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The Conceptual Framework for the Financial Reporting (let’s title it just “Framework”) is a basic document that sets objectives and the concepts for general purpose financial reporting. Its predecessor, Framework for the preparation and presentation of the financial statements was issued back in 1989. Then in 2010, IASB published the new document, Conceptual Framework for … Read more

The end of 2018 spelled out relief for most accounting and financial modelling experts responsible for the implementation of IFRS 9: all necessary changes to accounting policies, models and methodologies were designed and enforced, all in time for a lovely Christmas break at the end of 2018! But for another group of professionals, namely auditors, … Read more

Impairment tests are one of the most judgmental areas in IFRS. It is all about estimating, judging, evaluating and forecasting. Sometimes it is almost like fortune telling, isn’t it? When I audited a few companies, I really disliked going through their impairment tests because all of them seemed nice and always showed no impairment whatsoever. … Read more

In my last article, I tried to outline the main things to consider and to avoid when preparing the cash flow projections for the impairment tests under IAS 36. Here let’s illustrate the theory and show the numerical example of making cash flow projections for impairment tests. Please be warned that there are many variations … Read more

Note: This article is a guest post written by Mr. Mohammed Afsar, Director of MizaanTech Ltd. IFRS 2 Share-based Payment (the “Standard”) is the financial reporting standard dealing with share based payments. It was first introduced in 2005, and is considered to be one of the most complex standards. One complexity is due to the … Read more

The standard IFRS 16 Leases has been issued for a while with the mandatory effective date of 1 January 2019. It means that you should have done some work and have it in function by this time. Yet, I still keep receiving questions related to different transition approaches, something like: “Is it possible that the … Read more

Should you ever recognize impairment, or a provision on your intercompany loan (if you are a lender, of course)? Why would you do that when all intercompany balances are eliminated on consolidation and there’s nothing left in the consolidated financial statements – no loan, no provision? Short answer – YES, you should, in most cases. … Read more

Let’s face the truth: most intercompany loans (or at least many of them) are special in some way: They are undocumented – a parent simply sends cash to a subsidiary with no contract whatsoever and no one has an idea what the terms of the loan are; There is no maturity date – a loan … Read more

Earnings per share (EPS) is one of the two ingredients for calculating PE ratio (or P/E ratio) – one of the most significant and important indicators of a performance of certain stock or share in the stock market. As I have already written in this article, the two ingredients are: Market price per share – … Read more