Accounting Miscellany

IFRS 17 Insurance Contracts requires the discount rate for insurance liabilities to reflect the characteristics of the insurance liabilities, including their liability characteristics. IFRS Accounting Standards dealing with other types of liability do not typically mention liquidity. This post explains why IFRS 17 addresses this topic. This post covers: This post discusses only the discount… Continue reading Liability discount rates and liquidity

Consolidated financial statements report the assets and liabilities, income and expenses, and equity of a group as if the group were a single entity. A group is a parent and its subsidiaries (the entities controlled by the parent). Obviously, a parent and its subsidiaries are not a single entity, even though consolidated financial statements report… Continue reading Can a subsidiary have assets and liabilities?

People often talk about how much capital a company ‘holds’ and about how much capital the company needs to ‘hold’. Talking about a company’s capital can be a convenient shorthand, but runs the risk of confusion. That risk arises because companies hold assets but do not ‘hold’ capital. Also, measures of capital are simplistic and… Continue reading Holding enough capital is short hand for holding enough assets