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Last update 16/11/2019 Financial guarantee contract – IFRS 17 Definition: A contract that requires the issuer to make specified payments, to reimburse the holder for a loss it incurs because a specified debtor fails to make a payment when due in accordance with the original or modified terms of a debt instrument. Further explanation These … Read more
Last update 18/11/2019 Contract assets and contract liabilities relates to a complete explanation of IFRS 15 Revenue from contracts with customers in respect of Engineering & Construction contracts, see Revenue from Engineering & Construction contracts. IAS 11 required entities to record contract assets for unbilled accounts receivable when revenue is recognised but not billed. Contract … Read more
Last update 16/08/2019 The asset is measured at fair value. Changes in fair value are recognised in profit and loss as they arise. Financial assets should be classified as fair value through profit or loss if they do not meet the criteria for fair value through other comprehensive income or amortised cost. Fair value through … Read more
Last update 21/12/2019 Construction warranties – This part relates to a complete explanation of IFRS 15 Revenue from contracts with customers in respect of Engineering & Construction contracts, see Revenue from Engineering & Construction contracts. Construction warranties Construction warranties Construction warranties Construction warranties Warranties may fall into several categories. If the contractor provides the customer … Read more
Last update 05/02/2019 Accounting policy example Financial assets are recognized initially at fair value, normally being the transaction price plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs. The subsequent measurement of financial assets depends on their classification, as set out below. The group derecognizes financial assets … Read more
Last update 26/11/2019 Construction Variable pricing is about a thing that happens quite a lot in the construction industry. Additions, extras, deletions, you name in construction they use it…. How to measure construction contract revenue: variable consideration – variable pricing? If the consideration promised in a contract includes a variable amount, then an entity estimates … Read more
Last update 13/07/2019 A general definition/description is: A financial asset is a tangible liquid asset that gets its value from a contractual claim. Cash, stocks, bonds, bank deposits and the like are examples of financial assets. Unlike land, property, commodities or other tangible physical assets, financial assets do not necessarily have inherent physical worth. See … Read more
Last update 26/11/2019 Construction of a residential home provides a case to better understand the accounting issues in construction activities. Home-builder B enters into a contract to build a new home for a customer on land owned by Home-builder B. Ownership of the home and land are transferred to the customer when construction is completed. … Read more
Last update 04/08/2019 Financial information that faithfully represents the phenomena that it purports to represent. A faithful representation provides information about the substance of an economic phenomenon instead of merely providing information about its legal form. A perfectly faithful representation would be complete, neutral and free from error. Providing a faithful representation is one of … Read more
Last update 26/11/2019 Construction contracts revenue over time or at a point in time? – In the this has been a enthusiastic discussion back and forth, and that is what it still is…. The rule: If the contract arrangements do not permit revenue to be recognised progressively, then revenue is recognised at a specific point … Read more