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I think IFRS 5.3 reads that Assets (once) classified as non-current shall not be (subsequently) reclassified as current assets until they meet the criteria to be classified as held for sale. BC10 also says assets are not reclassified as current simply "because they reached their final twelve mo...

IFRS 5's measurement provisions do not apply to financial assets, but its classification and presentation requirements do cover non-current financial assets as stated in the basis for conclusions. So, I think IAS 1 and IFRS 5 provide conflicting guidance about financial assets that were originally c...

DJP wrote: ↑08 May 2021, 11:18 whoever buys this asset has an economic objective

That's a good point! Economic resource does flow into the investor.

In practice, I state all the amount as non-current, but I am struggling to find out a basis for this in the standards, for assets in particular. It's a good point that the meaning of "realise" may vary depending on the type of asset. It is also a conceptually interesting question. The abov...

Consider a zero-coupon bond issued at $150 and repaid at $100 after five years (or if it sounds too unrealistic, assume that the carrying amount ends up at $150 when the fair value hedge is discontinued). Assume that by applying the effective interest rate method, $10 is recognized in PL within the ...

I am assuming AQS is calculating the changes in working capital based on the consolidated balances, which include the effect of exchange differences. If you first calculate the changes based on the foreign currency balances and then translate the changes using the same rate as PL, the OCI translatio...

Thank you, JRSB. It's a cool approach to find a way out based on ISAs. Now I'm convinced it's best for me to talk to my auditors to agree on an acceptable approach.

Agree.

Oops, I believed it was a financial liability that embedded a derivative. Right, if it is a financial asset, then the host contract and embedded derivative must be accounted for together as.a single unit. That said, it is possible to designate the embedded derivative as a hedged item in a certain si...

You can designate the embedded derivative as a hedged item but usually you don't need to. You will have to measure both the ED and the hedging derivative at FVTPL, and in this way the P&L impact will be naturally cancelled by each other's. Anyway, you have to record an asset and liability separa...

Yeah, I'm currently taking that approach for several subsidiaries, and perhaps I need to do so too for the other subsidiaries.

You're right! The subsidiaries in mind are no longer immaterial from a purely accounting perspective, but it's often a big deal for small entities to prepare FS on time. We consolidates 300+ subsidiaries in two weeks and completes the audit of short-note FS in one month. It's difficult or just costl...

All the subsidiaries must be consolidated unless IFRS 10's exemption applies, but I believe it's common in practice to skip fully consolidating some negligible subsidiaries. I'm interested in how you treat such ignored subsidiaries in practice. The approaches I've seen in practice are: - State the i...

As if obsessed with disclosing accounting standards rather than disclosing the accounts of an entity!

I'm not that good at IFRS 2, but to me the good leaver condition sounds like a vesting condition. If not, then two years of service is the only vesting condition and thus all the options are treated as vested in two years, are they? That sounds a little bit odd.

I do have experience to rebut an auditor's comment using the "obscuring" provision. It could take decades to change the mindset of regulators, but it would be really nice if they focused more on "obscuring" disclosures.

That's a good point. We might be able to leverage this amendment to fight against "checklist" people (auditors in mind :roll:). It's good news that IASB seems really concerned about the checklist approach as discussed in the recent ED https://www.ifrs.org/news-and-events/2021/03/iasb-propo...

True. For example, "standardised descriptions or information that only duplicates requirements of IFRS Standards" was a key area of discussion at first but the outcome about this is highly ambiguous.

One more useless paragraph

Not a question. IASB recently issued an amendment that required to disclose material accounting policies instead of significant ones. https://www.ifrs.org/projects/2021/accounting-policies/ What kind of changes in the actual disclosure do you guys expect by this amendment? I've personally looked for...

FVTPL instruments including arbitrary monetary and non-monetary instruments need to be measured at every reporting date, so if one is monetary it has to be translated in accordance with IAS 21.23(a), which uses the spot rate at the reporting date, and if another is non-monetary it has to be translat...

I think it is possible to defer the day 1 gain/loss as a cost of hedging under IFRS 9 (time value of options) if the gain/loss really represents a deferred option premium.

To be honest, I have no idea how to price this "option" in a closed form. Average market prices don't random-walk, which breaks the Black-Scholes' assumption. And, the premium seems variable depending on the magnitude of the average market price. Anyway, you have to analyze the day 1 gain/...

You're right, DJP. The OP's description isn't clear and ot seems to imply an option-like instrument. I just assumed it without thinking a lot because a normal interest rate floor has multiple coupon dates and looks just like a swap or a series of European options.

It's a swap contract so perhaps the Black-Scholes isn't the directly relevant model, though I can't name an appropriate model for floors. Anyway, it's beyond the scope of accounting....

FX forward contracts are measured at fair value every day, and such fair value is usually based on the latest forward rate that obviously depends on the latest spot rate. So, a FX forward is conceptually translated at the latest spot rate no matter whether it is monetary or non-monetary. Personally,...

Under normal orderly transactions, the fair value of a derivative is supposed to be zero at inception unless you pay/receive a premium; otherwise, parties wouldn't reach an agreement. This is the case though only when both parties can reasonably evaluate the fair value of a contract....

It's common in my country to accrue VAT when the work is done but before receiving invoice. I believed it depended on VAT laws in a country and an asset should be recognized when the VAT is legally recoverable.

Is it technically under the scope of IFRIC 21?

I've just checked out E&Y's International GAAP book, and it reads even IFRS 13 isn't clear or specific enough about the bid-ask spreads. IFRS 13 doesn't preclude to use the mid price for everything or bid/ask price for assets/liabilities respectively. Fair value isn't supposed to include transac...

If the fund holds the 6% through a consolidated subsidiary that the fund controls, then it is strange that the 6% is not eliminated for the EPS purpose or disclosed in the footnotes in accordance with IAS 1.79. But the other 603k sound not to be a reciprocal holding because neither of the parent or ...