Revenue recognition when or as

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Topics hide Revenue recognition when or as the entity satisfies a performance obligation Different pricing conventions Revenue recognition when or as the entity satisfies a performance obligation The obligation to purchase and sell electricity under a PPA generally will be viewed as a single performance obligation that is satisfied over time (when). A power and … Read more

IFRS 15 Measuring progress to completion – Best complete explanation

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Topics hide IFRS 15 Measuring progress to completion Introduction Practical expedient in IFRS 15 for recognition of revenue over time Selecting a method to measure progress Time-based measure of progress: Technical support services Time-based measure of progress: Unspecified updates Determining which measure of progress to apply is not a free choice(IFRS 15.BC159) Single method of … Read more

Electricity revenue recognition example

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Topics hide Electricity revenue recognition example Application of the five-step model Electricity revenue recognition – IFRS 15 step-by-step Step 1 – Identify the contract with a customer Step 2 – Identify the performance obligations Step 3 – Determine the transaction price Step 4 – Allocate transaction price to the performance obligations in the contract Step … Read more

Separate lease and non-lease components for real estate under IFRS 16

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Topics hide Separate lease and non-lease components 1 Overview 2 Typical lease components in real estate contracts Typical lease components 2.1 Additional considerations for leases of land and buildings for landlords 3 Common area maintenance and other non-lease components 4 Property taxes and insurance 5 Allocation of consideration to lease and non-lease 6 Allocation of … Read more

Landlord Lease term – IFRS 16 Best complete read

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Topics hide Landlord Lease term 1 Overview of landlord lease term 2 Non-cancellable period 4 Reasonably certain threshold 5 Renewable and cancellable leases – Application issues 6 Changes in the lease term Landlord Lease term New guidance on lease term could impact the period over which operating lease incentives are recognised in profit or loss, … Read more

Landlord accounting model – IFRS 16 best replacement for IAS 40

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Topics hide Landlord accounting model 1 Overview 2 Lease classification 3 Operating lease model 4 Finance lease model Landlord accounting model Landlords continue to classify leases as finance or operating leases, and continue to classify many real estate leases as operating leases. 1 Overview The lessor follows a dual accounting approach for lease accounting. The … Read more

Contract modifications in power and utilities – Best IFRS 15 Revenue recognition

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Topics hide Contract modifications in power and utilities Blend and extend arrangements Case – Contract modification prospective basis Case – Contract modification – construction services arrangement: cumulative catch-up adjustment Contract modifications in power and utilities One of the most judgemental aspects of implementing IFRS 15 for power and utilities entities is applying the contract modifications … Read more

IFRS 15 Power purchase agreement

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Topics hide IFRS 15 Power purchase agreement Case – Identify the performance obligations (power purchase agreement (‘PPA’)) Case – Identify the performance obligations (gas supply agreement) Case – Identify the performance obligations (design and build a power plant) Take-or-pay power supply and similar long-term energy supply agreements Failed own use on trading contracts IFRS 15 … Read more

Transaction price power and utilities

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Topics hide Determining the transaction price power and utilities Variable consideration power and utilities Case – Variable consideration: performance bonus Case – Price protection if competitor subsequently lowers price Provisional pricing arrangements power and utilities Case – Variability arises from market price only Case – Variability arises from physical attributes only Case – Variability arises … Read more

Payment holidays on loans

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Topics hide Payment holidays on loans under IFRS 9 What is this all about? Accounting treatment of payment deferrals – Overview Treatment of payment holidays under IFRS 9 – Loan classification and measurement IFRS 9 – Classification, measurement and interest income recognition Authorities’ public statements on Covid-19 related payment deferrals Disclosure Practical considerations – Overview … Read more