Dear all
Can someone tell me how do you define normal capacity of IAS 2?
In IAS 2, it said that normal capacity is the production expected to
be achieved on average over a number of periods or seasons under
normal circumstances.
I am wondering how to caculate the normail capacity?
ex: one machine can produce 10 finish good in 8 hours, then, the
factory works 8 hours per days and five days per week, so the normal
capacity will be
10 *8*4=320 ?
or the enterprise estimate that they can sell 250 finish goods per
months in normal circumstances. so, …

Dear All,
Can any one give their opinion on the below:
The organization is charging license cancellation fee for each
customer’s license cancellation. What if customer ran away without
canceling license. Now the Organization wants to cancel on their own
and charge license fee and recognize revenue and provide against
doubtful debts. In my opinion no need of license cancellation charged
to customer.
Best Regards,
Hemant

Hi Hemant,The revenue should not be recognized because it is NOT probable that
the economic benefits associated with the transaction will flow to the
entity.License cancellation fee should be classified as a service type
revenue, governed under …

Dear All
Greeting
In UAE work visa would be for 3 years and cost would be paid by the
employer and in my company it is practice to debit as administration
expense. Employees must has to complete 3 years and if he/she leave
the job prior to three years he has to pay back the full visa cost to
company.
In my opinion it should be capitalized and depreciated for three years
to meet fair presentation of financial reporting standard.
Please suggest appropriate treatment
Regards,
Ahmad

Dear Ahmad,
I think you should put the cost in prepayments and write-off against
admin expenses during the …

Dear Ifrs members,
A manufacturing company in plastic have main raw materials based on
oil and sometimes during the month the price of oil increase and
decrease very sharply. However, in the software of the accounting
system, the cost is based on standard cost changed only once a month.
The name of the software is BPCS.
My Questions are:
1. Do you have any ideas to the fluctuation of real cost ?
2. Is there any one know about this software and if so, could you
recommend on the standard cost and actual cost on this system?
3. What cost …

Dear Every one,

Can any one help to solve the following problems:
   
Say, XY is a joint venture company between X & Y with 70:30 proportion with issued capital of  $100. Now, Y intends to offload its share to Z company for a consideration of $ 80.
Now the question is how this investment would be shown in Z company’s F/S and which IAS/IFRS will cover this transaction ?
 
Also can any one share reconciliation between IFRS and US GAAP F/S ?
 
Advance thanks to every one
 
 
MM

Hi there,

My answer would be the following:
Y has a …

dear sir or mam
 
When one company adopt the IFRSs 1 first time then what are the irems exempted from national GAAP in the case of convergance to IFRSs.
 
Thanks
 
Sincerely yours,
Rakesh

dear rakesh

pls read ifrs 1 and see the exemption given for the same
there are 10 exemptions
Regards
Jignesh

We have a projector & purchased 6 years back @ 17000/- we have depreciated 8000/- as of now and the NBV is 9000/-. Now the market value is 5000/-. Do we need any accouning treatment as per IFRS.
Upul

Dear Upul,
IAS 16, Property, Plant and Equipment (PPE), allows a choice …

Hi

 
Please give me your opinion on forex loss on Assets. Do you capitalize it or do expense it to the foreign loss

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Dear allPlease find attached a news from European Commission about IFRS.
In addition you’ll find a link to a pdf file related to consolidated
text of IFRS.Have a good joining.
Regards
Simone SalviAccounting standards: Commission adopts consolidated text of IFRS
applicable in the EUThe European Commission has adopted on Monday 3 November the
consolidated text of all International Financial Reporting Standards
(IFRS) in force in the European Union (EU). The consolidated version
puts together all IFRS endorsed to date, including the latest
amendments endorsed on 15.10.2008. It will enable stakeholders to
refer to only one single legal document. This is …

The Company has taken a loan for construction of projects. A part of
amount is kept in FD with the Bank. Interest is capitalized on the
amount paid as per payment certificates like draw down. If the project
is capitalized and 2 payment certificates received after the
capitalization date. Now question is whether interest will be
capitalized on amount paid after capitalization date or expensed out.
Hemant

I think after the project is completed, the interest expenses, is charged to
P&L.
Krishnendu

Query is not clear:

1. If the loan was taken for construction, interest component to the date of capitalization …

Dear all.

I have a question on valuation of equity investments.
What is the best method to value an unquoted investment
Cheers
Shehzad  

Well for unquoted investment you could:
If there is substantial market and volume of such equity in the market then, you could value it using market price.
If there is not market, or if, say due to the legal implications (private co. for example), the equity cant have liquidity in the market due to restrictions in transferring such shares, net worth (intrinsic value) method can be used.
There are other options for valuations …

Dear friends,
Can you please give your opinion for the capitalization of the followings:
Modification to Existing Car Park
Construction of Temporary Car Park
Refurnish-Cooling Tower
Thanks
Hemant

Dear
I think that all of these costs should be capitalized.

