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cuongtd Last update 13/12/2019 The loss given default (LGD) represents the entity’s expectation (entity often being an insurer but also other entities) of the extent of loss on a defaulted exposure. The LGD varies by type of borrower, type and seniority of claim and availability of collateral or other credit support. The LGD is expressed as … Read more
Last update 23/12/2019 Disclosure innovations in financial reporting – This is a note on the innovative history of Philips’ financial reporting, see the ‘Introduction to a history of innovation in financial reporting‘. In the Netherlands formal legislation concerning financial reporting was introduced rather late in the early 1970s. The lack of formal legislation was a … Read more
Last update 14/11/2019 Loss allowance is an approach for the prudence or conservatism principle. Assets should not be overstated, liabilities not understated. Better save, than sorry! The term ‘Loss allowance’ covers allowances recorded against the following financial assets: The allowance for expected credit losses on financial assets measured at amortised costs (in accordance with IFRS … Read more
Last update 17/12/2019 Disclosure for Insurance contracts – The disclosure requirements in IFRS 17 aim to provide users of the financial statements with a basis to assess the effect that contracts within the scope of IFRS 17 have on an entity’s financial position, financial performance and cash flows. Disclosure for Insurance contracts Disclosure for Insurance … Read more
Last update 18/08/2019 Non-derivative financial assets with fixed or determinable payments that are not quoted in an active market other than: those at fair value through profit or loss; those designated as available-for-sale; and those which the holder may not recover substantially all of its initial investment. Loans and receivables shall be measured upon initial … Read more
Last update 27/11/2019 Disclosure financial instruments tries to address a large part of the significant disclosure requirements included in IFRS 7 Financial Instruments: Disclosure. IFRS 7 requires certain disclosures to be presented by category of an instrument based on the IFRS 9 recognition and measurement categories of financial instruments (previously the IAS 39 measurement categories). … Read more
Last update 18/08/2019 One major tool to finance corporations is via credit line commitments. These are short term credit lines that firms can withdraw from their banks, up to a certain, predetermined ceiling, at a certain cost, usually above the interest rate on long term credit. The credit lines serve corporations to finance, usually, short … Read more
Last update 11/12/2019 Disclosure about insurance risks – Disclosure about the nature and extent of insurance risks An entity needs to disclose information that enables financial statement users to evaluate the nature, amount, timing and uncertainty of future cash flows that arise from contracts within the scope of IFRS 17 [IFRS 17 93 and IFRS … Read more
Last update 18/08/2019 Definition: The risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. Liquidity risk is the most fundamental financial risk that companies need to manage. Insufficient or no access to liquidity or cash at a required time and … Read more
Last update 20/11/2019 Having identified an investee’s relevant activities, the next step is to determine how directing relevant activities has been organised. IFRS 10 breaks this down into the following two steps (although in practice these steps are normally combined with the identification of relevant activities): Directing relevant activities understanding the decisions about relevant activities … Read more