Factors specific to initial measurement

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Last update 30/09/2019 Measurement choices for recording transactions discusses factors to consider when selecting a measurement basis, whether for initial recognition or subsequent measurement. Here some additional factors to consider at initial recognition are considered. At initial recognition, the cost of an asset acquired, or of a liability incurred, as a result of an event … Read more

Puttable instrument

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Last update 21/08/2019 A puttable instrument is a financial instrument that gives the holder the right to put the instrument back to the issuer for cash or another financial asset or is automatically put back to the issuer on the occurrence of an uncertain future event or the death or retirement of the instrument holder. It should be noted … Read more

Factoring without recourse

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Last update 29/11/2019 Factoring without recourse – This is an illustration of how derecognition is applied in practice. The objective is to present the mechanics of applying the IFRS 9 requirements for derecognition of financial assets, starting with an analysis of the transaction using the flowchart [IFRS 9 B3.2.1], and culminating with the initial and … Read more

Purpose of related party disclosures

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Last update 04/01/2020 Purpose of related party disclosures – Related party relationships are a normal feature of commerce and business. For example, entities frequently carry on parts of their activities through subsidiaries, joint ventures and associates. In those circumstances, the entity has the ability to affect the financial and operating policies of the investee through … Read more

Factoring with recourse

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Last update 29/11/2019 Factoring with recourse – This is an illustration of how derecognition is applied in practice. The objective is to present the mechanics of applying the IFRS 9 requirements for derecognition of financial assets, starting with an analysis of the transaction using the flowchart [IFRS 9 B3.2.1], and culminating with the initial and … Read more

Purchased or originated credit-impaired financial asset

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Last update 21/08/2019 Purchased or originated financial asset(s) that are credit-impaired on initial recognition. For purchased or originated credit-impaired financial assets it is clear for the owner that the value of these financial assets is lower than their nominal or initial value.  Also it was clear the interest revenue is not the full interest promoted at … Read more

Factoring with late payment risk retained

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Last update 29/11/2019 Factoring with late payment risk retained – This is an illustration of how derecognition is applied in practice. The objective is to present the mechanics of applying the IFRS 9 requirements for derecognition of financial assets, starting with an analysis of the transaction using the flowchart [IFRS 9 B3.2.1], and culminating with … Read more

Provisions

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Last update 21/08/2019 A provision is a liability of uncertain timing or amount. To better understand the nature of the financial reporting line ‘Provisions’ a comparison is made with other liabilities and contingent liabilities. From their nature provisions are more or less in between other liabilities (less uncertain) and contingent liabilities (more uncertain). Provisions and … Read more

Factoring of trade debtors

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Last update 29/11/2019 Factoring of trade debtors is by far the most common transaction entered into by non-financial entities that requires assessment against the derecognition criteria. Surprisingly, IFRS 9 does not mention it in its examples. Factoring of trade debtors can serve as a useful example to illustrate derecognition requirements. Factoring of trade debtors Example: … Read more

Protective rights

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Last update 22/10/2019 Rights designed to protect the interest of the party holding those rights without giving that party power over the entity to which those rights relate. Protective rights relate to fundamental changes to the activities of an investee or apply in exceptional circumstances. However, not all rights that apply in exceptional circumstances or are contingent … Read more