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

Focus definition or best trends in IFRS reporting based on IAS 1

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Topics hide Focus definition or Trends in IFRS reporting Example Report Corp. (IAS 1.49, IAS 1.51(a)) Structure of the notes Materiality matters 1. Example Report Corp. How did we arrive at these numbers? What are the risks included in these financial statements? How is the Group/Company organised? What are the conditional items not yet recognised? … Read more

Sub-leases of real estate – IFRS 16 Best short read

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Sub-leases of real estate New classification guidance means that more sub-leases are finance leases under IFRS 16 than previously, impacting the financial position and financial performance of intermediate landlords. A sub-lease is a transaction in which a lessee (or ‘intermediate lessor’) grants a right to use the underlying asset to a third party, and the … Read more

Lease calculation – IFRS 16 Structured best approach

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Topics hide Lease calculation The 5-step lease calculations model Step 1. Identification of a lease contract Step 2 Lease term Lease Options to Extend or Terminate Reassessment of Lease Term Step 3 Initial measurement of the lease liabilty Right-of-Use Asset Subsequent Measurement of Lease Liability Step 4 Historical reporting Step 5 Historical changes to the … Read more

Period of use

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The total period of time that an asset is used to fulfil a contract with a customer (including any non-consecutive periods of time).         IFRS terms or definitions come from the Official Journal of the European Union (© European Union, https://eur-lex.europa.eu). Individual jurisdictions around the world may require or permit the use … Read more

Accounting for Intra-group Transactions in Separate Financial Statements

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Last updated: 4 August 2022 IFRS contain very limited guidance on accounting for intra-group transactions that would apply specifically to separate financial statements. Although effects of such transactions are eliminated in the course of preparation of consolidated financial statements, they may have a material impact on separate financial statements. Furthermore, an intra-group transaction may also … Read more

Commencement date of the lease

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The date on which a lessor makes an underlying asset available for use by a lessee.         IFRS terms or definitions come from the Official Journal of the European Union (© European Union, https://eur-lex.europa.eu). Individual jurisdictions around the world may require or permit the use of (locally authorised and/or amended) IFRS Standards … Read more