Search found 59 matches

by nauman
16 Jun 2020, 12:26
Forum: IFRS-related topics
Topic: Transfer of assets to a wholly owned subsidiary
Replies: 14
Views: 85

Re: Transfer of assets to a wholly owned subsidiary

Yes the asset(s) are investment properties, carried at fair value.
by nauman
16 Jun 2020, 11:27
Forum: IFRS-related topics
Topic: Transfer of assets to a wholly owned subsidiary
Replies: 14
Views: 85

Re: Transfer of assets to a wholly owned subsidiary

The question of restatement of comparatives was more from business combinations under common control, since each real estate asset qualifies as a separate business on its own.
by nauman
16 Jun 2020, 11:25
Forum: IFRS-related topics
Topic: Transfer of assets to a wholly owned subsidiary
Replies: 14
Views: 85

Re: Transfer of assets to a wholly owned subsidiary

Transferred as shareholder contribution, which is why I do not understand where the held for sale/discontinued operations classification came from. Well those assets are commercial real estate properties, which is the core business of that particular sub group. After these transfers the HoldCo will ...
by nauman
16 Jun 2020, 11:00
Forum: After hours
Topic: article on IFRIC23
Replies: 15
Views: 266

Re: article on IFRIC23

the-accountant.net

I originally started it couple of years ago but then sort of left it (way too many work commitments) but during the lock down I contemplating giving it another go. Let's see how long that will last.
by nauman
16 Jun 2020, 10:05
Forum: After hours
Topic: article on IFRIC23
Replies: 15
Views: 266

Re: article on IFRIC23

I have a small accounting blog that I operate (purely as a hobby). If you want, you can post it there or you can simply post it on LinkedIn.
by nauman
16 Jun 2020, 10:01
Forum: IFRS-related topics
Topic: Transfer of assets to a wholly owned subsidiary
Replies: 14
Views: 85

Transfer of assets to a wholly owned subsidiary

We have a sub group within our business which has a Holding company called HoldCo. The HoldCo had bunch of real estate assets which have now been transferred to their respective legal entities. My question is on the stand alone financial statements for the HoldCo. I am of the opinion that we simply ...
by nauman
16 Jun 2020, 09:53
Forum: IFRS-related topics
Topic: IAS 2 inventories - Letter of Credit
Replies: 11
Views: 101

Re: IAS 2 inventories - Letter of Credit

Sorry edited my reply to make it more specific. As I mentioned, once the bank makes the payment the amount to be recovered from purchasing entity becomes part of the main credit facility and interest is charged. This of course is not allocated to or forms part of the cost of inventory.
by nauman
16 Jun 2020, 09:43
Forum: IFRS-related topics
Topic: IAS 2 inventories - Letter of Credit
Replies: 11
Views: 101

Re: IAS 2 inventories - Letter of Credit

It is a bit of a grey area but in your case, I would call it directly attributable to procurement of goods so would include the fee as part of cost of inventory. Usually, when I have dealt with letter of credits (as a procuring entity), the bank does not charge separate fee for each LC issued and LC...
by nauman
07 Jun 2020, 10:33
Forum: IFRS-related topics
Topic: Net equity method for an investment in associate
Replies: 2
Views: 62

Re: Net equity method for an investment in associate

Even Joint Ventures and Associates are required to have consistent accounting policies. You will need to make adjustments to your share of profit/equity pickup to reflect the accounting for an associate as if it had followed the same accounting policies as your Group. However, you can always take a ...
by nauman
30 May 2020, 11:55
Forum: IFRS-related topics
Topic: Few IFRS16 related Questions
Replies: 9
Views: 253

Re: Few IFRS16 related Questions

Spot on, the one at the original spot rate (at the time of original lease recognition) and the second one at the time of lease modification.
by nauman
29 May 2020, 20:27
Forum: IFRS-related topics
Topic: Few IFRS16 related Questions
Replies: 9
Views: 253

Re: Few IFRS16 related Questions

Regarding the last question, we have lease liabilities in developing markets where the lease payments are in USD. I am not sure what your question is but I will tell you what we do and that has worked for us. For these lease payments, we prepare DCF in USD and use a USD specific discount rate to arr...
by nauman
28 May 2020, 19:45
Forum: General accounting and financial reporting discussion
Topic: The cost constraint on useful financial reporting
Replies: 9
Views: 850

Re: The cost constraint on useful financial reporting

Can you give a specific example where compliance with IFRS requires significant additional cost?
by nauman
28 May 2020, 19:40
Forum: General accounting and financial reporting discussion
Topic: IFRS Adoption and Audit Opinion
Replies: 14
Views: 276

Re: IFRS Adoption and Audit Opinion

If preparing financial statements under IFRS is not a legal requirement as per corporate law governing the entity, you can prepare special purpose financial statements and get those audited. I am no longer in audit profession but the auditors will be able to give a clear opinion (under a different a...
by nauman
28 May 2020, 19:35
Forum: After hours
Topic: Thoughts on a book to read during this time
Replies: 6
Views: 196

Re: Thoughts on a book to read during this time

Read that last year and to be honest it didn’t really click with me. I found Mr. Jordan to be too self righteous and over the top with the biblical stuff. The book could have easily been 1/10th its size but he just went on and on and on.

