Search found 192 matches

by pub_acco
26 Jan 2021, 12:31
Forum: IFRS-related topics
Topic: Common control transaction
Replies: 5
Views: 25

Re: Common control transaction

Is it a common control transaction? If so does the same shareholders control both A and C? Entity C looks like an external party in the diagram :|
by pub_acco
22 Jan 2021, 15:12
Forum: General accounting and financial reporting discussion
Topic: Gross profit or gain on sale of PP&E
Replies: 8
Views: 89

Re: Gross profit or gain on sale of PP&E

Marek Muc wrote: 22 Jan 2021, 15:07 nobody's going to go to prison ;)
Good news :lol:
by pub_acco
22 Jan 2021, 15:02
Forum: General accounting and financial reporting discussion
Topic: Gross profit or gain on sale of PP&E
Replies: 8
Views: 89

Re: Gross profit or gain on sale of PP&E

Aha, I missed your point! Yeah, that's another sensible approach I hadn't thought of at all. So, now I'm convinced that there are perhaps only two possible approaches under IFRS. Now IMO the second approach better presents the economic substance but probably I need to go for the first one because th...
by pub_acco
22 Jan 2021, 14:19
Forum: General accounting and financial reporting discussion
Topic: Gross profit or gain on sale of PP&E
Replies: 8
Views: 89

Re: Gross profit or gain on sale of PP&E

Thanks! As for IFRS/non-IFRS figures, I was more concerned about Cost of sales in the second approach. Cost of sales is usually understood as the amount of inventories expensed, and in the example case, the book value of the land as an inventory is still 10. I don't think there is a standard that pe...
by pub_acco
17 Jan 2021, 02:21
Forum: IFRS-related topics
Topic: Cash-settled share based payment outside scope of IFRS 2
Replies: 6
Views: 71

Re: Cash-settled share based payment outside scope of IFRS 2

Interesting case :) I have a bit different view. This arrangement sounds like a gift from P to S, and usually a gift from a parent to its subsidiary, no matter whether that is a share-based payment or not, is deemed to be a capital contribution because the parent is assumed to be acting in its capac...
by pub_acco
16 Jan 2021, 14:07
Forum: General accounting and financial reporting discussion
Topic: Gross profit or gain on sale of PP&E
Replies: 8
Views: 89

Re: Gross profit or gain on sale of PP&E

Thank you, Marek! It's a good point that the construction business can also produce a very high margin by holding the land as Inventories for years. Yeah, perhaps the fluctuation of fair value of lands is a built-in risk to the construction segment and thus it might be appropriate to present the unu...
by pub_acco
14 Jan 2021, 14:53
Forum: General accounting and financial reporting discussion
Topic: Gross profit or gain on sale of PP&E
Replies: 8
Views: 89

Gross profit or gain on sale of PP&E

Assume an entity has a production (of something) division and a building construction division and plans to close a production factory to build an office building for sale on the factory site. The entity at some point reclassifies the land from PP&E to Inventories and then sells it together with the...
by pub_acco
14 Jan 2021, 01:24
Forum: IFRS-related topics
Topic: Put option
Replies: 12
Views: 88

Re: Put option

Should be kd or incremental borrowing rate because the put is just one of financial liabilities of X, maybe?

I'm interested too in how you would account for the put, in concrete debits and credits.
by pub_acco
13 Jan 2021, 14:10
Forum: IFRS-related topics
Topic: Discounting in negative interest rate environment
Replies: 9
Views: 55

Re: Discounting in negative interest rate environment

In practice I've been using 0% for discounting purposes when a straight forward calculation comes out a negative interest rate. But I don't think I'm doing right.... Currently, it's okay because of the modest negative rate environment, but perhaps in the future we might need to use negative rates fo...
by pub_acco
05 Jan 2021, 16:05
Forum: IFRS-related topics
Topic: Capitalising movement in FV liability
Replies: 16
Views: 79

Re: Capitalising movement in FV liability

Wow IFRIC did have the same discussion! So, now that they have completed revenue and lease projects, which way, analogy to IFRS 3 or IFRIC 1, do you guys think IFRIC would go for? I think IFRS 15 and 16 deal with variable considerations differently though....
by pub_acco
03 Jan 2021, 09:27
Forum: IFRS-related topics
Topic: "Variable" interest bearing financial instruments
Replies: 13
Views: 86

