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Example of business combinatios

Example of business combination

In the following article, we will make a practical example of a business combination. With the help of this example, you will quickly understand the acquirer method set out in IFRS 3. The acquire method is composed of the following

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IFRS 16 summary

IFRS 16 summary

In this summary of IFRS 16, we will carry out a detailed analysis of this standard. We will see the most relevant aspects of the accounting recognition of a right of use asset and the liability associated with a lease

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ias 37 provisions examples

ias 37 provisions examples

In this post, we will see a series of examples of provisions under IAS 37. These examples include legal provisions, implicit, recognition of a provision by enacting a law, provisions with a wide range of likely outcomes, and provisions with

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example of accounting policy

example of accounting policy

An accounting policy is a series of specific principles, bases, conventions, rules, and procedures adopted by an entity to prepare and present its financial statements. Below, we will show several examples of accounting policies. Example of accounting policy Property plant

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ias 40 practical examples

ias 40 practical examples

Today we will talk about investment properties and carry out a series of practical examples where we will refer to IAS 40, IAS 16, and IFRS 16. An investment property is a land or a building or part of a

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Actuarial gains and losses

Actuarial gains and losses under IAS 19

A defined benefit plan’s actuarial gains or losses will be recognized in other comprehensive income under IAS 19. IAS 19 contemplates four types of employee benefits: Short-term benefits. Long-term benefits. Post-employment benefits. Termination benefits. Actuarial calculations are used in post-employment

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carrying value definition

carrying amount of an asset

The carrying amount is different from fair value and value in use. On the one hand, fair value is the price that an entity would receive to sell an asset or pay a company to transfer a liability in an

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Non-current assets list IFRS

Non-current assets list

In this post, we will show a series of non-current assets. Paragraph 66 of IAS 1 sets out requirements to identify a current asset. All those assets that do not have these characteristics will be classified as non-current. Let’s remember

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current assets list IFRS

Current assets list IFRS

Below you will find a list of current assets according to IFRS. Remember that paragraph 66 of IAS 1 set out that an entity will classify an asset as current when: It expects to realize the asset in its normal

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Associate in ifrs

Associate in ifrs

An associate in ifrs is an entity over which another company exercises significant influence. Significant influence is the power to participate in an associate entity’s financial and operating policy decisions without having control or joint control. An entity may exercise

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Asset exchange accounting recognition ifrs

Exchange assets accounting recognition

Exchange assets : are the exchange of one or more non-monetary assets or a combination of monetary and non-monetary assets. In this article, we will refer to non-monetary assets. The following diagram shows how should be recognized these assets. It

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acquiree definition in ifrs

Acquiree definition in ifrs

An acquiree is one or more businesses controlled by an acquirer in a business combination. For example, company A acquires 90% of the interest of entity B. In this case, entity A is known as the acquired company, and entity

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Deemed cost in IFRS

Deemed cost in IFRS

The deemed cost, is a substitute cost used in recognition of property plant and equipment, or intangible assets, in the adoption of international financial reporting standards for the first time. That is, when an entity has its accounting under the

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Formula to calculate the recoverable amount

Formula to calculate the recoverable amount

The formula to calculate the recoverable amount is: Depreciable amount = the higher of fair value and value in use. The recoverable amount is used to determine whether an asset or group of assets is impaired. In other words, if

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ifrs 16 illustrative examples

ifrs 16 illustrative examples

The following post shows a series of illustrative examples related to IFRS 16. An entity leases a building for 5 years with payments of 20,000 per year and an implicit interest rate of 9%. ¿ What is the carrying amount of

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What is Goodwill in accounting and economic terms

what is the meaning of goodwill

A meaning of goodwill refers to an entity’s prestige, or its good name, before third parties When we talk about companies like Coca-Cola, Pepsi, Google, or Apple, it is easily understandable that this type of entity owns a reputation recognizes

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Accounting recognition of equity method.

Accounting recognition of equity method

The equity method of accounting is used in international financial reporting standards to recognize an investment in an entity that has significant influence over another company. The accounting recognition, when the equity method is used, consists of the initial recognition of an

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What is a contingent consideration in IFRS

contingent consideration in business combination

Contingent consideration in business combination is an obligation assumed by the acquiring entity to transfer additional assets or equity participation to the acquired entity on the condition that this entity achieves specific objectives, such as an increase in sales or productivity.

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Accounting recognition of spare parts under IFRS

Accounting recognition of spare parts under IFRS

Spare parts under IFRS are generally recognized as inventories. However, if the entity expects these spare parts to be used for more than the accounting period, and the economic benefits of these assets are expected to flow to the entity,

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What are right of use asset in IFRS 16

ifrs 16 right of use asset

Right of use asset in IFRS 16 is an asset that represents a right for a lessee to use an underlying asset during the term of the lease. As we can see in the previous paragraph, we only refer to

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Change in accounting estimate recognition

Change in accounting estimate recognition

Changes in accounting estimates occur when an entity, as a result of new information, is forced to make a new valuation of it’s estimated liabilities. An accounting estimate is a calculation that a company performs on events that will occur

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Decommissioning costs provision meaning

Decommissioning costs provision meaning

The provision or costs for decommissioning is an estimate a company makes to determine the disbursements it must make in the future to restore a site or land. Many entities that need to develop a specific economic activity incur a series

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impairment of receivables IFRS 9

Impairment of receivables

To analyze the impairment of accounts receivable, it’s necessary to keep in mind a concept known as expected credit losses; this concept incorporated in the IFRS 9 refers to the losses that come from events previous to default in payment on a financial instrument. The accounts receivable

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IFRS 2 summary and illustrative examples.

IFRS 2 summary and illustrative examples

This article will make an IFRS 2 summary and a series of illustrative examples to easily understand this standard. Share-based payments are a consideration an entity makes to a third party or an employee for the giving up of goods and services

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What are the existing depreciation methods

Depreciation methods used in IFRS

In IAS 16, specifically in paragraph 62, the depreciation methods IFRS in force to date are set out; among these are the straight-line method, the diminishing balance method, and the units of production method. The straight-line method This method is based on the cost of a property plant and equipment

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¿How is the goodwill impairment recognized

¿How is the goodwill impairment loss recognized?

An impairment loss on the goodwill generated in a business combination occurs when a cash-generating unit carrying amount exceeds its recoverable amount. In this sense, said impairment generated must first be attributed to the goodwill. If remaining impairment exists, this

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