IFRS Topics

Last update 11/12/2019 The IFRS glossary – A basic concepts bootcamp A basic concepts bootcamp to guide readers through accounting fundamentals. Fully up-to-date treatment of key IFRS changes including revenue recognition, leasing and insurance accounting. Specialist chapters on banks, insurance accounting, off balance sheet finance, financial instruments and consolidations. Detailed worked examples throughout, supplemented by … Read more

Last update 16/12/2019 Future operating losses – Example on recognising and measuring provisions Topics hide The Case: Background Future operating losses Related posts: The Case: An entity determines that it is probable that a segment of its operations will incur future operating losses for several years. Present obligation as a result of a past obligating … Read more

Last update 22/12/2019 Fundamental Principles of Value Creation – Companies create value by investing capital to generate future cash flows at rates of return that exceed their cost of capital. The faster they can grow and deploy more capital at attractive rates of return, the more value they create. The mix of growth and return … Read more

Last update 01/11/2019 The two definitions in functional currency and presentation currency to start with: Presentation currency is the currency that a group reports its consolidated profits in. This is a free choice available to a group and directly affects the headline reported profit. Functional currency and Presentation currency Functional currency is the currency of … Read more

Last update 01/11/2019 Full derecognition with new assets liabilities retained is part of a decision model for the derecognition of financial assets. The derecognition can be a full derecognition, a full continued recognition, a full derecognition with recognition of new assets or liabilities retained or a continued involvement. The model is starting here Derecognition of … Read more

Last update 18/11/2019 There are two accounting events in which an entity must deal with foreign currency translation: Purchases, sales, cash receipts, cash payments, investments and other (individual) financial transactions in a currency other than the functional currency of the entity accounting for these transactions, Foreign currency translation Conversion of financial statements of a foreign … Read more

Last update 28/11/2019 Foreign currency forward contracts is about one of the other changes from IAS 39 to IFRS 9 in respect of hedge accounting What is a forward element of forward contracts? A forward exchange contract is a special type of foreign currency transaction. Forward contracts are agreements between two parties to exchange two … Read more

Last update 22/12/2019 Foreign currency cash flows – IAS 7.25 requires cash flows arising from transactions in a foreign currency to be recorded at the exchange rate between an entity’s functional currency and the foreign currency at the date of the cash flow. A similar approach is required for cash flows of a foreign subsidiary … Read more

Last update 28/11/2019 Foreign currency basis spreads is about one of the other changes from IAS 39 to IFRS 9 in respect of hedge accounting What is the cross currency basis spread In general, the cross currency basis is a measure of dollar shortage in the market. The more negative the basis becomes, the more … Read more

Last update 22/12/2019 Food for thought for Property plant and equipment – Economic benefits to be derived from an item of Property, plant and equipment (PPE) can be direct or indirect. An item of PPE may generate economic benefit individually or in association with other assets and liabilities. An item of PPE like safety and … Read more