How to make a change in functional currency
Some time ago I was a part of an audit team auditing the financial statements of a medium-sized manufacturing company. When we received the trial balance of that client, we spotted something strange: There were loads of transactions in a foreign currency and resulting impact…
IFRS 2019 Update: Major changes you should be aware of
Here we go again – another year has started and a number of changes or amendments of IFRS came into effect. I am pretty sure that you are aware of the biggest ones like new IFRS 16, but let me sum up all the new…
Example: IFRS 10 Disposal of Subsidiary
Some time ago I published an article with an example of very simple method of consolidating a parent and a subsidiary. This article still applies and you can learn the basic steps and methodology of consolidation with a nice video in it. Many of my…
030: How to deal with capex threshold for property, plant and equipment?
What happens when you buy lots of assets below your capex threshold, but still high expense? And, should you revise your capex threshold retrospectively? Learn here!
029: How to classify expenses in profit or loss statement under IFRS?
How to classify depreciation of warehouse? Is it cost of sales or administrative expense? What to do when the classification changes? Learn here!
How to Consolidate Special Purpose Entity
I lost my first serious job in Arthur Andersen in 2001. I was devastated, because I really loved that job. Yes, it was full of hard work and long overtimes, but it was the best accounting and auditing school ever. How did I lose my…
014: How to present a loan with breached covenants?
So, you have a long-term loan, you breached the covenants and it became repayable on demand. Is it current or non-current? Learn here!
How to Present Earnings per Share (IAS 33)
If you invest your savings to the purchase of some shares on the stock exchange, then you probably perform some analysis in order to select the right stock. Well, this is at least what you should do. Still, your own hard-earned money needs to work…
How to Make Consolidated Statement of Cash Flows with Foreign Currencies
Did you know that many groups prepare their consolidated cash flow statement completely incorrectly? And, if you are well-experienced accountant, you can actually spot the faulty numbers instantly when you look to the statement of cash flows. Sadly, this wrong method is often taught in…
Example: Consolidation with Foreign Currencies
In today’s world, most groups spread their activities abroad and logically different members of the group operate in different currencies. Is the consolidation process of combining the financial statements of two (or more) companies different when they operate in different currencies? Yes and no. If…
