IAS 36 How? – Impairment test

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When looking at the step-by-step IAS 36 impairment approach it comes down to the following broadly organised steps: What?? – Determining the scope and structure of the impairment review, explained here, If and when? – Determining if and when a quantitative impairment test is necessary, explained here, IAS 36 How? – Impairment test or understanding … Read more

Impairment Test in the Covid-19 Pandemic

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Here we are, another year comes closer to its and – and what a year! Pandemic entered into our lives in early 2020 and we all must admit it – this was totally new experience, since only older generations can remember similar situation. Yes, it was and still is hard for all of us. The … Read more

Contract Modifications (IFRS 15)

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Last updated: 31 October 2020 A contract modification is a change in the scope or price (or both) of a contract that creates new, or changes existing, rights or obligations. Contract modification that is an additional separate contract A contract modification should be treated as a separate contract for accounting purposes when both of the … Read more

Fair Value Hierarchy (IFRS 13)

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Last updated: 2 November 2020 For disclosure and comparability purposes, IFRS 13 establishes a fair value hierarchy that categorises the inputs to valuation techniques into three levels (IFRS 13.72): Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. Level 2: inputs other … Read more

Valuation Techniques (IFRS 13 Fair Value Measurement)

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Last updated: 2 November 2020 The three widely used valuation techniques cited by IFRS 13 are the market approach, the cost approach and the income approach. Entities should choose a technique, or combination of techniques, that is most appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the … Read more

Fair Value Measurement of Liabilities and Own Equity (IFRS 13)

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Last updated: 2 November 2020 A fair value measurement assumes that a financial or non-financial liability or an entity’s own equity instrument is transferred to a market participant at the measurement date. The transfer assumes the following (IFRS 13.34): A liability remains outstanding and the market participant transferee is required to fulfil the obligation. In … Read more

Fair Value Framework (IFRS 13)

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Last updated: 2 November 2020 Fair value is defined in IFRS 13 as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (IFRS 13.9). In other words, it is a current exit price and it is applicable … Read more