
The international financial reporting standards course will allow you to take your professional career to the next level.
In this article, we will develop a couple of practical examples to understand the accounting recognition of foreign currency transactions under international accounting standards. A foreign currency transaction is a transaction settled in a currency other than the functional currency
A company’s functional currency is the currency of the primary economic environment in which the entity operates. https://youtu.be/9wtwCddMXtk To understand this concept, let’s look at the following example: An entity located in Europe manufactures vehicles. The unit price of each
The qualitative characteristics of accounting information are comparability, verifiability, timeliness, and understandability. https://youtu.be/bb9h74PzStQ Before explaining each of them, it is essential to know the objective of these four characteristics. Then, for financial statements to be useful to users, the information
Right of use asset depreciation is the systematic allocation of the asset’s initial cost over the useful life of the lease. https://youtu.be/bb9h74PzStQ Let’s see an example. In January of year 1, an entity leases a machine for 10 years. The
A constructive obligation is an accounting provision that a company must make as a result of a pattern established in the past, a certain policy approved by the entity that is in the public domain, or a statement made by
goodwill amortization is not precedent, under IFRS 3 because its useful life is unlimited. However, it must be reviewed periodically if this asset present impairment. Nevertheless, under generally accepted accounting principles for small and medium-sized companies, Goodwill can be amortized. In other
Under IFRS, the land is not depreciated because it is considered an asset with an unlimited useful life. The reason for that is because they are considered long-term assets; they do not wear out or become obsolete over time. That
In this article, we will explain in a simple way how to consolidation of financial statements step by step. Table of Contents Requirements to carry out a consolidation of financial statements. An entity must control another company to carry out
Going concern is an accounting concept that implies that a business will continue to operate in the future. It is based on the assumption that a company has sufficient resources to remain operational and continue to develop its economic activity.
Table of Contents To understand what is a property plant and equipment, we will analyze 5 fundamental characteristics. First characteristic to understand what is a property plant and equipment. Property plant, and equipment must generate economic benefits, and their cost
This IFRS EXAM allows you to assess your knowledge of international financial reporting standards. Remember that at the end of the exam, you can leave your email if you want us to send you a series of videos with the
Table of Contents This post will give you some guidelines to learn IFRS quickly. Learning IFRS can be quite a headache for accountants and, generally, for people who handle financial information. First step to learn IFRS – substance over form.
Below we will summarize IAS 10 – Events after the Reporting Period with examples and practical cases. IAS 10 refers to the accounting treatment that an entity must carry out on economic events arising after the reporting period and before
In the following article, we will make a practical example of business combination With the help of this example, you will quickly understand the acquirer method set out in IFRS 3. https://www.youtube.com/watch?v=LCo3R_IcSSU&t=31s The acquire method is composed of the
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
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
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
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
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
Cash and cash equivalents are held to meet short-term payment commitments and not for investment or similar aspects. Two requirements are necessary for an asset to meet the definition of a cash equivalent. On the one hand, it must be
The carrying amount of an asset is the value recognized after deducting accumulated depreciation or amortization and impairment losses. https://youtu.be/buQKxIhdqQE For example, an entity acquires a building in year 1 for 200,000 with a useful life of 30 years. In
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
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
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
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
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
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. https://youtu.be/43Ll8LpJDlw That is, when an entity has its accounting under
The formula to calculate the recoverable amount is: Recoverable 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
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
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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