Search found 328 matches

by pub_acco
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...
by pub_acco
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...
by pub_acco
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...
by pub_acco
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).
by pub_acco
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....
by pub_acco
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...
by pub_acco
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...
by pub_acco
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!
by pub_acco
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?
by pub_acco
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...
by pub_acco
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 :)
by pub_acco
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? :o
by pub_acco
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 ...
by pub_acco
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...
by pub_acco
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 ...
by pub_acco
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 :lol:
by pub_acco
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...
by pub_acco
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...
by pub_acco
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?
by pub_acco
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.
by pub_acco
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...
by pub_acco
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...
by pub_acco
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...
by pub_acco
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...
by pub_acco
05 Nov 2021, 02:24
Forum: General accounting and financial reporting discussion
Topic: Inventory
Replies: 2
Views: 2496

Re: Inventory

LGTM
by pub_acco
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 :?
by pub_acco
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...
by pub_acco
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.
by pub_acco
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.