Measuring expected credit loss: Loss rate vs. Probability of default
Some time ago I published an article about calculating bad debt provision in line with IFRS 9. Precisely speaking, it was about measuring expected credit loss using simplified approach for trade receivables – just to be on the safe side. Since then, I keep receiving…
How to Account for Cryptocurrencies in line with IFRS
Cryptocurrencies + their accounting under IFRS explained very clearly. Video included!
Example: IAS 33 EPS and Rights Issue
Step-by-step calculation of earnings per share in line with IAS 33 for the rights issue.
Example: Expected Credit Loss on Interest-free On-demand Loan
Let’s face the truth: most intercompany loans (or at least many of them) are special in some way: They are undocumented – a parent simply sends cash to a subsidiary with no contract whatsoever and no one has an idea what the terms of the…
Expected Credit Loss on Intercompany Loans
Should you ever recognize impairment, or a provision on your intercompany loan (if you are a lender, of course)? Why would you do that when all intercompany balances are eliminated on consolidation and there’s nothing left in the consolidated financial statements – no loan, no…
Adopting IFRS 16 – What Is The Best Option For You?
Let’s compare different transition options that you have when adopting IFRS 16 in your company. Let’s see what they are, which one is easier and which one has the smallest impact on your equity.
IFRS 2 – How to Calculate Fair Value for Share Based Payments
Note: This article is a guest post and its author asked me not to reveal his name, so he stays anonymous. IFRS 2 Share-based Payment (the “Standard”) is the financial reporting standard dealing with share based payments. It was first introduced in 2005, and is…
Example: Cash flow projections and value in use under IAS 36
In my last article, I tried to outline the main things to consider and to avoid when preparing the cash flow projections for the impairment tests under IAS 36. Here let’s illustrate the theory and show the numerical example of making cash flow projections for…
How to Make Cash Flow Projections for Impairment Testing under IAS 36
Impairment tests are one of the most judgmental areas in IFRS. It is all about estimating, judging, evaluating and forecasting. Sometimes it is almost like fortune telling, isn’t it? When I audited a few companies, I really disliked going through their impairment tests because all…
IFRS 9: An Auditor’s Perspective
The end of 2018 spelled out relief for most accounting and financial modelling experts responsible for the implementation of IFRS 9: all necessary changes to accounting policies, models and methodologies were designed and enforced, all in time for a lovely Christmas break at the end…
