Just another WordPress site
Last update 22/08/2019 The process of capturing, for inclusion in the statement of financial position or the statement(s) of financial performance, an item that meets the definition of an element. It involves depicting the item (either alone or as part of a line item) in words and by a monetary amount, and including that amount in totals in the relevant statement. … Read more
Last update 25/11/2019 Fair Value of Decommissioning Obligation is about a nice example of decommissioning a large oil platform. On 1 January 20X1 Entity A assumes a decommissioning (i.e., asset retirement) liability in a business combination. The entity is legally required to dismantle and remove an offshore oil platform at the end of its useful … Read more
Last update 09/12/2019 Reclassification of financial assets – This section looks at the circumstances in which financial assets are reclassified, and their measurement on reclassification. Financial liabilities cannot be reclassified. [IFRS 9 4.4.2] Reclassification of financial assets – requirements Under IFRS 9, reclassification of financial assets is required if, and only if, the objective of … Read more
Last update 25/11/2019 Fair value of a liability provides a practical case showing how fair value of liabilities is measured in slightly more complicated transactions. The Case Fair value of a liability Assume that Entity X and Entity Y each enter into a contractual obligation to pay cash (€500) to Entity Z in five years. … Read more
Last update 22/08/2019 Reclassification adjustments are amounts reclassified to profit or loss in the current period that were recognised in other comprehensive income in the current or previous periods.[IAS 1 92] The following reporting lines are items included in Other comprehensive income, the reclassification adjustments are marked. IFRS link Financial reporting line IAS 1 … Read more
Last update 26/11/2019 Fair value measurement in short is a brief introduction to some of the key terms used in fair value measurement, as well as a diagram that shows the flow in relation to the process of measuring fair value and determining the appropriate disclosures. The key term that drives this process is fair value: … Read more
Last update 22/08/2019 IFRS 9 contains a rebuttable presumption that credit risk has increased significantly when contractual payments are more than 30 days past due. This means that when payments are 30 days past due, the financial asset is considered to have moved from Stage 1 to Stage 2, and lifetime expected credit losses are … Read more
Last update 21/12/2019 Fair value measurement and disclosure – The following are some examples of assets and liabilities that fall within the scope of IFRS 13 for the purpose of measurement and/or disclosure. IFRS=== Financial reporting item Measurement Disclosure [IAS 39] Financial instruments available-for-sale or held for trading (recurring fair value measurements) Fair value measurement … Read more
Last update 21/08/2019 The realisation principle is the concept that revenue can only be recognised once the underlying goods or services associated with the revenue have been delivered or rendered, respectively. Thus, revenue can only be recognised after it has been earned. The best way to understand the realisation principle is through the following examples: Advance payment … Read more
Last update 17/09/2019 Fair value is defined as ‘the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date’, also referred to as the willing buyer-willing seller principle. It is important to note that fair value is a market-based … Read more