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Last update 04/12/2019 Consideration transferred and Goodwill – I could not obtain a good understanding on ‘Consideration transferred’ from IFRS 3 Business combinations sub 32. So I started writing this piece of text. As per IFRS 3 Consideration transferred is as follows: The acquirer shall recognise goodwill as of the acquisition date measured as the … Read more
Last update 10/08/2019 Uncertainty about whether an asset or a liability exists. Further explanations: There are sections in IFRS that discuss cases in which it is uncertain whether an asset or liability exists. In some cases, that uncertainty, possibly combined with a low probability of inflows or outflows of economic benefits and an exceptionally wide … Read more
Last update 30/09/2019 IFRS 15 Revenue from Contracts with Customers (contents page is here) introduced a single and comprehensive framework which sets out how much revenue is to be recognised, and when. The core principle is that a vendor should recognise revenue to depict the transfer of promised goods or services to customers in an … Read more
Last update 10/08/2019 A contract that is equally unperformed: neither party has fulfilled any of its obligations, or both parties have fulfilled their obligations partially and to an equal extent. The Conceptual Framework provides the following guidance [Conceptual Framework 4.57 – 4.58]: An executory contract establishes a combined right and obligation to exchange economic resources. … Read more
Last update 11/11/2019 Many entities make payments to their customers. In some cases, the consideration paid or payable to a customer represents purchases by the entity of goods or services offered by the customer that satisfy a business need of the entity. In other cases, the consideration paid or payable represents incentives given by the … Read more
Last update 10/08/2019 Those events, both favourable and unfavourable, that occur between the reporting date and the date when the financial statements are authorised for issue. Two types of events can be identified: Those that provide evidence of conditions that existed at the reporting date (adjusting events after the reporting date); and Those that are … Read more
Last update 30/11/2019 Conceptual Framework for Financial Reporting – Just as an introduction some language thoughts to better understand what we are talking about. Conceptual: consisting of concepts Conceptual Framework for Financial Reporting Concept: an abstract or generic idea generalized from particular instances Conceptual Framework for Financial Reporting Framework: a basic conceptual structure (as of … Read more
Last update 17/10/2019 Equity method is used to account for investments in associates and joint-ventures. Simply put, the equity method is a simplified form of consolidation (IAS 28 27), with one major difference: items are not added line-by-line, but a single asset (investment in associate or joint-venture) is recognised in the statement of financial position … Read more
Last update 31/10/2019 Conceptual framework 2018 measurements is part of the explanations on the revised Conceptual Framework for Financial Reporting (the Conceptual Framework 2018) issued in 2018 by IASB. It describes various measurement bases, the information they provide and factors to consider when selecting a measurement basis. The 2010 Conceptual Framework did not include much … Read more
Last update 10/08/2019 An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. FVOCI election for equity instruments At initial recognition of an equity investment, that is not held for trading or a contingent consideration (recognised by the acquirer in a business combination), … Read more