Re: "Variable" interest bearing financial instruments

I'm curious too :) Some web sites indicate that only fixed-rate loans can be structured under Murabaha but I have absolutely no experience on Islamic financing.
by pub_acco
03 Jan 2021, 08:37
Forum: IFRS-related topics
Topic: "Variable" interest bearing financial instruments
Replies: 13
Views: 86

Re: "Variable" interest bearing financial instruments

Then, you can calculate the interest expenses of each quarter by multiplying the principal and EIR, can't you? The interest expenses increase the carrying amount of the loan, the repayments (including the 2.67M "interest") decrease it, and as a result the carrying amount will be zero after six years...
by pub_acco
03 Jan 2021, 08:31
Forum: IFRS-related topics
Topic: Acquisition through debt assignment
Replies: 20
Views: 143

Re: Acquisition through debt assignment

If Y can potentially request repayment, then X should record the obligation as a liability to Y. If so, IFRIC 19 may or may not apply depending on the contractual terms, but at the end of the day, I think there is no clear answer because no clear contract seems to exist.
by pub_acco
03 Jan 2021, 05:20
Forum: IFRS-related topics
Topic: "Variable" interest bearing financial instruments
Replies: 13
Views: 86

Re: "Variable" interest bearing financial instruments

Oops the above cash flow is wrong because you told the quarterly payments start after the initial 6 months. Anyway, if you can project cash flows then you can calculate an EIR using Excel.
by pub_acco
03 Jan 2021, 04:57
Forum: IFRS-related topics
Topic: "Variable" interest bearing financial instruments
Replies: 13
Views: 86

Re: "Variable" interest bearing financial instruments

Perhaps you need to calculate an effective interest rate based on a cash flow projection like this?

Q0: 180
Q1: (8.18)
Q2: (8.18) + (2.67)
Q3 thru Q22: (8.18)

The straight-line method might be inappropriate because the principal is considerably different at the 1st quarter and the 22nd quarter.
by pub_acco
02 Jan 2021, 10:23
Forum: IFRS-related topics
Topic: Acquisition through debt assignment
Replies: 20
Views: 143

Re: Acquisition through debt assignment

IFRIC 19 applies to your case because the "debt equity swap" takes place on the date of the debt assignment in the accounting sense. You need an account to credit when the bank loans go away, and it is the only economically reasonable interpretation to assume that a certain form of equity is issued ...
by pub_acco
02 Jan 2021, 01:03
Forum: IFRS-related topics
Topic: Capitalising movement in FV liability
Replies: 16
Views: 79

Re: Capitalising movement in FV liability

how do you account for contingent consideration relating to purchases of PP&E/intangibles under your policy? Initially measure PP&E/intangibles using a best estimate and subsequently restate the carrying amount when the estimate changes (if material; otherwise and usually just recognize the change ...
by pub_acco
01 Jan 2021, 20:50
Forum: IFRS-related topics
Topic: Capitalising movement in FV liability
Replies: 16
Views: 79

Re: Capitalising movement in FV liability

Btw, US GAAP has a detailed guideline under ASC 230-10-45 about the presentation of contingent considerations in the cash flow statements, which I found helpful when developing an accounting policy for income statements under IFRS :)
by pub_acco
01 Jan 2021, 20:09
Forum: IFRS-related topics
Topic: Capitalising movement in FV liability
Replies: 16
Views: 79

Re: Capitalising movement in FV liability

Should a contingent consideration arising from an operating activity (ie not a business combination) be measured at FVTPL? IAS 37 sounds more relevant to such a case than does IFRS 9, and probably we can follow the guidelines of IAS 8 in the subsequent changes in the estimate of the provisions, can'...
by pub_acco
31 Dec 2020, 14:40
Forum: IFRS-related topics
Topic: IFRS-16 (leasor leasee accounting)
Replies: 4
Views: 39

Re: IFRS-16 (leasor leasee accounting)

