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Fixed income Accounting for expected credit losses

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Last update 20/11/2019 The ability to delay the recognition of credit losses on loans until there is evidence of a trigger event has been identified as one of the weaknesses in the incurred loss model outlined in IAS 39 for Fixed income Accounting for expected credit losses. To tighten up the credit loss rules, a forward-looking … Read more

Securitisation

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Last update 29/12/2019 Securitisation is a financial process by which an owner of an asset, such as a portfolio of loans, receives cash upfront in exchange for the future cash flows from the asset without selling the asset in a normal contractual sales agreement. This process entails pooling the cash flows and selling them to … Read more

First time adoption IFRS Introduction

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Last update 03/12/2019 First time adoption IFRS Introduction – It is not only about IFRS 1 when an entity prepares its first IFRS financial statements, but also about some other IFRS because IFRS 1 references to these IFRS standards. Therefore, entities will need to consider the following standards in their first time adoption review process: … Read more

Sales tax and VAT

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Last update 04/01/2020 Sales tax and VAT Sales tax is collected by the retailer when the final sale in the supply chain is reached via a sale to the end consumer. End consumers pay the sales tax on their purchases. Businesses issue resale certificates to their sellers when buying business supplies/inputs that will be resold … Read more

Right of return

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Last update 20/12/2019 Right of return – IFRS 15 notes that, in some contracts, an entity may transfer control of a product to a customer, but grant the customer the right to return. In return, the customer may receive a full or partial refund of any consideration paid; a credit that can be applied against … Read more

Financing component in the contract

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Last update 01/10/2019 IFRS 15 Revenue from Contracts with Customers (contents page is here) 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 transfer of promised goods or services to customers in an … Read more

Revaluation model

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Last update 29/12/2019 As part of IAS 16 Property, Plant and Equipment it is possible to use the revaluation model. An asset will be carried at its fair value at the revaluation date less subsequent depreciation and/or impairment. Gains/losses arising on the revaluation of an entity’s property (other than investment property) are recorded within equity … Read more

Financial Statements 2018 Investment Property

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Last update 20/12/2019 Just some highlights how financial statements for entities holding investment properties are different from more general purpose financial statements. Just like financial institutions and in the past companies with building and construction activities have/had their own industry specific IFRS that cover/covered the reporting of useful information outside the general/mainstream IFRS reporting rules. … Read more

Return on Average Capital Employed

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Last update 04/01/2020 The return on average capital employed (ROACE) is a ratio that reveals the profitability against the investments made in the company. The return on average capital employed is different from the return on capital employed for it counts the average of the opening and closing capital for the specific period contrasting to only the … Read more

Financial reporting models

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Last update 23/12/2019 Financial reporting models – This is a note on the innovative history of Philips’ financial reporting, see the ‘Introduction to a history of innovation in financial reporting‘. Literature suggests that voluntary disclosure of financial reporting is associated with participatory, democratic ownership structures. Conversely, secretive attitudes are fostered by the centralization of equity … Read more