Search found 345 matches

by DJP
21 Mar 2024, 09:43
Forum: IFRS-related topics
Topic: IAS 7 - cashflow
Replies: 5
Views: 50

Re: IAS 7 - cashflow

Hi,

If this is equity settled, why would you show it in the cash flow statement? It should be a movement in reserves shown in the SOCIE.
by DJP
12 Mar 2024, 17:57
Forum: IFRS-related topics
Topic: Cash pooling
Replies: 10
Views: 101

Re: Cash pooling

Good reference, Marek. Thanks!!
by DJP
12 Mar 2024, 11:37
Forum: IFRS-related topics
Topic: Cash pooling
Replies: 10
Views: 101

Re: Cash pooling

If you meet all these criteria, it is a cash equivalent: - short-term nature (i.e. readily convertible to a known amount of cash) - subject to insignificant changes in value - the purpose is to meet short-term cash commitments (i.e. it is used for cash management purposes rather than for investment ...
by DJP
12 Mar 2024, 10:05
Forum: IFRS-related topics
Topic: Cash pooling
Replies: 10
Views: 101

Re: Cash pooling

This may require a few discussions between management and auditors, but you can also make the case that the balances in the cash pool are a cash equivalent, as it meets the definition in IAS 7. If you conclude that it does not meet the definition of a cash equivalent, then these are I/C balances, as...
by DJP
11 Mar 2024, 09:55
Forum: IFRS-related topics
Topic: Time deposits
Replies: 5
Views: 345

Re: Time deposits

It should be in financial assets at amortised cost. Although 'Trade receivables' is also a financial asset, it is a separate category required by IAS 1.
by DJP
06 Mar 2024, 12:29
Forum: IFRS-related topics
Topic: Income Provision for Trade Payables
Replies: 2
Views: 300

Re: Income Provision for Trade Payables

There is no such thing as "positive provisions" for financial liabilities.

You first need to understand why your creditors are not claiming payment for these trade payables. You can only derecognise them if settled or legally released.
by DJP
01 Mar 2024, 19:09
Forum: IFRS-related topics
Topic: Cash cheques accounting under IFRS
Replies: 1
Views: 231

Re: Cash cheques accounting under IFRS

The cheques are merely a payment method. You don't have to disclose them. Similarly, if you have a standing order with a bank (like a direct debit) to make a specific payment every month, you don't have to disclose that either. Your commitment -- the lease liability -- is already recognised and disc...
by DJP
29 Feb 2024, 13:51
Forum: IFRS-related topics
Topic: Covenant breach
Replies: 2
Views: 263

Re: Covenant breach

It should be classified as current because it seems that the entity does not have the right at the end of the reporting period to defer settlement for more than 12 months after the reporting period.
by DJP
28 Feb 2024, 12:20
Forum: IFRS-related topics
Topic: Client Money Question
Replies: 3
Views: 344

Re: Client Money Question

It looks like X controls the account where those funds are deposited. Therefore, X will have to recognise those funds while they are sitting in the 'corporate account'.
by DJP
16 Feb 2024, 11:19
Forum: IFRS-related topics
Topic: Equity method - convertible preference shares
Replies: 10
Views: 408

Re: Equity method - convertible preference shares

I think it really depends on the voting rights you get if you convert the pref shares and accumulated PIK dividends. If those voting rights give you access to the same returns as those of ordinary shareholders, then you should account for the instruments using the equity method, according to paragra...
by DJP
08 Feb 2024, 11:25
Forum: IFRS-related topics
Topic: IFRS 10 & IAS 7
Replies: 1
Views: 108

Re: IFRS 10 & IAS 7

When you dispose of the subsidiary, you are selling its net assets (which will include the borrowing). Assuming you disposed of the sub for cash, you should have a cash inflow in your investing activities in the consolidated cash flow statement.
by DJP
05 Feb 2024, 14:21
Forum: IFRS-related topics
Topic: Preference shares
Replies: 3
Views: 221

Re: Preference shares

I would say financial liability in its entirety. IAS 32 para 26
by DJP
02 Feb 2024, 12:55
Forum: IFRS-related topics
Topic: Financial guarantee
Replies: 19
Views: 987

Re: Financial guarantee

PD (associate's probability of default) x LGD (100% in this case) x shares' maket value
by DJP
02 Feb 2024, 12:43
Forum: IFRS-related topics
Topic: Financial guarantee
Replies: 19
Views: 987

Re: Financial guarantee

The transaction seems to meet the definition of a financial guarantee. When measuring the guarantee, you should take into consideration the probability of default of the associate and the value of the shares (which in this case seems to be your exposure at default). At initial recognition you recogn...
by DJP
02 Feb 2024, 12:05
Forum: IFRS-related topics
Topic: Financial guarantee
Replies: 19
Views: 987

Re: Financial guarantee

"in case of associate's default, the Parent is obliged to sell the stake on the open market and paid off the associate's liability."

