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Blog posts from Annual Reporting Posts
Topics hide Separate lease and non-lease components 1 Overview 2 Typical lease components in real estate contracts Typical lease components 2.1 Additional considerations for leases of land and buildings for landlords 3 Common area maintenance and other non-lease components 4 Property taxes and insurance 5 Allocation of consideration to lease and non-lease 6 Allocation of … Read more
Topics hide Landlord Lease term 1 Overview of landlord lease term 2 Non-cancellable period 4 Reasonably certain threshold 5 Renewable and cancellable leases – Application issues 6 Changes in the lease term Landlord Lease term New guidance on lease term could impact the period over which operating lease incentives are recognised in profit or loss, … Read more
Topics hide Landlord accounting model 1 Overview 2 Lease classification 3 Operating lease model 4 Finance lease model Landlord accounting model Landlords continue to classify leases as finance or operating leases, and continue to classify many real estate leases as operating leases. 1 Overview The lessor follows a dual accounting approach for lease accounting. The … Read more
Topics hide Contract modifications in power and utilities Blend and extend arrangements Case – Contract modification prospective basis Case – Contract modification – construction services arrangement: cumulative catch-up adjustment Contract modifications in power and utilities One of the most judgemental aspects of implementing IFRS 15 for power and utilities entities is applying the contract modifications … Read more
Topics hide IFRS 15 Power purchase agreement Case – Identify the performance obligations (power purchase agreement (‘PPA’)) Case – Identify the performance obligations (gas supply agreement) Case – Identify the performance obligations (design and build a power plant) Take-or-pay power supply and similar long-term energy supply agreements Failed own use on trading contracts IFRS 15 … Read more
Topics hide Determining the transaction price power and utilities Variable consideration power and utilities Case – Variable consideration: performance bonus Case – Price protection if competitor subsequently lowers price Provisional pricing arrangements power and utilities Case – Variability arises from market price only Case – Variability arises from physical attributes only Case – Variability arises … Read more
Topics hide Payment holidays on loans under IFRS 9 What is this all about? Accounting treatment of payment deferrals – Overview Treatment of payment holidays under IFRS 9 – Loan classification and measurement IFRS 9 – Classification, measurement and interest income recognition Authorities’ public statements on Covid-19 related payment deferrals Disclosure Practical considerations – Overview … Read more
Topics hide Measurement of investment property Introduction 1. Investment properties under construction 1.1 Accounting for the costs of construction 2. Subsequent measurement of investment property 2.1 Costs incurred after initial recognition 2.2 Replacement of parts of investment property and subsequent expenditure 2.3 Subsequent measurement: Cost model 2.4 Subsequent measurement: Fair value model Measurement of investment … Read more
Topics hide Identified asset 1. Specified asset 1.1 Capacity portions 1.2 Substantive supplier substitution rights 3. Right to direct the use 3.1 How and for what purpose decisions 3.2 Determining who makes the how and for what purpose decisions 3.3 How and for what purpose decisions are predetermined 3.4 Supplier’s protective rights Identified asset a … Read more
Topics hide Acquisition of investment properties Asset acquisition or business combination New guidance (from 1 January 2020 or earlier) The concentration test Case – Acquisition of a residential real estate portfolio Framework in IFRS 3 Case – Acquisition of a residential and office real estate portfolio Case – Acquisition of a residential and office real … Read more