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Last update 04/12/2019 The credit adjusted approach applies only rarely when an entity acquires or originates a loan or receivable that is “credit impaired” at the date of its initial recognition (e.g., when a loan is acquired at a deep discount due to credit concerns via a business combination). This is part of the impairment … Read more

Last update 30/09/2019 The costs of financial reporting measurement are not just the routine, recurring costs that an entity incurs directly. They also include one-off costs in setting up and documenting the relevant methods and systems and in training staff, and indirect expenses such as the costs of audit. The cost of maintaining a measurement … Read more

Last update 16/09/2019 SellCo sells a building to BuyCo for cash of CU1,800,000, which is its fair value at that date. The previous carrying value of the building is CU1,000,000. At the same time, SellCo enters into a lease with BuyCo conveying back the right to use the building for 18 years. Annual payments are … Read more

Last update 03/12/2019 The best of 10 Accounting conventions – In order to enable a very diverse population of users of financial statement a basis set of accounting conventions have to be more or less defined. The word convention is used in a Wikipedia definition way – a set of agreed, stipulated, or generally accepted … Read more

Last update 15/12/2019 The basic concepts bootcamp on IFRS all blogs is about International Financial Reporting Standards, usually called IFRS, that are accounting standards issued by the IFRS Foundation and the International Accounting Standards Board (IASB) to provide a common global language for business affairs so that company accounts are understandable and comparable across international boundaries. They are a consequence of growing international … Read more

Last update 08/12/2019 The Acquisition Method illustrated – a little history of acquisitions, mergers, purchase accounting, pooling of interests, goodwill, intangible assets acquired and the current end to this IFRS 3 Business Combinations. This is a developing story I will add stuff to end with a complete overview. The short case: The Acquisition Method illustrated … Read more

Last update 01/12/2019 Technology-based intangible assets Other technology – In a Business Combinations, this is a intangible asset and is therefore recognised separately from goodwill, provided that its fair value can be measured reliably. This customer-related intangible asset does not arise from contractual or other legal rights, but meets the definition of an intangible asset … Read more

Last update 04/12/2019 Technology reseller arrangements – IFRS 15 also changed practice for entities that sell their products through distributors or resellers (collectively referred to in this section as resellers). It is common in the technology industry for entities to provide resellers with greater rights than end-customers. For example, an entity may provide a reseller … Read more

Last update 05/12/2019 Technology consignment arrangements – Entities may deliver inventory on a consignment basis to other parties (e.g., distributor, dealer). By shipping on a consignment basis, consignors are able to better market products by moving them closer to the end-customer. However, they do so without selling the goods to the intermediary (consignee). Technology consignment … Read more

Last update 04/12/2019 Technology bill-and-hold arrangements – In certain technology transactions, the entity fulfils its obligations and invoices the customer for the work performed, but does not ship the goods until a later date. These transactions, often called ’bill-and-hold‘ transactions, are usually designed this way at the request of the customer for a variety of … Read more