IAS 36 How Impairment test

IAS 36 How Impairment test is all about this – When looking at the step-by-step IAS 36 impairment approach it comes down to the following broadly organised steps: IAS 36 How Impairment test

  • 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 the mechanics of the impairment test and how to recognise or reverse any impairment loss, if necessary. Which is explained in this section…

The objective of IAS 36 Impairment of assets is to outline the procedures that an entity applies to ensure that its assets’ carrying values are not … Read more

11 Best fair value measurements under IFRS 13

11 Best fair value measurements under IFRS 13 – Several IFRS standards provide guidance regarding the scope and application of the fair value option for assets and liabilities. Here they are from 1 to 11…….

1 Investments in associates and joint ventures

Investments held by venture capital organizations and the like are exempt from IAS 28’s requirements only when they are measured at fair value through profit or loss in accordance with IFRS 9. Changes in the fair value of such investments are recognized in profit or loss in the period of change.

The IASB acknowledged that fair value information is often readily available in venture capital organizations and entities in similar industries, even for start-up and non-listed entities, as … Read more

3 powerful capital maintenance concepts

3 powerful capital maintenance concepts – There are three (or two a matter of definition) concepts of capital: a financial concept of capital (nominal maintenance and purchasing power maintenance) and a physical concept of capital. Under the financial concept, capital is defined as the net assets or equity of the enterprise, while under the physical concept, capital is defined as the productive capacity of the enterprise expressed in some physical units of measurement, as for example units of output per day.

The selection of the appropriate concept of capital by an enterprise should be based on the needs of the users of its financial statements. So, the financial concept of capital should be and mostly is used by the financial … Read more

Property plant and equipment

Property plant and equipment are tangible items that are held for use in many different ways and are expected to be used during more than one period.

Recognition

Recognition – The process of capturing, for inclusion in the statement of financial position or the statement(s) of financial performance, an item that meets the definition of an element. It involves depicting the item (either alone or as part of a line item) in words and by a monetary amount, and including that amount in totals in the relevant statement.


Conceptually the process of recognising a element/item/transaction/event in the financial statements is discussed in the Conceptual Framework  caption 5.1 – 5.25.  To summarise the concept of recognition here is caption 5.1:

‘Recognition is the process of capturing for inclusion in the statement of financial position or the statement(s) of financial performance an item that meets the definition of one of Read more

Fair value option

Fair value option - There are two of them 1) the FV option for debt instruments and 2) the FVOCI option for equity instruments (not held for trading)

Revaluation model

The revaluation model. An asset will be carried at its fair value at the revaluation date less subsequent depreciation and/or impairment recordings

Dismantle remove and restore items of PPE

Dismantle remove and restore items of PPE Dismantle remove and restore items of PPE – Many entities have obligations to dismantle, remove and restore items of property plant and equipment and in IFRIC 1 such obligations are referred to as ‘decommissioning, restoration and similar liabilities’ [IFRIC 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities].

Under IAS 16 Property, Plant and Equipment, the cost of an item of property, plant and equipment includes the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, the obligation for which an entity incurs either when the item is acquired or as a consequence of having used the item during a particular period for purposes other than Read more

Fair value measurement and disclosure

Fair value measurement and disclosure – The following are some examples of assets and liabilities that fall within the scope of IFRS 13 for the purpose of measurement and/or disclosure.

IFRS=== Financial reporting item Measurement Disclosure
[IAS 39] Financial instruments available-for-sale or held for trading (recurring fair value measurements)

Fair value measurement and disclosure

Fair value measurement and disclosure

 

 

[IAS 39 /

IFRS 7]

Financial instruments held-to-maturity subsequent to initial recognition at amortised costs (so not part of IFRS 13.
[IFRS 1] Fair value as deemed cost by a first-time adopter of IFRS (e.g. for property, plant and equipment) in the year of adoption of IFRS

Fair value

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