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Last update 16/09/2019 IFRS 8 defines an operating segment as a ‘component of an entity that engages in business activities from which it may earn revenues and incur expenses’. This recognises that not all business activities earn revenues. Where transfer prices are charged between an entity’s stages of production (for example, with oil and gas … Read more

Last update 16/09/2019 IFRS 8 defines an operating segment as a ‘component of an entity that engages in business activities from which it may earn revenues and incur expenses’. This recognises that not all business activities earn revenues. Topics hide Cost centers as a separate segment Related posts: Cost centers as a separate segment Manufacturing … Read more

Last update 16/09/2019 IFRS 8 10 addresses the issue of matrix structures. It uses the example of an entity where some managers are responsible for product and service lines worldwide, whereas other managers are responsible for specific geographical areas. The CODM reviews the operating results of both sets of components, and discrete financial information is … Read more

Last update 17/12/2019 Topics hide Initial recognition Onerous insurance contracts Example initial measurement Subsequent measurement Onerous insurance contracts Onerous insurance contracts Related posts: Initial recognition Onerous insurance contracts An insurance contract is onerous at the date of initial recognition if the fulfilment cash flows allocated to the contract, including any previously recognised acquisition cash flows … Read more

Last update 16/12/2019 Onerous contracts – Example on recognising and measuring provisions Topics hide The Case: Consideration Background Onerous contracts Related posts: The Case: An onerous contract is one in which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. The unavoidable costs under … Read more

Last update 15/12/2019 IFRS 13 On Demand technology With and Without – Estimates the fair value of an asset by comparing the value of the business inclusive of the subject asset, to the hypothetical value of the same business excluding the subject asset. The with and without method is used to separate one intangible asset … Read more

Last update 16/09/2019 IAS 32 prescribes rules for the offsetting of financial assets and financial liabilities. It specifies that a financial asset and a financial liability should be offset and the net amount reported when and only when, an enterprise: Offsetting of financial assets and financial liabilities has a legally enforceable right to set off … Read more

Last update 04/12/2019 Obligations may be legally enforceable as a consequence of a binding contract or statutory requirement. This is normally the case, for example, with amounts payable for goods and services received. However, obligations do not have to be legally binding. If, for example, an entity decides as a matter of policy to rectify … Read more

Last update 27/11/2019 Objective of hedge accounting provides the introduction a a few narratives to obtain an understanding of hedge accounting under IFRS 9. All hedge accounting narratives are listed here. Every entity is exposed to business risks from its daily operations. Many of those risks have an impact on the cash flows or the … Read more

Last update 12/12/2019 Nuclear power plant and decommissioning liability These examples accompany, but are not part of, IFRIC 1. Common facts Cost model Nuclear power plant and decommissioning liability An entity has a nuclear power plant and a related decommissioning liability. The nuclear power plant started operating on 1 January 2000. The plant has a … Read more