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Last update 20/11/2019 Credit derivatives allow a lender or borrower to transfer the default risk of a loan to a third party. Though the terms differ from one credit derivative to another, the general procedure is for a lending party to enter into an agreement with a counterparty (usually another lender), who agrees, for a fee, to cover any losses incurred in the event … Read more
Last update 13/11/2019 Case value intangibles in business combinations provides a comprehensive business case of valuation of an acquisition of a regional provider of professional services, ProfServCo. The following intangible assets were identified as of the date of the combination: Trade name Case value intangibles in business combinations Service concession number Case value intangibles in … Read more
Last update 29/12/2019 Cost of Property plant and equipment – The cost of an item of property, plant and equipment comprises: Cost of Property plant and equipment its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates. Cost of Property plant and equipment any costs directly attributable to bringing … Read more
Last update 23/12/2019 Case IFRS 16 Lease car contract – Because this is a quite frequently used type of lease it is good to get an understanding of how to apply IFRS 16 on a car lease. This includes all the detailed calculations in spreadsheet examples (including Excel functions used) needed to record the correct … Read more
Last update 29/12/2019 Corporate asset-backed security – backed by the cash flows from receivables such as leases on aircraft or other corporate equipment, small and medium enterprise (SME) loans, trade receivables. Also includes ‘whole business’ securities (WBS) based on the cash flows of an entire business unit, such as franchise or brand royalties. An asset-backed … Read more
Last update 21/12/2019 Capitalisation of earnings – The Capitalisation of Earnings Method is an income-oriented approach to valuation modeling. This method is used to value a business based on the future estimated benefits, normally using some measure of earnings or cash flows to be generated by the company. These estimated future benefits are then capitalized … Read more
Last update 20/11/2019 Convertible notes are a form of long-term debt that converts into equity, typically in conjunction with a future financing round; in effect, the investor would be loaning money to a startup and instead of a return in the form of principal plus interest, the investor would receive equity in the company rather … Read more
Last update 16/09/2019 As long as discrete information is reviewed by the Chief Operating Decision Maker (CODM) a R&D function can be an operating segment. Typically, an entity’s research and development (R&D) function is a vertically integrated operation (see Operating segments – Vertically integrated operation), in which the R&D activities serve as an integral component … Read more
Last update 31/12/2019 Convertible debt option reserve – A convertible instrument is dealt with by an issuer as having two ‘components’, being a liability host contract plus a separate conversion feature which may or may not qualify for classification as an equity instrument. When the conversion feature qualifies as an equity instrument it is recorded … Read more
Last update 16/09/2019 A discontinued operation can meet the definition of an operating segment if: it continues to engage in business activities; Can a discontinued operation be an operating segment? the operating results are regularly reviewed by the CODM; and Can a discontinued operation be an operating segment? discrete financial information is available to facilitate … Read more