EBITDA

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Last update 06/01/2020 EBITDA, Earnings before interest, taxes, depreciation and amortisation is a measure of a company’s overall financial performance and is used as an alternative to simple earnings or net income in some circumstances. Earnings before interest, taxes, depreciation and amortisation, however, can be misleading because it strips out the cost of capital investments … Read more

Classification of financial assets

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Last update 16/11/2019 Classification of financial assets at amortised cost, at fair value through other comprehensive income (FVOCI) or at fair value through profit or loss (FVPL) is mainly based on the business model assessment and the solely payments of principal and interest (SPPI-) test. A financial asset is classified into a measurement category at inception … Read more

Distributions to owners

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Last update 07/08/2019 Future economic benefits or service potential distributed by the entity to all or some of its owners, either as a return on investment or as a return of investment. There are two major types of distributions to owners/shareholders: Distributions of profits to holders of equity instruments in proportion to their holdings of … Read more

Classification of crypto-assets

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Last update 19/12/2019 Classification of crypto-assets – Crypto-assets often have very different terms and conditions. The holder needs to evaluate their individual terms and conditions carefully in order to determine which International Financial Reporting Standard (IFRS) applies. Depending on the standard that applies, the holder may also need to assess its business model in determining … Read more

Distinct goods or services

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Last update 20/12/2019 Distinct goods or services is a cornerstone of IFRS 15 Revenue from contracts with customers. Determining a distinct good or service is part of identifying separate performance obligations. An important item to look at is whether a ‘promise to’ in a contract (established to be a contract for accounting purposes in Step 1) is a distinct good or … Read more

Classification of cash flows

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Last update 23/12/2019 Classification of cash flows – IAS 7 10 requires an entity to analyse its cash inflows and outflows into three categories: Operating activities, Investing activities, Financing activities. Topics hide Operating activities Investing activities Financing activities Classification of interest and dividends Classification of cash flows Related posts: Operating activities It is often assumed … Read more

Discount rate

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Last update 13/12/2019 Discount rate – As part of IFRS 13 Fair value measurement the measurement of fair value using the Discounted cash flow model has increased. One of the most influential inputs to a discounted cash flow model is the discount rate/discounting rate. A discount rate is used in different formats in different discounted … Read more

Classification measurement and impairment of financial assets

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Last update 03/12/2019 Classification measurement and impairment of financial assets – IFRS 9 Financial Instruments (IFRS 9) introduced major accounting changes for financial assets that significantly impacted the financial statements of all types of lending organizations, such as banks, financial cooperations, and leasing companies. Here the focus is on classification and measurement – including impairment loss … Read more

Discontinued operation

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Last update 17/11/2019 Discontinued operation – IFRS 5 Definition: A discontinued operation is a component of an entity that either has been disposed of or is classified as held for sale and: Represents a separate major activity or geographical area of operations, Is part of a single coordinated plan to dispose of a separate major activity … Read more

Classification for investments in bonds

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Last update 29/11/2019 Classification for investments in bonds – Under IFRS 9, bonds should be classified and measured based on an entity’s business model for managing the bonds and their contractual cash flow characteristics (SPPI Test) (see table below). The business model refers to how an entity manages bonds in order to generate cash flows—either … Read more