Search found 328 matches
- 01 Jun 2022, 01:56
- Forum: IFRS-related topics
- Topic: IAS 12 Exchange of assets and IRE
- Replies: 8
- Views: 3492
Re: IAS 12 Exchange of assets and IRE
I don't think that the applicability of IRE depends on the amounts involved, but on the type of a transaction. I agree with this idea, and perhaps in the Stock A/B exchange case, the IRE does not apply because the transaction inherently involves P&L. At the same time, though, I'm getting to bel...
- 28 May 2022, 08:50
- Forum: IFRS-related topics
- Topic: IAS 12 Exchange of assets and IRE
- Replies: 8
- Views: 3492
Re: IAS 12 Exchange of assets and IRE
Leo, I agree with your accounting. My point is that the IRE seemingly forbids that, and I am looking for logic to rebut IAS 12. Marek, As for the Stock A DTA, IAS 12 IE.B3 suggests this kind of approach, though I don't really do this in practice either. Anyway, if we can ignore the IRE, this point w...
- 26 May 2022, 02:38
- Forum: IFRS-related topics
- Topic: IAS 12 Exchange of assets and IRE
- Replies: 8
- Views: 3492
IAS 12 Exchange of assets and IRE
Assume an Entity carries a Stock A at 100 (FVTPL). Its tax base is 40, so a deferred tax liability has been recognized for the temporary difference of 60. Then, Entity enters a transaction with a Third Party where Entity gives Stock A to Third Party and Third Party gives Stock B (whose fair value is...
- 29 Apr 2022, 02:15
- Forum: IFRS-related topics
- Topic: Option to purchase additional goods at discounted price in case the product fails
- Replies: 21
- Views: 7391
Re: Option to purchase additional goods at discounted price in case the product fails
Is it not just one form of warranties (for the purpose of accounting only).
- 25 Apr 2022, 16:52
- Forum: IFRS-related topics
- Topic: Capitalization of legal fees
- Replies: 13
- Views: 7409
Re: Capitalization of legal fees
But still I'm not sure either if the legal fees can be capitalized in the OP's case....
- 24 Apr 2022, 13:58
- Forum: IFRS-related topics
- Topic: Capitalization of legal fees
- Replies: 13
- Views: 7409
Re: Capitalization of legal fees
By investment I meant more general activities rather than just financial ones. I see some similarities between the legal costs and many non-financial assets like PP&E, intangibles, inventories, and contract costs. The recovery of such non-financial items may sometimes be as contingent and uncert...
- 23 Apr 2022, 15:04
- Forum: IFRS-related topics
- Topic: Capitalization of legal fees
- Replies: 13
- Views: 7409
Re: Capitalization of legal fees
I agree the AD is very narrowly scoped and is not directly applicable to the OP's case. This case reminds me of a very similar case I came across before. At that time I felt legal fees were like an investment to obtain a favorable judge at court, and the "virtually certain" criteria was to...
- 22 Apr 2022, 16:56
- Forum: IFRS-related topics
- Topic: Capitalization of legal fees
- Replies: 13
- Views: 7409
Re: Capitalization of legal fees
Wow interesting AD!
- 22 Apr 2022, 16:51
- Forum: IFRS-related topics
- Topic: Capitalization of legal fees
- Replies: 13
- Views: 7409
Re: Capitalization of legal fees
Perhaps covered by IAS 37 that states a contingent asset isn't recognized unless the reimbursement is virtually certain?
- 20 Apr 2022, 23:58
- Forum: IFRS-related topics
- Topic: Valuation of an intangible asset in a business combination
- Replies: 16
- Views: 3332
Re: Valuation of an intangible asset in a business combination
I've seen some cases where the acquiree is a supplier of automotive/military/aircraft parts and has obtained qualifications by customers for the spec/quality standards/production processes of particular models of the parts, without which the supplier cannot sell such models to the customers. In such...
