The Best of IFRSbox 2015
The year-end is coming closer and closer; the closings have already started to push their pressure on all of us, the exam season approaches and we live the busy lives.
I know that this part of the year is usually the second busiest for any accountant or CFO (right after January), but let me stop and take a look back.
During 2015, IFRSbox published lots of articles and videos for you and now, I’d like to take my chance to remind you some of the best and most popular pieces. If you haven’t followed our web for the whole year, this is a good opportunity to catch up.
So, ready for the countdown?
#5: IFRS 15 Examples: How IFRS 15 Affects Your Company
The standard IFRS 15 Contracts with Customers was issued in May 2014 and there’s a lot of discussion going on.
The reason is that it introduces much more guidance for revenue recognition than the currently valid IAS 18 Revenue and other standards.
The essential ingredient of this standard is so-called “5-step model for revenue recognition”.
If you or your company generates some revenue, then you must evaluate every revenue-generating transaction according to this model.
But anyway – is this standard applicable particularly for you?
The probable answer is YES, but of course, it’s up to you to assess and find out.
In my article “IFRS 15 Examples: How IFRS 15 Affects Your Company”, I tried to come up with the specific industries and short illustrations of the impact of IFRS 15 on that particular industry.
Maybe you won’t find your own case there, but it’s still good to read it all and think about it.
Hmmm, I thought this article would make it to the top in my short countdown, but it did not, surprisingly. Maybe the reason is that it’s still not urgent, as it applies from 2018. However, you should at least take a look in order to get ready on time.
#4 Accounting for Prepayments in Foreign Currency under IFRS
During my years with IFRSbox I realized that foreign currencies is a BIG topic.
And, the questions about acquiring some assets from abroad, paying with foreign currencies and capitalizing foreign exchange differences are indeed very often.
In my article about Accounting for Prepayments in Foreign Currency under IFRS, I tried to outline a method for dealing with all these acquisitions or purchases from abroad, together with a numerical example.
If you are new to IFRS, then this article contains the link to the lesson from my IFRS Kit about the foreign currencies.
#3 Monetary or Non-Monetary?
Here we go again – foreign currencies! Why?
Because, when you need to translate your items denominated in foreign currency to your own functional currency, then you definitely need to determine whether the item is monetary or non-monetary.
Because, monetary items in foreign currency are treated in a different way than non-monetary items.
In my article “Monetary or Non-Monetary”, I explain:
- WHAT makes the difference (the general rule)
- HOW to assess a few difficult items such as a share capital in a foreign currency, and
- You’ll find a table that summarizes main balance sheet captions according to their monetary/non-monetary character.
#2 How to Account for Employee Loans (interest-free or below-market interest)
I thought this would be just a marginal issue – was I wrong!
It seems that many companies actually do deal with some sort of interest-free or below-market-interest loans, for example:
- Interest-free loans to employees;
- Interest-free loans with no maturity between companies in the group (parent-subsidiary or similar);
- Interest-free loans from government;
The main principle of these loans is that they should be recognized at their fair value initially – which is, in most cases, different from the cash amount actually given to your employee or received from a government.
If you want to learn how to do it, then my article How to Account for Employee Loans is for you!
You’ll learn the logic behind and the practical example illustrates the theory, too.
And the winner is…
#1 The “PPE Duet”
We can find some property, plant and equipment in almost every single company and in many cases, it represent the most essential, revenue-producing assets.
No wonder that many issues related to the accounting for property, plant and equipment arise.
Earlier this year, I dedicated two articles to the specific areas of accounting for property, plant and equipment and both of these articles became very popular and commented.
In this list, I show them together as they talk about the similar topics. If you come across PPE, then I strongly recommend reading both of them:
- The first article, When to Start Depreciation, deals with the principal question of starting to put the cost of your PPE in profit or loss (=depreciation).
In short, it stresses the “available-for-use” principle rather than “put-into-use” principle. You will learn that you shouldn’t wait for the operation of your assets before you start depreciating them. The fact that they are ready for use is sufficient.
- The second article, How to Account for Spare Parts under IFRS, deals with accounting for spare parts, servicing and stand-by equipment as this area is not very well covered by IFRS.
It will give you some ideas about:
- How to determine whether your item is a piece of inventories (IAS 2) or PPE (IAS 16)
- When and how to depreciate your spare parts – and no, there isn’t any rule of thumb.
A few words from me
Hmmm, as I look back to some of the best and most popular pieces published here on my website, I’d like to take the opportunity to say something personal:
1. I thank you
During 2015, IFRSbox grew quickly, more and more readers and followers found their way to this website and got some good advice.
For me, the feeling that I helped someone is very rewarding, indeed.
On top of that I received a lot of comments and feedback – most of it good, some of it bad – and I’d like to thank you for that.
I want to thank you for reading my articles, writing about your thoughts and issues in the comments, sending me e-mails and sharing my work with your friends and colleagues on social networks.
I really appreciate it very much and I feel honored that my work can help just a little.
BIG THANK YOU!
2. I apologize
As I wrote above, I got a lot of comments and questions from you, whether publicly in the comments below articles, or privately via e-mails or our contact form.
Believe me, I try hard to answer it all and help you as much as I can.
But, I’m only a human and it’s beyond my human capacity to reply everything. I’m still trying and I’m still responding a lot, but I simply can’t do it all.
Please, apologize if your question remained unanswered.
3. I ask for your help
Although I leave some of your questions unanswered, I publish them and they never get deleted.
Because I know that many knowledgeable people visit this website and they can help as well.
I truly believe that if you help, it will come back to you one day.
Therefore, please help. If you find some unanswered questions in the discussions below my articles and you know the answer, please add a comment and reply.
You will help:
- A guy or a girl asking that question;
- A lot of other guys or girls facing similar issues;
- Yourself to show your knowledge (if you sign and give a back-link to your website if you have some); and
- Me, of course!
Whether you celebrate Christmas or not, let me wish you all the best in the year to come. I wish you a lot of love, joy and success. Hope you have a great time ahead!
Please, tell us something nice in the comments below this article and help me share it with your friends. Thank you!
JOIN OUR FREE NEWSLETTER AND GET
report "Top 7 IFRS Mistakes" + free IFRS mini-course
Please check your inbox to confirm your subscription.
- About IFRS (15)
- Accounting estimates (IAS 8) (5)
- Accounting policies (4)
- Consolidation and Groups (21)
- Employees (8)
- FAQ (2)
- Financial Instruments (47)
- Financial Statements (28)
- Foreign currency (9)
- How To (18)
- IFRS Accounting (66)
- IFRS Summaries (28)
- IFRS videos (42)
- Impairment of assets (6)
- Income Tax (9)
- Intangible assets (8)
- Inventories (14)
- Leases (18)
- Most popular (6)
- Not just IFRS (10)
- Podcast (27)
- PPE (IAS 16 and related) (39)
- Provisions and Contingencies (5)
- Revenue recognition (19)
- Sectors&Industries (4)
- Uncategorized (2)
- US GAAP (3)