A European example of issues in separating lease and non-lease components of a contract Here’s another of the issues arising from extracts of enforcement decisions issued in the past by the European Securities and Markets Authority (ESMA); this is from their 24th edition: The issuer is a commercial real estate company whose core business covers…
CPA Canada’s IFRS Discussion Group recently discussed the following fact pattern: A landowner (“Landowner”) with a plot of agricultural land enters into an agreement for a specified period of time with Entity X (“Customer”) allowing the Customer to place a specified number of wind turbines and associated infrastructure on the plot of land. The Customer…
The UK’s Financial Reporting Council recently issued a report on its “thematic review” of disclosures in the first year of application of IFRS 16 Leases. Here’s how the news release summed it up: The FRC found that most companies provided a good explanation of the impact of adopting IFRS 16, which applies for the first…
The IASB recently issued Annual Improvements to IFRS Standards 2018-2020. There are only four items (proving once again that it was almost perfect already). Here they are. Financial instruments IFRS 9 regards an exchange of debt instruments with substantially different terms between an existing borrower and a lender as an extinguishment of the original financial liability…
The IASB has issued Covid-19-related rent concessions, amendments to IFRS 16, effective for annual reporting periods beginning on or after June 1, 2020, with earlier application permitted. This is how the accompanying news release summed it up: The amendment exempts lessees from having to consider individual lease contracts to determine whether rent concessions occurring as…
As we addressed here, the IASB issued the exposure draft Covid-19-related rent concessions, with a very short comment period which expired on May 8, 2020. As the IASB noted, the “objective of the amendment is to give timely relief to lessees when applying IFRS 16 to covid-19-related rent concessions while still enabling them to provide…
Someone went on Twitter and posed the plainly unbalanced question: “If Covid could end by sacrificing one IFRS standard, which would you pick and why IFRS-9?” Based on my unscientific review of the responses, IFRS 9 was indeed the favourite to be jettisoned, although IFRS 15 and 17 also got a good sprinkling of votes.…
In this space I’ve sometimes mentioned alternative uses of “IFRS” as an acronym, from the In-Furness Railway Series to Individual Forest Rights. Recent events add a grim new instance to the list – Individual Fatality Rates. Such that Twitter now generates a regular stream of this kind of thing: Lockdown on the hope that a…
Issues arising in identifying the incremental borrowing rate under IFRS 16. As we discussed here, this is what the standard has to say about initially measuring the lease liability: “At the commencement date, a lessee shall measure the lease liability at the present value of the lease payments that are not paid at that date.…
Kinaxis Inc. provides a recent example of a company simultaneously applying both IFRS 15 and (voluntarily in advance of the effective date) IFRS 16. The company “is a leading provider of cloud-based subscription software that enables its customers to improve and accelerate analysis and decision-making across their supply chain operations.” Here’s how it presented the…
John Hughes IFRS Blog 