Deferred tax assets Future tax profits

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Last update 22/12/2019 The availability of future taxable profits – a problem in four parts Deferred tax assets Future tax profits The best starting point for determining the availability of future taxable profits is a company’s own business planning cycle and resulting forecasts. Using the company’s forecasts to assess the value of assets with potentially significant … Read more

Intrinsic value

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Last update 09/12/2019 Intrinsic value – The difference between the fair value of the shares to which the counterparty has the (conditional or unconditional) right to subscribe or which it has the right to receive, and the price (if any) the counterparty is (or will be) required to pay for those shares. For example, a … Read more

Deferred cost Capitalised costs EM industry

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Last update 25/11/2019 Deferred cost Capitalised costs EM industry is about other costs to obtain a contract in the entertainment and media (E&M) industry Incremental costs to obtain a contract will be capitalized if they are expected to be recovered. Such costs may be expensed as incurred as a practical expedient if the amortization period … Read more

Interest in other entities

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Last update 10/12/2019 Interest in other entities – For the purpose of IFRS 12 Disclosure of Interest in Other Entities, an interest in another entity refers to contractual and non-contractual involvement that exposes an entity to variability of returns from the performance of the other entity. An interest in another entity can be evidenced by, … Read more

Debt instruments at FVOCI

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Last update 29/11/2019 Debt instruments at FVOCI – A debt instrument is classified as subsequently measured at fair value through other comprehensive income (FVOCI) under IFRS 9 if it meets both of the following criteria: Hold to collect and sell business model test: The asset is held within a business model whose objective is achieved … Read more

Intangible assets – Example

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Last update 18/08/2019 Example accounting policy Intangible assets, other than goodwill, include expenditure on the exploration for and evaluation of oil and natural gas resources, computer software, patents, licences and trademarks and are stated at the amount initially recognized, less accumulated amortization and accumulated impairment losses. Intangible assets acquired separately from a business are carried … Read more

Dealer sales vehicle incentives

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Last update 20/12/2019 Dealer sales vehicle incentives – To apply IFRS 15, original equipment manufacturers (OEMs) will need to change the way they evaluate incentives. Original equipment manufacturers need to use significant judgement when they identify separate performance obligations (i.e., units of account), which may be different from those identified under IAS 18. Original equipment … Read more

Intangible assets

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Last update 31/08/2019 An intangible asset is an identifiable non-monetary asset without physical substance. Intangible assets can be grouped into three broad categories — rights, relationships and intellectual property: Rights. Leases, distribution agreements, employment contracts, covenants, financing arrangements, supply contracts, licences, certifications, franchises. Relationships. Trained and assembled  workforce, customer and distribution relationships. Intellectual property. Patents; copyrights; trademarks; … Read more

DCF Calculation Value of the business

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Last update 24/12/2019 DCF Calculation Value of the business – This is a simple example to show the workings of a Discounted Cash Flow (DCF) model, which is hopefully also understandable for non-mathematicians. Using cash-flow-based measurement techniques is done using all the following factors: estimates of future cash flows. DCF Calculation Value of the business … Read more

Insurance contracts definitions

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Last update 06/12/2019 Insurance contracts definitions – Here are some of the IFRS 17 Insurance contracts Appendix A definitions. Other not listed here are directly available on IFRS Jargon. Coverage period –  The period during which the entity provides coverage for insured events. This period includes the coverage that relates to all premiums within the … Read more