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Last updated: 16 March 2020 Identification of cash-generating units – overview In most cases, companies do not test individual assets for impairment. Instead, IAS 36 requires assets to be combined into cash-generating units (‘CGU’) consisting of assets for which it is impossible to estimate the recoverable amount individually. This is the case when (IAS 36.67): … Read more

Last updated: 14 May 2020 The purpose of interim financial statements is to provide an update on the latest annual financial statements. IAS 34 prescribes how to prepare interim financial statements under IFRS, but sets no requirements as to which entities should prepare them and how often. It is usually the requirement of local legislation … Read more

Last updated: 15 April 2020 Arguably the biggest challenge in applying IAS 32 is making the distinction between financial liabilities (definition) and equity (definition). Contractual obligation to deliver cash or other financial assets Impact on the classification A critical feature in differentiating a financial liability from an equity instrument is the existence of a contractual … Read more

Last updated: 15 April 2020 Definitions essential in accounting for financial instruments are set out in IAS 32. Definition of a financial instrument A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity (IAS 32.11). ‘Contract’ and ‘contractual’ are … Read more

Last updated: 14 May 2020 Separate financial statements are covered in IAS 27 and are defined as financial statements in which investments in subsidiaries, joint ventures and associates and accounted either at cost, in accordance with IFRS 9 or using the equity method. When an entity does not have investments in subsidiaries, joint ventures or … Read more