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Blog posts from Annual Reporting Posts
Sub-leases of real estate New classification guidance means that more sub-leases are finance leases under IFRS 16 than previously, impacting the financial position and financial performance of intermediate landlords. A sub-lease is a transaction in which a lessee (or ‘intermediate lessor’) grants a right to use the underlying asset to a third party, and the … Read more
Topics hide Lease calculation The 5-step lease calculations model Step 1. Identification of a lease contract Step 2 Lease term Lease Options to Extend or Terminate Reassessment of Lease Term Step 3 Initial measurement of the lease liabilty Right-of-Use Asset Subsequent Measurement of Lease Liability Step 4 Historical reporting Step 5 Historical changes to the … Read more
The total period of time that an asset is used to fulfil a contract with a customer (including any non-consecutive periods of time). IFRS terms or definitions come from the Official Journal of the European Union (© European Union, https://eur-lex.europa.eu). Individual jurisdictions around the world may require or permit the use … Read more
The date on which a lessor makes an underlying asset available for use by a lessee. IFRS terms or definitions come from the Official Journal of the European Union (© European Union, https://eur-lex.europa.eu). Individual jurisdictions around the world may require or permit the use of (locally authorised and/or amended) IFRS Standards … Read more
Topics hide Landlord lease definition 1 Overview 3 Typical real estate arrangements Landlord lease definition Identifying a lease of real estate is usually straightforward – but some scenarios will require judgement. 1 Overview A lease is a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for … Read more
Topics hide Sale-and-leaseback of real estate Sale-and-leaseback Buyer-landlord Seller-tenant Case – Buyer-landlord accounting for a sale-and-leaseback transaction when transfer is a sale Case – Buyer-landlord accounting for a sale-and-leaseback transaction when transfer is not a sale Food for thought – How does a buyer-landlord assess whether a transaction qualifies for sale-and-leaseback accounting? Food for thought … Read more
Topics hide Leased investment property Food for thought – How does the accounting for leased investment properties differ under IFRS 16? Food for thought – Are there special rules for accounting for right-of-use investment property? Food for thought – How does a landlord apply the fair value model to a right-of-use asset? Leased investment property … Read more
Topics hide Revenue recognition when or as the entity satisfies a performance obligation Different pricing conventions Revenue recognition when or as the entity satisfies a performance obligation The obligation to purchase and sell electricity under a PPA generally will be viewed as a single performance obligation that is satisfied over time (when). A power and … Read more
Topics hide IFRS 15 Measuring progress to completion Introduction Practical expedient in IFRS 15 for recognition of revenue over time Selecting a method to measure progress Time-based measure of progress: Technical support services Time-based measure of progress: Unspecified updates Determining which measure of progress to apply is not a free choice(IFRS 15.BC159) Single method of … Read more
Topics hide Electricity revenue recognition example Application of the five-step model Electricity revenue recognition – IFRS 15 step-by-step Step 1 – Identify the contract with a customer Step 2 – Identify the performance obligations Step 3 – Determine the transaction price Step 4 – Allocate transaction price to the performance obligations in the contract Step … Read more