IFRSC Knowledge Base

Last updated: 7 November 2023 Assets reported in the statement of financial position must not exceed the expected economic benefits they will provide, referred to as the ‘recoverable amount’. If an asset’s recoverable amount falls below its carrying amount, the difference must be recognised in profit or loss (or OCI for revalued assets), known as … Read more

Last updated: 20 October 2023 Accounting errors may arise due to a range of factors inherent in the complex and intricate nature of the accounting processes. As businesses manage countless transactions, these errors can stem from simple data entry mistakes, mathematical inaccuracies, misunderstandings of applicable IFRS, oversights or misinterpretations of facts. Other causes include technological … Read more

Last updated: 20 October 2023 Accounting policies often necessitate estimating certain amounts in financial statements, as these amounts can’t be directly observed. The use of estimates is integral to financial statement preparation and does not undermine their reliability (IAS 8.33). Indeed, even highly uncertain estimates often remain the most accurate representation of certain transactions or … Read more

Last updated: 4 August 2022 IFRS contain very limited guidance on accounting for intra-group transactions that would apply specifically to separate financial statements. Although effects of such transactions are eliminated in the course of preparation of consolidated financial statements, they may have a material impact on separate financial statements. Furthermore, an intra-group transaction may also … Read more

List of external resources that an accountant may find useful and that are relevant to multiple IFRS Standards. Useful resources that are related to a specific standard are linked to in the respective parts of our knowledge base. Impact of COVID-19 on financial statements Recent hot topic. The best publications are by EY and PWC … Read more

Last updated: 31 October 2020 A contract modification is a change in the scope or price (or both) of a contract that creates new, or changes existing, rights or obligations. Contract modification that is an additional separate contract A contract modification should be treated as a separate contract for accounting purposes when both of the … Read more

Last updated: 2 November 2020 For disclosure and comparability purposes, IFRS 13 establishes a fair value hierarchy that categorises the inputs to valuation techniques into three levels (IFRS 13.72): Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. Level 2: inputs other … Read more

Last updated: 2 November 2020 The three widely used valuation techniques cited by IFRS 13 are the market approach, the cost approach and the income approach. Entities should choose a technique, or combination of techniques, that is most appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the … Read more

Last updated: 2 November 2020 A fair value measurement assumes that a financial or non-financial liability or an entity’s own equity instrument is transferred to a market participant at the measurement date. The transfer assumes the following (IFRS 13.34): A liability remains outstanding and the market participant transferee is required to fulfil the obligation. In … Read more