- 04 Apr 2022, 08:07
- Forum: General accounting and financial reporting discussion
- Topic: EY IFRS manual available for free
- Replies: 4
- Views: 15306
- 20 Mar 2022, 17:02
- Forum: General accounting and financial reporting discussion
- Topic: Associate to subsidiary
- Replies: 6
- Views: 3824
Re: Associate to subsidiary
IAS 28.22 says "An entity shall discontinue the use of the equity method from the date when its investment ceases to be an associate" and IFRS 10.20 says "Consolidation of an investee shall begin from the date the investor obtains control of the investee". So it's official
- 03 Mar 2022, 22:07
- Forum: IFRS-related topics
- Topic: Keyman Insurance Policy
- Replies: 12
- Views: 3561
Re: Keyman Insurance Policy
Does the underwriter make money from this contract?
- 03 Mar 2022, 00:31
- Forum: IFRS-related topics
- Topic: Can i book bookings, IFRS 15?
- Replies: 2
- Views: 891
Re: Can i book bookings, IFRS 15?
can we reflect bookings in our accounting? No, but as a bookkeeping technique, you can record any information in your journal using a pair of offsetting dummy accounts that do not show up on the financial statements, can't you? Alternatively, you can record revenue and an offsetting contra account ...
- 26 Feb 2022, 04:14
- Forum: IFRS-related topics
- Topic: advance proceed received
- Replies: 13
- Views: 2355
Re: advance proceed received
That would be a valid argument to support one accounting policy. My point is that the standards do not seem clear enough and we might need to establish our own accounting policy. IAS 32.4(a) explicitly excludes investments in subs from the scope, so the definitions of financial instruments in IAS 32...
- 23 Feb 2022, 00:46
- Forum: IFRS-related topics
- Topic: Can I use average rate on consolidated BS and P&L for cash flow purpose?
- Replies: 6
- Views: 2223
Re: Can I use average rate on consolidated BS and P&L for cash flow purpose?
The usual steps to prepare consolidated cash flows are to prepare separate cash flows of all the consolidated entities, aggregate them, and eliminate inter-company transactions. Preparing a AR-based BS sounds like an interesting approach. Though I am not sure if the AR-BS approach comes out correct ...
- 14 Feb 2022, 05:02
- Forum: IFRS-related topics
- Topic: advance proceed received
- Replies: 13
- Views: 2355
Re: advance proceed received
Loss making subs may be financial liabilities
- 12 Feb 2022, 09:32
- Forum: IFRS-related topics
- Topic: advance proceed received
- Replies: 13
- Views: 2355
Re: advance proceed received
It generally sounds reasonable to classify such an advance as non-financial, but can we also make an argument that it is a financial liability because it is an obligation to deliver another financial asset (stake in subsidiary)? At least in the separate FS this view is correct, but in the parent's c...
- 28 Jan 2022, 15:19
- Forum: IFRS-related topics
- Topic: IAS 38 Internally generated intangible Asset
- Replies: 8
- Views: 2225
Re: IAS 38 Internally generated intangible Asset
If the subs obtain the control over separate copies, it sounds reasonable for the subs to recognize the expenditures as Software under development. In this case, the holding is deemed acting as an agent. If the holding controls the software and lets the subs use it, the subs' payments to the holding...
- 27 Jan 2022, 13:12
- Forum: IFRS-related topics
- Topic: IAS 38 Internally generated intangible Asset
- Replies: 8
- Views: 2225
Re: IAS 38 Internally generated intangible Asset
Who is going to control the software once completed? Will the holding control it and let subs use it? Or will the subs obtain the control over separate copies of the software?
- 25 Jan 2022, 00:25
- Forum: IFRS-related topics
- Topic: IFRS 16 Derecognition of ROU
- Replies: 12
- Views: 3974
Re: IFRS 16 Derecognition of ROU
It's weird that IFRS 16 doesn't cover the derecognition of a ROU, but it doesn't either require disclosure of gross carrying amounts or the amount of derecognition. So they are usually not visible.
