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I am confused, PPA exercise is from buyer perspective and is basically allocation of consideration paid to different line items within the balance sheet. Usually, seller has nothing to do with PPA allocation. This seems more like a case of contingent consideration, which should have been accounted f...

Earlier adoption is also permissible as per IASB thought the constraint seems to be from EU regulator it seems.

The fact that it is a monthly fee is just a matter and question payment terms negotiated. The standard looks at costs which are incidental to equity issuance and I feel these are. If you were not going to raise this equity (regardless of whether it will be successful or not) you would not have incur...

IAS 40 allows you to carry investment properties on cost basis as well.

Nope, when it comes to other systematic basis you have to come up with an alternative systematic basis (same as if you are not following straight line depreciation you have to come up with an alternative). Where escalation clauses are built in a contract these have to be straight lined.

Without a contract, what is the basis of payment between Company Y and Company X?

I would even take the monthly fee to equity (in case company was successful in raising the capital). The question is on incremental, not on whether the equity round would be successful or unsuccessful. If the company was not going ahead with the decision to raise capital, they would not have incurre...

Yes your understanding is correct, the difference between what is to be received in cash and what is recognized in the income statement is recognized as an asset on the balance sheet (you will need to bifurcate it between current and non current as well) and this will automatically decline (by way o...

There is no standard guideline as such and depends on the materiality of the amounts in question. However, if you include say non financial liabilities within trade and other payables line item then the nomenclature needs to be revised to trade payables and other liabilities. Again, no strict requir...

Plenty of videos available on Youtube as well, the knowledge base on IFRS community is good. I have also seen people using IFRS box (geared towards beginners).

I think there is a case for it to be capitalized as leasehold improvement. If as a result of the delay the cost no longer holds its value then it should be written off to P&L.

You don't need to issue new shares to convert a shareholder loan to equity. Depending on the jurisdiction, a simple agreement between the shareholder (Holding company) and the borrower can convert the loan to equity, in form of shareholder contribution.

Thanks Marek, appreciate the feedback.

I would definitely consider mailing lists (have used mail chimp in past) but I need to be regularly writing on the blog for it any sort of newsletter / mail to be of any value.

Simply put, you start recognizing interest from the date you recognized the net investment in lease. The only bearing the date and amount of rental amount has on interest is the amount on which interest is calculated.

We have this case where our investment properties are also leased out to retail units within the group (in addition to leasing them to third party tenants as well). As a consequence, we reverse out all the balances pertaining to the intergroup leases and eliminate lease income against depreciation o...

JRSB wrote: ↑16 Jun 2020, 12:32 Which audit firm is getting excited about it? I assume Big 4....

Yes, one of the big 4

What I was referring to was retail inventory, so there is no capitalization period as such. I understand that if I was importing material to construct real estate inventory etc. then yes, this cost would be eligible for capitalization.

Marek, that is what we did. We transferred the investment property, it's related tenant balances (both assets and liabilities). So the accounting entry is simply credit to all the assets, debit to liabilities and the net amount is debited to Investment in subsidiary. This is how the transfers were a...

Yes the asset(s) are investment properties, carried at fair value.

The question of restatement of comparatives was more from business combinations under common control, since each real estate asset qualifies as a separate business on its own.

Transferred as shareholder contribution, which is why I do not understand where the held for sale/discontinued operations classification came from. Well those assets are commercial real estate properties, which is the core business of that particular sub group. After these transfers the HoldCo will ...

the-accountant.net

I originally started it couple of years ago but then sort of left it (way too many work commitments) but during the lock down I contemplating giving it another go. Let's see how long that will last.

I have a small accounting blog that I operate (purely as a hobby). If you want, you can post it there or you can simply post it on LinkedIn.

We have a sub group within our business which has a Holding company called HoldCo. The HoldCo had bunch of real estate assets which have now been transferred to their respective legal entities. My question is on the stand alone financial statements for the HoldCo. I am of the opinion that we simply ...

Sorry edited my reply to make it more specific. As I mentioned, once the bank makes the payment the amount to be recovered from purchasing entity becomes part of the main credit facility and interest is charged. This of course is not allocated to or forms part of the cost of inventory.

It is a bit of a grey area but in your case, I would call it directly attributable to procurement of goods so would include the fee as part of cost of inventory. Usually, when I have dealt with letter of credits (as a procuring entity), the bank does not charge separate fee for each LC issued and LC...

Even Joint Ventures and Associates are required to have consistent accounting policies. You will need to make adjustments to your share of profit/equity pickup to reflect the accounting for an associate as if it had followed the same accounting policies as your Group. However, you can always take a ...

Spot on, the one at the original spot rate (at the time of original lease recognition) and the second one at the time of lease modification.

Regarding the last question, we have lease liabilities in developing markets where the lease payments are in USD. I am not sure what your question is but I will tell you what we do and that has worked for us. For these lease payments, we prepare DCF in USD and use a USD specific discount rate to arr...

Can you give a specific example where compliance with IFRS requires significant additional cost?