Search found 77 matches

by nauman
30 Apr 2023, 08:51
Forum: IFRS-related topics
Topic: Project Revenue under IFRS 15
Replies: 2
Views: 1519

Re: Project Revenue under IFRS 15

I am questioning whether IFRS should even be applied here. I don’t think the receipt of funds / grants qualify as revenue.
by nauman
30 Apr 2023, 08:44
Forum: IFRS-related topics
Topic: Hedge Accounting
Replies: 30
Views: 14240

Re: Hedge Accounting

Yes that will be a cash flow hedge
by nauman
30 Apr 2023, 08:38
Forum: IFRS-related topics
Topic: Intercompany Asset Transfer from PVT to partnership by same ownership
Replies: 4
Views: 1344

Re: Intercompany Asset Transfer from PVT to partnership by same ownership

As far as I know, IFRS is not applicable on partnerships as a partnership by itself doesn’t constitute a separate legal entity / person. However you can always structure it as a sale of asset to the partnership and for accounting purposes assume the consideration to the cost of the building but this...
by nauman
18 Jan 2022, 05:49
Forum: IFRS-related topics
Topic: Discounting an obligation to a Group company
Replies: 4
Views: 1464

Re: Discounting an obligation to a Group company

There are transfer pricing regulations but because it is within the same jurisdiction and there is no CIT (UAE), the transfer pricing regulations only have consequences on cross border transactions.
by nauman
17 Jan 2022, 06:38
Forum: IFRS-related topics
Topic: Discounting an obligation to a Group company
Replies: 4
Views: 1464

Discounting an obligation to a Group company

What are the circumstances in which you can get away with not discounting a long term obligation (to a related party)? Would an argument that the working capital cycle of a real estate developer spans over multiple accounting periods (24 to 36 months) be sufficient for such an argument? A Group comp...
by nauman
14 Oct 2021, 12:26
Forum: IFRS-related topics
Topic: Recognizing non controlling interest based on profit sharing agreement
Replies: 11
Views: 3071

Re: Recognizing non controlling interest based on profit sharing agreement

Well if the agreement is worded as though there is no obligation to deliver cash but it would be on discretion of PropCo to declare dividend. Would that change your view?
by nauman
12 Oct 2021, 08:51
Forum: IFRS-related topics
Topic: Recognizing non controlling interest based on profit sharing agreement
Replies: 11
Views: 3071

Re: Recognizing non controlling interest based on profit sharing agreement

This is the whole point.

The transaction is in essence a borrowing transaction but the company wants to achieve equity accounting with it as the debt ratios are stressed right now. Hence it is being structured like this.
by nauman
11 Oct 2021, 15:42
Forum: IFRS-related topics
Topic: Recognizing non controlling interest based on profit sharing agreement
Replies: 11
Views: 3071

Re: Recognizing non controlling interest based on profit sharing agreement

JRSB wrote: 11 Oct 2021, 14:30 Not a joint arrangement?
If it were a joint arrangement, how would the accounting work?
by nauman
11 Oct 2021, 14:35
Forum: IFRS-related topics
Topic: Recognizing non controlling interest based on profit sharing agreement
Replies: 11
Views: 3071

Re: Recognizing non controlling interest based on profit sharing agreement

Well the Group still controls PropCo so I am not sure we can establish joint control here.
by nauman
11 Oct 2021, 13:53
Forum: IFRS-related topics
Topic: Recognizing non controlling interest based on profit sharing agreement
Replies: 11
Views: 3071

Recognizing non controlling interest based on profit sharing agreement

Hello all As the title suggests is it possible to recognize non controlling interest based on profit sharing agreement? Let me give you brief background to the arrangement: A newly formed entity (“PropCo”), will be formed Group A into which Group A shall contribute all of its portfolio of properties...
by nauman
02 Feb 2021, 07:28
Forum: IFRS-related topics
Topic: ias 24
Replies: 8
Views: 2487

Re: ias 24

You still have some flexibility with regards to what constitutes as key management as that is a matter of judgement.
by nauman
02 Feb 2021, 07:15
Forum: IFRS-related topics
Topic: IAS 21 - selection of exchange rates source in practice
Replies: 7
Views: 2461

Re: IAS 21 - selection of exchange rates source in practice

It is not a matter of compliance with IAS 21 per say as the standard doesn't say which rate to use but more a question on reasonableness of management's judgement and estimate with regards to exchange rate. This can become very tricky when it comes to some of the economies where there is a wide disc...
by nauman
26 Jan 2021, 14:25
Forum: IFRS-related topics
Topic: Equity under FVTOCI
Replies: 4
Views: 1909

Re: Equity under FVTOCI

You live by the sword and you die by the sword :) if you decided to avoid loss in P&L back in the day now you have to be consistent with the treatment.
by nauman
26 Jan 2021, 12:35
Forum: IFRS-related topics
Topic: Common control transaction
Replies: 8
Views: 2935

Re: Common control transaction

My bad, forgot to draw an arrow there. Yes, the ultimate shareholder owns both A and C.
by nauman
26 Jan 2021, 12:34
Forum: IFRS-related topics
Topic: IFRS 16 Assignment of Lease
Replies: 9
Views: 4254

Re: IFRS 16 Assignment of Lease

Is the "assignment of lease" agreement between you and the new tenant or land lord and the new tenant?
by nauman
26 Jan 2021, 12:26
Forum: IFRS-related topics
Topic: Common control transaction
Replies: 8
Views: 2935

Re: Common control transaction

Thanks Marek, good to be back. Yes we are talking about the consolidated FS of A. I know this is a very simple case of deconsolidation but a board member had me confused by saying that because we had already impaired the receivable balance in the stand alone financial statements of A by 100, that ch...
by nauman
26 Jan 2021, 08:17
Forum: IFRS-related topics
Topic: Common control transaction
Replies: 8
Views: 2935

Common control transaction

Been a while since I have been around and have a question on a common control transaction that is happening and I need some help regarding this. The transaction in its simplest form looks like this: Deconsolidation.JPG Background information Entity A has been paying salary of some entity B employees...
by nauman
29 Dec 2020, 10:59
Forum: IFRS-related topics
Topic: Interest-free loans or loans at below-market interest rate
Replies: 27
Views: 20887

Re: Interest-free loans or loans at below-market interest rate

Right, things can get blurred under common control. I guess you have two choices in such a case: 1. Treat such a loan as repayable on demand and therefore proceeds = fair value or 2. Consider the loan to be in substance equity contribution in full What are your observations in practice? Mostly no. ...
by nauman
21 Oct 2020, 12:49
Forum: IFRS-related topics
Topic: Contribution to joint operation
Replies: 20
Views: 4432

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: 1245

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: 2006

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: 4432

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: 1739

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: 2722

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 ...
by nauman
16 Sep 2020, 14:52
Forum: IFRS-related topics
Topic: Best Free Resource for learning IFRS
Replies: 3
Views: 1317

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: 10
Views: 3342

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: 5079

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: 5079

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: 1087

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: 6013

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...