Perhaps you need to calculate an effective interest rate based on a cash flow projection like this?
Q0: 180
Q1: (8.18)
Q2: (8.18) + (2.67)
Q3 thru Q22: (8.18)
The straight-line method might be inappropriate because the principal is considerably different at the 1st quarter and the 22nd quarter.
Search found 328 matches
- 03 Jan 2021, 04:57
- Forum: IFRS-related topics
- Topic: "Variable" interest bearing financial instruments
- Replies: 13
- Views: 3770
- 02 Jan 2021, 10:23
- Forum: IFRS-related topics
- Topic: Acquisition through debt assignment
- Replies: 20
- Views: 5071
Re: Acquisition through debt assignment
IFRIC 19 applies to your case because the "debt equity swap" takes place on the date of the debt assignment in the accounting sense. You need an account to credit when the bank loans go away, and it is the only economically reasonable interpretation to assume that a certain form of equity ...
- 02 Jan 2021, 01:03
- Forum: IFRS-related topics
- Topic: Capitalising movement in FV liability
- Replies: 16
- Views: 4014
Re: Capitalising movement in FV liability
how do you account for contingent consideration relating to purchases of PP&E/intangibles under your policy? Initially measure PP&E/intangibles using a best estimate and subsequently restate the carrying amount when the estimate changes (if material; otherwise and usually just recognize the...
- 01 Jan 2021, 20:50
- Forum: IFRS-related topics
- Topic: Capitalising movement in FV liability
- Replies: 16
- Views: 4014
Re: Capitalising movement in FV liability
Btw, US GAAP has a detailed guideline under ASC 230-10-45 about the presentation of contingent considerations in the cash flow statements, which I found helpful when developing an accounting policy for income statements under IFRS
- 01 Jan 2021, 20:09
- Forum: IFRS-related topics
- Topic: Capitalising movement in FV liability
- Replies: 16
- Views: 4014
Re: Capitalising movement in FV liability
Should a contingent consideration arising from an operating activity (ie not a business combination) be measured at FVTPL? IAS 37 sounds more relevant to such a case than does IFRS 9, and probably we can follow the guidelines of IAS 8 in the subsequent changes in the estimate of the provisions, can'...
- 31 Dec 2020, 14:40
- Forum: IFRS-related topics
- Topic: IFRS-16 (leasor leasee accounting)
- Replies: 4
- Views: 1811
Re: IFRS-16 (leasor leasee accounting)
Under the finance lease accounting, a lessor's investment in a lease is supposed to be zero at the end of the lease term, so no entry will be necessary. From the lessee's point of view, the leased asset is supposed to be depreciated over the useful life of the asset rather than the lease term (see I...
- 31 Dec 2020, 09:26
- Forum: IFRS-related topics
- Topic: Acquisition through debt assignment
- Replies: 20
- Views: 5071
Re: Acquisition through debt assignment
Can I assume that X is contractually obligated to issue and assign new shares to Y as of the reporting date? If so, I think X should account for the obligation as equity and apply the "debt for equity swap" accounting in accordance with IFRIC 19. Otherwise, I'm not sure if we can account f...
- 30 Dec 2020, 00:14
- Forum: After hours
- Topic: What we are playing during the holidays
- Replies: 8
- Views: 19444
Re: What we are playing during the holidays
Playing discounted old games too I finished Assassin's Creed IV recently and it was great!
- 29 Dec 2020, 23:47
- Forum: IFRS-related topics
- Topic: Deferred tax as 'current' asset
- Replies: 11
- Views: 3676
Re: Deferred tax as 'current' asset
Could be just for simplicity, because US GAAP recently adopted this style for that reason: https://www.fasb.org/cs/Satellite?c=Document_C&cid=1176167636650&d=Touch&pagename=FASB%2FDocument_C%2FDocumentPage I remember this event clearly because this was the only one recent standard change...
- 28 Dec 2020, 14:15
- Forum: IFRS-related topics
- Topic: IAS 32 Financial Instruments: Presentations
- Replies: 9
- Views: 2380
Re: IAS 32 Financial Instruments: Presentations
Several years ago, I heard of an arrangement where an entity issued convertible bonds at the public market and at the same time purchased options that allowed the issuer to buy back all the newly issued shares at maturity. This combination effectively worked like straight bonds but could be advantag...
