IFRS 2 Determination of the vesting period

Last update

Overview IFRS 2 Determination of the vesting period

Employee service costs are recognised in profit or loss over the vesting period from the service commencement date until vesting date. The following topics are of importance in IFRS 2 Determination of the vesting period

Service commencement date and grant date

The ‘vesting period’ is the period during which all of the specified vesting conditions are to be satisfied in order for the employees to be entitled unconditionally to the equity instrument. Normally, this is the period between grant date and the vesting date (see IFRS 2 Definitions).

However, services are recognised when they are received and grant date may occur after the employees have begun rendering services. … Read more

IFRS 2 How to easily determine the grant date

Last update

IFRS 2 How to easily determine the grant date – The determination of grant date is important because this is the date on which the fair value of equity instruments granted is measured. Usually, grant date is also the date on which recognition of the employee cost begins. However, this is not always the case (see 6.4.10) (reference will follow). (IFRS 2 11)

‘Grant date’ is the date at which the entity and the employee agree to a share-based payment arrangement, and requires that the entity and the employee have a shared understanding of the terms and conditions of the arrangement. (IFRS 2 Definitions) IFRS 2 How to easily determine the grant dateRead more

How to best account for COVID-19 under IAS 10

Last update

How to best account for COVID-19 under IAS 10 Events after the reporting period? The question is whether the COVID-19 crises is an adjusting event of a non-adjusting event for the Financial Statements for the period ended 31 December 2019 that have not been authorised for final distribution to stakeholders or for filing at a chamber of commerce or similar institute.

If it is a non-adjusting event what disclosures does it still require in the financial statements or management report accompanying these financial statements?

In terms of accounting implications, the current consensus is that an entity shall not adjust the amounts recognized in its financial statements (IAS 10 10 Non-adjusting events) as at 31 December … Read more

IFRS 15 Best and improved revenue for Telecoms

Last update

IFRS 15 Best and improved revenue for Telecoms – Setting the stage – the services in the market and distributors

The communications industry comprises several sub-sectors, including wireless, fixed line, and cable/satellite television (TV). These companies generate revenue through many different service offerings that include access to, and usage of, network and facilities for the provision of voice, data, internet, and television services.

These services generate revenues through subscription fees or usage charges. Some communications companies also sell or lease equipment such as handsets, modems, dongles (a wIFRS 15 Best and improved revenue for Telecomsireless broadband service connector), customer premises equipment (CPE), and a variety of accessories.

Offerings in the communications industry have evolved as a result of consolidation, technology changes and innovation. … Read more

Contract Modifications under IFRS 15

Last update

Contract Modifications under IFRS 15 – Just two practical examples, to better understand all kind of things for IFRS 15.

On 1 January 20X1, Wireless Company enters into a two-year contract with a customer for a 2-gigabyte (GB) data plan with unlimited talk and text for CU60/month and a subsidised handset for which the customer pays CU200. Contract Modifications under IFRS 15

The handset has a stand-alone selling price of CU600. Contract Modifications under IFRS 15

For purposes of this illustration, the time value of money has not been considered, the stand-alone selling price of the wireless plan is assumed to be the same as the contractual price and the effect of the constraint on variable consideration … Read more

Aggregation disaggregation and materiality

Last update

Aggregation disaggregation and materiality are cornerstones of financial reporting using IFRS. Here is a summary of the financial reporting items that include (mostly) disclosure requirements that relate to these cornerstones. See also Aggregation for an overview of general financial reporting rules in that respect. Aggregation disaggregation and materiality

Fair value measurement

Present additional line items (including by disaggregating the line items listed in IAS 1 54), headings and subtotals in the statement of financial position when such presentation is relevant to an understanding of the entity’s financial position. This may require additional line items when the size, nature or function of an item or aggregation of similar items is such that separate presentation is relevant to Read more

General model of measurement of insurance contracts

Last update

General model of measurement of insurance contracts – Insurance contracts may be highly complex bundles of interdependent rights and obligations and combine features of a financial instrument and features of a service contract. As a result, insurance contracts can provide their issuers with different sources of income – e.g. underwriting profit, fees from asset management services and financial income from spread business (when insurers earn a margin on invested assets) – often all within the same contract. [IFRS 17 IN5, IFRS 17 BC18]

The general measurement model introduced by IFRS 17 provides a comprehensive and coherent framework that provides information reflecting the many different features of insurance contracts and the ways in which the issuers of insurance … Read more

Contract asset

Last update

Contract assets are defined as an entity’s right to consideration in exchange for goods or services  (i.e. conditional) that the entity has transferred to a customer when that right is conditioned on something other than the passage of time (for example, the entity’s future performance). An entity shall assess a contract asset for impairment in accordance with IFRS 9. An impairment of a contract asset shall be measured, presented and disclosed on the same basis as a financial asset that is within the scope of IFRS 9.

A receivable is an entity’s right to consideration that is unconditional. A right to consideration is unconditional if only the passage of time is required before payment of … Read more

Combined financial statements

Last update

Combined financial statements: represents the combination of two or more legal entities or businesses that may or may not be part of the same group, but do not by themselves meet the definition of a group under IFRS 10 Consolidated Financial Statements – i.e. a parent and all of its subsidiaries. At a simplistic level, preparing combined financial statements involves adding together two or more legal entities and eliminating any inter-company transactions – e.g. intercompany profits, revenue and expenses, receivables and payables and equity (e.g. unrealised gains and losses).

Combined financial statements Combined financial statements Combined financial statements Combined financial statements Combined financial statements Combined financial statements Combined financial statements Combined financial statements Combined financial statements Combined financial statements Combined financial statements Combined financial statements

 

 

These activities are typically under common control, BUT do not comprise an existing legal entity or group and are presented as a single reporting entity.

For … Read more