Financial liabilities not at amortised costs

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Last update 01/12/2019 Financial liabilities not at amortised costs – IFRS 9 retains almost all of the existing requirements from IAS 39 on the classification of financial liabilities – including those relating to embedded derivatives – because the Board believes that the benefits of changing practice would not outweigh the costs of the disruption caused … Read more

Residual value

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Last update 23/08/2019 IAS 16 Definition: The residual value of an asset is the estimated amount that an entity would currently obtain from disposal of the asset, after deducting the estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life. Following … Read more

Financial instruments clearly explained

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Last update 20/11/2019 Financial instruments clearly explained provides the explanations on all aspects of IAS 32, IAS 39, IFRS 7 and IFRS 9 in this website. The need for so many Standards and their regular withdrawal and/or revisions may show the difficulty in regulating the financial reporting of financial assets, financial liabilities and equity instruments! … Read more

Reporting entity

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Last update 22/08/2019 An entity that chooses, or is required, to prepare general purpose financial statements. The Conceptual Framework provides the following guidance [Conceptual Framework 3.10 – 3.14]: A reporting entity can be a single entity or a portion of an entity or can comprise more than one entity. A reporting entity is not necessarily a … Read more

Financial instruments Basic risks

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Last update 05/12/2019 Financial instruments Basic risks are risks that apply to any type of financial instrument. However, depending on the relevant financial instrument, one or several of the risks described here below may apply cumulatively, therefore entailing an overall increase in the level of risk incurred by the investor. Topics hide 1. Economic risk … Read more

Reliable information

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Last update 06/01/2020 Reliable information – While everybody agrees that financial reporting measurements should provide reliable information, there is no consensus as to what exactly reliability means. For example, views differ as to whether verifiability is an essential component of reliability. Reliable information In measurement generally (as opposed to financial reporting specifically), repeat-ability is usually … Read more

Financial fixed assets at fair value through profit or loss

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Last update 12/12/2019 Financial fixed assets at fair value through profit or loss is part of the decision model for the classification and measurement of financial assets, that started in the IFRS 9 Framework for financial assets. But you can also read it without doing the test …. off course? Financial fixed assets at fair … Read more

Relevance

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Last update 22/08/2019 Relevant financial information is capable of making a difference in decisions made by users if it has predictive value, confirmatory value or both. Predictive value – the financial information is useful because it can be used as an input to processes employed by users to predict future outcomes, in making users’ own … Read more

Financial crises and excessive leverage

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Last update 22/12/2019 Financial crises and excessive leverage – Contrary to popular opinion, stock markets generally continue to reflect companies’ intrinsic value during financial crises. For instance, after the 2007 crisis had started in the credit markets, equity markets too came in for criticism. In October 2008, a New York Times editorial thundered, “What’s been … Read more

Related party transaction

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Last update 06/01/2020 IAS 24 Definition: A related party transaction is a transfer of resources, services or obligations between a reporting entity and a related party, regardless of whether a price is charged. See the definitions for related parties here. A related-party transaction is a deal or arrangement between two parties who are joined by … Read more