IFRS Topics

Last update 28/11/2019 Hedge of forecast foreign currency purchases presents a complete descriptive case of a hedge, from start to finish. Step-by-step build a file to document a hedge and appropriately account for it under IFRS. This narrative can also be used as a sort of starting point to the hedge documentation required for each … Read more

Last update 28/10/2019 Topics hide Q: When can an entity make use of a hedge of a net position? Under IFRS 9 can the group designate the net position of USD10,000 as the hedged item? Hedging an overall net position Hedge of a net position Case — hedge of a net position Treasury involvement Cash … Read more

Last update 27/11/2019 Hedge Economic relationship is the basis why hedging has been invented in the first place – your loss is my profit to put it simple, just like buying a piece of art and pay it by cash, win and loose. Under IFRS 9, a hedging relationship qualifies for hedge accounting if it … Read more

Last update 27/11/2019 Hedge accounting requirements – IFRS 9 now allows, for fair value hedges, the designation of layer components from a defined nominal amount or a defined, but open, population. IFRS 9 still includes some restrictions, in particular that a layer component that includes a prepayment option does not qualify as a hedged item … Read more

Last update 16/09/2019 Under the old rules of IAS 39, hedge accounting could be difficult to achieve in relation to commodity exposures. This was largely due to the fact that IAS 39 did not permit hedging of specific risk components of non-financial items (with the exception of FX risk). Hedge accounting of hedges for commodity … Read more

Last update 04/12/2019 Guidance in identifying the acquirer – The guidance in IFRS 10 Consolidated Financial Statements shall be used to identify the acquirer—the entity that obtains control of the acquiree. If a business combination has occurred but applying the guidance in IFRS 10 does not clearly indicate which of the combining entities is the … Read more

Last update 27/11/2019 Groups of items hedging, designation of layer components these are relevant for a practical risk management process to base hedge accounting on. Hedge accounting under IAS 39 was primarily designed from a single instrument viewpoint, and therefore less effective to apply. A hedging relationship would typically include a single hedging instrument (e.g., … Read more

Last update 22/12/2019 Group cash pooling and company accounts – Cash pooling arrangements arise where one group entity (which may be the ultimate group parent, or a fellow subsidiary) acts as the treasury function for the rest of the group. Under these arrangements, one entity within a group holds and maintains all cash balances with … Read more

Last update 02/12/2019 The receipt of government grants and assistance by an entity may be significant for the preparation of the financial statements for two reasons. Firstly, if resources have been transferred, an appropriate method of accounting for the transfer must be found. Secondly, it is desirable to give an indication of the extent to … Read more

Last update 06/01/2020 Going concern assumption – Going concern is one the fundamental assumptions in accounting on the basis of which financial statements are prepared. IAS 1 states “When preparing financial statements, management shall make an assessment of an entity’s ability to continue as a going concern. An entity shall prepare financial statements on a … Read more