Talal Pasha

Core principle of IFRS 15 Accounting requirements for revenue The five-step model framework The core principle of IFRS 15 is that an entity will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This core principle is delivered in a five-step model framework: [IFRS 15:IN7] Identify the contract(s) with a customer A contract with a customer will be within the scope of IFRS 15 if all the following conditions are met: [IFRS 15:9] the contract has been approved by the parties to the contract; each party’s rights in relation to the goods or services to be transferred can be identified; the payment terms for the goods or services to be transferred can be identified; the contract has commercial substance; and it is probable that the consideration to which the entity is entitled to in exchange for the goods or services will be collected. Identify the performance obligations in the contract Determine the transaction price Allocate the transaction price to the performance obligations in the contract Recognize revenue when (or as) the entity satisfies a performance obligation Superseded Standards IFRS 15 replaces the following standards and interpretations: IAS 11 Construction contracts IAS 18 Revenue IFRIC 13 Customer Loyalty Programme IFRIC 15 Agreements for the Construction of Real Estate IFRIC 18 Transfers of Assets from Customers SIC-31 Revenue - Barter Transactions Involving Advertising Services

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IFRS 9 - Financial Instruments Watch this short video on IFRS 9 to understand this important standard for your examination. https://lnkd.in/dPSi7cAf Stay connected. We are releasing videos like this throughout. Share with others Nhyira Premium, Impacting Business Leaders

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Core principle of IFRS 15 Accounting requirements for revenue The five-step model framework The core principle of IFRS 15 is that an entity will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This core principle is delivered in a five-step model framework: [IFRS 15:IN7] Identify the contract(s) with a customer A contract with a customer will be within the scope of IFRS 15 if all the following conditions are met: [IFRS 15:9] the contract has been approved by the parties to the contract; each party’s rights in relation to the goods or services to be transferred can be identified; the payment terms for the goods or services to be transferred can be identified; the contract has commercial substance; and it is probable that the consideration to which the entity is entitled to in exchange for the goods or services will be collected. Identify the performance obligations in the contract Determine the transaction price Allocate the transaction price to the performance obligations in the contract Recognize revenue when (or as) the entity satisfies a performance obligation Superseded Standards IFRS 15 replaces the following standards and interpretations: IAS 11 Construction contracts IAS 18 Revenue IFRIC 13 Customer Loyalty Programmes IFRIC 15 Agreements for the Construction of Real Estate IFRIC 18 Transfers of Assets from Customers SIC-31 Revenue - Barter Transactions Involving Advertising Services

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١ تعليق واحد

What is best practice to implement IFRS 16 in a Logistics company? A company has a contract to use vehicles from rental companies for its operation.

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IFRS 18, set to replace IAS 1, was issued by the IASB in April 2024. It concentrates on the presentation and disclosure of information in general purpose financial statements. The key changes include: 1. Introduction of new categories and subtotals in the Statement of Profit or Loss. 2. Disclosure requirements centered around Management-Defined Performance Measures (MPMs). 3. Improved principles for Aggregation and Disaggregation. 4. New classification categories for income and expenses. As I familiarize myself with this standard, I will detail each change accordingly 🙂 . #IFRS18 #Jan27 #FINACIALREPORTING

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🚨 IFRS 18 Announcement as a replacement for IAS 1 🚨 👉 IFRS 18 Presentation and Disclosure in Financial Statements—Key terms 🔸️ Operating profit or loss: ➖️ The total of all income and expenses classified in the operating category. 🔸️ Profit or loss before financing and income taxes: ➖️ The total of operating profit or loss and all income and expenses classified in the investing category. 🔸️ Entities with specified main business activities: ➖️ An entity can have one or more main business activities, to classify income and expenses into the categories of operating, investing and financing as required by IFRS 18, an entity needs to assess whether it invests in assets or provides financing to customers as a main business activity. 🔸️ Management-defined performance measures: ➖️ A subtotal of income and expenses that 👇 1️⃣ an entity uses in public communications outside financial statements. 2️⃣ an entity uses to communicate to users of financial statements management’s view of an aspect of the financial performance of the entity as a whole. 3️⃣ and is not listed in IFRS 18 or specifically required to be presented or disclosed by IFRS Accounting Standards. 🔸️ Public communications: ➖️ Public communications include management commentary, press releases and investor presentations. For the purpose of defining management-defined performance measures, public communications exclude oral communications, written transcripts of oral communications and social media posts. 🔸️ Useful structured summary: A structured summary provided in a primary financial statement of a reporting entity’s recognised assets, liabilities, equity, income, expenses and cash flows that is useful for: 1️⃣ obtaining an understandable overview of the entity’s recognised assets, liabilities, equity, income, expenses and cash flows. 2️⃣ making comparisons between entities, and between reporting periods for the same entity. 3️⃣ and identifying items or areas about which users of financial statements may wish to seek additional information in the notes. 💡 it is important to know that IFRS 18 was issued by the International Accounting Standards Board (IASB) on 09 April 2024 and It will be effective for reporting periods beginning or after 1 January 2027. #accountingtips #accounting #financeandaccounting #financialaccounting #financialanalysis #finance #IAS1 #IFRS18 #financialstatements

