IFRS Topics

Last update 16/09/2019 IFRS 9 sets out guidance (IFRS 9 B5.5.17) to assist entities in determining when a provision for lifetime expected credit losses is required. Entities may consider the following factors when making this determination: Significant changes in internal pricing indicators of credit risk for a particular financial instrument or similar financial instruments with … Read more

Last update 25/11/2019 Portfolio of contracts or performance obligations is a practical solution to revenue recognition in IFRS 15. Although IFRS 15 specifies the accounting for an individual contract with a customer, the Standard allows as a practical expedient that it can be applied to a portfolio of contracts or performance obligations with similar characteristics … Read more

Last update 26/11/2019 Plan to sell a factory Highly probable explores the meaning of highly probable in accounting for IFRS 5 through a clear case. Topics hide The case When a sale is highly probable? 12-month limit Example Commitment to sell a business line Highly probable? Example Sell a non-current asset Plan to sell a factory … Read more

Last update 30/09/2019 IFRS 15 Revenue from Contracts with Customers (contents page is here) introduced a single and comprehensive framework which sets out how much revenue is to be recognised, and when. The core principle is that a vendor should recognise revenue to depict the transfer of promised goods or services to customers in an … Read more

Last update 20/12/2019 Performance obligations in software and cloud services contracts – Once an entity has identified the contract with a customer, it evaluates the contractual terms and its customary business practices to identify all the promised goods or services within the contract and determine which of those promised goods or services (or bundles of … Read more

Last update 26/11/2019 Performance obligations in a property management contract considers key implications IFRS 15 Revenue from Contracts with Customers for real estate entities. It provides an overview of the revenue recognition model in IFRS 15 with a focus on entities that: Own, operate and sell real estate Performance obligations in a property management contract … Read more

Last update 01/11/2019 A construction contract may, in theory, be broken down into many promises that may need to be accounted for separately, the performance obligations construction industry. However, the contract for the construction service can continue to be accounted for as one performance obligation if the contractor can demonstrate that: Performance obligations construction industry … Read more

Last update 29/11/2019 Pass through testing provides some examples to learn which types of financial instruments/transactions qualify for accounting for a pass-through arrangement. All the following conditions have to be met to conclude that such pass-through arrangements meet the criteria for a transfer: [IFRS 9 3.2.5] The entity has no obligation to pay amounts to … Read more

Last update 29/11/2019 Pass through arrangements – If there is no transfer of contractual rights under IFRS 9 3.2.4 (a), an entity should determine if there is an obligation to pass on the cash flows of the financial asset under a pass-through arrangement. For example, a transferor that is a trust or SPE may issue … Read more

Last update 28/11/2019 Own use contracts is one of the other changes from IAS 39 to IFRS 9 in respect of hedge accounting. What are own use contracts Generally, a contract to buy or sell a non-financial item is not within the scope of IFRS 9. However, certain contracts to buy or sell a non-financial … Read more