Natural disasters IFRS accounting

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Natural disasters IFRS accounting In the wake of the recent and devastating flood events in Queensland and Victoria, the destruction caused by Cyclone Yasi in Far North Queensland and the fires that have raged in Western Australia, attention for business has now turned from crisis management and clean up to addressing the longer term financial … Read more

Sales outside ordinary activities – best way of combining IFRS 15 IAS 16 IAS 38 and IAS 40

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Topics hide Sales outside ordinary activities Case – Sale of a single-property real estate (IFRS 3, IFRS 10, IAS 40 ) Food for thought – Judgement required to identify ordinary activities (IFRS 15.BC53) Food for thought – Accounting for a non-current non-financial asset held for sale may result in a gain or loss on transfer … Read more

IFRS 17 at a glance – Complete best read

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Topics hide IFRS 17 at a glance Scope The general measurement model Initial recognition Subsequent measurement A simplified approach and modifications to the general measurement model IFRS 17 Presentation requirements IFRS 17 Transition What is the key impact of IFRS 17 on insurance reporting? IFRS 17 at a glance IFRS 17 introduces the new measurement … Read more

Group of insurance contracts

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A set of insurance contracts resulting from the division of a portfolio of insurance contracts into, at a minimum, contracts written within a period of no longer than one year and that, at initial recognition: are onerous, if any; have no significant possibility of becoming onerous subsequently, if any; or do not fall into either … Read more

General model in Insurance contracts measurement

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Topics hide General model in Insurance contracts measurement The General Model Estimates of future cash flows Insurance contract boundary Cash flows within the contract boundary Explicit cash flows Insurance contract discount rates Discount rates and characteristics of cash flows Current discount rates consistent with observable market prices Bottom-up approach Top-down approach Discount rates beyond the … Read more

ECL: How to Measure Probability of Default

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Expected credit loss challenges many experienced accountants and finance people, because it contains the element of uncertainty and some sort of guessing or estimating what can happen in the future. That’s why it is “expected” after all. I wrote a few articles about the process of applying ECL in your accounts, so let me just … Read more

Definition of Material – Important changes to IAS 1 and IAS 8

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Topics hide Definition of Material Applying materiality when preparing financial statements, by: Materiality as a filter Definition of Material Amendments on accounting policy disclosures Definition of Material The Definition of Material (with amendments to IAS 1 and IAS 8) puts the spotlight on: Applying materiality when preparing financial statements, by: Encouriging IFRS reporting specialists to … Read more

Projected Unit Credit Method (IAS 19) with Example

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Recently I got across the interesting question. One lady working for a company adopting IFRS for the first time asked me if they can still mark their financial statements as compliant with IFRS, if they do not apply projected unit credit method, but do apply everything else. In her view, it was extremely difficult and … Read more

Landlord Lease modifications

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Topics hide Landlord Lease modifications / Rental modifications 1 Modifications to operating leases – General considerations 2. Modifications to operating leases related to COVID-19 3 Changes to operating leases that are not lease modifications 4 Changes to operating leases that are not lease modifications 5 Modifications to finance leases 5.1 Separate lease 5.2 Not a … Read more

IFRS 17 – The 3 Greatest Misconceptions

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To err is human. But the following mistakes are not the ones you can afford to make in a board meeting or a job interview. Because, no matter how right these notions sound or how prevalent these views are, they are still very “wrong”: IFRS 17 is for insurance “companies” IFRS 17 is for “all” … Read more