IFRS Topics

Last update 04/12/2019 Change in the fair value of a bond – The following example illustrates the calculation that an entity might perform in accordance with the application guidance in IFRS 9 B5.7.18. The case: On 1 January 20X1 an entity issues a 10-year bond with a par value of CU150,0001 and an annual fixed … Read more

Last update 01/12/2019 Change in accounting principles – There is an underlying presumption that an accounting principle, once adopted, should not be changed for similar events and transactions. A change in principle may be caused by new events, changing conditions, or additional information or experience. There are two circumstances when a company is required to … Read more

Last update 22/12/2019 Change in accounting policy – Oil and natural gas properties, including related pipelines, are depreciated using a unit-of-production method. The cost of producing wells is amortized over proved developed reserves. License acquisition, common facilities and future decommissioning costs are amortized over total proved reserves. The unit-of-production rate for the depreciation of common … Read more

Last update 21/12/2019 Challenges in financial reporting – There are specific problems that affect the different bases of measurement available to financial reporting: historical cost, value to the business, fair value, realisable value and value in use. How the different bases work will be considered separately, but it will be helpful to look first at … Read more

Last update 14/11/2019 Cash-flow-based measurement techniques are widely used in measurement of fair values by valuation experts. Fair value is many times determined indirectly using measurement techniques, for example, cash-flow-based measurement techniques, reflecting all the following factors: estimates of future cash flows. Cash-flow-based measurement techniques possible variations in the estimated amount or timing of future … Read more

Last update 23/12/2019 IAS 1 Presentation of financial statements paragraph 32 prohibits the offset of assets and liabilities, and income and expense, unless this is specifically required or permitted by another IFRS. IAS 7 13 – 17 sets out requirements for, and examples of, individual cash inflows and outflows that are to be presented separately … Read more

Last update 22/12/2019 Cash flows identification Only Principal and interest – Cash flows solely payments of principal and interest on the principal amount The following examples illustrate contractual cash flows that are solely payments of principal and interest on the principal amount outstanding. For the context within IFRS 9: Financial Instruments, reference is made to … Read more

Last update 22/12/2019 Cash flows identification Not-Only Principal and interest – The following examples illustrate contractual cash flows that are not solely payments of principal and interest on the principal amount outstanding. For the context within IFRS 9: Financial Instruments, reference is made to IFRS 9 The Solely Payments of Principal and Interest Test . … Read more

Last update 22/12/2019 Cash flows for income tax and sales tax – IAS 7 includes some specific standards for the treatment of cash flows in the Statement of cash flows for income tax and sales tax (and other taxes). Topics hide (i) Income taxes (ii) Sales taxes Direct method Cash flows for income tax and … Read more

Last update 22/12/2019 Cash Flow Risk Management The risk that companies must identify and manage is their cash flow risk, meaning uncertainty about their future cash flows. Finance theory is, for the most part, silent about how much cash flow risk a company should take on. Company Cash Flow Risk Management In practice, however, managers … Read more