- 27 Dec 2020, 02:25
- Forum: IFRS-related topics
- Topic: Goodwill amortization & deferred taxes
- Replies: 11
- Views: 3670
Re: Goodwill amortization & deferred taxes
I've seen in practice a similar situation where goodwill was amortized for the tax purpose at the separate FS level and related deferred taxes were recognized. But that was under US GAAP, though I guess similar accounting is expected under IFRS too
- 26 Dec 2020, 07:28
- Forum: IFRS-related topics
- Topic: IFRS15 - Cloud storage
- Replies: 5
- Views: 1755
Re: IFRS15 - Cloud storage
Hi, I think you should usually recognize revenue corresponding to the period from December 15 to the closing date in your example case. Para B16 doesn't mean you can delay the recognition until invoice dates, but just allows you to use invoice prices for measurements instead of following the complex...
- 21 Dec 2020, 12:47
- Forum: IFRS-related topics
- Topic: Conceptual Framework - Capitalisation of a Cellphone
- Replies: 15
- Views: 4280
Re: Conceptual Framework - Capitalisation of a Cellphone
Yep, I was just going to cite the para 5! But I think the exact border between IAS 16 and 38 is actually vague and in practice we need judgements to apply IAS 38 to tangible things.
- 21 Dec 2020, 00:42
- Forum: IFRS-related topics
- Topic: Attributing Benefit to Periods of Service (IAS 19)
- Replies: 7
- Views: 1952
- 20 Dec 2020, 03:28
- Forum: IFRS-related topics
- Topic: Conceptual Framework - Capitalisation of a Cellphone
- Replies: 15
- Views: 4280
Re: Conceptual Framework - Capitalisation of a Cellphone
I agree cellphones meet the definition of an asset under CF, but they will not show up on balance sheets as an asset if they are leased under a pure variable lease contract (IFRS 16) or if they are procured for research, training, promotion, etc. purposes (IAS 38). This kind of tricks often makes me...
- 17 Dec 2020, 03:46
- Forum: IFRS-related topics
- Topic: Attributing Benefit to Periods of Service (IAS 19)
- Replies: 7
- Views: 1952
Re: Attributing Benefit to Periods of Service (IAS 19)
Getting confused too in particular about the relationship between the IFRIC decision and para 72 :? Para 72 says the obligations have to be also allocated to the periods before "vesting" conditions are met. So in your Poland case, because even 20-year-old employees may become eligible for ...
- 15 Dec 2020, 23:53
- Forum: IFRS-related topics
- Topic: Attributing Benefit to Periods of Service (IAS 19)
- Replies: 7
- Views: 1952
Re: Attributing Benefit to Periods of Service (IAS 19)
I think in the agenda decision case, the employees are entitled to receive payments in proportion of their service years up to 16, so the obligations are spread over the 16 years. It sounds like in your Poland case, employees receive the monthly salary irrespective of their service years, so the obl...
- 13 Dec 2020, 03:52
- Forum: IFRS-related topics
- Topic: Designated FCTOVI
- Replies: 7
- Views: 2052
Re: Designated FCTOVI
That in substance breaches IFRS 9’s requirements not to recycle any remeasurement gain/loss from OCI to PL I’m afraid.
- 07 Dec 2020, 14:41
- Forum: IFRS-related topics
- Topic: IAS 37 improvements?
- Replies: 6
- Views: 1668
Re: IAS 37 improvements?
I would be likely incentivized to interpret a provision as a contingent liability to avoid extensive disclosure requirements
Seriously speaking though it seems unnatural to me too that IAS 37.85 doesn’t require material assumption disclosure other than future events.
Seriously speaking though it seems unnatural to me too that IAS 37.85 doesn’t require material assumption disclosure other than future events.
- 06 Dec 2020, 06:31
- Forum: IFRS-related topics
- Topic: Write off to NRV (stock test)
- Replies: 3
- Views: 1165
Re: Write off to NRV (stock test)
IAS 2.29 describes some situations where grouping items is more appropriate than evaluating item by item, but other than that, IFRS is silent on how we should actually arrive at certain NRVs. I’ve seen several approaches in practice such as (1) grouping similar items, (2) applying agreed prices with...
