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

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