IFRS Box

There are over 40 IFRS standards, and without a structure, they can feel chaotic. But here’s the truth: every standard fits into one of a few big themes. I call these themes IFRS Clouds, because each cloud groups related ideas. There are 7 main categories (clouds) and please note that this is not any official … Read more

Deferred tax is not a new concept – however, it is the concept quite misunderstood by many. Well, first of all – deferred tax is NOT a tax to be paid. Instead, it is an accrual for tax, working similarly as any other accrual or even a provision. The next confusing thing about the deferred … Read more

What are management-defined performance measures, the new requirement in IFRS 18? The guidance in IFRS 18 related to MPMs is quite extensive, however, in my humble opinion, most “outside-financial statements” measures will not meet the definition of MPM in IFRS 18. As a result, no specific disclosure will be needed. Why? Because, first, you need … Read more

The new standard IFRS 18 brought a few significant changes in the financial reporting, especially in profit or loss statement. Let’s examine the top four of them and illustrate them on simple examples.   #1 New categories of income and expenses under IFRS 18 Under the new IFRS 18, we need to classify income and … Read more

As the new IFRS 18 has been adopted, it might bring a bit of turmoil to some accountants who might need to change the structure of their accounts to adjust to the new requirements. The good news is that the rules for the statement of changes in equity did not change, when compared to the … Read more

IFRS 18 was issued in 2024 and is mandatorily applicable for the period starting on or after 1 January 2027, with earlier application permitted. However, please watch out because we need to apply IFRS 18 retrospectively, with the restatement of the comparative period. It means that if you apply IFRS 18 from 2027, also the … Read more

Hedge accounting is an optional model for reporting the derivatives, yet it is not a free ride: there are conditions and admin work to do. So, if there is so much additional work related to hedge accounting, why even bother? Well, some people say that hedge accounting is a privilege that we must earn. Let … Read more

Trying to make IFRS 17 complexity a bit easier, here’s the practical numerical solved example of initial measurement of insurance contracts, using the general model under IFRS 17 Insurance Contracts. Please see the following topics: The main principles of initial measurement under IFRS 17; Example #1: Insurance contracts other than onerous; Example #2: Onerous insurance … Read more

IFRS 17 was issued in 2017 and is mandatorily applicable for the period starting on or after 1 January 2023. It replaced “temporary” standard IFRS 4 Insurance Contracts, which is no longer applicable. This summary splits the topics covered in IFRS 17 to the following subtopics: Introduction: Objective, scope, definitions, separating and aggregation; Recognition; Measurement: … Read more