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About 3 years ago, I was reviewing the financial statements of a medium-sized company providing consumer loans. They needed the IFRS financial statements due to lots of loans taken from foreign banks. Usually, these banks require bigger debtors to provide the financial statements annually. So I was checking the notes to the financial statements. The … Read more

If you have a large portfolio of trade receivables, then you face the same issue over and over again: How to calculate bad debt provision to these receivables? When I worked as an auditor, I used to discuss this issue with my colleagues very frequently. Everyone of them agreed that yes, there is always some … Read more

During my audit days in Arthur Andersen I had a privilege to lead audit engagements in a few subsidiaries of international holdings and groups. For me, it was very interesting and educative. First of all I learned that the local management of these subsidiaries is often just a formal function and the real decisions are … Read more

I lost my first serious job in Arthur Andersen in 2001. I was devastated, because I really loved that job. Yes, it was full of hard work and long overtimes, but it was the best accounting and auditing school ever. How did I lose my job? Well, Arthur Andersed died after the big accounting scandal … Read more

Recently I had an argument with auditors of one company related to the customer list they bought. The company paid significant amount of cash for the list of customers of telecommunications. The list contained the names, addresses and phone numbers of all the clients. And, the buyer intended to use the list to contact the … Read more

Many companies incur huge costs from which they expect to benefit in the future. For example, companies pay salaries to software engineers who develop some game or an application. Well, how would you treat these costs? It does not feel OK to put all salaries of these engineers in profit or loss when they are … Read more

Ever since the new revenue standard IFRS 15 Revenue from Contracts with Customers was issued, I get one and the same question: What happened to construction contracts? They were guided by IAS 11 Construction Contracts, but you might well know that after 1 January 2018, IAS 11 became superseded – it does NOT apply anymore. … Read more

Some time ago I published an article with an example of very simple method of consolidating a parent and a subsidiary. This article still applies and you can learn the basic steps and methodology of consolidation with a nice video in it. Many of my readers then asked me for a different situation: How to … Read more

There are three IFRS covering the area of the most complex IFRS topic – financial instruments: IAS 32 Presentation of Financial Statements – this standard contains basic definitions and rules for presenting of financial instruments; IFRS 7 Financial Instruments: Disclosures – here, you can find a list of all necessary information that you need to … Read more

Here we go again – another year has started and a number of changes or amendments of IFRS came into effect. I am pretty sure that you are aware of the biggest ones like new IFRS 16, but let me sum up all the new things so that you keep them in mind. In this … Read more