CPDbox – Making IFRS Easy: Recent Episodes
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The new standard IFRS 18 brought a few significant changes in the financial reporting, especially in profit or loss statement. Let’s examine the top four of them and illustrate them on simple examples. #1 New categories of income and expenses under IFRS 18 Under...
The post Top 4 Changes in Profit or Loss Statement under IFRS 18 (with video) appeared first on CPDbox - Making IFRS Easy.
As the new IFRS 18 has been adopted, it might bring a bit of turmoil to some accountants who might need to change the structure of their accounts to adjust to the new requirements. The good news is that the rules for the statement of...
The post How to Prepare Statement of Changes in Equity under IFRS 18 (with excel and video) appeared first on CPDbox - Making IFRS Easy.
IFRS 18 was issued in 2024 and is mandatorily applicable for the period starting on or after 1 January 2027, with earlier application permitted. However, please watch out because we need to apply IFRS 18 retrospectively, with the restatement of the comparative period. It means...
The post IFRS 18 Presentation and Disclosure in Financial Statements: summary appeared first on CPDbox - Making IFRS Easy.
Hedge accounting is an optional model for reporting the derivatives, yet it is not a free ride: there are conditions and admin work to do. So, if there is so much additional work related to hedge accounting, why even bother? Well, some people say that...
The post IFRS 9 Hedge accounting example: why and how to do it appeared first on CPDbox - Making IFRS Easy.
Trying to make IFRS 17 complexity a bit easier, here’s the practical numerical solved example of initial measurement of insurance contracts, using the general model under IFRS 17 Insurance Contracts. Please see the following topics: The main principles of initial measurement under IFRS 17; Example...
The post IFRS 17 Example: Initial Measurement of Insurance Contracts appeared first on CPDbox - Making IFRS Easy.
IFRS 17 was issued in 2017 and is mandatorily applicable for the period starting on or after 1 January 2023. It replaced “temporary” standard IFRS 4 Insurance Contracts, which is no longer applicable. This summary splits the topics covered in IFRS 17 to the following...
The post IFRS 17 Insurance Contracts: Summary appeared first on CPDbox - Making IFRS Easy.
Updated: June 2023 When you need to translate your items denominated in foreign currency to your own functional currency, then there’s one little problem: Is that item monetary or non-monetary? If you determine the nature of your item incorrectly, it can lead to totally wrong...
The post Monetary or Non-Monetary? appeared first on CPDbox - Making IFRS Easy.
Updated in March 2023 I bet every single company needed to change something in its accounting records and financial statements. Often, the change is very small, so you just don’t worry about it and make correction on the go. But sometimes, the change can impact...
The post IAS 8 Accounting Policies, Changes in Accounting Estimates, Errors appeared first on CPDbox - Making IFRS Easy.
The standard IFRS 15 has been with us for a while now, yet I still receive the same question: What precisely is 5-step model and should we really apply it to even the simple shop sales to the customer? The short answer is YES, you...
The post 5-Step Model for Revenue Recognition under IFRS 15 + Journal Entries appeared first on CPDbox - Making IFRS Easy.
Last update: 10/2022 (video added to the end of the article) 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...
The post Example: Consolidation with Foreign Currencies appeared first on CPDbox - Making IFRS Easy.
How to account for exchanges of inventories or long-term assets under IFRS? Or other barter transactions? Learn here!
The post How to account for barter transactions? appeared first on CPDbox - Making IFRS Easy.
How to account for exchanges of inventories or long-term assets under IFRS? Or other barter transactions? Learn here!
The post How to account for barter transactions? appeared first on CPDbox - Making IFRS Easy.
How to classify depreciation of warehouse? Is it cost of sales or administrative expense? What to do when the classification changes? Learn here!
The post How to classify expenses in profit or loss statement under IFRS? appeared first on CPDbox - Making IFRS Easy.
Lockdowns stripped many businesses of their revenues due to temporary closures and ban on activities. However, businesses still have assets and related expenses. For example depreciation. Many businesses still need to charge the depreciation despite having zero revenues, and as a result they end up...
