IFRS Topics

Last update 27/10/2019 When should a reporting entity recognise events after the reporting period in the financial statements that are being finalised? What are the disclosures that should be given about the date when the financial statements were authorised for issue and about the events after the reporting date? The answers look a bit colorful … Read more

Last update 26/11/2019 Estimating market rate of return when volume or activity is slight shows a way to estimate the current required market rate of return on a potential investment in a security when there is no active market or principal market for trading in securities issued by companies comparable to the company for which … Read more

Last update 22/12/2019 Estimating fair value – To start this narrative on fair value measurement three things to keep in mind!!!! Fair value measurement is an estimation process, not a scientific method: Uncertainty is key, what are the expected cash flows, what type of industry is concerned, at what stage of the Business Life Cycle … Read more

Last update 17/12/2019 Estimates of future cash flows – The first element of measuring fulfilment cash flows in the general model (see ‘General model of measurement of insurance contracts‘) is an estimate of future cash flows within the contract boundary period of each contract in a group. Here is how the estimates of future cash flows … Read more

Last update 22/11/2019 Equity reserves are part of owner’s equity, Equity is defined as follows: The residual interest in the assets of the enterprise after deducting all of its liabilities. Equity reserves are defined/described in several IFRS Standards, let’s see…. Equity consists of several components such as Share capital, Treasury shares (issued shares held by … Read more

Last update 12/12/2019 Equity investments at FVOCI – IFRS 9 requires all equity investments to be measured at fair value. The default approach is for all changes in fair value to be recognised in profit or loss. However, for equity investments that are neither held for trading nor contingent consideration recognised by an acquirer in … Read more

Last update 12/12/2019 This Equity instruments held for trading question is part of the decision model for the classification and measurement of financial assets, that started in the IFRS 9 Framework for financial assets. But you can also read it without doing the test …. off course? OK the financial asset is an equity instrument. … Read more

Last update 21/12/2019 Engineering and Construction contract costs – This part relates to a complete explanation of IFRS 15 Revenue from contracts with customers in respect of Engineering & Construction contracts, see Revenue from Engineering & Construction contracts. IFRS 15 also specifies the accounting treatment for certain costs an entity incurs in obtaining and fulfilling … Read more

Last update 22/12/2019 Embedded derivatives Equity kicker – A more specific type of embedded derivative that is often found in practice relates to a type of funding provided by venture capital entities is the equity kicker. It is many times part of a sales of a part of a business of a listed company, financed … Read more

Last update 23/12/2019 Elimination of the parents investment – The parent company will report the ‘investments in subsidiaries’ as an asset, with the subsidiary reporting the equivalent equity owned by the parent as equity on its own accounts. At the consolidated level, an elimination adjustment must be recorded so that the consolidated statement is not … Read more