- 18 Jan 2022, 10:29
- Forum: IFRS-related topics
- Topic: Discounting an obligation to a Group company
- Replies: 4
- Views: 1464
Re: Discounting an obligation to a Group company
Not sure if it's possible but one creative (or silly) solution might be to interpret the arrangement as a joint operation where the group company contributes the land and the developer contributes skills to jointly collect money from consumers. It must be much easier to just discount the payable tho...
- 14 Jan 2022, 15:41
- Forum: IFRS-related topics
- Topic: IAS 19
- Replies: 4
- Views: 1233
Re: IAS 19
I think the word "wholly" makes sense here. IAS 19 generally requires complex calculations to reflect uncertainty and time value of money, while it allows simplified approaches for common easy cases, which are short term benefits. It sounds reasonable to set a strict hurdle to apply such a...
- 13 Nov 2021, 11:56
- Forum: IFRS-related topics
- Topic: IFRS 9 - Off market derivative in a new hedging relationship
- Replies: 7
- Views: 1829
Re: IFRS 9 - Off market derivative in a new hedging relationship
Anushree, So you've got a favorable or unfavorable contract thanks to the value of old CCS. In this sense, I'd see the initial gain/loss as a termination gain/loss of the old CCS rather than a day 1 thing of the new one. Such a termination gain/loss might go to OCI to the extent it is covered by the...
- 12 Nov 2021, 05:16
- Forum: IFRS-related topics
- Topic: IFRS 9 - Off market derivative in a new hedging relationship
- Replies: 7
- Views: 1829
Re: IFRS 9 - Off market derivative in a new hedging relationship
IFRS 9.6.5.12 says the cash flow hedge reserve related to a discontinued hedge remains there until the future cash flow occurs. As for the second point, how did the day 1 gain/loss arise? A CCS is usually configured to be a zero-FV contract by adjusting spreads and prepaid premium so it is not favor...
- 05 Nov 2021, 02:24
- Forum: General accounting and financial reporting discussion
- Topic: Inventory
- Replies: 2
- Views: 2496
Re: Inventory
LGTM
- 24 Oct 2021, 02:03
- Forum: IFRS-related topics
- Topic: IAS12 & IAS34
- Replies: 10
- Views: 2090
Re: IAS12 & IAS34
IAS 34 technically doesn't allow us to rely on the best available information, saying that interim tax expense must be calculated by arithmetically multiplying accounting profit and ETR. But I don't really see a material difference between the two approaches either in the normal circumstances
- 23 Sep 2021, 11:41
- Forum: IFRS-related topics
- Topic: IFRS 15 and IAS 28, Revenue to the associate
- Replies: 10
- Views: 2726
Re: IFRS 15 and IAS 28, Revenue to the associate
I'm not fully understanding the arrangement, but to me it sounds like a sort of repurchase agreements where A promises to buy back some products when selling them to B. Usually, revenue is not recognized under IFRS 15 in such a situation because the risks and control over the products are effectivel...
- 23 Sep 2021, 10:48
- Forum: IFRS-related topics
- Topic: Storage costs
- Replies: 6
- Views: 2639
Re: Storage costs
I'd be likely to choose Selling expenses if the storage cost relates to finished products waiting for sale.
- 23 Sep 2021, 10:45
- Forum: IFRS-related topics
- Topic: Prepayments
- Replies: 7
- Views: 2124
Re: Prepayments
This AD is directly relevant to this topic, maybe? https://www.ifrs.org/content/dam/ifrs/s ... tracts.pdf
IMO this arrangement is not a loan or under IFRS 9 if the buyer is not able to collect the prepayment in cash.
IMO this arrangement is not a loan or under IFRS 9 if the buyer is not able to collect the prepayment in cash.