Search found 59 matches

by Porus
20 Mar 2024, 13:53
Forum: IFRS-related topics
Topic: Definition of Gross Margin under IFRS
Replies: 6
Views: 57

Re: Definition of Gross Margin under IFRS

OK, thanks everyone for your inputs!
by Porus
19 Mar 2024, 18:54
Forum: IFRS-related topics
Topic: Definition of Gross Margin under IFRS
Replies: 6
Views: 57

Re: Definition of Gross Margin under IFRS

Thanks JRSB.

Will it be possible under IFRS 18 ?
by Porus
19 Mar 2024, 15:35
Forum: IFRS-related topics
Topic: Definition of Gross Margin under IFRS
Replies: 6
Views: 57

Definition of Gross Margin under IFRS

Hi All, Does IFRS/IAS define the term "Gross Margin" anywhere ? Reason for the query: A Logistics entity spends USD 10 million on its payroll, $ 7M of which relates to employees working in its warehouse/transportation business and $ 3M on Administrative and Sales staff salaries. So also De...
by Porus
09 Jun 2023, 20:15
Forum: IFRS-related topics
Topic: IAS-24 Related party relationship
Replies: 14
Views: 3770

Re: IAS-24 Related party relationship

Already did đź‘Ť
by Porus
09 Jun 2023, 12:33
Forum: IFRS-related topics
Topic: IAS-24 Related party relationship
Replies: 14
Views: 3770

Re: IAS-24 Related party relationship

We don't have a smiley for thumbs up :)
by Porus
08 Jun 2023, 21:27
Forum: IFRS-related topics
Topic: IAS-24 Related party relationship
Replies: 14
Views: 3770

Re: IAS-24 Related party relationship

Most likely yes!
by Porus
08 Jun 2023, 20:54
Forum: IFRS-related topics
Topic: IAS-24 Related party relationship
Replies: 14
Views: 3770

Re: IAS-24 Related party relationship

Yes Marec, the entity receiving the service is smaller than the other joint operator, hence the value of such services is significant in the current year for the recipient. And yes, its true Ketan, they have a tough job drawing the boundary lines, but transfer of resources free-of-charge in such cas...
by Porus
08 Jun 2023, 19:57
Forum: IFRS-related topics
Topic: IAS-24 Related party relationship
Replies: 14
Views: 3770

Re: IAS-24 Related party relationship

"Highly likely" to help each other out, more than two completely unrelated entities - is probably a more appropriate description of what I had in mind. Came across a case recently where one joint operator provided technical staff to their other joint operator for their in-house HR/Accts fu...
by Porus
08 Jun 2023, 18:20
Forum: IFRS-related topics
Topic: Equity component of convertible loan upon settlement.
Replies: 10
Views: 2737

Re: Equity component of convertible loan upon settlement.

Thanks Ketan. No not debt-for-equity swaps, I was referring only to conversion happening on the occurrence of a conversion event before maturity. So, it would appear that, in scenario 2 above, assuming the fair value of the liability component was the same as the carrying amount, nothing would go to...
by Porus
08 Jun 2023, 17:58
Forum: IFRS-related topics
Topic: IAS-24 Related party relationship
Replies: 14
Views: 3770

Re: IAS-24 Related party relationship

Thanks Ketan, I agree. The essence however, of the related party standard (IAS-24) is to disclose relationships and balances where arms length transactions are likely to be overriden ? I think some of the relationships that are scoped out by the standard should be scoped in ? But ofcourse, that is t...
by Porus
08 Jun 2023, 12:24
Forum: IFRS-related topics
Topic: Equity component of convertible loan upon settlement.
Replies: 10
Views: 2737

Re: Equity component of convertible loan upon settlement.

Just realised that the missing debit would be partly or wholly covered over a period of time since inception of the convertible loans, by way of unwinding of the interest, under the effective interest rate method. So the loan balance at the date of the conversion event would be higher than 30,000. I...
by Porus
07 Jun 2023, 21:31
Forum: IFRS-related topics
Topic: IAS-24 Related party relationship
Replies: 14
Views: 3770

IAS-24 Related party relationship

Hi All, IAS-24 para 11 (b) basically states that two joint venturers, simply because they share joint control of a joint venture, are NOT related parties. I guess the same would apply if they were two joint operators, jointly controlling a joint operation. Is this statement in the standard to be tak...
by Porus
07 Jun 2023, 21:26
Forum: IFRS-related topics
Topic: Equity component of convertible loan upon settlement.
Replies: 10
Views: 2737

Re: Equity component of convertible loan upon settlement.