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Who will have to apply IFRS 18 and when does it have to be applied? All companies that prepare financial statements that comply with IFRS Accounting Standards are required to apply IFRS 18 retrospectively from 1 January 2027. They are permitted to apply it earlier. What are the main changes for companies? IFRS 18 means companies will: • in the statement of profit or loss—report two new defined subtotals including operating profit, based on a new set of requirements for classifying income and expenses in categories; • in the notes—disclose information about some performance measures defined by management, which IFRS 18 identify as ‘management-defined performance measures’ (MPMs); and • in both the primary financial statements and the notes—group items applying enhanced requirements for aggregation and disaggregation of information. IFRS 18 also introduces limited changes to the statement of cash flows. What are the likely benefits? IFRS 18 will improve the quality of financial reporting by: • providing investors with additional useful information about financial performance; • improving investors’ ability to compare performance between companies and between reporting periods for the same company; and • improving transparency to help investors understand how management defines the company’s performance measures and how those performance measures compare with measures defined by IFRS Accounting Standards. The IASB expects these improvements will enable investors to make more informed decisions leading to better allocations of capital that will contribute to long term financial stability.

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The influence of the inappropriate going concern assumption on accounting standards can be summarized as follows: - IAS 2 (Inventories): Inventory valuation and cost allocation may be affected, impacting impairment evaluation due to uncertainty regarding ongoing operations. - IAS 1 (Presentation of FS): Financial statements may need to be prepared on a different basis, reflecting potential liquidation values instead of ongoing operations. - IAS 16 (PPE): Measurement, depreciation, and possible impairment of assets could be impacted if the assumption of continued use becomes unreliable. - IAS 8 (Accounting Policies, Changes in Accounting Estimates and Errors): Disclosure and potential changes in accounting policies might be necessary in the absence of the going concern basis. - IAS 10 (Events After the Reporting Period): Evaluation of events after the reporting period could change if the going concern assumption is invalidated. - IAS 37 (Provisions, Contingent Liabilities and Contingent Assets): Recognition and measurement of provisions may be influenced by changes in the likelihood and timing of outflows without the going concern assumption. - IAS 40 (Investment Property): Valuation and presentation of investment property might be affected if ongoing business activities cannot be assumed. - IFRS 16 (Leases): Accounting for lease arrangements could be altered if the entity's ability to continue as a going concern is questionable. - IFRS 15 (Revenue from Contracts with Customers): Recognition of revenue could change, leading to adjustments in timing and amounts recognized if the going concern assumption is invalid. - IAS 28 (Investments in Associates and Joint Ventures): Equity accounting for associates and joint ventures might be influenced by the absence of a going concern assumption. - IAS 21 (The Effects of Changes in Foreign Exchange Rates): Exchange rate translations might be impacted if the entity's going concern status affects its functional currency determination. - IFRS 9 (Financial Instruments): Classification, measurement, and impairment assessment of financial instruments could be affected by changes in the entity's ability to continue operations. - IFRS 7 (Financial Instruments: Disclosures): Disclosure of risks related to the going concern assumption becomes crucial. - IFRS 3 (Business Combinations) & IFRS 10 (Consolidated Financial Statements): Assessment of fair values, consolidation, and equity accounting might be impacted for acquiree or subsidiaries if the going concern assumption is not valid. - IFRS 5 (Non-current Assets Held for Sale and Discontinued Operations): Classification of assets as held for sale and criteria for discontinued operations might change if the entity's going concern assumption is not met.

