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Last update 11/12/2019 The IFRS glossary – A basic concepts bootcamp A basic concepts bootcamp to guide readers through accounting fundamentals. Fully up-to-date treatment of key IFRS changes including revenue recognition, leasing and insurance accounting. Specialist chapters on banks, insurance accounting, off balance sheet finance, financial instruments and consolidations. Detailed worked examples throughout, supplemented by … Read more
Last update 20/12/2019 Software warranties – A customer may have the option to separately purchase a warranty on a product (e.g., computer hardware, networking equipment) for a period of time at the point of sale or the warranty may be explicitly stated in the contract. Software warranties Software warranties Software warranties Warranties may fall into … Read more
Last update 16/12/2019 Future operating losses – Example on recognising and measuring provisions Topics hide The Case: Background Future operating losses Related posts: The Case: An entity determines that it is probable that a segment of its operations will incur future operating losses for several years. Present obligation as a result of a past obligating … Read more
Last update 14/11/2019 Next to recording loss allowances based on expected credit losses under the ‘general approach’ IFRS 9 has also made it possible to use a Simplified approach Lifetime expected credit losses for trade receivables, contract assets and lease receivables. Under the “expected credit loss” model, an entity calculates the allowance for credit losses … Read more
Last update 22/12/2019 Fundamental Principles of Value Creation – Companies create value by investing capital to generate future cash flows at rates of return that exceed their cost of capital. The faster they can grow and deploy more capital at attractive rates of return, the more value they create. The mix of growth and return … Read more
Last update 06/01/2020 Similar economic characteristics – This is part of IFRS 8 Operating segments. When evaluating whether two segments have similar economic characteristics, the difference between their gross margins should be measured by their percentage difference, as illustrated in the example below. Topics hide Long-term average gross margin analysis Similar economic characteristics Long-term average … Read more
Last update 01/11/2019 The two definitions in functional currency and presentation currency to start with: Presentation currency is the currency that a group reports its consolidated profits in. This is a free choice available to a group and directly affects the headline reported profit. Functional currency and Presentation currency Functional currency is the currency of … Read more
Last update 28/12/2019 Significant insurance risk – An insurance contract is only in the scope of IFRS 17 if it transfers a significant amount of insurance risk to the entity (or reinsurer). Insurance risk is only significant if there is at least one scenario with commercial substance where the compensation paid by the insurer is … Read more
Last update 01/11/2019 Full derecognition with new assets liabilities retained is part of a decision model for the derecognition of financial assets. The derecognition can be a full derecognition, a full continued recognition, a full derecognition with recognition of new assets or liabilities retained or a continued involvement. The model is starting here Derecognition of … Read more
Last update 24/08/2019 Significance influence is a term used in IFRS regarding investments in joint ventures and associates as well as related parties. Significant influence (relating to interests in joint ventures) The power to participate in the financial and operating policy decisions of an activity but is not control or joint control over those policies. … Read more