Monthly Archives: November 2009


Loss on interest rate swap can be capitalized?

For development of qualifying assets we took a loan from bank, as per ias 23, interest cost on loan taken for qualifying assets will be capitalized to those assets, as per the loan agreement interest rate was libor+1.5, initially libor was high so to c...

By |November 23rd, 2009|DOCUMENTS, FINANCIAL INSTRUMENTS, IAS 23|7 Comments

Borrowing Cost

Hello I Have  A question if i have more than a qualify asset at the same time (say 4) and i only have one loan how i captilize the interest for each asset (give Examples )as they are all at the same time and they are all different??

By |November 21st, 2009|IAS 23|2 Comments

Loss identification period, loan loss provision

Hello, Can anyone tell me how the “loss identification period” (the period between the loss event and when the company becomes aware of it) should affect the probability of default in a collective provision model under the current IFRS sta...

By |November 19th, 2009|FINANCIAL INSTRUMENTS, IAS 39|1 Comment

Airline MRO Billing Accounting

I work in a company specialized in doing MRO for aircrafts, the issues that the work orders of the maintenance and repair takes from a month to 4 months direct salaries and materials are issued to the tasks and salaries are expensed in monthly basis and appears in the P&L while revenue will recorded once [...]

By |November 18th, 2009|GENERAL INFO, OTHER, OTHER GAAP, OTHER IFRS|1 Comment

New book “Accounting for Equity and Other Comprehensive Income: Dual Reporting Under U.S. GAAP and IFRSs”.

The book “Accounting for Equity and Other Comprehensive Income: Dual Reporting Under U.S. GAAP and IFRSs”, by Francesco Bellandi, CPA, CA, ACCADipIFR, MBA, Sapienza Rome State University Press is now available on-line at at or Paperback purchases can be ordered at This book examines and compares the reporting of stockholders’ equity as [...]

By |November 17th, 2009|IFRS, LOCAL GAAP vs IFRS|1 Comment

Penalty Income

Dear all, We have given a contract to ship builders for construcing a vessel. As per the contract terms, if the builder delay the delivery of the vessel beyond agreed delivery date, they have to give us penalty of USD 10,000 per day. Now they have delivered the vessel after 373 days of the agreed [...]

By |November 11th, 2009|OTHER IFRS|5 Comments

Software Capitalization / Expensed out

Dear IFRS Experts, Could you please give your opinion on the following: 1. Computer softare is to be considered as Intangible Assets or PPE 2. Which type of computer software can be capitalized / expensed out Whether following type can be capitalized or expensed out Photoshop Illustrator Adobe Writer AutoCAD AutoCAD 3D Max AutoCAd lite [...]

By |November 11th, 2009|IAS 38|3 Comments

Exchange difference on payment to contractor for development on fixed assets

we have a contract for development of a fixed assets, as per the contract:- Total Contract amount =  260 Million AED We have to pay this amount in Euro that is already fixed as per the contract it is 4.49 AED per Euro whatever is the rate prevailing currently doesnt matter bcoz it has been [...]

By |November 8th, 2009|OTHER IFRS|3 Comments

Accounting issues in marine industry?

Can someone please share thoughts around generic accounting issues in the marine industry. The nature of activities will involve using small ships (bareboat) to provide marine terminal services to clients on ports around the world ? From the top of my head, I can see following major issues to be considered: - Revenue recognition - [...]

By |November 5th, 2009|OTHER IFRS|0 Comments

IFRS treatment for interest free loans

ACo, an offshore company, makes non-interest bearing loans of $10m in FY00, to ZCo a related entity in a tax paying jurisdiction. Repayment terms are 5 equal annual installments from FY05, ending FY10. Whilst i agree that one would generally FV the loan by discounting the future receivables to PV using market rates, what would [...]

By |November 4th, 2009|FAIR VALUE, FINANCIAL INSTRUMENTS|2 Comments

Construction Contract

Case:  Party gets into a long term construction contract to prepare the machinery which takes 2 years to complete  Cost elements – Labor $ 3mm and Materials $ 5mm Total $ 8mm Revenue against – Labor $ 10mm and Materials $ 10mm Total $ 20mm Margin – Labor 70% Material 50% on total project 60% [...]

By |November 4th, 2009|OTHER IFRS|0 Comments

Project costs-Land lease

Dear all, This is my first participation in this forum. i have questions regarding the land as an operating lease. We have a leased land used for a project. Currently the lease rent is being capitalised as land costs- Property Under Development, on the basis that this cost was incurred to bring the assets into [...]

By |November 4th, 2009|Uncategorized|2 Comments

Sale of subsidiary

Company ABC and Company DEF both own Company XYZ (50%0 each). Company XYZ in turn owns subsidiary GHI (100%) and subsidiary XYZ (100%). Company ABC sells it s share in Company XYZ to Company DEF for a consideration of $1 and in turn buys 100% share of subsidiary GHI for $100,000. How do I account for sale of subsidiary GHI in [...]

By |November 2nd, 2009|CONSOLIDATION, FAIR VALUE|3 Comments