Search found 234 matches
- 09 Dec 2020, 16:50
- Forum: IFRS-related topics
- Topic: Badwill arising from a transfer of a company within a group?
- Replies: 25
- Views: 5718
Re: Badwill arising from a transfer of a company within a group?
Interesting discussion, to remove confirmation bias I thought I would use google to get a sense of usage of the terms. To give you a sense of scale of the use of "negative goodwill" and "badwill" here is analysis of usage in texts from 1900 - 2020: Goodwill 2.png The peak for &qu...
- 09 Dec 2020, 12:07
- Forum: IFRS-related topics
- Topic: IFRS-16
- Replies: 3
- Views: 1319
Re: IFRS-16
It sounds like a very unfortunate situation, and one that would not be expected to happen in many jurisdictions. Therefore I suspect you will struggle to find clear advice in IFRS 16, as it assumes that contracts will be followed, not retrospectively and unilaterally changed. (Funnily enough on a pe...
- 08 Dec 2020, 13:26
- Forum: IFRS-related topics
- Topic: Inventory Sale and repurchase...de-recognition?
- Replies: 52
- Views: 37314
Re: Inventory Sale and repurchase...de-recognition?
I missed the bit about GT, where did you see that?
- 08 Dec 2020, 12:55
- Forum: IFRS-related topics
- Topic: Inventory Sale and repurchase...de-recognition?
- Replies: 52
- Views: 37314
Re: Inventory Sale and repurchase...de-recognition?
I have continued to monitor this company. Nothing particularly interesting, but a comment in their latest press release amused me: the Company is in the process of agreeing an on-going collaboration with one of the Big Four[6] that is highly active in the development of International Financial Repor...
- 08 Dec 2020, 11:10
- Forum: IFRS-related topics
- Topic: IAS 37 improvements?
- Replies: 6
- Views: 1632
Re: IAS 37 improvements?
I think it could be useful investor information, more if it identified outliers, entities that are using significantly higher discount rates that could understate the value of the liability. Like a lot of these things exposure to daylight would force entities to... (how do I put this politely)... pu...
- 08 Dec 2020, 10:50
- Forum: IFRS-related topics
- Topic: IAS 37 improvements?
- Replies: 6
- Views: 1632
Re: IAS 37 improvements?
I am with you on this one JRSB, I mean the standard has problems, which is why the IASB has added Provisions to the Standard Setting Agenda (https://www.ifrs.org/projects/work-plan/provisions/), but I would have thought where material the Standards already support disclosure. Interestingly the imple...
- 07 Dec 2020, 11:37
- Forum: IFRS-related topics
- Topic: Accounting of equity settled share based payment in consolidation
- Replies: 10
- Views: 2482
Re: Accounting of equity settled share based payment in consolidation
Just to be clear, in the situation you are considering, the Parent (Shareholder) is rewarding the employees of Subsidiary (investee) by giving them some of its shares (investment) in the Subsidiary, effectively reducing it's investment? This is as opposed to the more common, Parent is awarding its o...
- 04 Dec 2020, 09:14
- Forum: IFRS-related topics
- Topic: Loan Vs Receivables
- Replies: 8
- Views: 2100
Re: Loan Vs Receivables
I was in the process of writing something similar, but @DJP has put it much better. I agree with their view, this is firstly a legal question. In terms of receivables vs loans, in the good old days it came down to the nature of the agreement. A loan was a formal contract I X lend you Y a set amount ...
- 03 Dec 2020, 18:43
- Forum: After hours
- Topic: 2 years | 1,000 members | 3,000 posts
- Replies: 5
- Views: 14881
Re: 2 years | 1,000 members | 3,000 posts
Congratulations Marek, that is worth celebrating and you deserve to be proud of what you have built!
- 03 Dec 2020, 17:28
- Forum: General accounting and financial reporting discussion
- Topic: Accrual for audit fees
- Replies: 24
- Views: 17535
Re: Accrual for audit fees
It's auditors all the way down
- 03 Dec 2020, 13:26
- Forum: General accounting and financial reporting discussion
- Topic: Accrual for audit fees
- Replies: 24
- Views: 17535
Re: Accrual for audit fees
So KPMG UK produces an annual report that complies with IFRS Standards (who knew right!?!). So this is their policy: The majority of the group’s revenue is derived from contracts where the consideration is based on time and materials. For these contracts the group satisfies performance obligations o...
