Search found 909 matches

by Leo
27 Mar 2024, 23:21
Forum: IFRS-related topics
Topic: Net Assets at Acquisition
Replies: 7
Views: 73

Re: Net Assets at Acquisition

In this situation, you wouldn't get a goodwill, but depending on the percentage you acquire, you might end up with a bargain purchase.
by Leo
26 Mar 2024, 20:48
Forum: IFRS-related topics
Topic: Equity host with a liablity component
Replies: 5
Views: 91

Re: Equity host with a liablity component

Just moving it up in case.
by Leo
25 Mar 2024, 14:27
Forum: IFRS-related topics
Topic: Equity host with a liablity component
Replies: 5
Views: 91

Re: Equity host with a liablity component

Just putting this up the chain.
by Leo
25 Mar 2024, 14:26
Forum: IFRS-related topics
Topic: Preference shares and consolidation
Replies: 0
Views: 17

Preference shares and consolidation

Based on IFRS 10 B91, IFRS 9 does not apply to interests in subsidiaries that are consolidated. When instruments containing potential voting rights in substance currently give access to the returns associated with an ownership interest in a subsidiary, the instruments are not subject to the requirem...
by Leo
21 Mar 2024, 16:47
Forum: IFRS-related topics
Topic: Alignment of joint venture's accounting policies in equity accounting
Replies: 6
Views: 74

Re: Alignment of joint venture's accounting policies in equity accounting

I think it all depends on what are you able to do as an investor, because sometimes, you just don't have the info, and it's too hard to do the adjustments (including for the prior years). I think you would need to agree with the auditors depending on the materiality of the investment. For example, y...
by Leo
21 Mar 2024, 00:07
Forum: IFRS-related topics
Topic: Equity host with a liablity component
Replies: 5
Views: 91

Re: Equity host with a liablity component

A strict application of a compound financial instrument would lead me to the journals on the right. However, I'm trying to find a economic rational.
by Leo
20 Mar 2024, 16:03
Forum: IFRS-related topics
Topic: Equity host with a liablity component
Replies: 5
Views: 91

Re: Equity host with a liablity component

In this case, the principal amount should be treated as equity and the PIK amount as liability. For example, a convertible prefs with principal amount of 1 million, paying a PIK cumulative interests of 10% every year. Principal convertible into fixed amount of shares and PIK amount into a variable a...
by Leo
20 Mar 2024, 15:38
Forum: General accounting and financial reporting discussion
Topic: Companies acts consolidation exemption and IFRS 10 exemptions
Replies: 15
Views: 133

Re: Companies acts consolidation exemption and IFRS 10 exemptions

I think generally, CA of your jurisdiction tells you who needs to prepare group accounts and IFRS 10 what they contain. On that basis, if a company is exempt of conso by CA, then no further questions, this company do not need to do conso, and can apply ias 27 to its full extent. if a company is not ...
by Leo
20 Mar 2024, 15:31
Forum: General accounting and financial reporting discussion
Topic: Companies acts consolidation exemption and IFRS 10 exemptions
Replies: 15
Views: 133

Re: Companies acts consolidation exemption and IFRS 10 exemptions

Make sense, same in France, the CA only gives guidance on exemptions in terms of group size.
by Leo
20 Mar 2024, 13:38
Forum: General accounting and financial reporting discussion
Topic: Companies acts consolidation exemption and IFRS 10 exemptions
Replies: 15
Views: 133

Re: Companies acts consolidation exemption and IFRS 10 exemptions

The issue is under CA06, there is the section that prescribes exemption for companies to do conso accounts. In such a case, they can prepare individual/statutory accounts. I cannot find anything on accounting if it's an investment entity. In parallel, there is this IFRS 10 para 27-33 which prescribe...
by Leo
20 Mar 2024, 12:54
Forum: IFRS-related topics
Topic: Definition of Gross Margin under IFRS
Replies: 6
Views: 58

Re: Definition of Gross Margin under IFRS

I've seen companies doing a "hybrid" P&L, with items by function, but putting an intermediary sub-total "EBITDA" and depreciation & amortisation coming after that. This has been rejected by the auditors. In this situation, you can show "EBITDA" only if you prepa...
by Leo
20 Mar 2024, 10:09
Forum: IFRS-related topics
Topic: Definition of Gross Margin under IFRS
Replies: 6
Views: 58

Re: Definition of Gross Margin under IFRS

I don't think the hybrid approach is possible, either a P&L by nature or by function.
by Leo
18 Mar 2024, 23:38
Forum: IFRS-related topics
Topic: Recognition of call/put options if not exercised
Replies: 9
Views: 2911

Re: Recognition of call/put options if not exercised

Looks fine. If it's only 2% provided it's sub already and it's ias27 accounting,
by Leo
18 Mar 2024, 13:04
Forum: IFRS-related topics
Topic: Recognition of call/put options if not exercised
Replies: 9
Views: 2911

Re: Recognition of call/put options if not exercised

Still you need if there is any value at a given time.
by Leo
15 Mar 2024, 15:20
Forum: General accounting and financial reporting discussion
Topic: Companies acts consolidation exemption and IFRS 10 exemptions
Replies: 15
Views: 133

Re: Companies acts consolidation exemption and IFRS 10 exemptions

I haven't found anything regarding this under CA06 JRSB, could you please have a look as you are the expert in the UK. Thanks
by Leo
15 Mar 2024, 14:54
Forum: General accounting and financial reporting discussion
Topic: Companies acts consolidation exemption and IFRS 10 exemptions
Replies: 15
Views: 133

