IFRScommunity Forum

On second thought my idea doesn't make sense. You should continue with the approach you are currently using.

Well the original cost was 100 so you should write it back up to 100, provided the NRV is at 100 or above 100.

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.

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.

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...

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 ...

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.

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...

IFRS as approved by IASB.

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...

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 ...

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...

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...

Earlier adoption is also permissible as per IASB thought the constraint seems to be from EU regulator it seems.

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...

IAS 40 allows you to carry investment properties on cost basis as well.

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.

Without a contract, what is the basis of payment between Company Y and Company X?

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...

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...

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...

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).

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.

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.

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.

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.

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...

JRSB wrote: ↑16 Jun 2020, 12:32 Which audit firm is getting excited about it? I assume Big 4....

Yes, one of the big 4

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.

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...