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Investment property - Introduction

16.1 Investment property applies to accounting for investments in land or buildings that meet the definition of investment property (See Definition and initial recognition of investment property – Owner and Lessee) and some property interests held by a lessee under an operating lease (see Definition and initial recognition of investment property - Lessee) that are treated like investment property. Only investment property whose fair value can be measured reliably without undue cost or effort on an ongoing basis is accounted for in accordance with this section at fair value through profit or loss. All other investment property is accounted for using the cost model in Property, Plant and Equipment and remains within the scope of Property, Plant and Equipment unless a reliable measure of fair value becomes available and it is expected that fair value will be reliably measurable on an ongoing basis. ...continue reading "Investment Property"

Just as a starter, two definitions!

Associate: An entity, including an unincorporated entity such as a partnership, over which an investor has significant influence and which is neither a subsidiary nor an interest in a joint venture.

Significant influence: The power to participate in the financial and operating policy decisions of the investee but it is not control or joint control over those policies. ...continue reading "Investments in Associates – Highlights"

Required disclosures in consolidated financial statements

9.23 The following disclosures shall be made in consolidated financial statements:

  1. the fact that the statements are consolidated financial statements;
  2. the basis for concluding that control exists when the parent does not own, directly or indirectly through subsidiaries, more than half of the voting power;
  3. any difference in the reporting date of the financial statements of the parent and its subsidiaries used in the preparation of the consolidated financial statements; and
  4. the nature and extent of any significant restrictions (for example resulting from borrowing arrangements or regulatory requirements) on the ability of subsidiaries to transfer funds to the parent in the form of cash dividends or to repay loans.

...continue reading "Disclosures in consolidated financial statements"

Introduction to Other Financial Instrument Issues

A financial instrument is a contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Financial Instruments in Other Financial Instrument Issues are more complex transactions measured at fair value, with changes in fair value in profit or loss with some hedges included in other comprehensive income by the section  Conditions are met  and some equity instruments at cost less impairment as per Reliable measure of fair value no longer available. ...continue reading "Other Financial Instrument Issues – 1"

Basic Financial Instruments and Other Financial Instrument Issues together deal with recognising, derecognising, measuring and disclosing financial instruments (financial assets and financial liabilities). Basic Financial Instruments applies to as it says basic financial instruments and is relevant to all entities. Other Financial Instrument Issues applies to other, more complex financial instruments and transactions. If an entity enters into only basic financial instrument transactions then Other Financial Instrument Issues is not applicable. However, even entities with only basic financial instruments shall consider the scope of Other Financial Instrument Issues to ensure they are exempt. ...continue reading "Basic Financial Instruments and Other Financial Instrument Issues"

This case is rather simple, fixed payments depending on an index and rent free period. Here are only included the journal entries to be made at the inception of the lease contract.

This contract comprises a lease contract for the lease of office space, archive space, inside garage space and outside parking places. The contract consist of special and general conditions. The special conditions prevail the general conditions.

The lease contract has a lease term of 12 consecutive years (144 months), starting date is 1 March 2015, ending date is 28 February 2027. Tacit renewal of the agreement for a definite period of time, such as with six months or a year, is not possible. Renewal can only be done by agreeing a new contract. ...continue reading "Simple case IFRS 16 Leases – Fixed payments depending on an index and rent free period"