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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
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
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
Topics hide Identified asset 1. Specified asset 1.1 Capacity portions 1.2 Substantive supplier substitution rights 3. Right to direct the use 3.1 How and for what purpose decisions 3.2 Determining who makes the how and for what purpose decisions 3.3 How and for what purpose decisions are predetermined 3.4 Supplier’s protective rights Identified asset a … Read more
Topics hide Capitalisation of expenditure Capital expenditure (including equipment repairs and maintenance) Initial recognition of indirect costs Subsequent recognition of indirect costs Recording lease contracts – Right-of-Use Assets Subsequent Measurement of the Right-of-Use Asset Capitalisation of borrowing costs Capitalisation of cloud computing costs Accounting for a cloud computing arrangement that does not include an intangible … Read more
Interest free loans As prescribed in IFRS 9.B5.1.1, a loan payable or receivable that carries no interest should be recognised at fair value measured as the present value of all future cash receipts discounted using the prevailing market rate(s) of interest for a similar instrument (currency, term, etc.) with a similar credit rating. An incremental … Read more
Topics hide Contingent IFRS 3 Business combinations Buyer’s accounting for royalties and milestones payable to a seller in a business combination Contingent consideration in a business combination Assumed contingent consideration Compensation IFRIC 12 – Service Concession Arrangements Accounting model IFRS 16 Leases Lease Options to Extend or Terminate IAS 19 Employee benefits – Measurement Shared … Read more
This is an overview of the use of onerous in the IFRS Standards, the major Standard being IAS 37 (see below). Topics hide IAS 37: ‘Onerous Contracts – Cost of Fulfilling a Contract’ Conceptual Framework – Executory contracts IFRS 3 Business combinations IFRS 9 Own use contracts IFRS 15 Revenue from contracts with customers IFRS … Read more
M and A or Mergers and Acquisitions in IFRS language Business Combinations. 1 Identifying a business combination IFRS 3 refers to a ‘business combination’ rather than more commonly used phrases such as takeover, acquisition or merger because the objective is to encompass all the transactions in which an acquirer obtains control over an acquiree no … Read more
Sub-leases under IFRS 16 The classification guidance in IFRS 16 means that many sub-leases are finance leases, impacting the financial position and financial performance of intermediate lessors. 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 lease (or … Read more