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Last update 28/12/2019 Grouping similar hedging transactions – It sometimes will be impractical (perhaps impossible) and not cost-effective for an entity to identify each individual transaction that is being hedged. An example is a group of sales or purchases over a period of time to or from one or more parties. IFRS 9 permits an … Read more
Last update 18/11/2019 Control without a majority of voting rights is a more special case of structuring the investments of investors in companies. IFRS 10 confirms that an investor with the majority of an investee’s voting rights controls an investee in most circumstances. In the absence of other relevant factors the majority vote holder has … Read more
Last update 05/01/2020 Group treasury function – the goal of most treasury functions is to optimize the organization’s liquidity, make sound financial investments, mitigate financial risks, and provide useful cash/interest/investment reporting. A treasury function is (depending on the size of a group) a centralised support and service function that acts as the custodian of a … Read more
Last update 26/11/2019 Control Structured entity with Credit-linked notes provides a case regarding control through contractual arrangements in a Special Purpose Vehicle or better NO control. Following is a case on the assessment whether certain stakeholders in a transaction/structure have obtained control over a certain entity in the transaction in line with the requirements of … Read more
Last update 17/12/2019 General model of measurement of insurance contracts – Insurance contracts may be highly complex bundles of interdependent rights and obligations and combine features of a financial instrument and features of a service contract. As a result, insurance contracts can provide their issuers with different sources of income – e.g. underwriting profit, fees from … Read more
Last update 23/12/2019 Control over structured entities – Although IFRS 10 has no separate guidance on Special Purpose Entities (SPEs), it does have guidance on assessing control over entities for which voting rights do not have a significant effect on returns. Despite the lack of a definition, entities typically considered to be SPEs in practice … Read more
Last update 09/12/2019 The general approach expected credit losses is what it is the most accepted or normal or preferred way of loss provisioning financial assets to a level at which it is becoming unlikely that they are overstated. Under the “expected credit loss” model, an entity calculates the allowance for credit losses by considering … Read more
Last update 20/11/2019 Control over CMBS issuer Structured entity is a case on the assessment whether certain stakeholders in a transaction/structure have obtained control over a certain entity in the transaction in line with the requirements of IFRS 10 Consolidated financial statements. Only one stakeholder can be in control! [IFRS 10 B16] Or no stakeholder … Read more
Last update 17/08/2019 Qualitative characteristics that financial information must possess to make it useful to the primary users of general purpose financial reports. They are relevance and faithful representation. Relevance Relevant financial information is capable of making a difference in the decisions made by users. Information may be capable of making a difference in a … Read more
Last update 30/11/2019 Control of an economic resource – This is all about: A present economic resource controlled by the entity as a result of past events. Two very simple examples to start with: Pat Co has purchased a patent for $20,000. The patent gives the company sole use of a particular manufacturing process which … Read more