Financial Instruments Archives - CPDbox - Making IFRS Easy: Recent Episodes
None
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.
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.
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 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.
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.
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.
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.
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.
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.
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.
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 account for the loan origination fees or the loan servicing fees? In profit or loss? Amortize? Find out here!
The post 018: How to account for income from loan application fees? appeared first on CPDbox - Making IFRS Easy.
How to determine the impairment on intercompany loans under IFRS 9? What are the special considerations in relation to groups and internal loans? Learn here!
The post 016: How to calculate impairment on intercompany loans? appeared first on CPDbox - Making IFRS Easy.
How to account for intercompany loans under IFRS when there is no documentation, loans are not at commercial terms or there is no fixed repayment date? Learn here!
The post How to account for intercompany loans under IFRS appeared first on CPDbox - Making IFRS Easy.
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!
The post 014: How to present a loan with breached covenants? appeared first on CPDbox - Making IFRS Easy.
If you have a large portfolio of trade receivables, then you face the same issue over and over again: How to calculate bad debt provision to these receivables? When I worked as an auditor, I used to discuss this issue with my colleagues very frequently....
The post How to calculate bad debt provision under IFRS 9 appeared first on CPDbox - Making IFRS Easy.
About 3 years ago, I was reviewing the financial statements of a medium-sized company providing consumer loans. They needed the IFRS financial statements due to lots of loans taken from foreign banks. Usually, these banks require bigger debtors to provide the financial statements annually. So...
The post What to disclose under IFRS 7 Financial Instruments: Disclosures appeared first on CPDbox - Making IFRS Easy.
When I was auditing the financial statements of one of our clients, I spotted a few strange things: There was a huge balance of cash on client’s bank account at the year-end. And I mean HUGE. To illustrate: normally, the client had about CU...
The post How to Account for Debt Factoring or Selling of Receivables appeared first on CPDbox - Making IFRS Easy.
If your company enters into some derivatives or other contracts to protect against any (potentially adverse) changes in cash flows or fair values, then it’s probably beneficial to apply hedge accounting. I wrote a few articles about hedge accounting, therefore if you need to refresh...
The post How to Make Hedging Documentation appeared first on CPDbox - Making IFRS Easy.
A few weeks ago, we published the article about How to Implement IFRS 9 to assist you with the adoption of the major forthcoming IFRS update. Many accountants and CFOs are worried about IFRS 9, there are numerous discussions going on about it, but not...
The post What Is a Financial Instrument? appeared first on CPDbox - Making IFRS Easy.
IFRS 9 Financial Instruments is one of the most challenging standards because it’s sooo complex and sometimes complicated. It belongs to the “Big 3” – the three difficult standards that need to be implemented in the near future: IFRS 9 Financial Instruments: adoption date =...
The post IFRS 9 Financial Instruments appeared first on CPDbox - Making IFRS Easy.
The new IFRS 9 Financial Instruments will replace the older standard IAS 39 in January 2018 and it practically means that if you are affected, you need to start getting ready NOW. Why? Because your comparative period starts in January 2017 and you will need...
The post How to Implement IFRS 9 appeared first on CPDbox - Making IFRS Easy.
We all know that IASB and US standard’s setting body FASB work together in order to prepare a single set of global accounting standards. Recently issued standard on revenue recognition, IFRS 15 and its American counterpart FAS 606 are a good example of these mutual...
The post IFRS 9 vs. US GAAP – Coming Closer? appeared first on CPDbox - Making IFRS Easy.
Hedge accounting belongs to the most difficult accounting areas and I published a few articles on this topic on IFRSbox – for example, here and here. Today, I’m delighted to present another hedging article written by Mr. Kevin Mitchel,Partner – Advisory Services at Rochford, the...
The post Hedge Accounting Under IFRS 9: Rebalancing – What Is This New Concept? appeared first on CPDbox - Making IFRS Easy.
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...
The post The Best of CPDbox 2015 appeared first on CPDbox - Making IFRS Easy.
The financial instruments belong to the most complicated and difficult areas in IFRS and therefore, I dedicated many articles to making the things understandable a bit. However, until now, we haven’t even touched the complexity of the disclosures about financial instruments as required by IFRS...
The post The Quick Guide to IFRS 7 Risk Disclosures appeared first on CPDbox - Making IFRS Easy.
Most balance sheets present individual items in distinction to current and non-current (except for banks and similar institutions). This seems so basic and obvious that most of us do not really think about classifying individual assets and liabilities as current and non-current. We do it...
The post Current or Non-Current? appeared first on CPDbox - Making IFRS Easy.
After I wrote an article about capitalizing borrowing cost, I got a lot of e-mails asking me actually HOW to account for loans that do not bear the interest rate reflecting market conditions. In other words, how to account for loans at below-market interest rate,...
The post How to Account for Employee Loans (interest-free or below-market interest) appeared first on CPDbox - Making IFRS Easy.
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 presentation in the...
The post Monetary or Non-Monetary? appeared first on CPDbox - Making IFRS Easy.
