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Cost of Property plant and equipment

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Last update 29/12/2019 Cost of Property plant and equipment – The cost of an item of property, plant and equipment comprises: Cost of Property plant and equipment its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates. Cost of Property plant and equipment any costs directly attributable to bringing … Read more

Case IFRS 16 Lease car contract

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Last update 23/12/2019 Case IFRS 16 Lease car contract – Because this is a quite frequently used type of lease it is good to get an understanding of how to apply IFRS 16 on a car lease. This includes all the detailed calculations in spreadsheet examples (including Excel functions used) needed to record the correct … Read more

Corporate asset-backed security

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Last update 29/12/2019 Corporate asset-backed security – backed by the cash flows from receivables such as leases on aircraft or other corporate equipment, small and medium enterprise (SME) loans, trade receivables. Also includes ‘whole business’ securities (WBS) based on the cash flows of an entire business unit, such as franchise or brand royalties. An asset-backed … Read more

Capitalisation of earnings valuation

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Last update 21/12/2019 Capitalisation of earnings – The Capitalisation of Earnings Method is an income-oriented approach to valuation modeling. This method is used to value a business based on the future estimated benefits, normally using some measure of earnings or cash flows to be generated by the company. These estimated future benefits are then capitalized … Read more

Convertible notes

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Last update 20/11/2019 Convertible notes are a form of long-term debt that converts into equity, typically in conjunction with a future financing round; in effect, the investor would be loaning money to a startup and instead of a return in the form of principal plus interest, the investor would receive equity in the company rather … Read more

Can a R&D function be an operating segment?

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Last update 16/09/2019 As long as discrete information is reviewed by the Chief Operating Decision Maker (CODM) a R&D function can be an operating segment. Typically, an entity’s research and development (R&D) function is a vertically integrated operation (see Operating segments – Vertically integrated operation), in which the R&D activities serve as an integral component … Read more

Convertible debt option reserve

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Last update 31/12/2019 Convertible debt option reserve – A convertible instrument is dealt with by an issuer as having two ‘components’, being a liability host contract plus a separate conversion feature which may or may not qualify for classification as an equity instrument. When the conversion feature qualifies as an equity instrument it is recorded … Read more

Can a discontinued operation be an operating segment?

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Last update 16/09/2019 A discontinued operation can meet the definition of an operating segment if: it continues to engage in business activities; Can a discontinued operation be an operating segment? the operating results are regularly reviewed by the CODM; and Can a discontinued operation be an operating segment? discrete financial information is available to facilitate … Read more

Control of an investee

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Last update 10/11/2019 Control of an investee starts with a definition: An investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. (IFRS 10 6) CONTROL Power over the investee Control … Read more

Calculations IFRS 16 Leases

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Last update 05/12/2019 Calculations IFRS 16 Leases is a case regarding fixed lease payments depending on an index and rent-free period. This case is rather simple, fixed payments depending on an index and rent-free period. Here are only included the journal entries to be made at the inception of the lease contract. This contract comprises … Read more