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Last update 12/12/2019 A business model assessment is needed for financial assets that meet the SPPI criterion, to determine whether they meet the criteria for classification as subsequently measured at amortised cost or FVOCI. [IFRS 9 B4.1.1 ] Financial assets that do not meet the SPPI criterion are classified as at FVPL irrespective of the … Read more
Last update 18/11/2019 Allocation between Controlling and Non-controlling interest is about consolidation, obtain control over but not hold 100% in another entity/subsidiary. When a parent entity first obtains control over another entity, it recognises any non-controlling interest in the new subsidiary’s net assets as illustrated in the example below. In subsequent periods the parent allocates … Read more
Last update 02/08/2019 A business combination is: a transaction or event in which acquirer obtains control over a business (e.g. acquisition of shares or net assets, legal mergers, reverse acquisitions). Transactions sometimes referred to as ‘true mergers’ or ‘mergers of equals’ are also business combinations as that term is used in IFRS 3. The three … Read more
Last update 10/12/2019 Breach of Contract – Contracting party’s actual failure or refusal to perform (or a clear indication of its intentions to not perform) its obligations under the contract. A breach could be effected by: repudiation of obligations before the beginning of the contract, repudiation of obligations before its completion, or a conduct that … Read more
Last update 26/11/2019 Allocate the transaction price to the performance obligations considers key implications IFRS 15 Revenue from Contracts with Customers for real estate entities. It provides an overview of the revenue recognition model in IFRS 15 with a focus on entities that: Allocate the transaction price to the performance obligation Own, operate and sell … Read more
Last update 13/12/2019 Bonus certificates are financial instruments. Bonus certificates represent patrimonial rights (wikipedia-link) as defined in the terms and conditions of issue of those bonds. Bonus certificates are participation products that feature full upside participation and a conditional capital protection as long as the underlying asset doesn’t cross a predefined threshold (barrier). In most … Read more
Last update 22/11/2019 Aggregation disaggregation and materiality are cornerstones of financial reporting using IFRS. Here is a summary of the financial reporting items that include (mostly) disclosure requirements that relate to these cornerstones. See also Aggregation for an overview of general financial reporting rules in that respect. Aggregation disaggregation and materiality Fair value measurement Present … Read more
Last update 13/12/2019 Bonds or debentures are financial instruments. A bond is a certificate or evidence of a debt on which the issuing company or governmental body promises to pay the bondholders a specified amount of interest for a specified length of time and to repay the loan on the expiration date. A bond may … Read more
Last update 23/12/2019 Agency relationships in consolidation – An investor with decision making rights has to determine whether it is a principal or an agent. An ‘agent’ is defined as ‘a party primarily engaged to act on behalf and for the benefit of another party or parties (the principal(s)) and therefore does not control the … Read more
Last update 02/08/2019 The table below provides examples of biological assets, agricultural produce, and products that are the result of processing after harvest: Biological assets Agricultural produce Products that are the result of processing after harvest Sheep Wool Yarn, carpet Trees in a timber plantation Felled trees Logs, lumber Dairy cattle Milk Cheese Pigs … Read more