When Canada was first learning about IFRS, the IAS 16 revaluation model probably received disproportionate attention, largely just because it was easy to talk about (to a point anyway). As it turned out, very few Canadian companies actually chose this option – almost all of them stuck with the familiar cost model. A couple did take the…
Some of the issues arising in deferring gains, rather than recognizing them immediately Here’s an extract from some financial statements of a few years ago: Here’s the note that discusses the deferred gain: I should emphasize at the outset that I’m just using this interesting disclosure as a springboard to muse on the general issue, rather…
An example of the limitations of valuation techniques The Canadian IFRS Discussion Group recently considered the following fact pattern, versions of which come up fairly often in practice: “On December 23, 2014, Entity A recognizes a financial liability at $1,000, which is equivalent to the consideration received; Entity A used a valuation technique to measure the…
IFRIC has issued a draft interpretation, Foreign Currency Transactions and Advance Consideration, with comments to be received by January 19, 2016 Here’s the background: “Paragraphs 21–22 of IAS 21 The Effects of Changes in Foreign Exchange Rates require that a foreign currency transaction must be recorded, on initial recognition in the entity’s functional currency, by…
IFRIC has issued a draft interpretation, Uncertainty over Income Tax Treatments, with comments to be received by January 19, 2016 An uncertain tax treatment for purposes of the draft interpretation is one where uncertainty exists “over whether the taxation authority will accept a specific tax treatment under the tax law,” for example where the acceptability…
We’ve previously looked here at the issue of allocating corporate costs to cash generating units for purposes of impairment testing. On that previous occasion, we looked at a European example of an entity that didn’t allocate the costs of corporate officers to CGUs for purposes of determining cash flow estimates. In that case, the local…
I somehow stumbled onto the website of the “Corporate Reporting Dialogue,” “an initiative designed to respond to market calls for greater coherence, consistency and comparability between corporate reporting frameworks, standards and related requirements.” It was spawned under the umbrella of the broad Integrated Reporting initiative, which seeks to work toward “a concise communication about how…
The endless oddity of one of the long-standing aspects of financial reporting On my old blog (now sadly wiped from cyberspace), I devoted several entries to the mechanics of equity accounting, not because I really wanted to, but because the topic generates so many head-scratching oddities (like the one I discussed last time). This is how I put…
I’ll return another day to the basic question of why we’re stuck with equity accounting, a practice that doesn’t really make much conceptual sense. But for as long as we’re stuck with it, it generates plenty of head-scratching opportunities. Take for example the situation where an investor’s share of losses in the associate or joint…
Here’s the background to an issue recently discussed by Canada’s IFRS Discussion Group: “The marketplace has evolved such that there are new types of entities emerging that have non-traditional structures in terms of raising capital (for example, crowd funding) or being structured as an investment (for example, closed-end funds). Crowd funding is the raising of…
John Hughes IFRS Blog 