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Last update 18/12/2019 Insurance modelling – The estimates of future cash flows should incorporate all reasonable and supportable information available without undue cost or effort about amount, timing and uncertainty of those future cash flows. To accomplish this, an entity should estimate the expected value of the full range of possible outcomes. Estimates and assumptions … Read more

Last update 13/12/2019 The IFRS 17 Insurance contracts model combines a current balance sheet measurement of insurance contracts with recognition of profit over the period that services are provided. The general model in the standard requires insurance contract liabilities to be measured using probability-weighted current estimates of future cash flows, an adjustment for risk, and … Read more

Last update 21/12/2019 Insurance contract liabilities – The measurement under IFRS 17 requires the determination of a current value of the insurance contract, considering market perspectives for financial risks and the reporting entity’s perspective for all other risks, in IFRS 17 referred to as the Fulfilment Cash Flows. This current value is the basis of … Read more

Last update 17/12/2019 Insurance contract discount rates – The second element of measuring fulfilment cash flows under the general model is an adjustment to the estimates of future cash flows to reflect the time value of money and financial risks related to those cash flows (to the extent that they are not included in the … Read more

Last update 01/12/2019 Instruments with certain par prepayment features debt instruments with prepayment features that give rise to compensation being paid to the party triggering the possibility to be measured at amortised cost or fair value through other comprehensive income (FVOCI) in certain circumstances. Instruments with certain par prepayment features If a financial asset would … Read more

Last update 29/11/2019 Instruments that may fail the SPPI test – Careful consideration and a documented decision regarding the Solely Payment of Principal and Interest test is needed in the following cases: [IFRS 9 B4.1.13, IFRS 9 BC4.186, IFRS 9 BC4.190] Instruments that may fail the SPPI test Instruments that may fail the SPPI test … Read more

Last update 29/11/2019 Instruments that failed the SPPI test – The following financial instruments in IFRS 9 have be carefully judged by the IASB and fail(ed) the Solely Payment of Principal and Interest test. [IFRS 9 B4.1.9D, IFRS 9 B4.1.14] Instruments that fail(ed) the SPPI test Contract description Considerations A bond that is convertible into … Read more

Last update 26/11/2019 Input method Measuring progress to completion is part of IFRS 15 Revenue from Contracts with Customers (contents page is here), which introduced a single and comprehensive framework which sets out how much revenue is to be recognised, and when. The core principle is that a vendor should recognise revenue to depict the … Read more

Last update 22/12/2019 Information to be presented either in the statement of financial position or in the notes – Here is a list of items that a reporting entity can either decide to include in the financial position/balance sheet or in the notes. Neither is wrong, the financial statement should provide useful information as a … Read more

Last update 14/09/2019 This is assist in timely detecting a possible default with one of your customers, it is used in Impairment of investments and loans. Descriptions of indicators of default are classified in three groups: the usual financial ratios derived from financial statements, market criteria, such as market conditions, the customer’s positioning and adaptability, … Read more