The post Can We Interrupt Depreciation due to Covid-19 Pandemics? 3 Tips & Tricks appeared first on CPDbox - Making IFRS Easy.
To err is human. But the following mistakes are not the ones you can afford to make in a board meeting or a job interview. Because, no matter how right these notions sound or how prevalent these views are, they are still very “wrong”: IFRS...
The post IFRS 17 – The 3 Greatest Misconceptions appeared first on CPDbox - Making IFRS Easy.
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!
The post Accounting for CAPEX threshold and its change under IFRS appeared first on CPDbox - Making IFRS Easy.
Recently I got across the interesting question. One lady working for a company adopting IFRS for the first time asked me if they can still mark their financial statements as compliant with IFRS, if they do not apply projected unit credit method, but do apply...
The post Projected Unit Credit Method (IAS 19) with Example appeared first on CPDbox - Making IFRS Easy.
What is the difference between contract asset and receivable? When to book a contract asset and when a receivable? Learn here (with example)!
The post Contract Asset vs. Trade Receivable – What’s the Difference? appeared first on CPDbox - Making IFRS Easy.
Expected credit loss challenges many experienced accountants and finance people, because it contains the element of uncertainty and some sort of guessing or estimating what can happen in the future. That’s why it is “expected” after all. I wrote a few articles about the process...
The post ECL: How to Measure Probability of Default appeared first on CPDbox - Making IFRS Easy.
Warren Buffett once said: “Other guys read Playboy. I read annual reports.” This is a profound statement indicating that Warren Buffett actually takes his time to go through a complete annual report, including the financial statements and notes. Thus, Mr. Buffett does NOT consider the...
The post How to Write Notes to Financial Statements under IFRS appeared first on CPDbox - Making IFRS Easy.
What if your lease payments depend on future sales, inflation, use of the asset, interest rate or other things - what should you do? How should you account for them under IFRS 16? Find out here!
The post How to account for rentals depending on inflation and future sales? appeared first on CPDbox - Making IFRS Easy.
How to report in hyperinflationary economy under IFRS in three steps: with the video!
The post IFRS Reporting in Hyperinflationary Economy (IAS 29) appeared first on CPDbox - Making IFRS Easy.
How to incorporate leases under IFRS 16 into the statement of cash flows - solved example with video.
The post How to present leases under IFRS 16 in the statement of cash flows (IAS 7) appeared first on CPDbox - Making IFRS Easy.
What is a financial guarantee? What is it NOT? And, how to account for financial guarantees under IFRS 9? Learn here!
The post How to account for financial guarantees under IFRS 9? appeared first on CPDbox - Making IFRS Easy.
How to account for veterinary costs, animal food, fertilizers, pesticides and other operating expenses in agriculture under IAS 41? Learn here!
The post How to Account for Subsequent Expenditures in Agriculture? appeared first on CPDbox - Making IFRS Easy.
IFRS do not specify any rules for presenting the financial statements when the going concern basis does not apply. So, what to do? How to present the financial statements? What should we take care of? Find out here!
The post How to prepare financial statements when going concern does NOT apply? appeared first on CPDbox - Making IFRS Easy.
How to assess hedge effectiveness prospectively under IFRS 9? Do we need to calculate the hedge effectiveness retrospectively?
The post How to test hedge effectiveness under IFRS 9? appeared first on CPDbox - Making IFRS Easy.
Advances from your clients received in cash... but you can't use that cash. That's just one example of restricted cash. How should you present it under IFRS?
The post How to present restricted cash under IFRS? appeared first on CPDbox - Making IFRS Easy.
When you purchase a commodity with future delivery for fixed price, should you account for it as for derivative under IFRS 9? Or as a purchase of inventories ("own-use" contract)? Find out here with example included.
The post How to account for contracts to buy commodities with future delivery (own use)? appeared first on CPDbox - Making IFRS Easy.
The truth is that there is no specific IFRS related to precious metals. What to do when you buy gold and other metals to store value? Learn here!
