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Last update 19/12/2019 Timing of Initial Recognition of Insurance contracts – Groups of insurance contracts are initially recognised from the earliest of [IFRS 17 25]: when the coverage period starts; when the first payment from the policyholder is due, or actually received if there is no due date; and based on the facts and circumstances, … Read more

Last update 28/11/2019 Time value of options is about one of the other changes from IAS 39 to IFRS 9 in respect of hedge accounting Time value of options is one leg of the fair value of an option, the other leg is the intrinsic value. When using an option for hedging activities, only the … Read more

Last update 27/11/2019 Third-party pricing service in fair value measurement reflects on the use of a pricing service for inputs in a fair value measurement does not change the analysis of the categorization of the inputs in the fair value hierarchy. Prices obtained from a pricing service are not considered observable simply because they were … Read more

Last update 26/10/2019 This is the way to IFRS 9 Financial Instruments, introducing the why? for this new IFRS standard. In July 2014 the International Accounting Standards Board (IASB) published the 4th and final version of IFRS 9 Financial Instruments. Topics hide The way to IFRS 9 Financial Instruments From the IAS 39 to IFRS … Read more

Last update 27/11/2019 The sub-LIBOR issue  (see further below) related to contractually specified risk components: Purchase or sales agreements sometimes contain clauses that link the contract price via a specified formula to a benchmark price of a commodity. Examples of contractually specified risk components are each of the price links and indexations in the contracts … Read more

Last update 12/11/2019 A Historical Perspective on the Statement of Cash Flows In 1987, the Financial Accounting Standards Board (FASB) issued an accounting standard, FASB Statement no. 95, requiring that the statement of cash flows be presented as one of the three primary financial statements. Previously, companies had been required to present a statement of … Read more

Last update 06/12/2019 The Role of Financial Reporting – How does financial reporting information fit into business? Financial reporting ultimately serves a number of different desired outcomes. One of these is economic growth. It does not promote growth directly; instead, growth is promoted through a number of subordinate outcomes. One of these could be described … Read more

Last update 16/11/2019 The Risk and Rewards Test and the Control Test are used to validate the accounting for a transfer of a financial asset under IFRS 9 Financial instruments. Based on criteria in previous steps it has been concluded that an entity has transferred a financial asset (see IFRS 9 B3.2.1). The central questions … Read more

Last update 30/11/2019 The Reporting Entity – The two most common reporting entities are a single legal entity preparing unconsolidated or company accounts or a group of legal entities preparing consolidated financial statements. Consolidation can be done at different levels, the most common being at the ultimate parent legal company level (the highest legal entity … Read more

Last update 24/12/2019 The relevant activities of an investee – Don’t get fooled, relevant activities for financial reporting and consolidation purposes does not mean that the activities of an investee are the same as the activities of other entities (parent entity and subsidiary entities) consolidated into that one group. No…….. it is about whether the … Read more