IFRScommunity.com

Hi, when you pay in advance, you add this payment to the initial value of the right of use asset which is recognised at the commencement date.

See this example where you can see how an upfront payment is treated.

Hi and welcome to our Forum.

Please have a look at this section:
https://ifrscommunity.com/knowledge-bas ... r-services

and let us know what your thoughts are based on the above and your specific case

It all depends what you're trying to show. If you want to present a separate line called "selling expenses" then I think that selling commissions belong there, otherwise what is the point of such a line? But IFRS do not require to present such a line in your P/L, so it really is up to you,...

Hi, please take a look at this page:
https://ifrscommunity.com/knowledge-bas ... ease-term/

and at this recognition exemption:
https://ifrscommunity.com/knowledge-bas ... erm-leases

And feel free to come back with more specific questions should you have any

so what is your definition of COGS?

well, this is a typical selling expense, right?

Hi, options must be enforceable in order to be taken into account below is the link to the knowledge base where you can find references to IFRS 16 https://ifrscommunity.com/knowledge-base/ifrs-16-lease-term/#options-to-extend-or-terminate-a-lease You can think about it this way: the lessor can unila...

OK so my approach is the same as yours, i.e. the payment under the purchase option is included in lease payments and therefore there is no unguaranteed residual value

When measuring the lease - will you include the payment under the purchase option in lease payments?

Hi, in my opinion the liability should be remeasured to FV on exercise date (via P/L), and the issuance of shares is recorded DR liability CR equity. So you credit the equity with the ultimate FV of liability

In my opinion it is not enforceable as the price is not set, you do need a further consent from the lessor to exercise that option...

I think it's best to start with 1/ lease term and 2/ lease payments, and then the assumptions for discount rate should be consistent. When you say that the extension option can be enforced by the Fund, then you must include period covered by this option in lease term and lease payments right? When m...

I see, as I wrote before, I would include them in a lease liability similarly to payments that depend on index/rate. The payments that you mentioned do not depend on future activity of a lessee or an underlying asset and therefore the is no reason to exclude them from lease liability

I would include them in the lease liability, as they don't depend on future activity of a lessee or an underlying asset. And I would use payments as calculated using current valuation of this pension fund obligation. Why are these payments linked to pension fund anyway? Is it a way of financing paym...

So you think that this kind of extension options are enforceable? i.e. they can be exercised by a lessee without any consent by the lessor?
As I see it, if the price is not agreed, such an option is not enforceable, as you de facto need a consent by the lessor, as the price is a crucial factor here

why do you need to allocate commissions to contracts? If they are incremental, aren't they specifically linked to a contract?

Hi, the guidance is already included in the knowledge base:
https://ifrscommunity.com/knowledge-ba ... a-contract

can you be more specific with you question?

Hi, the point of this paragraph is to state that such expenses should not be added to the cost of inventories in the balance sheet.

The classification in a specific line in P/L is up to you. In my opinion it can be treated as a cost of fulfilling the project

Then yes - two separate discount rates are needed

I think it's more a question on application of the local law. If the equipment is a part of the building, is it really against the law to enter into a 30-year "combined" lease? And if so, does it mean that there is no liability beyond this 7-year period to the lessor with respect to the eq...

Hi,

it depends

see these two sections of the knowledge base:

https://ifrscommunity.com/knowledge-bas ... rd-parties

https://ifrscommunity.com/knowledge-bas ... e-customer

Note that you need to meet only one of the criteria for PO to be treated as satisfied over time. The entries that you provided are OK, except that a contract asset is not the same as WIP, you probably meant contract costs there

in my opinion, it's very unlikely that each milestione in a contract is a separate PO. And it's hardly possible that such a fragmented PO meets all the criteria for being satisifed over time - all at the same time :) it's all explained in more detail in the knowledge base, it's really worth reading ...

You still haven't answered the most crucial question here: is it a performance obligation satisfied over time? If so - why? You seem to be saying that this should be rather a performance obligation satisfied at a point in time. In such a case, there is no measurement of progress at all - you simply ...

Hi, it's not clear to me what industry this is - construction? I see you have many objections whether input method is suitable. I suggest that you take a step back and answer another question - whether this is a performance obligation satisfied over time? See here: https://ifrscommunity.com/knowledg...

Some details on this arrangement would be useful What is the economic/business reason for such a transfer? Will employees be transferred as well? Which entity will be eventually issuing shares? Will there be any payment made by Co A?

Hi, I'm pretty sure there is no such guidance. Feel free to give us more details on this transaction and your thoughts on how to approach it, and we can develop guidance together

I don’t see any ‘negative goodwill’ here. In consolidated financial statements, it doesn’t really matter which entity pays. If Parent A paid 60m and Subsidiary B paid 40m, then total consideration would be 100m. Alternatively, if the payment by Subsid B of 40m is to be treated as a capital distribut...

Hi, in my opinion such extension options should be ignored as they have no real substance. Or, in IFRS 16 terms, they are not enforceable.

OK so you're saying that the conditions set out in IFRS 16.32 are met, i.e. the lease transfers ownership or the cost of the right-of-use asset reflects that the lessee will exercise a purchase option? then yes - it appears that the part attributable to land should not be depreciated. To reconcile t...