If you work for a bank or any other financial institution, then you are very well aware of the fact that IFRS is a little bit different there. OK, not quite like that: IFRS is still the same, just the way how you use it...
The post IFRS for Banks and Financial Institutions appeared first on CPDbox - Making IFRS Easy.
Hedge accounting has a reputation as being one of the most difficult areas for people to get to grips with, which is a shame because it is a very useful accounting “technology”. You can find several articles related to basics of hedge accounting in line...
The post How Ignoring Hedging Can Hurt Your Business appeared first on CPDbox - Making IFRS Easy.
Transactions in foreign currencies are sometimes a nightmare. Obviously, we are trading with each other, our own currencies are different and foreign exchange rates are jumping up and down constantly. We are all aware of basic rules with regard to selection of appropriate exchange rate...
The post Accounting for Prepayments in Foreign Currency under IFRS appeared first on CPDbox - Making IFRS Easy.
The year 2014 brought us some very significant changes in IFRS. While some changes might not give you a hard time to adopt, the other changes can cost you a lot of money and time to make them effective in your company. The year 2014...
The post Top 5 IFRS Changes Adopted in 2014 appeared first on CPDbox - Making IFRS Easy.
In July 2014, the standard IFRS 9 was finally completed and the latest amendments brought us new impairment rules (besides the other things). In my humble opinion, new impairment rules will cause a lot of headaches for mainly financial institutions. Why? Well, they will have...
The post How New Impairment Rules in IFRS 9 Affect You appeared first on CPDbox - Making IFRS Easy.
The first thing you need to do before you even start to play with hedge accounting is to determine the TYPE of hedge relationship that you’re dealing with. Why? Because: the type of hedge determines your accounting entries. Make no mistake here. If you incorrectly...
The post Difference Between Fair Value Hedge and Cash Flow Hedge appeared first on CPDbox - Making IFRS Easy.
The year 2013 started off with some really significant IFRS amendments that you need to take into account when preparing your IFRS financial statements as at 31 December 2013. Although these changes should be applied in the year 2013 for the first time, you also...
The post Top 5 IFRS 2014 and 2013 Changes appeared first on CPDbox - Making IFRS Easy.
Business world as of today presents a huge amount of various risks to almost every company or entrepreneur. I’m sure that also your company faces at least some of these risks: foreign currency risk, price risk, inflation risk, credit risk – just name it. Many...
The post Hedge Accounting: IAS 39 vs. IFRS 9 appeared first on CPDbox - Making IFRS Easy.
Many IFRS standards require you to measure the fair value of some items. Just name the examples: financial instruments, biological assets, assets held for sale and many other. In the past, there was limited guidance on how to set fair value; the guidance was spread...
The post IFRS 13 Fair Value Measurement appeared first on CPDbox - Making IFRS Easy.
Compound financial instruments became very common way of raising cash by many companies, but their shareholders don’t like them that much. Why? Because many compound financial instruments contain the option to convert into shares. Just imagine you purchased convertible bond that gives you the right...
The post How to Account for Compound Financial Instruments (IAS 32) appeared first on CPDbox - Making IFRS Easy.
Recently, during my lecture about financial instruments, I got a very interesting question from one clever participant. To give you a little background: He was a finance guy working in a huge company and for sure, he came across various accounting issues and problems. One...
The post How to Extrapolate Along Yield Curve appeared first on CPDbox - Making IFRS Easy.
Update 2017: This is an article from 2012 and I wrote the totally updated article in 2017 here. However, there’s a valuable discussion in the comments to this article, and that’s why I did not delete it, but left it here. Please, if you have...
The post IFRS 9 Financial Instruments 2012 appeared first on CPDbox - Making IFRS Easy.
IAS 39 is a standard fully replaced by the new standard on financial instruments IFRS 9 applicable from 1 January 2018. If you would like to know more about this process, please read our article IAS 39 vs. IFRS 9: Clarifying the Confusion. UPDATE 2018:...
The post IAS 39 Financial Instruments: Recognition and Measurement appeared first on CPDbox - Making IFRS Easy.
People are very creative and inventive. So they created and invented numerous kinds of financial instruments. Just admit it—are you really versed well in derivatives, various share options, warrants, certificates, convertible bonds and many others? This area happens to be so complicated and difficult to understand,...
The post IAS 39 vs IFRS 9 appeared first on CPDbox - Making IFRS Easy.
IFRS and US GAAP come closer to each other and the dream was to have a single set of the reporting standards until 2015. Now we know that that dream did not come true and there is still a long way to go. Until then, there...
The post US GAAP vs IFRS appeared first on CPDbox - Making IFRS Easy.
This is another useful tip I would like to give you. With these formulas, you can really speed up your IFRS accounting process, especially when dealing with sophisticated calculations. So let’s start. Top Financial Formula #1: IRR What is IRR? IRR formula calculates Internal Rate of Return for...
The post Top Excel Formulas for IFRS appeared first on CPDbox - Making IFRS Easy.