Under the finance lease accounting, a lessor's investment in a lease is supposed to be zero at the end of the lease term, so no entry will be necessary. From the lessee's point of view, the leased asset is supposed to be depreciated over the useful life of the asset rather than the lease term (see I...
by pub_acco
31 Dec 2020, 09:26
Forum: IFRS-related topics
Topic: Acquisition through debt assignment
Replies: 20
Views: 143

Re: Acquisition through debt assignment

Can I assume that X is contractually obligated to issue and assign new shares to Y as of the reporting date? If so, I think X should account for the obligation as equity and apply the "debt for equity swap" accounting in accordance with IFRIC 19. Otherwise, I'm not sure if we can account for the arr...
by pub_acco
30 Dec 2020, 00:14
Forum: After hours
Topic: What we are playing during the holidays
Replies: 8
Views: 146

Re: What we are playing during the holidays

Playing discounted old games too :) I finished Assassin's Creed IV recently and it was great!
by pub_acco
29 Dec 2020, 23:47
Forum: IFRS-related topics
Topic: Deferred tax as 'current' asset
Replies: 11
Views: 69

Re: Deferred tax as 'current' asset

Could be just for simplicity, because US GAAP recently adopted this style for that reason: https://www.fasb.org/cs/Satellite?c=Document_C&cid=1176167636650&d=Touch&pagename=FASB%2FDocument_C%2FDocumentPage I remember this event clearly because this was the only one recent standard change that reduce...
by pub_acco
28 Dec 2020, 14:15
Forum: IFRS-related topics
Topic: IAS 32 Financial Instruments: Presentations
Replies: 9
Views: 92

Re: IAS 32 Financial Instruments: Presentations

Several years ago, I heard of an arrangement where an entity issued convertible bonds at the public market and at the same time purchased options that allowed the issuer to buy back all the newly issued shares at maturity. This combination effectively worked like straight bonds but could be advantag...
by pub_acco
27 Dec 2020, 02:25
Forum: IFRS-related topics
Topic: Goodwill amortization & deferred taxes
Replies: 10
Views: 77

Re: Goodwill amortization & deferred taxes

I've seen in practice a similar situation where goodwill was amortized for the tax purpose at the separate FS level and related deferred taxes were recognized. But that was under US GAAP, though I guess similar accounting is expected under IFRS too :)
by pub_acco
26 Dec 2020, 07:28
Forum: IFRS-related topics
Topic: IFRS15 - Cloud storage
Replies: 5
Views: 109

Re: IFRS15 - Cloud storage

Hi, I think you should usually recognize revenue corresponding to the period from December 15 to the closing date in your example case. Para B16 doesn't mean you can delay the recognition until invoice dates, but just allows you to use invoice prices for measurements instead of following the complex...
by pub_acco
21 Dec 2020, 12:47
Forum: IFRS-related topics
Topic: Conceptual Framework - Capitalisation of a Cellphone
Replies: 15
Views: 105

Re: Conceptual Framework - Capitalisation of a Cellphone

Yep, I was just going to cite the para 5! But I think the exact border between IAS 16 and 38 is actually vague and in practice we need judgements to apply IAS 38 to tangible things.
by pub_acco
20 Dec 2020, 03:28
Forum: IFRS-related topics
Topic: Conceptual Framework - Capitalisation of a Cellphone
Replies: 15
Views: 105

Re: Conceptual Framework - Capitalisation of a Cellphone

I agree cellphones meet the definition of an asset under CF, but they will not show up on balance sheets as an asset if they are leased under a pure variable lease contract (IFRS 16) or if they are procured for research, training, promotion, etc. purposes (IAS 38). This kind of tricks often makes me...
by pub_acco
17 Dec 2020, 03:46
Forum: IFRS-related topics
Topic: Attributing Benefit to Periods of Service (IAS 19)
Replies: 7
Views: 79

Re: Attributing Benefit to Periods of Service (IAS 19)

Getting confused too in particular about the relationship between the IFRIC decision and para 72 :? Para 72 says the obligations have to be also allocated to the periods before "vesting" conditions are met. So in your Poland case, because even 20-year-old employees may become eligible for the retire...