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I bet every single company needed to change something in its accounting records and financial statements. Often, the change is very small, so you just don’t worry about it and make correction on the go. But sometimes, the change can impact companies quite hard. For example: You are adopting new IFRS. You forgot to revalue … Read more

If you work for a bank or any other financial institution, then you are very well aware of the fact that IFRS is a little bit different there. OK, not quite like that: IFRS is still the same, just the way how you use it is a bit different. Why is it so? Unlike product-based … Read more

I often talk with many professionals about a practical application of IFRS and the topic of long-term tangible asset is very frequent. To my surprise I found out that a lot of them believed that with regard to accounting for property, plant and equipment (especially real estate of various kinds), there is just 1 standard … Read more

Have you ever heard a joke about two accountants applying for a job? During their interview, they were given a task to calculate a net profit figure based on available data. After some while, interviewer asked them a question: “What result did you get? What is the net profit of this company?” The first accountant … Read more

Should you capitalize or not? When it comes to determining the cost of your assets, most standards ask to include all directly attributable items. What about interest and other borrowing costs? Did you know that if you have 10 dollars in your pocket and no debt, then you are wealthier than 25% of all Americans? … Read more

Today, let’s be practical. A couple of weeks ago, I published an article about IAS 37 Provisions, Contingent Liabilities and Contingent Assets. I received a lot of questions from you, so here I try to give you my answers to the issues that popped out the most frequently. If there’s any issue you face, share … Read more

When you need to translate your items denominated in foreign currency to your own functional currency, then there’s one little problem: Is that item monetary or non-monetary? If you determine the nature of your item incorrectly, it can lead to totally wrong presentation in the financial statements. It’s not so important when you consolidate and … Read more

After I wrote an article about capitalizing borrowing cost, I got a lot of e-mails asking me actually HOW to account for loans that do not bear the interest rate reflecting market conditions. In other words, how to account for loans at below-market interest rate, or even interest-free loans. Such advantageous loans are seen in … Read more

Most balance sheets present individual items in distinction to current and non-current (except for banks and similar institutions). This seems so basic and obvious that most of us do not really think about classifying individual assets and liabilities as current and non-current. We do it automatically. But not always correctly. For example, one of the … Read more