IFRScommunity.com

There could be all sorts of ways. Example 1: the company in question has said "we think we'll only be able to pay you $500k - here is our cash flow forecast that shows why".

PS sounds like a great investment for $100!

"It now expects to receive only $0.5 million "..?

If you want to show the 'value' then don't apply cost - apply fair value! It's an option in IAS 27.

Did you just acquire it? Or how did you record it in the past?

Oh good spot thanks. Great- I guess it won't be something I'll have to think about too soon then!

Just wondering if anyone knows which country or countries would meet the scenario given in the above, whereby a subsidiary's profits are only taxed when distributed (ie undistributed profits not taxed). Perhaps it is common, and I am just not aware - also would be useful to know! Thanks https://www....

Would be a definite Admin item for me..!

Did they know in 2017 that it wouldn't be settled until 2020?

Even if A and B's contribution is valued at $500k each (eg contributing an asset etc), I think you mean that C paid $500k cash and the total value is therefore $1.5m? Actually it sounds like A and B contribute nothing and the management service provided is actually part of the future profit share ar...

What is your 200k figure - the current year fair value vesting charge in the P&L?

So C paid $1.5m for a 1/3 share worth $500,000?

Pub - thanks for that, to be honest I've never seen this is practice. I suppose in 99% of cases the shareholdings represent the substance. Re your 2 point I think that's the case, so if control doesn't deem to exist you do get what seems to be an unusual situation. Marek - you mention what happens i...

Just thinking this one through. Say Entity A has 30% interest in Entity B, and equity accounted as an Associate. It doesn't consider that it has control. Entity B only has one contract, which is a 10% ongoing management fee for services relating to an asset that Entity A operates. So if the asset ge...

Thanks both. Pub - I see what you mean, although from the initial owner's point of view the value could be $1. For example let's say they are a small business and don't have the capability to fully exploit the asset, perhaps even they make a loss from trading. But the optionholder can contribute wid...

Suppose a holding company has a valuable asset contained within its subsidiary, but which doesn't produce cash flows yet. Let's say that holding company is running out of cash and wants to become a passive entity, but still get the benefit from that asset. So it offers to sell an unconnected party a...

Most of my points are just curiosity or wanting to understand more, rather than pressing need!

Isn't it all there in B13 onwards?

I don't quite see the issue addressed in IFRIC 19 since it concludes that the treatment described in IFRS 9 3.3.3. is still applied.

Ok yes I will try and find more... You'll remember I was looking in to OCI a little, as there are gaps in my understanding of the objectives here sometimes. We'll see!

Marek, do you happen to know the rationale behind the FVOCI equity/debt different treatments regarding recycling, to save dipping into basis for conclusions?

phew, glad you said that!

That page says "As mentioned on the classification page, FVOCI category can be used for debt investments only."

Is that specifically referring to the "FVOCI with recycling" category rather than FVOCI as a whole?

I've certainly seen Big4 guidance on IFRS 9 about this grey area for informal loans, and some conclude that they might be partially or fully capital contributions in substance. Ie is it intended that it will ever be repaid? Presumably there are no contractual cash flows etc.

Can I ask about the particular circumstances that led you to identify the holding as FVOCI?

I agree, based on what you've said, and of course no impact at all on group.

Which audit firm is getting excited about it? I assume Big 4....

Sounds like the assets may be investment property, so possibly at FV anyway. Need more info!

I assume the transfer was done at it's carrying value and shown as a capital contribution, ie DR investment in subsidiary CR asset?

Are those assets the substantially the whole business of the group, or just incidental? Not sure how it would meet the definition of held for sale because evidently they weren't! Eg for this to apply the asset must be 'actively marketed'. Were they sold to the subsidiary at market price, or transfer...

It seems you should capitalise borrowing costs into inventories, but not if they are produced over a short period of time.

But not required to where produced in large quantities on a repetitive basis.

IAS 23, 4 and 7.