Search found 3228 matches

by Marek Muc
31 Jan 2021, 17:18
Forum: IFRS-related topics
Topic: Practical approaches to lease term under IFRS 16
Replies: 10
Views: 3342

Re: Practical approaches to lease term under IFRS 16

I totally agree that they should redraft IFRS 16 because is not easy to reconcile the agenda decision with IFRS 16. I even wrote a comment letter on this: http://eifrs.ifrs.org/eifrs/comment_letters//538/538_25796_MarekMucIFRScommunitycom_0_commentletterIFRScommunitycomIFRS16leaseterm.pdf So in the ...
by Marek Muc
31 Jan 2021, 17:03
Forum: IFRS-related topics
Topic: IAS 21 - selection of exchange rates source in practice
Replies: 7
Views: 2461

Re: IAS 21 - selection of exchange rates source in practice

IAS 21 does actually cover this briefly in par. 26: When several exchange rates are available, the rate used is that at which the future cash flows represented by the transaction or balance could have been settled if those cash flows had occurred at the measurement date. can you describe your case s...
by Marek Muc
31 Jan 2021, 16:56
Forum: IFRS-related topics
Topic: IAS28 - entity consolidated by equity method
Replies: 13
Views: 3656

Re: IAS28 - entity consolidated by equity method

and see here for equity transactions of associate/joint-venture:

https://ifrscommunity.com/knowledge-bas ... nt-venture
by Marek Muc
31 Jan 2021, 11:35
Forum: IFRS-related topics
Topic: ias 24
Replies: 8
Views: 2487

Re: ias 24

https://ifrscommunity.com/knowledge-bas ... d-entities

What kind of difficulties do you have with identifying or disclosing transactions with key management personnel?
by Marek Muc
29 Jan 2021, 13:02
Forum: IFRS-related topics
Topic: IFRS 16 revaluation model
Replies: 2
Views: 1053

Re: IFRS 16 revaluation model

and this will obviously be a change in accounting policy applied retrospectively under IAS 8

plus you need to come up with other 'official' reason (see IAS 8.14b)
by Marek Muc
29 Jan 2021, 11:58
Forum: IFRS-related topics
Topic: IAS28 - entity consolidated by equity method
Replies: 13
Views: 3656

Re: IAS28 - entity consolidated by equity method

I don't understand what you're trying to do. Do you want to make a retrospective correction of error or continue with current policy?
by Marek Muc
29 Jan 2021, 11:32
Forum: IFRS-related topics
Topic: IAS28 - entity consolidated by equity method
Replies: 13
Views: 3656

Re: IAS28 - entity consolidated by equity method

you could argue that it's correct to have 400 in assets, but 400 in equity of the group as well

showing 80 as NCI makes no sense I'm afraid
by Marek Muc
29 Jan 2021, 11:08
Forum: IFRS-related topics
Topic: IAS28 - entity consolidated by equity method
Replies: 13
Views: 3656

Re: IAS28 - entity consolidated by equity method

simplistically speaking 40% * 800, but in fact it depends on how much you paid for the shareholding in the first place
by Marek Muc
29 Jan 2021, 10:13
Forum: IFRS-related topics
Topic: Incremental borrowing rate | IFRS 16
Replies: 18
Views: 17518

Re: Incremental borrowing rate | IFRS 16

Good question. My initial thought is that a new player wouldn't be reliable enough to use their input in the accounts. Also I think that many entities simply use their actual borrowing rate and don't need additional paid service. I don't know what's available in Bloomberg or Reuters paid data feeds,...
by Marek Muc
29 Jan 2021, 09:51
Forum: IFRS-related topics
Topic: Decommissioning liability
Replies: 17
Views: 4611

Re: Decommissioning liability

In my experience, a risk-free rate is used if the entity looks for a simple solution. E.g. for decommissioning liability you can say that the risk and uncertainty is built into the cash flow part. Whereas in WACC you have expected return on equity built in, so it's harder to reconcile WACC with conc...
by Marek Muc
28 Jan 2021, 15:01
Forum: General accounting and financial reporting discussion
Topic: Reporting framework
Replies: 10
Views: 4266

Re: Reporting framework

yep, 've seen this accouncement...
by Marek Muc
28 Jan 2021, 14:55
Forum: General accounting and financial reporting discussion
Topic: Reporting framework
Replies: 10
Views: 4266

Re: Reporting framework

didn't know that! this is something the EU should do as well, and even it wouldn't be a bad idea for the IASB to incorporate something like this into full IFRS
by Marek Muc
28 Jan 2021, 14:46
Forum: General accounting and financial reporting discussion
Topic: Reporting framework
Replies: 10
Views: 4266

Re: Reporting framework

I think that there should be one more solution for SMEs that are subsidiaries of listed entities: full IFRS but with limited disclosure requirements. This way they would be able to use the same accounting policies as the group, but without the onerous disclosure requirements
by Marek Muc
28 Jan 2021, 13:04
Forum: General accounting and financial reporting discussion
Topic: Reporting framework
Replies: 10
Views: 4266