- 04 Dec 2020, 08:24
- Forum: IFRS-related topics
- Topic: Market cap of an entity as impairment indication
- Replies: 5
- Views: 1566
Re: Market cap of an entity as impairment indication
It’s usually supposed to be very difficult to justify a carrying amount considerably higher than a observable market price (level 1 input!), but, yeah, I do have an experience to conclude the market was wrong based on internal information when testing impairment of an equity-accounted investment in ...
- 04 Dec 2020, 06:27
- Forum: After hours
- Topic: 2 years | 1,000 members | 3,000 posts
- Replies: 5
- Views: 15091
Re: 2 years | 1,000 members | 3,000 posts
Congrats, Marek! I am still taking a lot of insights from the discussions and happy to be able to give some back to the forum
- 01 Dec 2020, 11:17
- Forum: General accounting and financial reporting discussion
- Topic: Accrual for audit fees
- Replies: 24
- Views: 18112
Re: Accrual for audit fees
That’s a good point too. I’m getting interested in the other point of view: how does the auditor identify performance obligations and allocate the transaction price in accordance with IFRS 15?
- 01 Dec 2020, 00:49
- Forum: IFRS-related topics
- Topic: Financial Instruments with Characteristics of Equity
- Replies: 57
- Views: 53271
Re: Financial Instruments with Characteristics of Equity
I think the unpaid cumulative dividends are not recognized as a liability until the issuer declares to pay some or all of them. But the cumulative amount has to be disclosed in accordance with IAS 1.137, and the accrued amounts continue to limit the EPS of common shares every year. So, they are neve...
- 30 Nov 2020, 00:50
- Forum: General accounting and financial reporting discussion
- Topic: Accrual for audit fees
- Replies: 24
- Views: 18112
Re: Accrual for audit fees
Interesting topic :) I’ve seen in practice the $100 is allocated to the calendar year but that should be a practical shortcut. Also, I see some gaap matters because in my country, the $100 is deductible for the tax purpose when the opinion is issued. Under IFRS, the audit fee should be allocated to ...
- 29 Nov 2020, 10:10
- Forum: IFRS-related topics
- Topic: Guidance - Invt in Associate - Equity Accounting
- Replies: 10
- Views: 2462
Re: Guidance - Invt in Associate - Equity Accounting
IFRS 11.B10 says deadlock resolution clauses do not necessarily prevent an arrangement from being a joint arrangement. We will need to focus on the economic substance
- 29 Nov 2020, 09:51
- Forum: IFRS-related topics
- Topic: Guidance - Invt in Associate - Equity Accounting
- Replies: 10
- Views: 2462
Re: Guidance - Invt in Associate - Equity Accounting
The client and the third party collectively holds 100% in Entity X and neither party has a dominant role; that’s a joint control, isn’t it?
- 28 Nov 2020, 12:55
- Forum: IFRS-related topics
- Topic: Guidance - Invt in Associate - Equity Accounting
- Replies: 10
- Views: 2462
Re: Guidance - Invt in Associate - Equity Accounting
Is IAS 28.27 not enough? This specifically says the share of P&L includes associate‘a subsidiaries’.
Btw, in your case, the Entity X sounds more like a joint venture than an associate.
Btw, in your case, the Entity X sounds more like a joint venture than an associate.
- 25 Nov 2020, 14:53
- Forum: IFRS-related topics
- Topic: IAS 41
- Replies: 6
- Views: 1556
Re: IAS 41
I have absolutely zero experience of IAS 41, but I believe bearer plants are covered by IAS 16. If so, Operating Costs are usually excluded from the cost of PP&E and thus the carrying amount of the orchard is something close to 1, maybe? It depends on what the Operating Costs exactly mean, though.
- 25 Nov 2020, 14:23
- Forum: IFRS-related topics
- Topic: Novation derivate swap
- Replies: 7
- Views: 1983
Re: Novation derivate swap
I agree that the CFH reserve at Company X should be immediately reclassified to P&L. This would be a natural treatment if Company Z were split out from X and immediately sold to an external party; in such a case, the reclassified gain/loss would adjust the gain/loss on disposal of a business. An...