The post How to account for investment in gold under IFRS? appeared first on CPDbox - Making IFRS Easy.
The accounting for the dividends paid to employees depends on whether the employee is a shareholder or not; and whether the dividend was paid out to employees in their capacity of shareholders. Learn more here.
The post How to account for dividends paid to employees? appeared first on CPDbox - Making IFRS Easy.
Variable interest with cap/floor, full recourse, inflation-linked interest, collaterals - can you still classify these loans as at amortized cost?
The post Can we classify loans with variable interest at amortized cost? appeared first on CPDbox - Making IFRS Easy.
Here we are, another year comes closer to its and – and what a year! Pandemic entered into our lives in early 2020 and we all must admit it – this was totally new experience, since only older generations can remember similar situation. Yes, it...
The post Impairment Test in the Covid-19 Pandemic appeared first on CPDbox - Making IFRS Easy.
If you acquired land with some old building and you plan to demolish that building, how should you treat the demolition cost and the carrying amount of old building? Can you capitalize it to the new asset? Or expense it? It depends...
The post Can you capitalize demolition cost under IFRS? appeared first on CPDbox - Making IFRS Easy.
How to handle the situation when the parent requires subsidiary to apply different depreciation rates or useful lives than in the local legislation.
The post How to deal with different useful lives of PPE within the group? appeared first on CPDbox - Making IFRS Easy.
What closing rate shall you select under IFRS when more rates are available at the reporting date (mid rate, sell rate, buy rate)? Find out here...
The post What closing rate to apply when more rates are available? appeared first on CPDbox - Making IFRS Easy.
My dear readers, subscribers, followers, and friends, I am very excited to announce that IFRSbox has been rebranding to CPDbox. As you can see, our URL has already changed to www.cpdbox.com, and our logo has also changed. More changes will follow shortly to make a...
The post IFRSbox Rebrands to CPDbox appeared first on CPDbox - Making IFRS Easy.
A few years ago I wrote an article about differences between IFRS and US GAAP. And, I was completely wrong! Why? I assumed, or better said – I expressed the hope that by 2015, we would have a single set of the global reporting standards....
The post IFRS vs US GAAP in 2020: Top 5 Most Common Differences appeared first on CPDbox - Making IFRS Easy.
Did you note that with the globalizing world, the number of large entities decreases and their size increases? Just as an example – 20 years ago, there were about 50 large media companies in the USA, controlling US entertainment industry. I mean film studios, TV...
The post IFRS 3: A Business or an Asset? appeared first on CPDbox - Making IFRS Easy.
The pandemics of coronavirus, or COVID-19 has been here for a while and after the first shock of its quick spread and effect on people’s health, we are all seeing its economic consequences. In order to stop the spread, governments in many countries ordered complete...
The post Example: Leases under IFRS 16 during COVID-19 appeared first on CPDbox - Making IFRS Easy.
The standard IAS 10 has been here for a long time. In fact, it is one of the oldest standards in place. It is sweet and short and often it is seen as a minor thing compared to other complex standards. However, the ongoing pandemic...
The post IAS 10 Events After the Reporting Period appeared first on CPDbox - Making IFRS Easy.
Over past few months, coronavirus became the most mentioned word everywhere. No wonder – not only it takes lives of our dear ones, but it also affects our daily life in many different ways. In many countries, people cannot go to work, kids cannot go...
The post Coronavirus and IFRS – What is happening? appeared first on CPDbox - Making IFRS Easy.
Agriculture is a huge sector, significantly contributing to the world’s GDP. According to the World Bank, in 2018 the value added in the agricultural sector represented 10.39% on total GDP in average – which is HUGE! After all, we all need to eat. Besides its...
The post How to Measure Fair Value in Agriculture – IAS 41 and IFRS 13 appeared first on CPDbox - Making IFRS Easy.
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...
The post Measuring expected credit loss: Loss rate vs. Probability of default appeared first on CPDbox - Making IFRS Easy.
Cryptocurrencies + their accounting under IFRS explained very clearly. Video included!
