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The year 2013 started off with some really significant IFRS amendments that you need to take into account when preparing your IFRS financial statements as at 31 December 2013. Although these changes should be applied in the year 2013 for the first time, you also need to restate your comparative figures for the previous reporting … Read more
Do you work in the production company? And did you find out that some of your production assets are still in operation but they were fully depreciated? In this case, the original estimate of machinery’s useful life proved to be incorrect. Here’s one of the questions I received: “Dear Silvia, we are a manufacturing company. … Read more
Ignoring an accrual principle??? What?! No way! That’s the basic accounting rule we should all follow! Yes, of course, you’re right. BUT: There IS an exception. The statement of cash flows. Preparing the statement of cash flows might become the biggest accountant’s nightmare. Why is that? Because the statement of cash flows is THE ONLY … Read more
These days people use about 180 currencies world wide! The truth is that we, people, don’t want to stay isolated. We love to sell, buy, import, export, trade together and do many other things, all in foreign currencies! When you look at the business world, you’ll see that business go global in two ways: they … Read more
The first thing you need to do before you even start to play with hedge accounting is to determine the TYPE of hedge relationship that you’re dealing with. Why? Because: the type of hedge determines your accounting entries. Make no mistake here. If you incorrectly identify the type of the hedge, then your hedge accounting … Read more
When to recognize revenue? This simple question is one of the most controversial issues in today’s accounting. Why? Well, it’s simple and easy when you sell goods, but how about long-term contracts or some sort of services? You need to have some rules on WHEN to recognize the revenue from all these things, because all … Read more
Buying a foreign company or just some shares, building up an entirely new business or starting mutual venture with somebody else are some basic ways of spreading the business activities. Consolidation goes “hand in hand” with any foreign business. But what is it? Many people refer to consolidation when they speak about their share in … Read more
In my previous article I introduced the world of group accounts and consolidation to you. You learned that there about 6 IFRS dealing with this topic. Here, I’d like to summarize the first “consolidation” standard dealing with the consolidated financial statements: IFRS 10. What is the objective of IFRS 10? The objective of IFRS 10 … Read more
A few weeks ago I visited our dentist together with my little 4-year old girl just to check up everything’s OK with her little teeth. While we were sitting in the waiting room, my little one playing with the small teeth replicas (OMG!), I looked around myself noting that there were beautiful wall paintings around, … Read more
When should you apply IFRS 3 and when IFRS 10? What is the difference between IFRS 3 Business Combinations and IFRS 10 Consolidated Financial Statements? Today, I’d like to continue our “consolidation” series and after the introductory lesson and the summary of IFRS 10, let’s dive in the IFRS 3 Business Combinations. What is the … Read more