidiary
Replies: 7
Views: 110

Re: Impairment of subsidiary

Exactly as @jonyicheng said, when you are performing consolidation you reverse the impairment against i.e. credit Retailed earnings / impairment charge and debit the investment in subsidiary and then the investment in subsidiary is eliminated against share capital / pre-acquisition reserves of the s...
by nauman
18 Jul 2020, 18:16
Forum: General accounting and financial reporting discussion
Topic: Disposal of subsidiary
Replies: 7
Views: 160

Re: Disposal of subsidiary

I am confused, PPA exercise is from buyer perspective and is basically allocation of consideration paid to different line items within the balance sheet. Usually, seller has nothing to do with PPA allocation. This seems more like a case of contingent consideration, which should have been accounted f...
by nauman
18 Jul 2020, 18:09
Forum: IFRS-related topics
Topic: IFRS 16 Covid rent concessions
Replies: 20
Views: 197

Re: IFRS 16 Covid rent concessions

Earlier adoption is also permissible as per IASB thought the constraint seems to be from EU regulator it seems.
by nauman
13 Jul 2020, 17:52
Forum: IFRS-related topics
Topic: Treatment of professional fees paid to raise capital
Replies: 16
Views: 174

Re: Treatment of professional fees paid to raise capital

The fact that it is a monthly fee is just a matter and question payment terms negotiated. The standard looks at costs which are incidental to equity issuance and I feel these are. If you were not going to raise this equity (regardless of whether it will be successful or not) you would not have incur...
by nauman
13 Jul 2020, 10:58
Forum: IFRS-related topics
Topic: IFRS - Investment Properties
Replies: 7
Views: 69

Re: IFRS - Investment Properties

IAS 40 allows you to carry investment properties on cost basis as well.
by nauman
13 Jul 2020, 10:55
Forum: IFRS-related topics
Topic: IFRS 16 - Lessor accounting
Replies: 5
Views: 98

Re: IFRS 16 - Lessor accounting

Nope, when it comes to other systematic basis you have to come up with an alternative systematic basis (same as if you are not following straight line depreciation you have to come up with an alternative). Where escalation clauses are built in a contract these have to be straight lined.
by nauman
12 Jul 2020, 09:10
Forum: IFRS-related topics
Topic: IFRS 16 sub lease
Replies: 11
Views: 117

Re: IFRS 16 sub lease

Without a contract, what is the basis of payment between Company Y and Company X?
by nauman
12 Jul 2020, 09:03
Forum: IFRS-related topics
Topic: Treatment of professional fees paid to raise capital
Replies: 16
Views: 174

Re: Treatment of professional fees paid to raise capital

I would even take the monthly fee to equity (in case company was successful in raising the capital). The question is on incremental, not on whether the equity round would be successful or unsuccessful. If the company was not going ahead with the decision to raise capital, they would not have incurre...
by nauman
12 Jul 2020, 08:59
Forum: IFRS-related topics
Topic: IFRS 16 - Lessor accounting
Replies: 5
Views: 98

Re: IFRS 16 - Lessor accounting

Yes your understanding is correct, the difference between what is to be received in cash and what is recognized in the income statement is recognized as an asset on the balance sheet (you will need to bifurcate it between current and non current as well) and this will automatically decline (by way o...
by nauman
12 Jul 2020, 08:48
Forum: IFRS-related topics
Topic: Do trade and other receivables/payables include non-financial accruals and deferrals?
Replies: 3
Views: 79

Re: Do trade and other receivables/payables include non-financial accruals and deferrals?

There is no standard guideline as such and depends on the materiality of the amounts in question. However, if you include say non financial liabilities within trade and other payables line item then the nomenclature needs to be revised to trade payables and other liabilities. Again, no strict requir...
by nauman
07 Jul 2020, 08:40
Forum: After hours
Topic: Questions to refresh oneself
Replies: 9
Views: 522

Re: Questions to refresh oneself

Plenty of videos available on Youtube as well, the knowledge base on IFRS community is good. I have also seen people using IFRS box (geared towards beginners).
by nauman
01 Jul 2020, 11:57
Forum: IFRS-related topics
Topic: IFRS 16 Lessee Involment before the lease
Replies: 8
Views: 78

Re: IFRS 16 Lessee Involment before the lease

I think there is a case for it to be capitalized as leasehold improvement. If as a result of the delay the cost no longer holds its value then it should be written off to P&L.
by nauman
17 Jun 2020, 19:24
Forum: IFRS-related topics
Topic: Loan to Equity
Replies: 7
Views: 82

Re: Loan to Equity

You don't need to issue new shares to convert a shareholder loan to equity. Depending on the jurisdiction, a simple agreement between the shareholder (Holding company) and the borrower can convert the loan to equity, in form of shareholder contribution.
by nauman
17 Jun 2020, 17:15
Forum: After hours
Topic: article on IFRIC23
Replies: 15
Views: 249

Re: article on IFRIC23

Thanks Marek, appreciate the feedback.

I would definitely consider mailing lists (have used mail chimp in past) but I need to be regularly writing on the blog for it any sort of newsletter / mail to be of any value.
by nauman
17 Jun 2020, 09:17
Forum: IFRS-related topics
Topic: IFRS 16 - Lessor Interest Income Recognition and Accrual
Replies: 4
Views: 31

Re: IFRS 16 - Lessor Interest Income Recognition and Accrual

Simply put, you start recognizing interest from the date you recognized the net investment in lease. The only bearing the date and amount of rental amount has on interest is the amount on which interest is calculated.
by nauman
16 Jun 2020, 22:00
Forum: IFRS-related topics
Topic: IFRS 16 - Leases (Parent- Subsidiary) recognition and measurement.
Replies: 7
Views: 116

Re: IFRS 16 - Leases (Parent- Subsidiary) recognition and measurement.

We have this case where our investment properties are also leased out to retail units within the group (in addition to leasing them to third party tenants as well). As a consequence, we reverse out all the balances pertaining to the intergroup leases and eliminate lease income against depreciation o...
by nauman
16 Jun 2020, 14:08
Forum: IFRS-related topics
Topic: Transfer of assets to a wholly owned subsidiary
Replies: 14
Views: 81

Re: Transfer of assets to a wholly owned subsidiary

JRSB wrote: 16 Jun 2020, 12:32 Which audit firm is getting excited about it? I assume Big 4.... :D
Yes, one of the big 4 :)
by nauman
16 Jun 2020, 12:32
Forum: IFRS-related topics
Topic: IAS 2 inventories - Letter of Credit
Replies: 11
Views: 94

Re: IAS 2 inventories - Letter of Credit

What I was referring to was retail inventory, so there is no capitalization period as such. I understand that if I was importing material to construct real estate inventory etc. then yes, this cost would be eligible for capitalization.
by nauman
16 Jun 2020, 12:29
Forum: IFRS-related topics
Topic: Transfer of assets to a wholly owned subsidiary
Replies: 14
Views: 81

Re: Transfer of assets to a wholly owned subsidiary

Marek, that is what we did. We transferred the investment property, it's related tenant balances (both assets and liabilities). So the accounting entry is simply credit to all the assets, debit to liabilities and the net amount is debited to Investment in subsidiary. This is how the transfers were a...