- 03 Dec 2020, 12:54
- Forum: IFRS-related topics
- Topic: IFRS 15 variable considerations
- Replies: 10
- Views: 2254
Re: IFRS 15 variable considerations
I agree with Marek, here we have to assume surely that the most likely outcome is they will pay on time. That bias towards being conservative would push us to ignore for now the possibility of late payment I would think.
- 03 Dec 2020, 11:45
- Forum: IFRS-related topics
- Topic: IFRS 15 variable considerations
- Replies: 10
- Views: 2254
Re: IFRS 15 variable considerations
As you note and Marek points out rather than providing an exemption, IFRS 15 explicitly requires you to take into account penalty clauses (IFRS15.51). The key issue is that constraint on estimating variable consideration, effectively rather than ignoring the risk of penalty you should give it additi...
- 01 Dec 2020, 21:13
- Forum: IFRS-related topics
- Topic: Virtually certain (contingent) asset becomes probable only
- Replies: 7
- Views: 5121
Re: Virtually certain (contingent) asset becomes probable only
I would say that contractual assets can also be disputed before the court. But the mere fact that we looked into IAS 37 in the first place implies that this is non-contractual, otherwise it wouldn't be in the scope of IAS 37 in the first place, however fiercely disputed between parties. Do you agre...
- 01 Dec 2020, 19:02
- Forum: General accounting and financial reporting discussion
- Topic: Accrual for audit fees
- Replies: 24
- Views: 17535
Re: Accrual for audit fees
As you note this not really an IFRS question in some ways. I can't find a reference to disclosure of Audit Fees in the current IFRS Standards (please correct me if I am wrong). In the UK and Australia this is a statutory requirement that this information is included in the Financial Reports. The ICA...
- 01 Dec 2020, 18:16
- Forum: IFRS-related topics
- Topic: Virtually certain (contingent) asset becomes probable only
- Replies: 7
- Views: 5121
Re: Virtually certain (contingent) asset becomes probable only
Interesting. IAS37.33 is pretty clear, when realisation of income becomes virtually certain, the related asset is not a contingent asset and recognition is appropriate. So the IAS37.35 requirements for continual reassessment wouldn't apply. It is presumably an Intangible Asset as opposed to a Financ...
- 01 Dec 2020, 14:41
- Forum: IFRS-related topics
- Topic: Current or non-current loan
- Replies: 55
- Views: 24358
Re: Current or non-current loan
Well the IFRIC has met. Their conclusion seems to be summarised as "okay the staff are right, that is what the amendment will mean, BUT they are generally "not comfortable with it"". I am pleased that many of the comments raised in this comment thread were raised by members of th...
- 01 Dec 2020, 11:28
- Forum: General accounting and financial reporting discussion
- Topic: Accrual for audit fees
- Replies: 24
- Views: 17535
Re: Accrual for audit fees
I realise we have moved away for the original question but do we think audit revenue meet the IFRS 15 criteria for recognition overtime, and if so which of the criteria? Performance obligation is satisfied over time if one of the criteria given in IFRS 15.35 is met: The customer simultaneously recei...
- 29 Nov 2020, 20:21
- Forum: IFRS-related topics
- Topic: Financial Instruments with Characteristics of Equity
- Replies: 57
- Views: 52892
Re: Financial Instruments with Characteristics of Equity
As one final, unhelpful aside, in trying to get to the bottom of this I found this comment in a KPMG review of the current FICE project (emphasis added): "In a change to current IAS 32 requirements, the timing and the amount features would be applied consistently, regardless of whether a contra...
- 29 Nov 2020, 19:59
- Forum: IFRS-related topics
- Topic: Financial Instruments with Characteristics of Equity
- Replies: 57
- Views: 52892
Re: Financial Instruments with Characteristics of Equity
I apologize I mislead @marea on this one. I agree only A and B relate to puttable instruments I knew that the whole liquidation thing was still niggling the back of my mind. It may also be worth looking at this document too: https://www.grantthornton.global/globalassets/1.-member-firms/global/insigh...