Started David and Goliath by Malcolm Gladwell today.
by nauman
28 May 2020, 17:52
Forum: General accounting and financial reporting discussion
Topic: Deferred tax
Replies: 14
Views: 411

Re: Deferred tax

There is no such thing as investment in a subsidiary in consolidated financial statements. What we have are the net assets of the subsidiary and you would compare that against the tax base of the net assets (which should be reduced by amount of loss or at the very least the tax loss of the subsidiar...
by nauman
28 May 2020, 16:41
Forum: IFRS-related topics
Topic: IFRS2
Replies: 5
Views: 94

Re: IFRS2

I don't believe this would fall under IFRS 2 as the shares are purchased at fair value by the employee and not granted to them as compensation. From an IFRS perspective this wouldn't even warrant a disclosure but from corporate governance stand point you might need to disclose that (depends on the j...
by nauman
28 May 2020, 16:33
Forum: General accounting and financial reporting discussion
Topic: Deferred tax
Replies: 14
Views: 411

Re: Deferred tax

I just read through the bit about outside temporary differences. I understand the bit about temporary differences arising because of impairment of goodwill and investment in subsidiary (in consolidated and separate financial statements, respectively) but for the consolidated financial statements wou...
by nauman
28 May 2020, 16:20
Forum: IFRS-related topics
Topic: Bond arrangement
Replies: 19
Views: 349

Re: Bond arrangement

What is the commercial rationale behind this transaction from entity A's perspective? Surely, the 10% of fee income would be significantly less than the payout at the end of 20 years (500M EUR/GBP). If the instrument is credit impaired, shouldn't that be the case from entity B's perspective as well ...
by nauman
28 May 2020, 16:16
Forum: After hours
Topic: Thoughts on a book to read during this time
Replies: 6
Views: 196

Re: Thoughts on a book to read during this time

I don't really "read" these books, only do that if there is a really good one. My modus operandi is audio books. I have audible subscription and you get one credit per month and listen to audio books whenever I get a chance. Before the lock down, it used to be during my gym workouts, drive to work, ...
by nauman
28 May 2020, 08:48
Forum: After hours
Topic: Thoughts on a book to read during this time
Replies: 6
Views: 196

Re: Thoughts on a book to read during this time

I aim to finish at least one book every month. Few good ones that I have read over past few months are: The Four: Hidden DNA of Amazon, Apple, Facebook and Google by Scott Galloway Hit Refresh: The Quest to Rediscover Microsoft's Soul and Image a Better Future for Everyone by Satya Nadella Shoe Dog:...
by nauman
28 May 2020, 08:27
Forum: General accounting and financial reporting discussion
Topic: Deferred tax
Replies: 14
Views: 411

Re: Deferred tax

Marek Muc wrote: 27 May 2020, 22:37 great story! my experience is that only accountants understand deferred tax, even tax advisors usually know very little, if anything at all
That's because it is simply an accounting adjustment. Has very little to do with tax legislation.
by nauman
28 May 2020, 08:24
Forum: IFRS-related topics
Topic: Bond arrangement
Replies: 19
Views: 349

Re: Bond arrangement

Is entity B going to recognize a loss when it transfers back the bond to entity A for nil consideration? Since you mention that the agreement no longer has the repo clause, does that mean there is a risk that entity B would keep the bond and en-cash the principal and interest at the end of the term?
by nauman
27 May 2020, 21:36
Forum: IFRS-related topics
Topic: Bond arrangement
Replies: 19
Views: 349

Re: Bond arrangement

I am pretty sure you wouldn’t record current value at the best estimate of 10% fee to be paid to A. That would be a contingent consideration.
by nauman
27 May 2020, 14:34
Forum: IFRS-related topics
Topic: Substantial Debt restructuring - IFRS 9
Replies: 10
Views: 240

Re: Substantial Debt restructuring - IFRS 9

ifrs scotty wrote: 27 May 2020, 13:05 I was thinking more to use market rate interest to calculate the PV
You can use market discount rate as well but in my experience it is always better to use entity specific rate as determining what an appropriate market interest rate is not as easy as it sounds.
by nauman
27 May 2020, 14:31
Forum: IFRS-related topics
Topic: Bond arrangement
Replies: 19
Views: 349

Re: Bond arrangement

In developments, the arrangement has been revised (and perhaps simplified) such that Entity B acquires full ownership and title to the bond, and the only condition is to pay 10% of future profits to Entity A in exchange. Just to be clear, is the entity B acquiring the bond without paying anything? ...
by nauman
26 May 2020, 22:47
Forum: General accounting and financial reporting discussion
Topic: Deferred tax
Replies: 14
Views: 411

Re: Deferred tax

Hi, This is the only area where I lack lots of expertise. Can someone please explain me, if there are any chances of a current tax to become deferred tax asset or a liability? Txs. In layman terms, its the other way around, deferred tax liability and deferred tax asset eventually become current tax...
by nauman
26 May 2020, 22:32
Forum: After hours
Topic: Hello folks
Replies: 5
Views: 146

Hello folks

I have been looking for a place like this for ages. In fact I couldn’t find one earlier so I created my own forum a few years ago (but couldn’t put in the hours so closed it). Anyway, I am a Chartered Accountant (ACA) and a CFA Charter holder. I used to work with PwC once upon a time and now work as...
by nauman
26 May 2020, 22:15
Forum: IFRS-related topics
Topic: Bond arrangement
Replies: 19
Views: 349

Re: Bond arrangement

I am not sure if legal ownership of the bond is of any value here since entity B does not have rights to any future economic benefits / cash flows associated with the financial asset. The way I see it, in substance A still owns the bond. Second, as already raised by Marc, I am not sure how entity B ...
by nauman
26 May 2020, 22:04
Forum: IFRS-related topics
Topic: Substantial Debt restructuring - IFRS 9
Replies: 10
Views: 240

Re: Substantial Debt restructuring - IFRS 9

Did you calculate the present value of the loan using company’s cost of debt to determine its present value and unwinding of interest on the loan?