IFRS Topics

Last update 21/12/2019 Implementation IFRS 16 Leases Air France KLM – In the Registration Document 2018 including the annual financial report by AIR FRANCE KLM GROUP the Group implemented IFRS 16 and IFRS 15 and IFRS 9. Here are some excerpts from the document to illustrate the effects: [Air France KLM – 2018 Registration document … Read more

Last update 18/11/2019 Impairment testing cash generating unit with leases is about a right-of-use asset (leased asset) and  such an asset will frequently be included in a cash generating unit to be tested for impairment. At initial recognition, the right-of-use-asset equals the recognised lease liability, plus any lease payments made at or before the commencement … Read more

Last update 19/12/2019 Impairment test before and after IFRS 16 Leases – Below is a simplified example of an impairment test that shows the situation pre-IFRS 16 and post-IFRS 16 and the effects of adjusting the (pre-tax) discount rate. The CGU has a finite life of five years, with no residual value. The lease term … Read more

Last update 06/01/2020 Impairment of right-of-use assets explains the lease assets now on the balance sheet and as a result also susceptible of impairment risks to be accounted for. Impairment of right-of-use assets Right-of-use asset is an asset that represents a lessee’s right to use an underlying asset for the lease term. Right-of-use A contract conveys … Read more

Last update 11/11/2019 Impairment of investments and loans is about impairment in a ‘normal’ business not complicated accounting but straightforward accounting calculations. Impairment of investments and loans Topics hide Normal operations Impairment not in IFRS 9 Financial instruments The 7 Steps for impairment New impairment model ‘General approach’ to impairment Lifetime expected credit loss Default … Read more

Last update 01/11/2019 Possible impairment of intangible assets has to be assessed on a periodical basis. Intangible assets are tested for impairment when there is indication that they might be impaired. Indicators of impairment include legal restrictions, business restructuring, development of new technology, economic changes, etc. Impairment of intangible assets Impairment test for intangible assets … Read more

Last update 01/11/2019 Impairment of assets Highlights in IAS 36 applies to: Impairment of assets Highlights property, plant and equipment; Impairment of assets Highlights intangible assets; Impairment of assets Highlights goodwill; Impairment of assets Highlights investments in entities measured at cost; and Impairment of assets Highlights cash-generating units. Impairment of assets Highlights The standard requires … Read more

Last update 24/12/2019 Impairment Expected credit losses on financial assets relates to the impairment requirements that are applied to: Financial assets measured at amortised cost (originated, purchased, reclassified or modified debt instruments incl. trade receivables), Financial assets measured at fair value through other comprehensive income, Loan commitments except those measured at fair value through profit … Read more

Last update 22/12/2019 Impact of the Discount Rate on Pension obligations – In order to understand how the discount rate impacts the company’s pension obligations, it is useful to first understand the finance concepts of time value of money and present value. Note that the discount rate is the most important (and most difficult to … Read more

Last update 27/11/2019 IFRS 9 requires that, to achieve hedge accounting, the impact of changes in credit risk (in short Impact of credit risk) should not be of a magnitude such that it dominates the value changes, even if there is an economic relationship between the hedged item and hedging instrument. Credit risk can arise … Read more