Dear Colleague,
Whether you work in Life or General insurance, or are involved in the Lloyd’s market, by attending this must-attend event you’ll learn how seismic financial reporting changes will impact your organisation over the coming months…

i need examples
mina.wagih@cibeg.com

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IFRS treatment for interest free loans
Loans

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Please let me know the entry for the below transaction.
we have a job value 15.2 million. Let say, main client-x, contractor-y and we are subcontractror-z.
x has given the order  to y. y has given order to us. we have to provide the equipment which va…

Where is share application money classified in balance sheet?

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Minority Interest
Accounting treatment for Increase in Equity-share Mkt. Price at FY- Closing.

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The FV of the loan is the discounted receivable using market rates, the difference between the PV (say $8m) and the $10m should be deferred and amortized over the term of the loan on the same basis as the accretion.

The free interest is an additional cost to the company. However, this difference is not a transaction cost (e.g., costs paid to the broker, legal costs, commissions) as defined under IFRS (more closely mirrors premiums/discounts, financing costs or holding costs) and therefore should not be expensed immediately but should rather be deferred and amortized on the same basis as the amount that is being accreted.

On the financials you would present the long term loan receivable on a discounted basis and would also show a deferred charge that is amortized on the same basis.

Don’t adjust for any changes in market interest rate as this should be accounted for using the amortized cost method.

Daniel

The FV of the loan is the discounted receivable using market rates, the difference between the PV (say $8m) and the $10m should be deferred and amortized over the term of the loan on the same basis as the accretion.

The free interest is an additional cost to the company. However, this difference is not a transaction cost (e.g., costs paid to the broker, legal costs, commissions) as defined under IFRS (more closely mirrors premiums/discounts, financing costs or holding costs) and therefore should not be expensed immediately but should rather be deferred and amortized on the same basis as the amount that is being accreted.

On the financials you would present the long term loan receivable on a discounted basis and would also show a deferred charge that is amortized on the same basis.

Don’t adjust for any changes in market interest rate as this should be accounted for using the amortized cost method.

Daniel

We need a trainer to deliver an IFRS training course to one of our Asian clients.  If you have IFRS subject matter expertise and if you have training expertise, please email your CV to info@bccp-llc.com and I will then contact you with additional information.

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For finance and accounts professionals looking for an effective training on IFRS with special focus to India implementation.

The problems of accounting for defined benefit pensions represents a significant issue on corporate balance sheets.  As of December 31, 2010, of the S&P 500 companies the funded ratio of plans was 81%, and corporate governance reports it the #1 concern in corporate planning.  One of the largest parts to the problem is understanding just how big the liabilities are, as older expectations and differing measurements make sets of circumstances difficult to compare.
Rules tending to earlier …

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I can deliver leased instruments to Organisations or individuals with their
preferred text verbiage as been approved by their bankers. We also proffer sales
option to interested buyers. Our terms and procedures are so flexible and
workable by RWA clients. Our lease rate is (5.5+0.5)%+x%. X% IS Lessee broker’s
Commission and he determines his commission. Also we have facilities to discount
BG and Put you into PPP Trading.

Contact me through this email:(financialinstruments01@gmail.com) or through
skype: (muhsin.abid.ali) in other to furnish you with other information.

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24-25 May 2011, London
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IFRS Update 2011
14-15 June 2011, Zurich
7-8 December, Zurich
Quote VIP Code: KM2306IFRSL to receive 10% discount off the delegate fee.
An in-depth knowledge of the constantly evolving financial reporting regulations is essential. Alongside IFRS 9 and …

If it’s a construction contract, you should probably be applying IAS 11 not IAS 18?

In either event, the percentage of completion method is preferred.

I’m not exactly sure what you mean by “completed basis”, but if you are referring to the “completed-contract method” (ASC 605-35-25-88), the alternative method used under US GAAP, this method is not an allowed alternative under either IAS 18 or 11.

Thus, if the outcome of a construction contract cannot be estimated reliably, the IFRS alternative (IAS 11.32) is the zero-profit method.

If it’s a construction contract, you should probably be applying IAS 11 not IAS 18?

In either event, the percentage of completion method is preferred.

I’m not exactly sure what you mean by “completed basis”, but if you are referring to the “completed-contract method” (ASC 605-35-25-88), the alternative method used under US GAAP, this method is not an allowed alternative under either IAS 18 or 11.

Thus, if the outcome of a construction contract cannot be estimated reliably, the IFRS alternative (IAS 11.32) is the zero-profit method.

