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Last update 17/12/2019 Measurement of contracts with participation features – Entities that issue participating contracts (referred to in the standard as contracts with participation features) provide policyholders with a financial return on the premiums they pay by sharing the performance of underlying items with policyholders. Participating contracts can include cash flows with different characteristics, for … Read more

Last update 14/12/2019 This is a case for the measurement of building held for sale under IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. Topics hide The case The analysis Other topics regarding held for sale: Available for immediate sale Sale highly probable Extension of the period required to complete a sale Related … Read more

Last update 25/11/2019 Measurement information avoid perverse effects is a dilemma, focus on fair value but how accurate and ‘manageable’. Pressure to achieve certain results. In assessing the probable and actual effects of measurement information: Measurement information avoid perverse effects it is its impact on behaviour that counts; and Measurement information avoid perverse effects how … Read more

Last update 13/09/2019 The measurement bases that will be considered here are: Historical cost measurement; Current value measurements, consisting off: Fair value measurement; Current costs measurement (also known as deprival value or value to the business); Realisable value measurement; and Value in use measurement. All these bases are forms of accrual accounting – that is, … Read more

Last update 26/11/2019 Matrix pricing of bonds is an estimation technique used to estimate the market price of securities that are not actively traded. Matrix pricing is primarily used in fixed income, to estimate the price of bonds that do not have an active market. The price of the bond is estimated by comparing it … Read more

Last update 18/12/2019 Market consistent measurement of options and guarantees – IFRS 17 will require stochastic modelling of financial options and guarantees (such as a guaranteed maturity value), which might not be a common practice in certain territories, as discussed in ‘Example – Stochastic and deterministic modelling‘. Options and guarantees should be recognised and measured … Read more

Last update 22/12/2019 Market Bubbles- During the Internet bubble, managers and investors lost sight of what drove return on invested capital; indeed, many forgot the importance of this ratio entirely. When Netscape Communications went public in 1995, the company saw its market capitalization soar to $6 billion on an annual revenue base of just $85 … Read more

Last update 05/12/2019 Management of credit risk for financial instruments – Financial institutions (banks, insurance companies, investment entities) should have a management process in place to identify, measure, monitor and control credit risk as well as to determine that they hold adequate capital against these risks and that they are adequately compensated for risks incurred. … Read more

Last update 05/12/2019 Main FS Statements Insurance contracts – These examples of the main Financial Statements statements demonstrate the requirements in respect of presentation and disclosure according to IFRS 17 Insurance contracts. They also include the requirements (introduced or amended) in respect of presentation and disclosure according to IFRS 9 Financial instruments and IFRS 7 Financial … Read more

Last update 27/11/2019 Applying hedge accounting for macro hedging strategies under IFRS 9 Because of its pending project on an accounting model specifically tailored to macro hedging situations (see ‘Accounting for macro hedging‘), the IASB created a scope exception from the IFRS 9 hedging accounting requirements that allows entities to use the specific fair value … Read more