Unexpected prediction

IFRS 15 Revenue from Contracts with Customers discusses 2 methods of estimating the amount of variable consideration. Those estimates are used in calculating the transaction price for contracts with customers. Unfortunately, the discussion is not totally clear because the wording is a compromise between proponents of the 2 methods. I discuss below: Estimating variable consideration… Continue reading Unexpected prediction

‘Reserves’: things we don’t know how to account for?

The word ‘reserve’ has sometimes been used to describe two items on opposite sides of the balance sheet. The first item is oil or gas reserves, which are assets. The second item is insurance ‘reserves’, which are liabilities. Coincidentally, accounting standard setters have found both items hard to deal with. I think the label ‘reserve’… Continue reading ‘Reserves’: things we don’t know how to account for?

Liability or equity?

I have submitted a comment letter to the IASB on 2 aspects of its Exposure Draft Financial Instruments with Characteristics of Equity, available at IFRS – Exposure Draft and comment letters: Financial Instruments with Characteristics of Equity—Proposed amendments to IAS 32, IFRS 7 and IAS 1 The comment deadline is 26 March 2024. The text… Continue reading Liability or equity?

Why no single use of the IASB’s Conceptual Framework is primary

The IASB overhauled its Conceptual Framework for Financial Reporting in a project carried out between 2012 and 2018. One topic the IASB addressed in a Discussion Paper in 2013 was the purpose of the Conceptual Framework. The IASB expressed a preliminary view that it should single out one use of the Conceptual Framework as its… Continue reading Why no single use of the IASB’s Conceptual Framework is primary

Does future tense help keep goodwill alive?

When a verb refers to the future, some languages require explicit marking of that fact. A recent paper presents evidence that companies in countries using those languages are slow in reporting goodwill as impaired. The paper suggests that this is because speakers of those languages perceive the future as more distant than speakers of other… Continue reading Does future tense help keep goodwill alive?

Own credit risk

The topic of own credit risk generates perhaps more strongly held views than any other accounting topic. For example, in around 2011, the IASB was developing a discussion paper on insurance contracts. Some of us visited one of the largest insurers in the world. They knew almost nothing about the project. But they had heard… Continue reading Own credit risk

How IASB members use comment letters

John Hughes runs an excellent blog on Accounting and IFRS Standards. In a recent post Language barriers and the IASB, or: please read the letter that I wrote! | John Hughes IFRS Blog (disclosurehub.org), John Hughes commented on my post Language Barriers to commenting on IASB proposals – Accounting Miscellany I need to pick up… Continue reading How IASB members use comment letters

Assumptions are not just a throw-away

The term ‘assumption’ figures prominently in some accounting standards, but can give the wrong impression. Where accounting standards refer to ‘assumptions’ The term appears in contexts where a preparer needs to make an accounting estimate. IAS defines accounting estimates as ‘monetary amounts in financial statements that are subject to measurement uncertainty’. Some IFRS standards use… Continue reading Assumptions are not just a throw-away

Government grants: is the answer really so easy?

When the IASB first took over from its predecessor (IASC), many Board members believed that the IASB should replace IAS 20 Government Grants and Disclosure of Government Assistance. They considered that developing a replacement would be easy. The general feeling seemed that: This post deals with the following: Overview of IAS 20 The following are… Continue reading Government grants: is the answer really so easy?