IFRS Topics

Last update 26/11/2019 Alternative performance measures is about what needs to be improved in financial reporting, more relevance, more transparency, more accuracy, more fair value? Effective communication in financial statements is also supported by considering entity-specific information is more useful than standardised descriptions, sometimes referred to as ‘boilerplate’ [IAS 1 7.6] Although financial statements are … Read more

Last update 30/09/2019 Many measurements in financial reporting involve allocations of costs and revenues to different accounting periods and different assets. These allocations inevitably include an element of arbitrariness and therefore subjectivity. Just to name a few obvious items: Depreciation of fixed assets involves judgmental allocation decisions (See explanation below). Where assets are bought for … Read more

Last update 18/11/2019 Allocation between Controlling and Non-controlling interest is about consolidation, obtain control over but not hold 100% in another entity/subsidiary. When a parent entity first obtains control over another entity, it recognises any non-controlling interest in the new subsidiary’s net assets as illustrated in the example below. In subsequent periods the parent allocates … Read more

Last update 26/11/2019 Allocate the transaction price to the performance obligations considers key implications IFRS 15 Revenue from Contracts with Customers for real estate entities. It provides an overview of the revenue recognition model in IFRS 15 with a focus on entities that: Allocate the transaction price to the performance obligation Own, operate and sell … Read more

Last update 22/11/2019 Aggregation disaggregation and materiality are cornerstones of financial reporting using IFRS. Here is a summary of the financial reporting items that include (mostly) disclosure requirements that relate to these cornerstones. See also Aggregation for an overview of general financial reporting rules in that respect. Aggregation disaggregation and materiality Fair value measurement Present … Read more

Last update 23/12/2019 Agency relationships in consolidation – An investor with decision making rights has to determine whether it is a principal or an agent. An ‘agent’ is defined as ‘a party primarily engaged to act on behalf and for the benefit of another party or parties (the principal(s)) and therefore does not control the … Read more

Last update 17/12/2019 Advance payment to purchase Property plant and equipment is an example presented in IFRIC 22 Foreign Currency Transactions and Advance Consideration. Other examples are: Multiple advances and multiple service deliveries, Multiple advances and multiple deliveries of goods and Multiple advances for one delivery of goods. These examples accompany, but are not part … Read more

Last update 25/11/2019 The adjusted net asset method tangible asset example is used to value a business based on the difference between the fair market value of the business assets and its liabilities. Depending on the particular purpose or circumstances underlying the valuation, this method sometimes uses the replacement or liquidation value of the company assets … Read more

Last update 25/11/2019 The adjusted net asset method negative goodwill example is used to value a business based on the difference between the fair market value of the business assets and its liabilities. Depending on the particular purpose or circumstances underlying the valuation, this method sometimes uses the replacement or liquidation value of the company assets … Read more

Last update 25/11/2019 The adjusted net asset method intangible assets example is used to value a business based on the difference between the fair market value of the business assets and its liabilities. Depending on the particular purpose or circumstances underlying the valuation, this method sometimes uses the replacement or liquidation value of the company assets … Read more