IFRSC Knowledge Base

Last updated: 8 April 2020 An intangible asset is recognised when it meets all of the criteria below (IAS 38.18,21): identifiability, probability of future economic benefits, control over the future economic benefits, reliable measurement of cost. An intangible asset is recognised at cost (IAS 38.24). IAS 38 provides application guidance for separate acquisition of intangible … Read more

Last updated: 15 March 2020 IAS 38 prescribes accounting treatment for all intangible assets that are not specifically covered elsewhere in IFRS. Examples of intangible assets that are not within the scope of IAS 38 are given in paragraphs IAS 38.2-3 (e.g. deferred tax assets, financial assets). Any expenditure that does not result in recognition … Read more

Last updated: 20 March 2020 Contingent assets and contingent liabilities are dealt with in IAS 37, except for assets and liabilities covered by another standard, as listed in paragraph IAS 37.5. See also the discussion on contractual assets and liabilities. What is a contingent liability? A contingent liability is (IAS 37.10; 27-30): a possible obligation … Read more

Last updated: 1 June 2020 What is a provision? Provisions are liabilities of uncertain timing or amount. This uncertainty makes them different from accruals or payables, where the timing and amount are often contractual and the uncertainty is insignificant. Provisions are dealt with in IAS 37. However, items specifically covered by another standard are scoped … Read more

Last updated: 16 March 2020 If the recoverable amount of an asset is less than its carrying amount, the carrying amount must be reduced to its recoverable amount and the difference charged to P/L (or OCI for revalued assets). This is an impairment loss.  Following an impairment loss, subsequent depreciation charge is adjusted to reflect … Read more

Last updated: 30 March 2020 Value in use – overview Value in use (IAS 36.30-57) can be shortly defined as future cash inflows and outflows from continuing use of the asset and from its ultimate disposal, which are then discounted to reflect time value for money and risk. In practice, a single estimate of cash … Read more

Last updated: 16 March 2020 Identification of cash-generating units – overview In most cases, companies do not test individual assets for impairment. Instead, IAS 36 requires assets to be combined into cash-generating units (‘CGU’) consisting of assets for which it is impossible to estimate the recoverable amount individually. This is the case when (IAS 36.67): … Read more

Last updated: 14 May 2020 The purpose of interim financial statements is to provide an update on the latest annual financial statements. IAS 34 prescribes how to prepare interim financial statements under IFRS, but sets no requirements as to which entities should prepare them and how often. It is usually the requirement of local legislation … Read more