Option for discounted software

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Last update 20/12/2019 Option for discounted software – A customer receives a discount for purchasing a bundle of goods or services if the sum of the stand-alone selling prices of those promised goods or services in the contract exceeds the promised consideration in a contract. Except when an entity has observable evidence in accordance with … Read more

Eligibility for the premium allocation approach

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Last update 17/12/2019 Eligibility for the premium allocation approach – The premium allocation approach is permitted if, and only if, at the inception of the group of contracts one of the following conditions are met [IFRS 17 53]: The entity reasonably expects that such simplification would produce a measurement of the liability for remaining coverage … Read more

Operating segment

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Last update 06/01/2020 IFRS 8 Definition: An operating segment is a component of an entity: that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the entity’s chief operating decision maker (CODM) to make decisions about resources to be allocated to the segment and … Read more

Earnings per share

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Last update 19/12/2019 Earnings per share – The objective of IAS 33 Earnings per share is prescribing principles for the determination and presentation of earnings per share, so as to improve performance comparisons between different entities in the same reporting period and between different reporting periods for the same entity. Earnings per share is mostly … Read more

Onerous contract

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Last update 01/09/2019 A contract for the exchange of assets or services in which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits or service potential expected to be received under it. So these a loss-making contracts. Such a contract can represent a main financial burden for an entity. Here … Read more

Drawbacks and Benefits of Intangible assets

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Last update 04/12/2019 Drawbacks and Benefits of Intangible assets – Intangibles have become a more prominent reporting line in IFRS financial reporting. Here are some remarks on their current use. Benefits of Intangible assets Drawbacks and Benefits of Intangible assets Intangible assets form a major proportion of the modern businesses and are a primary area … Read more

Offsetting

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Last update 07/01/2020 Offsetting – Identifying, recognising and measuring both an asset and a liability as separate units of account, but presenting them in the statement of financial position as a single net amount. Offsetting, otherwise known as netting, takes place when entities present their rights and obligations to each other as a net amount … Read more

Does the contract contain a lease 5

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Last update 15/05/2019 Did the customer design the asset in a way that predetermines how and for what purpose the asset will be used throughout the period of use? Consideration: The customer designed the asset (or specific aspects of the asset) in a way that predetermines how and for what purpose the asset will be used … Read more

Obligating event

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Last update 21/08/2019 An obligating event is an event that creates a legal or constructive obligation that results in an entity having no realistic alternative to settling that obligation. A legal obligation is an obligation that derives from: a contract (through its explicit or implicit terms); legislation; or other operation of law. A constructive obligation … Read more

Does the contract contain a lease 4

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Last update 15/05/2019 Does the customer have the right to operate the asset throughout the period of use, without the supplier having the right to change those operating instructions? Consideration: The customer has the right to operate the asset (or to direct others to operate the asset in a manner that it determines) throughout the … Read more