Current asset

by

Last update 06/08/2019 An entity shall classify an asset as a current asset when: It expects to realise the asset, or intends to sell or consume it, in its normal operating cycle; It holds the asset primarily for the purpose of trading it; It expects to realise the asset within twelve months after the reporting … Read more

Cash flows identification Only Principal and interest

by

Last update 22/12/2019 Cash flows identification Only Principal and interest – Cash flows solely payments of principal and interest on the principal amount The following examples illustrate contractual cash flows that are solely payments of principal and interest on the principal amount outstanding. For the context within IFRS 9: Financial Instruments, reference is made to … Read more

Currency risk

by

Last update 06/08/2019 The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. Currency risk (or foreign exchange risk) arises on financial instruments that are denominated in a foreign currency, ie in a currency other than the functional currency in which they … Read more

Cash flows identification Not-Only Principal and interest

by

Last update 22/12/2019 Cash flows identification Not-Only Principal and interest – The following examples illustrate contractual cash flows that are not solely payments of principal and interest on the principal amount outstanding. For the context within IFRS 9: Financial Instruments, reference is made to IFRS 9 The Solely Payments of Principal and Interest Test . … Read more

Cryptocurrency

by

Last update 19/12/2019 What are cryptocurrencies? – Cryptocurrency Here is a definition from Techopedia Cryptocurrency is a type of digital currency that is based on cryptography. Cryptocurrency uses cryptography for security, making it difficult to counterfeit. Money has been used for centuries to facilitate the trade of goods and services. The form of money has … Read more

Cash flows for income tax and sales tax

by

Last update 22/12/2019 Cash flows for income tax and sales tax – IAS 7 includes some specific standards for the treatment of cash flows in the Statement of cash flows for income tax and sales tax (and other taxes). Topics hide (i) Income taxes (ii) Sales taxes Direct method Cash flows for income tax and … Read more

Credit-impaired financial asset

by

Last update 25/11/2019 Credit-impaired financial asset A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial asset have occurred. Evidence that a financial asset is credit-impaired include observable data about the following events: the significant financial difficulty of the issuer or the borrower; Credit-impaired financial … Read more

Cash Flow Risk Management

by

Last update 22/12/2019 Cash Flow Risk Management The risk that companies must identify and manage is their cash flow risk, meaning uncertainty about their future cash flows. Finance theory is, for the most part, silent about how much cash flow risk a company should take on. Company Cash Flow Risk Management In practice, however, managers … Read more

Credit-adjusted effective interest rate

by

Last update 14/12/2019 Credit-adjusted effective interest rate – The rate that exactly discounts the estimated future cash payments or receipts through the expected life of the financial asset to the amortised cost of a financial asset that is a purchased or originated credit-impaired financial asset. When calculating the credit-adjusted effective interest rate, an entity shall … Read more

Cash flow hedge of a net position

by

Last update 27/11/2019 Cash flow hedge of a net position has changed from IAS 39 to IFRS 9, this section illustrates these changes for hedge accounting of a net position, by discussing the application under IAS 39 and the changes thereto under IFRS 9. Many entities are exposed to foreign exchange risk arising from purchases … Read more