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cuongtd Last update 03/08/2019 Inflows and outflows of cash and cash equivalents. Also called payments of cash and receipts of cash or cash payments and cash receipts. Cash payments (cash outflows) are among others payments to trade creditors, employees (net salary), governments (corporate tax, social securities, VAT or sales tax and/or labor tax withholdings), owners (dividends … Read more
Last update 27/11/2019 Applying the fair value hierarchy provides explanations on how to use and disclose the fair value hierarchy. Fair value measurements (based on inputs to the calculation models used) are categorized in their entirety based on the lowest level input that is significant to the entire fair value measurement. This is summarized in … Read more
Last update 31/12/2019 Cash flow hedge reserve – Hedge accounting can bring a number of advantages over traditional accounting methods. The core benefit is that by addressing the timings mismatch associated with standard derivative accounting, hedge accounting removes temporary volatility from the P&L. As a result, the financial statements will better reflect the company’s true … Read more
Last update 25/11/2019 Analysis of cash flows provides a introduction on how to…. How to use the cash flows in the statement of cash flows to form a opinion on the performance of a business under the slogan: CASH is KING! See operating, financing and investing activities for a technical explanation of the components of … Read more
Last update 11/12/2019 The cash flow hedge is one of three hedges defined in IFRS 9, the others are the fair value hedge and the hedge of a net investment. Hedge accounting can bring a number of advantages over traditional accounting methods. The core benefit is that by addressing the timings mismatch associated with standard derivative … Read more
Last update 12/11/2019 Adjustment of an error in previously issued financial statements is not an accounting change. Such errors include mathematical mistakes, mistakes in the application of accounting principles, or oversight or misuse of facts that existed at the time financial statements were prepared. – IN SHORT – Adjustments of accounting errors. If detected in … Read more
Last update 03/08/2019 Cash is defined as ‘Cash on hand and demand deposits’. Cash equivalents is defined as ‘Short-term, highly liquid investments that are readily convertible to known amounts of cash and that are subject to an insignificant risk of changes in value’. That cash (and cash equivalents) matters makes sense: CASH IS KING is … Read more
Last update 26/11/2019 Alternative performance measures is about what needs to be improved in financial reporting, more relevance, more transparency, more accuracy, more fair value? Effective communication in financial statements is also supported by considering entity-specific information is more useful than standardised descriptions, sometimes referred to as ‘boilerplate’ [IAS 1 7.6] Although financial statements are … Read more
Last update 05/01/2020 Cash accounting – IFRS only accepts accounting for financial reporting on an accrual basis, see below. [IAS 1 27] However, tax authorities sometimes allow (smaller) entrepreneurs to prepare Financial Statements for tax filing purposes on a cash basis. The cash basis is much simpler, but its financial statement results can be very … Read more
Last update 30/09/2019 Many measurements in financial reporting involve allocations of costs and revenues to different accounting periods and different assets. These allocations inevitably include an element of arbitrariness and therefore subjectivity. Just to name a few obvious items: Depreciation of fixed assets involves judgmental allocation decisions (See explanation below). Where assets are bought for … Read more