Bank overdrafts and cash and cash equivalents

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Last update 23/12/2019 Bank overdrafts and cash and cash equivalents – IAS 7 8 notes that although bank borrowings are generally considered to be financing activities, in some countries bank overdrafts form an integral part of an entity’s cash management. In such cases, bank overdrafts are included as a component of cash and cash equivalents … Read more

Contingent consideration

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Last update 04/08/2019 Usually, an obligation of the acquirer to transfer additional assets or equity interests to the former owners of an acquiree as part of the exchange for control of the acquiree if specified future events occur or conditions are met. However, contingent consideration also may give the acquirer the right to the return … Read more

Assets held for sale measurement

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Last update 17/11/2019 Assets held for sale measurement is part of IFRS 5 Non-current assets held for sale and discontinued operations. Plans to dispose of assets may be an indicator that the asset(s) may be impaired and may accordingly trigger impairment testing procedures. Any impairments (or reversals of previous impairments) are recognised before the entity … Read more

Contingent asset

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Last update 04/08/2019 A contingent asset is a possible asset that arises from past events, and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. In short: A contingent asset is an asset that depends on some future … Read more

Assets as an element of financial statements

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Last update 30/11/2019 Assets as an element of financial statements – Definition: An asset is a present economic resource controlled by the entity as a result of past events. Assets as an element of financial statements An economic resource is a right that has the potential to produce economic benefits. Assets as an element of … Read more

Contingencies

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Last update 09/12/2019 Contingencies – There are three (general) definitions of a contingency: IAS 37 – Provisions, contingent liabilities and contingent assets An existing situation whose result is unknown or unpredictable, A possible event that must be prepared for, A condition that must be satisfied before an action is triggered, an agreement is effected, a … Read more

Asset-based business valuations

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Last update 25/11/2019 Asset-based business valuations are one of the most used valuation approaches in accounting. The asset accumulation method and the adjusted net asset method are both generally accepted business valuation methods of the asset-based business valuation approach. When properly applied using consistent valuation variables, all asset-based business valuation approach methods should conclude approximately … Read more

Construction contract

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Last update 27/12/2019 Under IFRS 15 revenue recognition is handled under a 5-step model, as follows: Identify contract with the customer; Identify the performance obligations in the contract; Determine the transaction price; Allocate the transaction price to the performance obligations in the contract; Recognize revenue when (or as) an entity satisfy a performance obligation. A … Read more

Asset accumulation valuation example

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Last update 30/11/2019 Asset accumulation valuation example  – The asset accumulation method and the adjusted net asset method are both generally accepted business valuation methods of the asset-based business valuation approach. Here is an example of the asset accumulation method: A valuation expert has been retained to estimate the fair market value of the total … Read more

Consolidated financial statements

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Last update 24/08/2019 IFRS 10 Definition The financial statements of a group in which the assets, liabilities, equity, income, expenses and cash flows of the parent and its subsidiaries are presented as those of a single economic entity. Parent – An entity that controls one or more entities. The other types of financial statements are … Read more