Just another WordPress site
Last update 26/11/2019 Example Understanding related party disclosures shows two disclosures of related-party transactions. Here is a real life disclosure from Petrobas in Brasil followed by an example from IAS 24: Exemption from disclosure (IAS 24 25) Government G directly or indirectly controls Entities 1 and 2 and Entities A, B, C and D. Person … Read more
Last update 07/01/2020 Primary users of general purpose financial reports – IAS 1 9 defines the purpose of financial statements as follows: ‘……The objective of financial statements is to provide information about the financial position, financial performance and cash flows of an entity that is useful to a wide range of users in making economic … Read more
Last update 21/12/2019 Example of hyperinflation accounting – Here is an example of hyperinflation accounting (change from functional currency (ARS) to presentation currency (USD)) and a limited disclosure on hedge accounting for a net investment in a foreign operation (Third-party financing of EUR operations in EUR-denominated notes). Hyperinflation accounting (Source: www.ft.com, ‘American companies count cost … Read more
Last update 07/01/2020 Presentation and disclosure are the meta terms used to describe how information about assets, liabilities, equity, income and expenses is provided in financial statements. Presentation and disclosure have received a prominent combined place in the Conceptual Framework for Financial Reporting 2018. After Recognition and Derecognition and Measurement it provides the end process … Read more
Last update 01/12/2019 Example impairment and revaluation of a building – On January 1, 2005 OwnPlus Inc. purchased a building for €2 million. Its estimated useful life at that date was 20 years and the company uses the straight-line depreciation method. On December 31, 2009 the government embarked on a plan to construct a fly-over adjacent … Read more
Last update 11/08/2019 Existing rights that give the current ability to direct the relevant activities. “Power” is defined as the investor having such rights that (s)he can direct the activities that affect the investee’s returns. In the simplest cases, such power arises from the voting rights granted by shares. A parent company exerts power when it … Read more
Last update 22/12/2019 Example IFRS 9 Applying the own use scope exemption – [IFRS 9.2 Scope] The case: Entity XYZ enters in to a contract to buy 100 tonnes of copper for CU200/tonne. The contract permits XYZ to take physical delivery of the copper at the end of 12 months or to settle net in cash, … Read more
Last update 21/08/2019 Post-employment benefits are employee benefits (other than termination benefits and short-term employee benefits) that are payable after the completion of employment. These are retirement benefits (eg pensions and lump sum payments on retirement) and other post-employment benefits, such as post-employment life insurance and post-employment medical care. Other long-term employee benefits are employee … Read more
Last update 22/12/2019 Example financing component in a contract- This is an example of the workings of IFRS 15 60 – 64. A vendor enters into a contract with a customer to build and supply a new machine. Control over the completed machine will pass to the customer in two years’ time (the vendor’s performance … Read more
Last update 20/12/2019 Post-contract support services – Most arrangements involving software also include promises for the right to receive services or unspecified upgrades and enhancements (or both) after the licence period begins. Generally, these services include telephone support and correction of errors (bug fixes or debugging), as well as unspecified upgrades or enhancements. These activities … Read more