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Hi,

Should the service fee payable to the banks for letter of credit processing (in our country it is usually 2.5% of the invoice value of the imported item) be included in cost of inventory or charged to profit or loss?

I think they don't know the reasons. They inherit it from the king toppled in 1974. By the way Ethiopia has its own calander. It lapses from Meskerem 1 (September 11) to Puagume 5 (September 10). The government's fiscal year starts at the start of the 11th month Hamle 01 (July 8). It is kind of weird.

Most of the companies use the government's fiscal year-8 July to 7 July

Thank you. Very definitive answer.

It a change in depreciation rates- an accounting estimate. I was just reading IFRS 1 Para 4 says Estimates An entity’s estimates in accordance with IFRSs at the date of transition to IFRSs shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments t...

Hi A company is adopting IFRS for the first time and preparing the first IFRS financial statements for the year ended 7 July 2019. During the transition to IFRS, as per the advice of the consultants management changes the depreciation policy for property plant and equipment (PPE). My question: Shoul...

Thank you for the invaluable insights.

Thank you. Very helpful.

Thank you. Then should it be accounted for as defined benefit plan? And required to do the following at each reporting date 1. Estimate the date of termination of the employee 2. Estimate the salary growth and anticipate the salary of the employee at the estimated date of termination 3. Estimate the...

Hi Is severance payable to employees upon termination of employment as per law under the scope of IAS 19? Important note: As per the law the severance payable to the employee shall be calculated based on his salary immediately before his termination. The severance shall be paid if the employee has s...

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Thank you.

Hence it is an assurance warranty and treated as per IAS 37?

Hi, An entity has entered a sales contract with a customer. In that contract it is stated that the entity is obliged to replace items that are defective after the inspection process. As a policy the company doesn’t return sold items. My question: what is the substance of this transaction, I mean sho...

Thank you. It is really helpful. I was completely lost.

Thank you for sharing the material.

I think both events are adjusting as they provide evidence of conditions that existed at the reporting dates. And consequently the figures at 8 July 2017 (the transition date), 7 July 2018 (the comparative period) and 7 July 2019 need to be adjusted.

Hi, I have one client adopting IFRS for the first time and preparing the first IFRS financial statements for the year ended 7 July 2019. The financial statements have yet been issued to date. The issues I faced are as follows: 1. The old government regulation, that was enforce before 7 July 2019, gr...

Thank you for the help.

Thank you. Yes, so many issues. The conversion was done by inexperienced consultants and that the client finance team has no knowledge of IFRS. But my concerns are 1. As mentioned, some of the findings are on accounting policy and disclosures. The client doesn't have complex financial instruments an...

Greetings to you I have questions on the auditors' opinion in relation to the audit of the financial statements of a first time IFRS adopter. Below are the audit findings The first time adopter has departed from the IFRS in the following 1. The accounting policy notes for the financial instruments a...

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thank you. Very helpful

Hi The IASB Conceptual framework includes the cost constraint on useful financial reporting. I have difficulty in interpretation of the cost constraint. Specifically my questions are 1. Can reporting entities omit information required by an IFRS or depart from the requirements of the IFRS based on t...

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The fact is the entity is withholding part of the payments from the performance and shall release the retention at the completion of the performance.

It is repayable within the year.

Thank you. Very much appreciated

In the 3rd item the entity is retaining and hence is a liability. What would be the treatment?

Hi

Are the following financial liabilities, I mean are they under IFRS 9’s scope?

1. Interest payable
2. Value added tax and employment income tax payable to the government
3. Retention from contract payments payable after some time after completion of the contract as per the agreement

Yes, the gains from the revaluation of the investment properties to fair value are recognised in P&L.

Thank you for the answer. Very much appreciated.

Continuing the discussion on deferred tax, I have the following doubt I have a real estate client which is engaged in 1. rental business of its investment properties and 2. sale of real estate units (apartments units) The entity has taxable temporary differences on its investment properties (the fai...

Thank you. I will go through the material