The post How to Account for Cryptocurrencies in line with IFRS appeared first on CPDbox - Making IFRS Easy.
Step-by-step calculation of earnings per share in line with IAS 33 for the rights issue.
The post Example: IAS 33 EPS and Rights Issue appeared first on CPDbox - Making IFRS Easy.
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...
The post Example: Expected Credit Loss on Interest-free On-demand Loan appeared first on CPDbox - Making IFRS Easy.
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...
The post Expected Credit Loss on Intercompany Loans appeared first on CPDbox - Making IFRS Easy.
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.
The post Adopting IFRS 16 – What Is The Best Option For You? appeared first on CPDbox - Making IFRS Easy.
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...
The post IFRS 2 – How to Calculate Fair Value for Share Based Payments appeared first on CPDbox - Making IFRS Easy.
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...
The post Example: Cash flow projections and value in use under IAS 36 appeared first on CPDbox - Making IFRS Easy.
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...
The post How to Make Cash Flow Projections for Impairment Testing under IAS 36 appeared first on CPDbox - Making IFRS Easy.
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...
The post IFRS 9: An Auditor’s Perspective appeared first on CPDbox - Making IFRS Easy.
The summary of the Conceptual Framework for Financial Reporting 2018 - with VIDEO!!!
The post Conceptual Framework for the Financial Reporting 2018 appeared first on CPDbox - Making IFRS Easy.
“They waste time asking the same questions every year.” “They do not know my business and they are wasting my time.” “They are expensive and offer zero value to us – in fact they are The necessary evil!” These are some of an infinite list...
The post Is your auditor being unreasonable? appeared first on CPDbox - Making IFRS Easy.
The best things in life are free… … at least that’s what Janet Jackson sang in one of her top hits. However, when your company receives some free assets, then the question is: Are they really received at no cost and no strings attached? Is...
The post How to account for free assets received under IFRS appeared first on CPDbox - Making IFRS Easy.
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...
The post How to make a change in functional currency appeared first on CPDbox - Making IFRS Easy.
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...
The post IFRS 2019 Update: Major changes you should be aware of appeared first on CPDbox - Making IFRS Easy.
There are three IFRS covering the area of the most complex IFRS topic – financial instruments: IAS 32 Presentation of Financial Statements – this standard contains basic definitions and rules for presenting of financial instruments; IFRS 7 Financial Instruments: Disclosures – here, you can find...
The post How to Present Financial Instruments under IAS 32 appeared first on CPDbox - Making IFRS Easy.
How to determine whether the performance obligations in the contract are distinct or not distinct under IFRS 15? Find out here, with example included!
The post 039: Distinct or not distinct under IFRS 15? appeared first on CPDbox - Making IFRS Easy.
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...
The post Example: IFRS 10 Disposal of Subsidiary appeared first on CPDbox - Making IFRS Easy.
What if the tax rate on capital gains is different from the tax rate on profit? How to calculate deferred tax on assets that will be recovered via both use and sale? Learn here!
The post 038: Deferred tax when different tax rates apply appeared first on CPDbox - Making IFRS Easy.
How to apply 5-step model of IFRS 15 to the licenses of intellectual property? Are there any special considerations? Learn here!
The post 037: Accounting for the sales of software licenses with subsequent updates appeared first on CPDbox - Making IFRS Easy.
Market prices of most non-financial assets are usually not available, because these assets might be outdated or highly customized or simply not traded on the market. How do you set the fair value of these assets in this case? Learn here!
The post 035: How to determine the fair value of a machine? appeared first on CPDbox - Making IFRS Easy.
How to account for construction contracts under IFRS 15? Learn here on a complex solved example with calculations and journal entries!
The post Example: Construction contracts under IFRS 15 appeared first on CPDbox - Making IFRS Easy.
Should you recognize settlement discount as a cost at the time when the payment is received? Or, should you adjust revenue? How? Learn here!
The post 033: How to account for settlement discounts under IFRS 15? appeared first on CPDbox - Making IFRS Easy.