–
Hesham

I agree with Hesham, it is to be capitalised, modification & refurnishing
extends the life of the existing asset, thus providing future benefits.& for Construction of Temporary Car Park, it is to be seen as to how
temporary is the car park. If it does not give you future benefits, like a
park for a couple of months, I think it should be …

Hi All,
Accounting of lease rentals for operating lease in lessee’s book is
ruled in IAS as under :
“Lease payments under an operating lease shall be recognised as an
expense on a straight-line basis over the lease term unless another
systematic basis is more representative of the time pattern of the
user’s benefit.”
My query is that when there is an escalation clause in the contract
how should the accrual be made over the total tenor of the lease; for
eg: refer following table, should the accrual be made as per option 1
or option 2.
Thanks to reply asap.
Regards
Deepak

Option …

Dear all

My Company has an outstanding USD loan of say US$10m and as our main subsidiaries are operating in China and earns revenue denominated in RMB, which will ultimately flow to our company in terms of RMB dividend (converted to USD due to exchange regulation in PRC).
As we need to make periodic payments say US$1m every quarter, we are considering entering forex contracts to fix the USD/RMB rate that matches the payments (i.e. 10 contracts @US$1m each @ either same conversion price or different conversion price).
How should we disclose …

Dear all,
As I know , as per IFRS there is no prior year adjustment anymore ,
and back dated entries are not allowed once the year closed and
figures reported , Hence the actual variance will be booked in the
next year PL ,
example : if company A , estimated an income in 2007 and took a
provision for this income for 1M $ in 2007
The actual income received in 2008 for 2M$ , the
accounting entry will be reversing the 1M$ provision and Book the 1M$
variance in 2008 PL
My question is , As per …

Any one please clarify me this….
Hari

Hi Team,
Will any one clarify the difference between Exceptional Items &
Extraordinary Items?
With reference to IFRS what is the disclosure policy for the both.
Thanks & Regards,
Hari

Hi Hari,
to my understanding according to IAS 1 there was for several years the
possibility to show extraordinary items in the P+L (IAS 1.85). Since
2004 this seems to be no longer allowed according to Dr. David
Grünberger who is member in the Accounting Regulatory Committee in
Brussels which decides upon the endorsement of new IAS/IFRS standards
within the EU. According to US-GAAP extraordinary items are …

Dear All,
The Company was incorporated in Oct 2007.Could you please give your
expert opinion on the treatment of preliminary expenses (Revenue
generation is not yet started) e.g. rent, salary, traveling etc.
incurred during Oct 2007- Aug 2008. Please reply in reference to IFRS.
Revenue is expected in Sept 2008.
In my view, preliminary expenses can be accumulated and amortized when
revenue is started due to matching concept.
BestRegards,
Hemant

Preliminary expenses / startup costs, etc. cannot be deferred. They
have to be charged off to income statement in the year of actual
startup of operations.
–
Thanks & Regards
Anand

Hemant,
Whether to Deffer the preliminary …

Dear Friend,
Please inform which website can give me detailed IFRS and IAS access
free of cost. Deloittee IAS PLUS gives summary.
Thanks
Hemant

Hi Hemant
For a summary of the scope of each Standard you may want to rely on
the official site of the International Accounting Standard Board
(www.iasb.org). Detailed information on each standard are instead
subject to a subscription which however provides you also with regular
updates.
Regards
Antonello

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Good day,
I would like to know how a company would record shares in its books if
these were received as a gift.
For example:
Shares held by Mr. Brown in Company A were transferred to Company B as
a gift. How would these shares be recorded in the books of Company B
under IFRS? Please refer me to the applicable IFRS
I look forward to your response
Regards,
Tracia

TraciaOne would need to refer to the terms and conditions of the transfer of
the gift for the more detailed aspects of recording the transaction.However, assuming that it is a vanilla …

Dear IFRSListers
Has anyone in the group dealt with carbon credit accounting under IFRS
yet? If so, please advise.
Regards
Vatsala

No business case as such. IFRIC 3 dealt with Emissions and was applied
by many companies until its withdrawal in 2005 as it resulted in
massive volatilities in the financial statements though it was the
correct way to apply IFRS for carbon credit accounting. IAS 8 applies
now.A fellow professional asked me this question and my research proved
unsatisfactory. I just want to know if any colleagues on this list are
still applying IFRS accounting and how they are dealing …

Dear Experts,
Please give your export opinion on the following query:
The Company issues lease agreement for 12 months for rent of 120000
from 1 Jan 2008 to 31 Dec 2008. The Company gives concession for 2
months from 1 Jan 2008 to 28 Feb 2008 for 20000 i.e. a customer has to
pay 100,000.
Rent Amortization : Spread 12000 monthly over 12 months
Concession : Spread over concession period 2 months 10000 monthly
Do you think that concession should have been amortized over 12 months period.
Please mention the reference of IFRS.
Best Regards,
Hemant

Hi,
As per IAS 17, the first …