Is the parent responsible to pay the whole liability or just to transfer the shares in the sub in case of default?
by DJP
30 Jan 2024, 09:25
Forum: IFRS-related topics
Topic: IFRS 16 - Intercompany lease
Replies: 3
Views: 485

Re: IFRS 16 - Intercompany lease

In the consolidated accounts you only have the building (PPE). All intra-group transactions are eliminated in the consolidation process.
by DJP
26 Jan 2024, 10:42
Forum: IFRS-related topics
Topic: IAS 1.90
Replies: 3
Views: 997

Re: IAS 1.90

Hi Kevin, Yes, the tax effect is usually deferred taxation. But please mind that gains and losses in the income statement may also give rise to deferred taxes. That is because income taxes follow local tax rules and it is often the case that tax accounting rules are different from financial accounti...
by DJP
09 Jan 2024, 17:20
Forum: IFRS-related topics
Topic: Bank Guarantee and Contingent Liability?
Replies: 23
Views: 3912

Re: Bank Guarantee and Contingent Liability?

End of the day we both agree on the entries, and that's what matters :) I still think IAS 37 applies to the performance guarantee because this is an agreement you have with a party other than your customer, and as such you ought to disclose the guarantee as part of your contingent liabilities disclo...
by DJP
08 Jan 2024, 11:01
Forum: IFRS-related topics
Topic: Bank Guarantee and Contingent Liability?
Replies: 23
Views: 3912

Re: Bank Guarantee and Contingent Liability?

While I fully understand your arguments that a performance guarantee could be seen as some sort of penalty to be considered as variable consideration, I am not sure if this would lead to the best accounting treatment. Even though it is possible that a guarantee can be executed, it would make no sens...
by DJP
04 Jan 2024, 16:55
Forum: IFRS-related topics
Topic: Bank Guarantee and Contingent Liability?
Replies: 23
Views: 3912

Re: Bank Guarantee and Contingent Liability?

That is an interesting view, but in my opinion performance guarantees should follow "warranty accounting" and be scoped out of IFRS 15 (based on IFRS 15 BC60).
by DJP
04 Jan 2024, 10:07
Forum: IFRS-related topics
Topic: Bank Guarantee and Contingent Liability?
Replies: 23
Views: 3912

Re: Bank Guarantee and Contingent Liability?

This is the same as in many other performance guarantees. If ABC Co does not deliver or perform under the contract it has with its customer, the customer may activate the guarantee, in which case the bank will pay a certain amount to the customer (defined in the guarantee contract) and claim that am...
by DJP
03 Jan 2024, 11:49
Forum: IFRS-related topics
Topic: Bank Guarantee and Contingent Liability?
Replies: 23
Views: 3912

Re: Bank Guarantee and Contingent Liability?

It is a contingent liability. Contingent liabilities shall be disclosed, unless remote (or immaterial). You may want to disclose the total amount of the bank performance guarantee facilities that are outstanding as at the reporting date.
by DJP
03 Jan 2024, 10:50
Forum: IFRS-related topics
Topic: Bank Guarantee and Contingent Liability?
Replies: 23
Views: 3912

Re: Bank Guarantee and Contingent Liability?

All guarantees are contractual. But I suspect that the guarantee kishant50 is referring to is a performance guarantee, not a financial guarantee. Performance guarantees fall under the scope of IAS 37 (and some potentially under the scope of IFRS 17 for the issuer). Let's indeed wait for kishant50 to...
by DJP
02 Jan 2024, 09:30
Forum: IFRS-related topics
Topic: Bank Guarantee and Contingent Liability?
Replies: 23
Views: 3912

Re: Bank Guarantee and Contingent Liability?

Hi everyone and Happy New Year.

This seems to be a performance guarantee, not a financial guarantee. It is also a contingent liability for XYZ Company and falls under the scope of IAS 37. It should be disclosed, unless remote.
by DJP
21 Dec 2023, 08:57
Forum: IFRS-related topics
Topic: Convertible Promissory Note
Replies: 7
Views: 904

Re: Convertible Promissory Note

Hi TaroSushi, My opinion: 1. This is a compound instrument. Interest payments cannot be avoided and shall be treated as a liability. The Qualified Financing trigger is only accelerating the timing of conversion. This conversion feature shall be treated as equity. 2. The financial liability and equit...
by DJP
19 Dec 2023, 15:13
Forum: IFRS-related topics
Topic: Preference shares - PIK dividends
Replies: 28
Views: 2684

Re: Preference shares - PIK dividends

In the scenario you are hypothesising, arguably the issuer would only deliver a fixed number of shares if their value were lower than the amount of cash. Given that there is a possibility the settlement is made in cash -- which the issuer cannot avoid -- I think this meets the condition of financial...
by DJP
19 Dec 2023, 14:32
Forum: IFRS-related topics
Topic: Preference shares - PIK dividends
Replies: 28
Views: 2684

Re: Preference shares - PIK dividends

No. In my opinion, that would still be a financial liability.
by DJP
19 Dec 2023, 10:58
Forum: IFRS-related topics
Topic: Preference shares - PIK dividends
Replies: 28
Views: 2684

Re: Preference shares - PIK dividends

I think you are confusing things. The assessment depends on who has the option, and what that option is for. If the issuer has the option of avoiding paying cash or another financial asset, it is equity. If the holder has the option of converting the pref shares into a variable number of shares, it ...
by DJP
19 Dec 2023, 10:36
Forum: IFRS-related topics
Topic: Preference shares - PIK dividends
Replies: 28
Views: 2684

Re: Preference shares - PIK dividends

No, that's not correct. If the issuer has the option of avoiding paying cash or another financial asset, then it is equity.