Effective hedge – Example

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Last update 10/08/2019 Accounting policy example Financial assets are recognised initially at fair value, normally being the transaction price plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs. The subsequent measurement of financial assets depends on their classification, as set out below. The group de-recognises … Read more

Combination of Insurance Contracts

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Last update 19/12/2019 Combination of Insurance Contracts – An entity might enter into a series of insurance contracts with the same or a related counterparty to achieve an overall economic effect. In order to ensure that the accounting reflects the substance of these contracts, it might be necessary to combine the group or series of … Read more

Economic resource

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Last update 21/08/2019 An economic resource is a right by the reporting entity that has the potential to produce economic benefits. An economic resource in general has the form of an asset. This information is provided in the financial position. Potential to produce economic benefits – Within an economic resource, a feature that already exists and will … Read more

Economic life

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Last update 06/01/2020 Economic life also known as useful life is either Economic life the period over which an asset is expected to be economically usable by one or more users, or Economic life the number of production or similar units expected to be obtained from an asset by one or more users. Economic life … Read more

Collateral in measurement of expected credit losses

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Last update 22/12/2019 Collateral in measurement of expected credit losses – In IFRS 9 collateral is a relevant factor in the measurement of expected credit losses. In IFRS 9 the estimate of expected cash shortfalls is reflected by the cash flows expected from collateral and other credit enhancements that are integral to the instrument’s contractual … Read more

ECL

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Last update 14/11/2019 The Expected Credit Losses (ECL) requirement in IFRS 9 makes the initial selection of bonds for fixed income investments by financial institutions much more important, as selecting bonds with good long-term credit health is key to reducing the risk of future P&L fluctuations caused by changes in ECL. This is especially important … Read more

Closure of a division

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Last update 15/12/2019 Closure of a division – Example on recognising and measuring provisions Just to provide the right frame for the case here is a short introduction of the key features of IAS 37 needed to judge the court case. Topics hide Key definitions [IAS 37 10] Closure of a division Recognition of a … Read more

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