Retention in construction contracts
Question We run a construction company and regularly sign contracts for the construction of buildings for our customers. The customers usually pay us at different points of time defined in the contracts (“milestones”). These milestones and payments usually reflect the progress towards completion and we…
Accounting when acquired subsidiary is not a business
Question We (the parent) acquired a company (the subsidiary) and we identified that the company does not constitute a business, therefore we cannot follow the acquisition method under IFRS 3. The subsidiary only owns some assets and liabilities and we need to account for this…
Depreciation when asset is disposed off
Question Can we depreciate assets those are disposed of during the year? For instance, if one asset is used till October 10 and then sold on that day. Do we have to charge depreciation for the asset till October 10, 2020 since we have used…
Decrease in decommissioning provision results in negative asset
Question We operate a power plant and we recognized a provision related to its decommissioning at the end of its useful life. We remeasure the amount of the provision annually based on updated discount rate and estimated cost report. We apply cost model to our…
Journal entries – finished goods
Question When you produce finished goods from raw materials, labour and other items, what are the journal entries to reflect that? For example, in the lecture #5 Solved Examples in Inventories section, you calculated the cost of one unit of finished product as follows: Item…
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