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Last update 01/12/2019 Order or production backlog – In a Business Combinations, this is a intangible asset and is therefore recognised separately from goodwill, provided that its fair values can be measured reliably. This marketing-related intangible asset meets the definition of an intangible asset because it arises from contractual or other legal rights. An order … Read more

Last update 14/09/2019 Contracts frequently include options for customers to purchase additional goods or services in the future. Customer options that provide a material right to the customer (such as a free or discounted good or service) give rise to a separate performance obligation. In this case, the performance obligation is the option itself, rather … Read more

Last update 12/12/2019 Topics hide Option to put a non-financial asset Practice of settling net forward contract to purchase a commodity Option to put a non-financial asset Related posts: Option to put a non-financial asset Entity XYZ owns an office building. XYZ enters into a put option with an investor that permits XYZ to put … Read more

Last update 16/09/2019 IFRS 8 defines an operating segment as a ‘component of an entity that engages in business activities from which it may earn revenues and incur expenses’. This recognises that not all business activities earn revenues. Where transfer prices are charged between an entity’s stages of production (for example, with oil and gas … Read more

Last update 16/09/2019 IFRS 8 defines an operating segment as a ‘component of an entity that engages in business activities from which it may earn revenues and incur expenses’. This recognises that not all business activities earn revenues. Topics hide Cost centers as a separate segment Related posts: Cost centers as a separate segment Manufacturing … Read more

Last update 16/09/2019 IFRS 8 10 addresses the issue of matrix structures. It uses the example of an entity where some managers are responsible for product and service lines worldwide, whereas other managers are responsible for specific geographical areas. The CODM reviews the operating results of both sets of components, and discrete financial information is … Read more

Last update 17/12/2019 Topics hide Initial recognition Onerous insurance contracts Example initial measurement Subsequent measurement Onerous insurance contracts Onerous insurance contracts Related posts: Initial recognition Onerous insurance contracts An insurance contract is onerous at the date of initial recognition if the fulfilment cash flows allocated to the contract, including any previously recognised acquisition cash flows … Read more

Last update 16/12/2019 Onerous contracts – Example on recognising and measuring provisions Topics hide The Case: Consideration Background Onerous contracts Related posts: The Case: An onerous contract is one in which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. The unavoidable costs under … Read more

Last update 15/12/2019 IFRS 13 On Demand technology With and Without – Estimates the fair value of an asset by comparing the value of the business inclusive of the subject asset, to the hypothetical value of the same business excluding the subject asset. The with and without method is used to separate one intangible asset … Read more

Last update 16/09/2019 IAS 32 prescribes rules for the offsetting of financial assets and financial liabilities. It specifies that a financial asset and a financial liability should be offset and the net amount reported when and only when, an enterprise: Offsetting of financial assets and financial liabilities has a legally enforceable right to set off … Read more