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So I agree very strongly with JRSB and DJP on this one. This is what the staff paper going to the IFRS Interpretations Committee has to say on the exact facts I outlined above: "The entity's right to defer settlement of the loan for at least twelve months after the reporting period is subject t...

I think the key thing is we are in compliance at 31 December, I we believe we will be in compliance at 30 June. I will post later today some relevant documents, but Marek, a question on Para 72A. If the loan (as many do) states that: interest must be paid quarterly, or else the loan becomes current....

Thanks JRSB and Marek for your views! Before I share my view I would be interested to hear if anyone else has any thoughts.

Any thoughts? An entity has a loan with the following contractual terms: (a) the loan is repayable in five years (ie at 31 December 20X6). (b) however, the loan requires a working capital ratio above 1.0 at 31 December 20X1 and above 1.1 at 30 June 20X2 (and at each 30 June thereafter). The loan bec...

Not a question. I just thought this was interesting that in the merger between PSA Group, the French owner of Peugeot and its US-Italian "rival" Fiat Chrysler that has just been announced Fiat are pointing out this is a "merger of equals" and that IFRS forces them to identify an ...

I don't think it is explicitly precluded, and non-IFRS defined subtotals are permitted and discussed at IAS 1.85. There are requirements about how they are developed and presented IAS 1.85B. There is a bit of discussion in the Basis for Conclusions that might be worth reviewing (IAS 1.BC38A - D). Yo...

I never leave.

I see JRSB beat me to it!

The International Accounting Standards Board has been looking closely at this issue. You can see a full discussion here: https://cdn.ifrs.org/-/media/project/goodwill-and-impairment/goodwill-and-impairment-dp-march-2020.pdf But to summarise the arguments for amortisation: Amortisation could be a sim...

Not that I have anything useful to add to the conversation, other than to say yes, this is a known problem with the way paragraph 37 is worded, I think it is supposed to be an expedient, which in theory makes everything balance nicely. So my understanding is that your interpretation is correct Andre...

For me it is the current period from the beginning, but as often is the case, it would be nice if it was clearer., and is probably a matter for judgement. That bring said IAS 8 Para 5 definitions states: Prospective application of a change in accounting policy and of recognising the effect of a chan...

Yeah, I am relying on IFRS 1, but the effect is similar to IFRS 16 transition.

I read IFRS 1 para D9 and D9B as requiring you to go back to 1 September 2017 given that is the beginning of the earliest period for which an entity presents full comparative information under IFRSs. This isn't changed by the effective date of IFRS 16 as far as I am aware. D9B When a first-time adop...

A lease is a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration. The leasee must have the right to control the use of an identified asset which means having the right to direct the use of the asset. Are yo...

I have always read it as from the start of the period in which the estimate is made.

It is a change in estimate IAS 8 Paragraph 32(d) specifically calls out useful life as an example of an estimate. IAS 16, talks about changes in method (IAS 16 paragraph 61), which is generally interpreted to include useful life etc, even though technically the depreciation method would be more to d...

Hey Roger84, Just a couple of clarification questions if I can. I assume we are talking about LESSEE accounting? The person paying to the lease the asset? You might need to be a bit clearer on the terms (or maybe they are clear to others and it is just me). Are you saying that the whole lease paymen...

This may be one of the reasons that as I understand this kind of arrangement is prohibited in many jurisdictions, especially those based on UK Law. Section 136 of UK Companies Act: Prohibition on subsidiary being a member of its holding company (1) Except as provided by this Chapter— (a) a body corp...

I agree with Marek, the lease is remeasured at the date it becomes reasonably certain the purchase option will be exercised? It is pretty much addressed by IFRS 16 Para 40(b). You remeasure the liability including the penalty, this change gets added to the value of the ROU Asset. Effectively you hav...

I knew something was niggling the back of my mind.

For what it's worth, I would have suggested the same approach to question 2 as JRSB. You set the residual value to some trivial value, and just add it to the final depreciation amount. Maybe it is a UK/Commonwealth approach .

I wouldn't celebrate too early it would certainly be worth hearing the thoughts of the others. There could be something about a step down I have missed, or a key point I have glossed over for sure!

This is one of those areas where the Standards are a little frustrating in their lack of guidance, at least when is comes to step-up and step-down acquisitions. While JRSB is absolutely correct that acquisition costs in a Business Combination under IFRS 3 are not capitalised, this was a subsequent a...

You only have one presentation currency. But it is not uncommon to show a second currency for convenience. A recent example I have been reading is Softbank which has a presentation currency of Yen, but also shows USD (https://group.softbank/system/files/pdf/ir/financials/annual_reports/annual-report...

IAS 38 Paras 81-82: An organisation can revalue intangibles only if the fair value can be determined by reference to an active market (Defined in IFRS 13 Appendix A) for that intangible. The key point is that an active market would preclude the need to use a model or indices, as there needs to be an...

Yes, it only applies to items measured at amortised cost.

If I understand the question correctly, LIBOR reform could change the contract for a financial asset or liability that could (without the expedient) trigger derecognition because the standard treats the change effectively as a new contract. The expedient is designed to smooth the transition allowing...

@IFRS2020 this example might help you I think:

https://www.bdo.com.au/en-au/accounting ... der-ifrs-9

This is where you get to apply your professional judgement. Me I generally lean towards capitalisation, as long as it is not egregious. But you really are starting to run up against a materiality issue, does it really matter in the grand scheme of the overall financial statements? PS I know nothing ...