IFRS Box

When you need to translate your items denominated in foreign currency to your own functional currency, then there’s one little problem: Is that item monetary or non-monetary? If you determine the nature of your item incorrectly, it can lead to totally wrong presentation in the financial statements. It’s not so important when you consolidate and … Read more

After I wrote an article about capitalizing borrowing cost, I got a lot of e-mails asking me actually HOW to account for loans that do not bear the interest rate reflecting market conditions. In other words, how to account for loans at below-market interest rate, or even interest-free loans. Such advantageous loans are seen in … Read more

Most balance sheets present individual items in distinction to current and non-current (except for banks and similar institutions). This seems so basic and obvious that most of us do not really think about classifying individual assets and liabilities as current and non-current. We do it automatically. But not always correctly. For example, one of the … Read more

Almost every government supports certain companies or business by providing grants or other kind of assistance. As this is clear benefit and advantage comparing with other companies without such an assistance, it should be properly reported in the financial statements. How? Let’s explain the rules and then solve a simple example. What do the rules … Read more

In my previous article about accounting for government grants I asked you to give me some feedback and write me about some problems or issues in this area. Surprisingly, most of your responses asked one and the same question: How to account for tax incentives of various kinds? Are they a government grant or not? … Read more

After graduating from a university I started my career in a famous, then Big 5 audit company. If you work in auditing I bet you got the worst tasks and assignments during your first year at work! Just as I did. I remember taking part in numerous inventory counts, including those who should be avoided … Read more

The financial instruments belong to the most complicated and difficult areas in IFRS and therefore, I dedicated many articles to making the things understandable a bit. However, until now, we haven’t even touched the complexity of the disclosures about financial instruments as required by IFRS 7 Financial Instruments: Disclosures. Therefore today, I’m happy to publish … Read more

One of the biggest issues related to property, plant and equipment is accounting for spare parts, servicing equipment, stand-by equipment and similar items. IFRS standards are pretty silent about this topic, the guidance is very limited and as a result, companies need to rely on careful assessment of the situation and their judgment. There are … Read more

The year-end is coming closer and closer; the closings have already started to push their pressure on all of us, the exam season approaches and we live the busy lives. I know that this part of the year is usually the second busiest for any accountant or CFO (right after January), but let me stop … Read more

In the past few years, the revenue recognition rules changed dramatically with introduction of the new standard IFRS 15. All affected companies face a lot of challenges and work related to the proper implementation of the new standard. I have written 2 articles about the new rules in the past, namely: IFRS 15 vs. IAS … Read more