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Preparation of financial from IGAAP To IFRS

28 August 2008 2,830 views No Comment

Dear All 

i am working in a home finance company which is subsidary of german company, due to which we are require to prepare the financial from IGAAP to IFRS.

i have the following questions:-

1.we take a loan and in taking loan that we usually pay a processing fee.
2. we pay security deposit for taking Building on rent.
3. we pay Fringe benefit tax on varoius items

 

i want to know,how the above mentioned items will be Accounted in Books in IFRS.

thanks in advance

Vivek



Hi , I had read IAS 32-39 and if you like read ias 39, over there are the answer to your question. Good look.

 

28 May 2008 15:26:05 -0000, vivek kumar garg <vicky1321@rediffmail.com>:

 

 

FRANCISCO

 



 
 

 

Dear Vivek 

 

  1. You should apply IAS39 because loan and borrowing should be calculated on effective interest basis and processing fee should be considered in to the account,
  2. It depended on the financial instruments you place as security deposit. If you pay money, you have very simple entry by debit Deposit(asset) and credit Bank. If you use other financial instrument, you should observe the accounting rule in IAS39 about Recognition and Decognition because it depended on the economic substance of transaction. I can’t answer it exactly.
  • I am not sure what you question is, it’s about fringe benefit tax pertinent to employee or not. If yes you should read IAS employee benefits.
  •  

    Mac

     

     



     


     

    Vivek

    Please read IAS 39 carefully and base your treatment for the loan according to classification of the liability. There have been amendments following the improvements project of 2007 and hence please look at that as well as treatment may have changed.

    Security deposit treatment will depend upon the nature of the deposit and whether the primary lease has expired.

    As for FBT, this does not fall under IAS 12 and would need to be allocated to the expense head that it pertains to.

     



    Dear All

    I am highly appreciated if could answer following:

    CASE

    ABC is a company that offering loan on flat rate basis. Say 20%

    Q 1 Can we say that effective rate as per IFRS is the rate equivalent to declining method?

    Q2 AS IFRS, we need to recognise interest income on effective rate method…it means that we have to calculate the portfolio as per effective rate method?

    Q3 what is impact on income statement, as ABC practice flat rate?

     

    asim
     

     

     

     




     

    Asim
     
    A few questions….
     
    1. Is this a concessionary loan or is it being made at the same rate as a market loan for a similar purpose, eg car loan, house loan or other
    2. What is the duration of the loan?
    3. What is frequency of payment of interest and principal?

     



     

    Dear Asim
     
    Flat rate u mention is the coupon rate on which you calculate intrest , Then you have to discount all the cash  outflow related to intrest payment using effective rate (annuty) .
     
    You have to book interest expense on the basis of effective intrest in the income statement . While your cash fow will be on the flat rate baiss . This difference is basicallly the amportization
    Shabi 



     

     

     
     


    Dear Shukla
     

    1. Loan is market based.

    2. Duration: 12 month

    3. Repayment frequency is monthly

    If need further information, please do let me know.

    Regards

    Asim

     

     

     




     

    dear Mac

    can tell me the address of any website, where i can get the IAS39 in simple language and in details along with example. if you know any book for this,please refer it

    thanks in advance

    regards

    Vivek



    Vivek

    > 

    I suggest the good website

     

    www.iasplus.com

     

    http://www.pwc.com/extweb/pwcpublications.nsf/docid/5EA2A3636FABDF2880256DDC004D818D

     

    www.pwc.com

     

    good reference

     

    Regards

    Mac

     

     

     

     

     

     

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