IFRS Topics

Last update 02/12/2019 Loan receivable classification and measurement – Once it has been determined that a loan receivable is within the scope of IFRS 9, it must be classified into one of three categories: Amortised cost; Loan receivable classification and measurement Fair Value through Profit or Loss (FVPL); or Loan receivable classification and measurement Fair … Read more

Last update 16/09/2019 Under IFRS 9, the scope of the three-stage impairment approach is extended to apply to such off-balance sheet items. An entity would consider the expected portion of the loan commitment that will be drawn down within the next 12 months when estimating 12-month expected credit losses (Stage 1), and the expected portion … Read more

Last update 18/11/2019 Limitations to financial reporting are many times presented with two clear limitations to the information provided by a general purpose financial report that are materiality and cost. Materiality. Information is material if its omission or misstatement could influence the decisions that users make on the basis of an entity’s financial information. Because … Read more

Last update 01/12/2019 Light Sweet Crude Oil commodity swap – If you need some background on commodity swaps, read this….. Light Sweet Crude Oil commodity swap The case An entity annual purchase 500 barrels of Light Sweet Crude Oil. These purchases are made in a regular pattern over the year. To ensure the price risk … Read more

Last update 29/11/2019 Licensing establishes a customer’s rights to the intellectual property of an entity. Licenses of intellectual property may include, but are not limited to, licenses of any of the following: Software (other than software subject to a hosting arrangement1) and technology Motion pictures, music, and other forms of media and entertainment Franchises Licensing … Read more

Last update 03/12/2019 Licences of intellectual property – The determination of whether a licence is distinct may require judgement. In some software arrangements, a software licence will be distinct because it is the only promise in the contract. In other arrangements, the customer will be able to benefit from the licence on its own or … Read more

Last update 01/11/2019 In a Business Combinations, these –by definition– are intangible assets and are therefore recognised separately from goodwill, provided that their fair values can be measured reliably. These intangible assets meet the definition of an intangible asset because they again –by definition– arise from contractual or other legal rights.  Topics hide These are … Read more

Last update 04/12/2019 Leases Contract for shirts – A case to make it easier to understand the concept of leasing and ultimately the accounting for such lease under IFRS 16 Leases. The case: Leases Contract for shirts Customer enters into a contract with a manufacturer (Supplier) to purchase a particular type, quality and quantity of … Read more

Last update 21/12/2019 Summary Leases capitalisation on the balance sheet IFRS 16 includes a single accounting model for all leases by lessees. The main implications of the new standard on current practice for lessees include: No more operating leases under IFRS 16 (subject to the exceptions described below) All leases (subject to the exceptions described … Read more

Last update 22/12/2019 Leasehold makegood and restoration provisions – Lease makegood / leasehold restoration provisions should be recognised in relation to properties held under operating leases. Such a provision may arise because many property leases contain clauses under which the lessee has to make good dilapidations or other damage which occurs to the property during … Read more