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need recommendations for treasury accountants

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IFRS 2- Share-based Payment Outlines the accounting treatment for share-based payment transactions. It requires an entity to recognize goods or services received in exchange for equity instruments (such as shares or share options) or liabilities based on the fair value of the instruments granted. This includes transactions with employees or other parties that are to be settled in cash, other assets, or equity instruments. Key points include: Equity-Settled Transactions: Measure goods or services at the fair value of the equity instruments at the grant date. Cash-Settled Transactions: Measure at the fair value of the liability incurred and remeasure at each reporting date. Recognition: Recognize the expense over the period during which the services are rendered, typically the vesting period. This standard ensures that the cost of share-based transactions is appropriately reflected in the financial statements.

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IFRS 10 Consolidated Financial Statements: Will cover in the following way: Overview of IFRS 10 Articles related to IFRS 10 as follows: Summary of IFRS 10 Consolidated Financial Statements Intro to consolidation and group accounts – which method for your investment? Example: How to consolidate Example: Consolidation with foreign currencies How to make consolidated statement of cash flows with foreign currencies How to test goodwill for impairment How the groups change How to consolidate special purpose entity How to account for the disposal of subsidiary How to account for intercompany loans under IFRS How to treat different useful lives of PPE used by the parent and subsidiary? How to calculate impairment on intercompany loans? Accounting when acquired subsidiary is not a business - how to account for the asset acquisition in both separate and consolidated financial statements Non-controlling interest in a private company - how to account for the acquisition of share in a private company. #IFRS10 #groupconsolidation #cma #cpa #hiring #acca #aca ----------------------------------------------------------- Follow Raajeshwar - Sharing 20+ years of journey. - Helping startups for fund raise

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Key Differences Between IAS 17 and IFRS 16 ▶Lease Classification IAS 17: Classifies leases as either finance leases or operating leases for both lessors and lessees. IFRS 16: Classifies leases only for lessors. Lessees recognize all leases as right-of-use assets and corresponding lease liabilities. ▶Separation of Lease and Non-Lease Components IAS 17: No specific guidance for separating lease and non-lease components. IFRS 16: Provides specific guidelines for separating lease and non-lease components. ▶Lease Payment Calculation IAS 17: Lease term and lease payments are calculated at the inception date. IFRS 16: Lease term and lease payments are reassessed at each reporting date. ▶Lease Modification IAS 17: Any modification to a lease is treated as a new lease. No specific rules for lessors. IFRS 16: Modifications can be part of the existing lease or a new lease, depending on certain criteria. Rules are provided for both lessors and lessees. ▶Contingent Rent IAS 17: Contingent rent is always an expense in the period in which it arises. IFRS 16: Some contingent rent due to changes in rates or indices can be part of lease payments. ▶Discount Rate IAS 17: The interest rate implicit in the lease is calculated only at the inception date. IFRS 16: The revised discount rate can be used in reassessments and modifications. ▶Sublease Accounting IAS 17: No accounting for sub-leases provided. IFRS 16: Accounting for sub-leases provided. ▶Sales & Leaseback IAS 17: Sales and leaseback accounting was not based on the concept of substance over form. i.e. on classification of lease IFRS 16: Sales and leaseback accounting is based on the concept of sale or not, aligning with IFRS 15. ▶Recognition of All Leases IAS 17: Some leases remained off-balance sheet. IFRS 16: Almost all leases are now on-balance sheet. ▶Combining Different Lease Contracts IAS 17: No specific guideline for combining lease contracts. IFRS 16: Specific guidelines for combining lease contracts are provided. Overall, IFRS 16 represents a significant departure from IAS 17, introducing a more comprehensive and standardized approach to lease accounting.

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١ تعليق واحد

IASB has replaced IAS 1 with IFRS 18 which provides general guidance for entities to classify the items among these categories operating, investing, financing, income taxes and discontinued operations. #Ifrs18 #ias1

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IFRS Accounting Taxonomy 2024—Proposed Update 1 IFRS 18 Presentation and Disclosure in Financial Statements 

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