Disclosure recognised insurance amounts

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Last update 14/12/2019 Explanation of recognised amounts Disclosure recognised insurance amounts An entity is required to disclose the following: Reconciliations that show how the net carrying amount of contracts within the scope of IFRS 17 changed during each period (see 1 below) Disclosures for contracts other than those to which the entity applies the premium … Read more

Macro hedging

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Last update 11/12/2019 Macro hedging – IFRS 9 hedge accounting applies to all hedge relationships, with the exception of fair value hedges of the interest rate exposure of a portfolio of financial assets or financial liabilities (commonly referred as ‘fair value macro hedges’). This exception arises because IASB has a separate project to address the accounting … Read more

Disclosure of significant judgments for insurances

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Last update 11/12/2019 Disclosure of significant judgments for insurances – Consistent with IAS 1, IFRS 17 requires disclosure of significant judgment and changes in judgment that an entity makes in applying the standard [IFRS 17 93 and IAS 1 122]. Specifically, an entity must disclose the inputs, assumptions and estimation techniques it has used, including … Read more

Low credit risk financial instruments

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Last update 21/08/2019 IFRS 9 includes a practical expedient for low credit risk financial instruments. Characteristics of low credit risk financial instruments include: Strong capacity to meet its contractual cash flow obligations in the near term, Adverse changes in economic and business conditions in the longer term may, but will not necessarily, reduce the borrower’s … Read more

Disclosure of restrictions to cash and its equivalents

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Last update 23/12/2019 Disclosure of restrictions to cash and its equivalents – Restricted cash and cash equivalent balances are those which meet the definition of cash and cash equivalents but are not available for use by the group. In practice, these balances may arise when a subsidiary in a group operates in a jurisdiction where … Read more

Low credit risk

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Last update 06/12/2019 Low credit risk, in the context of IFRS 9, is an indicator assigned to financial instruments deemed to have low default risk, that is a low likelihood of any credit event the borrower has a strong capacity to meet contractual cash flow obligations both in the near term. It is an important … Read more

Disclosure of operating segments

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Last update 16/09/2019 The disclosures regarding operating segments focus on the information that management believes is important when running the business. The disclosure requirements are summarised below. Information required Disclosures General information Factors used to identify the reportable segments. Types of product/service from which each reportable segment derives its revenue. Information about the reportable segment; … Read more

Loss given default

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Last update 13/12/2019 The loss given default (LGD) represents the entity’s expectation (entity often being an insurer but also other entities) of the extent of loss on a defaulted exposure. The LGD varies by type of borrower, type and seniority of claim and availability of collateral or other credit support. The LGD is expressed as … Read more

Disclosure innovations in financial reporting

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Last update 23/12/2019 Disclosure innovations in financial reporting – This is a note on the innovative history of Philips’ financial reporting, see the ‘Introduction to a history of innovation in financial reporting‘. In the Netherlands formal legislation concerning financial reporting was introduced rather late in the early 1970s. The lack of formal legislation was a … Read more

Loss allowance

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Last update 14/11/2019 Loss allowance is an approach for the prudence or conservatism principle. Assets should not be overstated, liabilities not understated. Better save, than sorry! The term ‘Loss allowance’ covers allowances recorded against the following financial assets: The allowance for expected credit losses on financial assets measured at amortised costs (in accordance with IFRS … Read more