As per IFRS, how should we recognize the revenue for constructions activities. can we still use percentage completion basis or fully Completed basis as per IAS 18. If % completion basis is allowed, then what is the minimum % should be, before revenue is recongnised and % completion should be certified by whom?

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A Practical Introduction the
IFRS Application for
Life Insurers
Including Case Studies & Worked Examples
24 & 25 May 2011 • Central London
For the latest programme or to register visit: http://www.informaglobalevents.com/KM6577IFRSWB

Att…

A Practical Introduction to
IFRS Application for
General Insurers
Including Case Studies & Worked Examples
18 & 19 May 2011 • Central London
For the latest programme or to register visit: http://www.informaglobalevents.com/KM6576IFRSWB

…

While IAS 16.20 discusses acquisition cessation, it is primarily aimed at preventing the capitalization of costs like re-installation or relocation, initial operating, etc.

Since none of these should not be relevant to your situation, you should primarily be concerned with those costs covered by paragraph 20.a (that continue to accrue even after the asset is “ready to use”).

Since the primary of these is likely to be interest (borrowing costs), other, similar costs should be treated (by analogy) in the same manner.

Per IAS 23.22, as long as the necessary infrastructure is in place, capitalization ceases when it is possible to have the electricity turned on, not when it is actually turned on.

Per .24, even if the infrastructure is not in place, borrowing costs would continue to accrue, but not to the entire project. They would only be applicable to that portion of the project (the electrical infrastructure) that is not yet complete.

In other words, the simply fact that you haven’t bothered to turn on the lights, doesn’t give you the right to keep capitalizing.

Finally (probably because it occurred to somebody in the past), paragraph 23 mentions decorations (furnishing, carpet, wallpaper). It explicitly states that these minor costs are not to be considered when determining the cessation of capitalization.

While IAS 16.20 discusses acquisition cessation, it is primarily aimed at preventing the capitalization of costs like re-installation or relocation, initial operating, etc.

Since none of these should not be relevant to your situation, you should primarily be concerned with those costs covered by paragraph 20.a (that continue to accrue even after the asset is “ready to use”).

Since the primary of these is likely to be interest (borrowing costs), other, similar costs should be treated (by analogy) in the same manner.

Per IAS 23.22, as long as the necessary infrastructure is in place, capitalization ceases when it is possible to have the electricity turned on, not when it is actually turned on.

Per .24, even if the infrastructure is not in place, borrowing costs would continue to accrue, but not to the entire project. They would only be applicable to that portion of the project (the electrical infrastructure) that is not yet complete.

In other words, the simply fact that you haven’t bothered to turn on the lights, doesn’t give you the right to keep capitalizing.

Finally (probably because it occurred to somebody in the past), paragraph 23 mentions decorations (furnishing, carpet, wallpaper). It explicitly states that these minor costs are not to be considered when determining the cessation of capitalization.

While IAS 16.20 discusses acquisition cessation, it is primarily aimed at preventing the capitalization of costs like re-installation or relocation, initial operating, etc.

Since none of these should not be relevant to your situation, you should primarily be concerned with those costs covered by paragraph 20.a (that continue to accrue even after the asset is “ready to use”).

Since the primary of these is likely to be interest (borrowing costs), other, similar costs should be treated (by analogy) in the same manner.

Per IAS 23.22, as long as the necessary infrastructure is in place, capitalization ceases when it is possible to have the electricity turned on, not when it is actually turned on.

Per .24, even if the infrastructure is not in place, borrowing costs would continue to accrue, but not to the entire project. They would only be applicable to that portion of the project (the electrical infrastructure) that is not yet complete.

In other words, the simply fact that you haven’t bothered to turn on the lights, doesn’t give you the right to keep capitalizing.

Finally (probably because it occurred to somebody in the past), paragraph 23 mentions decorations (furnishing, carpet, wallpaper). It explicitly states that these minor costs are not to be considered when determining the cessation of capitalization.

There is apparently an accounting change coming in next year affecting the way financial services (and possibly other) companies account for minority interests. I understand this may require companies to treat a minority investment as a trading/available for sale investment rather than an equity investment at present. Has anyone heard of this? I’ve tried to verify this with very little success.

IFRS Taxonomy Annual Convention
29th March 2011, Renaissance Chancery Court, London, UK
Quote VIP Code: KM2310IL1 – Special 10% discount for IFRS List
Dear Colleague,
With the exposure draft IFRS Taxonomy 2011 just published for public comment, t…