IFRS 16 Lease term explained

by

IFRS 16 Lease term explained or the lease term includes the following items (IFRS 16 18):

  • non-cancellable period of a lease; IFRS 16 Lease term explained
  • periods covered by an option to extend the lease – if the lessee (customer) is reasonably certain to exercise that option; and
  • periods covered by an option to terminate the lease – if the lessee (customer) is reasonably certain not to exercise that option.

The lease term should not go beyond the ‘enforceable period’ which lasts up to a point when both parties have the right to terminate the lease without permission from the other party with no more than an insignificant penalty (IFRS 16 B34).

Legal framework in a given country plays … Read more

IFRS 10 Cases of no consolidation requirements

by

This is what this is about

IFRS 10 Cases of no consolidation requirements

This requires all parent entities to present consolidated financial statements, other than:IFRS 10 Cases of no consolidation requirements

IFRS 10 Cases of no consolidation requirements

Conditions for a parent entity to be exempt from consolidation [IFRS 10 4]

A parent is not required to present consolidated financial statements if

… Read more

Assessment of investment entities

by

The assessment of investment entities is documenting whether an entity meets the definition, all facts and circumstances should be considered, including the entity’s purpose and design [IFRS 10 B85A]. It will often be straightforward to determine whether an entity is an investment entity. However, in view of the fundamental importance this assessment has on affected entities’ financial statements, IFRS 10 provides extensive application guidance.

More detail on each element of the definition is provided below:

1 Investment services condition

One of the essential activities of an investment entity is that it obtains funds from investors in order to provide those investors with investment management services. This is a feature that distinguishes investment entities and other entities, although … Read more

The way to IFRS 9 Financial Instruments

by

This is the way to IFRS 9 Financial Instruments, introducing the why? for this new IFRS standard. In July 2014 the International Accounting Standards Board (IASB) published the 4th and final version of IFRS 9 Financial Instruments.

The way to IFRS 9 Financial Instruments

This was the conclusion of a major project started in 2002 as part of the Norwalk Agreement (WIKI) between the IASB and US Financial Accounting Standards Board (FASB) as a long term reform of financial instrument accounting. The way to IFRS 9 Financial Instruments

The project had been divided into three phases in order to allow a step by step approach. Once a phase was completed, the corresponding chapters were created in IFRS 9 … Read more