What would be the accounting entry upon extinguishment ? Dr. Convertible Loan 30,000 Dr. ?????????? Cr. Share capital 50,000 There is already 20,000 sitting in equity since Day 1. Or would we pass the following entry ? Dr. Convertible Loan 30,000 Cr. Share capital 30,000 And then move the 20,000 als...
by Porus
07 Jun 2023, 08:49
Forum: IFRS-related topics
Topic: Internally generated intangible asset
Replies: 5
Views: 1653

Re: Internally generated intangible asset

Thanks Ketan, my view is also hovering around that conclusion. I think it fails the "separability" test ? Can such a certification be separated from the entity and sold, transferred, licensed, rented, or exchanged (I think not), or does it arise from legal or contractual rights (I think no...
by Porus
06 Jun 2023, 22:01
Forum: IFRS-related topics
Topic: Internally generated intangible asset
Replies: 5
Views: 1653

Internally generated intangible asset

Hello All! A higher education institution started the process of getting itself accredited with an American higher education board in 2021, with a view to improving its credentials, marketability and consequently its financial performance. Until the first half of 2022, limited time was spent by its ...
by Porus
16 May 2023, 16:48
Forum: IFRS-related topics
Topic: SPPI test
Replies: 4
Views: 982

Re: SPPI test

Thanks a lot Jakob!
by Porus
16 May 2023, 12:04
Forum: IFRS-related topics
Topic: SPPI test
Replies: 4
Views: 982

Re: SPPI test

Thanks Jakob. The 51% return is stipulated in the contract. It is an Islamic Sharia compliant arrangement called "Murabaha". The return is calculated on the basis of Principal ($26M) x Margin (50%) x ~8 years = $102M. As you may be aware, interest is called 'profit' under Islamic Sharia la...
by Porus
15 May 2023, 20:05
Forum: IFRS-related topics
Topic: SPPI test
Replies: 4
Views: 982

SPPI test

Dear All, An Islamic financing arrangement is entered into between a borrower and lender (both legally registered entities), wherein, the term is 8 years, and the rate of "profit" is fixed at 51% per annum, to be paid in a single bullet payment at the end of the financing arrangement, alon...
by Porus
30 Mar 2023, 14:02
Forum: IFRS-related topics
Topic: Employee Benefits and IFRS 9
Replies: 4
Views: 1717

Re: Employee Benefits and IFRS 9

Thanks, yes that would be a good argument for exclusion.
by Porus
16 Mar 2023, 16:34
Forum: IFRS-related topics
Topic: Employee Benefits and IFRS 9
Replies: 4
Views: 1717

Re: Employee Benefits and IFRS 9

Thanks DJP, I am of the same view, that these should be financial liabilities. Just thinking aloud to justify this stance :) ....the IFRIC begins with the specific case of "long service leave", and goes on to refer to "other formal and informal arrangements". So long as these are...
by Porus
15 Mar 2023, 17:48
Forum: IFRS-related topics
Topic: Employee Benefits and IFRS 9
Replies: 4
Views: 1717

Employee Benefits and IFRS 9

Hi All, IFRS 9 para 2.1(c) scopes out the following: employers’ rights and obligations under employee benefit plans, to which IAS 19 Employee Benefits applies. We commonly have accruals relating to employee remuneration and benefits on the balance sheet, relating to staff salary, bonuses, vacation p...
by Porus
13 Mar 2023, 21:01
Forum: IFRS-related topics
Topic: Interest rate risk affecting fair value
Replies: 8
Views: 1964

Re: Interest rate risk affecting fair value

Gentlemen, Read through all your comments/clarifications, thanks. Noted that fair value disclosure is required under IFRS 7.25-29. However, isn't sensitivity analysis disclosure just one step further, once you calculate the fair value of a fixed rate financial instrument - eg. "if the market in...
by Porus
13 Mar 2023, 09:56
Forum: IFRS-related topics
Topic: Interest rate risk affecting fair value
Replies: 8
Views: 1964

Re: Interest rate risk affecting fair value

Got it Jakob and DJP, thanks. Let's say we do not have any FVTPL assets/liabilities, no FVOCI debt financial assets and no derivatives. Only fixed-rate loans (both assets and liabilities) carried at amortised cost. For disclosure in the financial statements, could one possibly compute a sensitivity ...
by Porus
13 Mar 2023, 06:40
Forum: IFRS-related topics
Topic: Interest rate risk affecting fair value
Replies: 8
Views: 1964

Interest rate risk affecting fair value

Hi All, IFRS 7 defines "Interest rate risk" as: "The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates." It is no doubt clear that in the case of variable interest rate loan, the future cashflows wil...
by Porus
10 Mar 2023, 20:15
Forum: IFRS-related topics
Topic: Flow rate calculations for IFRS 9 ECL provisioning
Replies: 5
Views: 1571

Re: Flow rate calculations for IFRS 9 ECL provisioning

Thanks Jakob, will go through the KPMG paper as well.
by Porus
10 Mar 2023, 17:53
Forum: IFRS-related topics
Topic: Flow rate calculations for IFRS 9 ECL provisioning
Replies: 5
Views: 1571

Flow rate calculations for IFRS 9 ECL provisioning

Hi All, Let's say we have a receivable of $100 million in the 0-90 days age bucket as at the reporting date. Post reporting date, we have collected $60 million, so now only $40 million is outstanding. When we calculate ECL provision under IFRS 9 using the flow-rate approach, let's say we get a 5% pr...
by Porus
15 Dec 2022, 08:55
Forum: IFRS-related topics
Topic: Trust Accounts
Replies: 2
Views: 1596

Re: Trust Accounts

Thanks, will take a look at related SORPs.
by Porus
14 Dec 2022, 07:56
Forum: IFRS-related topics
Topic: Trust Accounts
Replies: 2
Views: 1596

Trust Accounts

Dear All, Appreciate your views on the following question: A Trust holds some investments in quoted debt/equity funds (all Level1 valuation) in favour of the beneficiaries of the Trust. When the Settlor of the Trust contributes some money or some non-monetary assets to the Trust, would such contribu...