IFRS Topics

Last update 23/11/2019 Presentation Cash flow hedges is about the reporting lines in which cash flow hedges are included in the Statement of financial position, Statement of profit or loss and other comprehensive income. Don’t forget about the hedge documentation and other qualifying criteria. The general mechanics of how ongoing cash flow hedges are presented … Read more

Last update 22/11/2019 Presentation and disclosure of crypto-assets possibilities are provided here. The disclosure by holders of crypto-assets will be driven by the disclosure requirements of the IFRS standards that are applied in accounting for them. This narrative illustrates selected disclosure requirements for each classification and measurement in more detail, as well as the general … Read more

Last update 03/12/2019 Present obligation as a result of past event – some basics in accrual accounting, some legal presumptions and a lot to understand…. Obligation: A duty or responsibility to act or perform in a certain way. Obligations may be legally enforceable as a consequence of a binding contract or statutory requirement. Obligations also … Read more

Last update 17/12/2019 The premium allocation approach is a simplified form of measuring insurance contracts in comparison with the general model. Use of the premium allocation approach is optional for each group of insurance contracts that meets the eligibility criteria, at the inception of the group: [IFRS 17:53]a) the entity reasonably expects that this will … Read more

Last update 06/12/2019 Practical implications of IFRS 17 transition choices – The choice between the modified retrospective approach and the fair value approach on transition will impact shareholders’ equity on transition and the release of profit from the insurance contracts in force after the transition. It is also likely to affect operational complexity and the … Read more

Last update 21/12/2019 The reference to the “practical ability” to reassess the risk is intended to differentiate from a pure formal legal right to do so, but where practical facts and circumstances actually prevent the entity from doing so. For example, it might be practically impossible to assess the risk due to any or all … Read more

Last update 25/11/2019 PPE Components and parts is about what to include in cost of letting a constructor build a certain technological type of asset/machinery. A complex asset is comprising of many major and small parts. Its cost excluding directly attributable costs is CU 1,000,000. One of its part costs CU 120,000 and another CU … Read more

Last update 20/11/2019 Power in IFRS-perspective is all about the difference between structured entities (also called Special Purpose Vehicles, think of Enron!) and non-structured entities (strange name for normal (legal) entities) and what control through power means in IFRS 10 Consolidation. Power is defined in IFRS 10 as ‘existing rights that give the current ability … Read more

Last update 23/12/2019 Potential voting rights – An investor may hold instruments that (if exercised or converted), give the investor power to direct the relevant activities. These are called ‘potential voting rights’ and may be held through ownership of the following types of instrument: share options and warrants Potential voting rights convertible bonds Potential voting … Read more

Last update 30/11/2019 Potential to produce economic benefits – This is all about: An economic resource is a right that has the potential to produce economic benefits. In the Conceptual Framework 2018, an asset is now specified as ‘a present economic resource controlled by the entity as a result of past events’. An economic resource, … Read more