Re: Companies acts consolidation exemption and IFRS 10 exemptions

I may have, thanks. So based on CA 06, a company exempt from producing conso can prepare separate accounts, if it's under UK adopted IFRS, then the company can prepare accounts under IAS 27. In such a case, it can apply the cost method to account for the subs. However, if the entity is an investment...
by Leo
14 Mar 2024, 23:22
Forum: General accounting and financial reporting discussion
Topic: Companies acts consolidation exemption and IFRS 10 exemptions
Replies: 15
Views: 133

Re: Companies acts consolidation exemption and IFRS 10 exemptions

Not particularly, the reason I'm asking this is I haven't found in the CA 2006 something obliging an entity exempt from consolidation (an investment entity for example) to hold investment at fair value. That's why I was wondering if someone has got any clue that I may have overlooked.
by Leo
13 Mar 2024, 20:19
Forum: IFRS-related topics
Topic: Equity host with a liablity component
Replies: 5
Views: 91

Equity host with a liablity component

Have you ever come across preference shares issued, with a equity host and a liability component? For example, the principle amount can only be redeem by a fixed number of ordinary shares, however, the instrument carries PIK interests compounded annually, which will be converted into a variable numb...
by Leo
13 Mar 2024, 17:22
Forum: IFRS-related topics
Topic: Accounting for Investment in subs
Replies: 2
Views: 40

Re: Accounting for Investment in subs

Answer is no because otherwise IAS 27 wouldn't require to switch from cost to fair value if lost control or vice versa.
by Leo
13 Mar 2024, 17:19
Forum: IFRS-related topics
Topic: Accounting for Investment in subs
Replies: 2
Views: 40

Accounting for Investment in subs

"Under IFRS 9.B5.7.1 the FVOCI election is made 'on an instrument-by-instrument (ie share-by-share) basis'. As I read this, you are allowed to designate only some of the shares that you buy at FVOCI and have the rest classified at FVTPL - even if they are issued by the same company. " This...
by Leo
13 Mar 2024, 08:15
Forum: General accounting and financial reporting discussion
Topic: Companies acts consolidation exemption and IFRS 10 exemptions
Replies: 15
Views: 133

Companies acts consolidation exemption and IFRS 10 exemptions

in the UK, a parent holding company, can benefit from conso if certain criteria are satisfied (as per section 401, 402 and 405). In parallel, a company can benefit from applying IFRS 10 if criteria are met (as per para 27-33). What would be the connection between a local law and IFRS 10? What happen...
by Leo
12 Mar 2024, 17:50
Forum: IFRS-related topics
Topic: How to distinguish an entity preparing accounts under IFRS 10 para 27-33 or IAS 27 fair value option
Replies: 5
Views: 55

Re: How to distinguish an entity preparing accounts under IFRS 10 para 27-33 or IAS 27 fair value option

Thanks Marek, I have completely overlooked this, really helpful.

I guess that means that investment in associates and JV can be recognised at cost? Because under IAS 27, that's a possible option.

(Investment in equity instruments in investee under 20% are kept under IFRS 9).
by Leo
11 Mar 2024, 22:35
Forum: IFRS-related topics
Topic: Cash pooling
Replies: 10
Views: 101

Re: Cash pooling

I have never seen a stat CFS with cash pooling in practice, so I cannot pronounce. Instinctively, I can think of two approaches. Approach 1: Consider the intercompany balance you've got with your parent as a bank balance. And everything else being the same than a normal CFS. So your cash flow is the...
by Leo
11 Mar 2024, 21:39
Forum: IFRS-related topics
Topic: Cash pooling
Replies: 10
Views: 101

Re: Cash pooling

In the individual accounts of the sub, it would be shown as an intercompany receivable/payable depending on the cash balance that the sub has with its parent. Whether there is interest and how much depends on the cash pooling conventions. (every group should have a cash pooling agreement). I haven't...
by Leo
11 Mar 2024, 15:05
Forum: IFRS-related topics
Topic: How to distinguish an entity preparing accounts under IFRS 10 para 27-33 or IAS 27 fair value option
Replies: 5
Views: 55

Re: How to distinguish an entity preparing accounts under IFRS 10 para 27-33 or IAS 27 fair value option

Just re-considering question 1, in a situation where a Topco hold one Midco which holds other subs. Even if Topco prepares IFRS 10 para 27-33 can still present only Midco, because the fair value of Midco includes all of its subsidiaries. So for Topco, preparing IFRS 10 para 27-33, or preparing IAS 2...
by Leo
11 Mar 2024, 13:58
Forum: IFRS-related topics
Topic: How to distinguish an entity preparing accounts under IFRS 10 para 27-33 or IAS 27 fair value option
Replies: 5
Views: 55

How to distinguish an entity preparing accounts under IFRS 10 para 27-33 or IAS 27 fair value option

Hi, When looking at the FS of an entity, whether the entity is preparing FS accounts under exemption of investment entity, which allows the entity to show the investment in one line, at fair value under IFRS 9; or an entity which presents separate FS under IAS 27 para 10 with fair value option, and ...
by Leo
08 Mar 2024, 22:55
Forum: IFRS-related topics
Topic: Accounting of preference shares from the holder's perspective
Replies: 3
Views: 384

Re: Accounting of preference shares from the holder's perspective

What I have mentioned earlier, about the accounting in conso was not exactly accurate, because Investment in equity shares is presented as financial assets, current and non-current. And if it's between a parent and a sub, it would be eliminated in conso and not shown in the statements. If it's a ass...