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25% of 16% might be 147k, and where do the other 603k come from?

Is it 25% * 10% that is adjusted for eps purpose? Or 25% * 16%?

Are there two private companies, one wholly owned by the fund and the other wholly owned by the parent? It's strange that the shares held by the latter aren't stated as deduction of equity. As for the former, I think the shares held by associates need to be disclosed in accordance with IAS 1.79. It ...

Even under IFRS, reciprocal interests must be eliminated if a consolidated subsidiary owns the shares in its parent. Is the closed-end fund really consolidated by the holding company? Isn't it excluded from the consolidation using the investment entity exemption of IFRS10?

Sounds like a complex instrument and I don't even understand the cash flows of that. But first of all, a level 1 input must be a quote of identical asset in active markets. Is your instrument traded in an active market?

I think at initial recognition the transaction should be measured at the mid quote because you will not actually pay the bid/ask spread unless you convert EUR from/to LCY. You can avoid the spread if you pay for your EUR purchase using the EUR you received for sales. The spread is specific to the ex...

I think IFRS doesn't provide a lot of opportunities to defer currency gain/loss other than CTA, as JRSB mentioned, and cash flow/net investment hedges. So we usually do not need to discuss realized/unrealized in terms of FX under IFRS, but I see realized/unrealized distinctions very often for tax pu...

In the quarterly approach case, the entity uses it for all pieces of PP&E, ROU, and intangibles. It reduces some paperwork for starting depreciation to once a quarter in the idle months, and it makes the budgeting process easier because, in the busy months, the entity runs dozens of construction...

I've seen something similar to the second one, but on a quarterly basis. I.e. 1.5 month depreciation in the quarter of acquisition and disposal.

Perfect! Converting a fixed-rate loan payable to a floater is the typical situation where FV hedges come into play.

Correct! (if the hedge is fully effective)

You can contract a derivative without hedge accounting, but PL does change depending on whether you apply hedge accounting or not. Without hedge accounting, the gain/loss from the derivative hits PL in full. With hedge accounting, you can remove a portion of the derivative gain/loss that corresponds...

You will not remeasure an amortized-cost loan, so no gain/loss would arise from the hedged item without the fair value hedge accounting. The fair value of a fixed-rate loan changes as the market interest rate changes, so it is a reasonable strategy for the management to contract a derivative to hedg...

Under the fair value hedge accounting, the gain/loss arising from the derivative adjusts the book value of hedged item (e.g. financial liability measured at amortized cost). In this way the effective portion of the gain/loss is eliminated from P&L.

An option has a certain value even if it is out of the money, and the premium paid upfront usually represents the fair value at inception. Therefore, you will need to measure the cap (including the premium) at fair value every reporting date, and as a result the time value of money element will be n...

Bloomberg provides credit rating vs. credit spread matrixes derived from the corporate bond market. So, I usually just plug the credit rating of my employer to get credit spreads by maturity date and then add them to government bond yields to arrive at IBRs. This obviously doesn't work if an entity ...

Is it a common control transaction? If so does the same shareholders control both A and C? Entity C looks like an external party in the diagram

Marek Muc wrote: ↑22 Jan 2021, 15:07 nobody's going to go to prison

Good news

Aha, I missed your point! Yeah, that's another sensible approach I hadn't thought of at all. So, now I'm convinced that there are perhaps only two possible approaches under IFRS. Now IMO the second approach better presents the economic substance but probably I need to go for the first one because th...

Thanks! As for IFRS/non-IFRS figures, I was more concerned about Cost of sales in the second approach. Cost of sales is usually understood as the amount of inventories expensed, and in the example case, the book value of the land as an inventory is still 10. I don't think there is a standard that pe...

Interesting case :) I have a bit different view. This arrangement sounds like a gift from P to S, and usually a gift from a parent to its subsidiary, no matter whether that is a share-based payment or not, is deemed to be a capital contribution because the parent is assumed to be acting in its capac...

Thank you, Marek! It's a good point that the construction business can also produce a very high margin by holding the land as Inventories for years. Yeah, perhaps the fluctuation of fair value of lands is a built-in risk to the construction segment and thus it might be appropriate to present the unu...

Assume an entity has a production (of something) division and a building construction division and plans to close a production factory to build an office building for sale on the factory site. The entity at some point reclassifies the land from PP&E to Inventories and then sells it together with...

Should be kd or incremental borrowing rate because the put is just one of financial liabilities of X, maybe?

I'm interested too in how you would account for the put, in concrete debits and credits.

In practice I've been using 0% for discounting purposes when a straight forward calculation comes out a negative interest rate. But I don't think I'm doing right.... Currently, it's okay because of the modest negative rate environment, but perhaps in the future we might need to use negative rates fo...

Wow IFRIC did have the same discussion! So, now that they have completed revenue and lease projects, which way, analogy to IFRS 3 or IFRIC 1, do you guys think IFRIC would go for? I think IFRS 15 and 16 deal with variable considerations differently though....

I'm curious too Some web sites indicate that only fixed-rate loans can be structured under Murabaha but I have absolutely no experience on Islamic financing.

Then, you can calculate the interest expenses of each quarter by multiplying the principal and EIR, can't you? The interest expenses increase the carrying amount of the loan, the repayments (including the 2.67M "interest") decrease it, and as a result the carrying amount will be zero after...

If Y can potentially request repayment, then X should record the obligation as a liability to Y. If so, IFRIC 19 may or may not apply depending on the contractual terms, but at the end of the day, I think there is no clear answer because no clear contract seems to exist.

Oops the above cash flow is wrong because you told the quarterly payments start after the initial 6 months. Anyway, if you can project cash flows then you can calculate an EIR using Excel.