Re: Reporting framework

in Poland, for example, IFRS for SME is not endorsed, SMEs must choose between full IFRS and Polish GAAP
by Marek Muc
28 Jan 2021, 09:32
Forum: General accounting and financial reporting discussion
Topic: Reporting framework
Replies: 10
Views: 4266

Re: Reporting framework

if your local law allows it and you satisfy the definition of SME, then you can do it

https://cdn.ifrs.org/-/media/feature/su ... ule-35.pdf
by Marek Muc
26 Jan 2021, 12:37
Forum: IFRS-related topics
Topic: Common control transaction
Replies: 8
Views: 2935

Re: Common control transaction

I see, I would answer that this impairment charge never showed up in consolidated financial statements of A before, so it makes sense that it will have an impact now. The payment of salary is a recurring transaction that happens every month (numbers were only there for illustration) so cant really s...
by Marek Muc
26 Jan 2021, 12:20
Forum: IFRS-related topics
Topic: Common control transaction
Replies: 8
Views: 2935

Re: Common control transaction

Hi Nauman, glad to see you back :) I assume we're talking about consolidated accounts of A. Yes I would show a charge of 250 to equity representing capital distribution to the shareholder. You will not see any impact on consolidated P&L of A So effectively you should see the following impact on ...
by Marek Muc
26 Jan 2021, 11:53
Forum: IFRS-related topics
Topic: Goodwill impairment testing
Replies: 2
Views: 906

Re: Goodwill impairment testing

it can be a bit tricky, the exercise depends on how you measured the NCI: https://ifrscommunity.com/knowledge-base/business-combination-accounting/#measurement-of-non-controlling-interest fortunately IAS 36 deliberates a bit on this matter (see appendix C of IAS 36 and example 7) eg.C4 of IAS 36 If ...
by Marek Muc
25 Jan 2021, 16:05
Forum: IFRS-related topics
Topic: EIR calculation based on success rate
Replies: 11
Views: 2649

Re: EIR calculation based on success rate

I sometimes wonder whether I should wait some time before replying to a topic to let others have some fun ;)
by Marek Muc
25 Jan 2021, 15:40
Forum: IFRS-related topics
Topic: EIR calculation based on success rate
Replies: 11
Views: 2649

Re: EIR calculation based on success rate

then it's a transaction cost that is part of the EIR as it's clearly incremental
by Marek Muc
25 Jan 2021, 15:04
Forum: IFRS-related topics
Topic: EIR calculation based on success rate
Replies: 11
Views: 2649

Re: EIR calculation based on success rate

you need to distinguish between transaction costs and fees, see defined terms in appendix A to IFRS 9: effective interest rate - [...] The calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate (see paragraph...
by Marek Muc
25 Jan 2021, 14:43
Forum: IFRS-related topics
Topic: EIR calculation based on success rate
Replies: 11
Views: 2649

Re: EIR calculation based on success rate

PS. to be clear: as expenses on scoring and verification of potential borrowers are paid irrespective of whether a loan is originated or not, they should be expensed in P/L immediately IMO
by Marek Muc
25 Jan 2021, 14:32
Forum: IFRS-related topics
Topic: EIR calculation based on success rate
Replies: 11
Views: 2649

Re: EIR calculation based on success rate

Hi, those expenses should be assessed against the definition of transaction costs: Incremental costs that are directly attributable to the acquisition, issue or disposal of a financial asset or financial liability (see paragraph B5.4.8). An incremental cost is one that would not have been incurred i...
by Marek Muc
22 Jan 2021, 15:07
Forum: General accounting and financial reporting discussion
Topic: Gross profit or gain on sale of PP&E
Replies: 8
Views: 4076

Re: Gross profit or gain on sale of PP&E

no wonder :)

but this approach is also acceptable IMO so nobody's going to go to prison ;)
by Marek Muc
22 Jan 2021, 14:50
Forum: General accounting and financial reporting discussion
Topic: Gross profit or gain on sale of PP&E
Replies: 8
Views: 4076

Re: Gross profit or gain on sale of PP&E

but under the second approach, you would treat the land as PP&E that is sold together with inventory (i.e. new building),

so the cost of sales would not include cost of land, because the sale of land would be shown as disposal of non-current assets together with allocated proceeds
by Marek Muc
21 Jan 2021, 13:40
Forum: IFRS-related topics
Topic: Equity under FVTOCI
Replies: 4
Views: 1909

Re: Equity under FVTOCI

typical question from management :)

the investment needs to be remeasured at the derecognition date, through OCI, so there won't be any gain in P&L unfortunately
by Marek Muc
21 Jan 2021, 11:42
Forum: IFRS-related topics
Topic: IFRS 9 - Calculating EIR on Overdrafts
Replies: 1
Views: 982

Re: IFRS 9 - Calculating EIR on Overdrafts

hi, this is similar to revolving credit facilities that we discussed some time ago:

viewtopic.php?f=4&t=200

the conclusion was that interest is accrued on straight-line basis and any fees are amortised over the duration of credit facility