- 29 Nov 2020, 10:12
- Forum: IFRS-related topics
- Topic: Guidance - Invt in Associate - Equity Accounting
- Replies: 10
- Views: 2425
- 29 Nov 2020, 09:58
- Forum: IFRS-related topics
- Topic: Guidance - Invt in Associate - Equity Accounting
- Replies: 10
- Views: 2425
Re: Guidance - Invt in Associate - Equity Accounting
Joint control is defined at IFRS 11.7 (emphasis added): Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. As you describe it, it would appear tha...
- 29 Nov 2020, 09:38
- Forum: IFRS-related topics
- Topic: Financial Instruments with Characteristics of Equity
- Replies: 57
- Views: 52892
Re: Financial Instruments with Characteristics of Equity
If the only condition is that the dividend only has to be paid before the ordinary shareholders get a dividend it is deemed to be discretionary. The organization has the discretion of if and when to pay a dividend because it has discretion as to whether or not to pay an ordinary dividend. This is th...
- 28 Nov 2020, 23:14
- Forum: IFRS-related topics
- Topic: Current or non-current loan
- Replies: 55
- Views: 24358
Re: Current or non-current loan
Oh, it took me ages, but I found a version of the smoke detector example (actually it was smoke filters). It is on page 26 of this document: https://www.ifrs.org/-/media/feature/meetings/2016/october/iasb/conceptual-framework/ap10c-testing-proposed-asset-liability-definitions-illustrative-examples.p...
- 28 Nov 2020, 23:04
- Forum: IFRS-related topics
- Topic: Financial Instruments with Characteristics of Equity
- Replies: 57
- Views: 52892
Re: Financial Instruments with Characteristics of Equity
PS my previous post was taken from ICAEW (UK's leading accounting professional body) I had come across the same document when looking at this, but it hinges on the dividend being "non-discretionary" which is not necessarily the same as cumulative? https://www.icaew.com/technical/financial...
- 28 Nov 2020, 22:35
- Forum: IFRS-related topics
- Topic: Current or non-current loan
- Replies: 55
- Views: 24358
Re: Current or non-current loan
I guess we should take heart from the fact the question is going to the IFRIC, as this indicates that there is not a clear answer, otherwise it would not have got as far as an agenda paper. Personally I think it feels wrong to classify as a current liability, this seems to me to misrepresent the und...
- 28 Nov 2020, 22:18
- Forum: IFRS-related topics
- Topic: Financial Instruments with Characteristics of Equity
- Replies: 57
- Views: 52892
Re: Financial Instruments with Characteristics of Equity
I have a slightly different view I am afraid, but I am concerned I may not fully understand the terms. Based on what I understand I believe the terms of the dividend do not make it a liability. The fact it is cumulative is not important, what is important is can the entity avoid paying it. From what...
- 27 Nov 2020, 21:21
- Forum: IFRS-related topics
- Topic: Financial Instruments with Characteristics of Equity
- Replies: 57
- Views: 52892
Re: Financial Instruments with Characteristics of Equity
If the company liquidates do the preference share get any cumulative dividend and/or capital return ahead of the ordinary shareholders?
- 27 Nov 2020, 17:02
- Forum: IFRS-related topics
- Topic: Current or non-current loan
- Replies: 55
- Views: 24358
Re: Current or non-current loan
Entity A takes out a loan on 1 June 20X1. A covenant requires the Entity to keep its working capital ratio above 1.1, but this will be tested on 30 June 20X2 for the first time. It's 31 December 20X1 and the capital ratio stands at 1.05 but the Entity expects it to rise to above 1.1 until 30 June 2...
- 27 Nov 2020, 16:34
- Forum: IFRS-related topics
- Topic: Current or non-current loan
- Replies: 55
- Views: 24358
Re: Current or non-current loan
I don't share this view. The facts at the reporting date matter, not when the repercussion will happen in the future - this a overarching concept across IFRS, so I don't think this is what IASB had in mind when they drafted this specific requirement. I think you have missed what I am trying to say,...