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Topics hide Designated hedged items Definition of hedged item Risk components of non-financial items Hedging groups of net positions Hedging layers of a group Aggregated exposures Designated hedged items This narrative provides an overview of the eligible hedged items that are permitted in IFRS 9. Definition of hedged item Under IFRS 9, a hedged item … Read more
Topics hide Designated hedging instruments Derivative financial instruments – Non-derivative financial instruments measured at fair value through P&L Embedded derivatives Purchased options Forward contracts Accounting for currency basis spreads Designated hedging instruments Most derivative financial instruments can be designated as hedging instruments, provided they are entered into with an external party. Intra-group derivatives or other … Read more
Fair Value Hedges In short – A fair value hedge is a hedge of the exposure to changes in fair value of a recognized asset or liability or an unrecognized firm commitment, or components of any such item, that is attributable to a particular risk and could affect profit or loss. Fair value hedges recognize … Read more
EPS Impact of share-based payments Because share-based payments are common and they impact EPS, it is important to understand how IFRS 2 interacts with IAS 33. Accordingly, this narrative starts with an alternative IFRS 2 perspective and discusses the EPS implications of each type of arrangement under IFRS 2. This narrative builds on the basic … Read more
Topics hide Cash Flow Hedges Example of a Cash Flow Hedge Case – Accounting for a Cash Flow Hedge (Setting up the Cash flow hedge reserve) Example of the Accounting for a Cash Flow Hedge of a Forecast Transaction Resulting in the Recognition of a Non-financial Asset Example of the Accounting for a Cash Flow … Read more
Current tax is the amount of income taxes payable (recoverable) in respect of the taxable profit (tax loss) for a period. 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 … Read more
Topics hide Deferred tax and business combinations Deferred tax and consolidated accounts Intangible assets arising on a business combination Whose tax rate should be applied to fair value adjustments arising in a business combination? Can the recognition of deferred tax on intangibles create goodwill which is immediately impaired? Was a fair price paid? Is the … Read more
Topics hide Allocating deferred tax charge or credit Step 1 – Recognition of deferred tax in OCI or equity Examples of items recognised in OCI Case – Purchase of an equity investment Examples of items recognised directly in equity Deferred tax on equity-settled share-based payments Measurement of deferred tax Component in which to recognise deferred … Read more
Topics hide The manner of tax recovery and the blended tax rate Method of recovery of an asset Dual intention assets Methodology for calculating deferred tax on dual intention assets Integrating initial recognition exemptions into the calculation Case – Building – Blended measurement method Case – Asset intention changes – Blended measurement method The manner … Read more
Topics hide Deferred taxes and Share-based payments Calculating the credit to equity Simple case – Tax credit in profit or loss Case – Tax in other comprehensive income / equity and profit or loss Deferred tax on share options not caught by the measurement provisions of IFRS 2 Deferred taxes and Share-based payments This narrative … Read more