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9: Comprehensive example (continued) 2. Initial recognition is always measured at fair value, and transaction costs are taken into account, except with the category "at fair value through profit or loss". 3 Structure of chapter. 10 Introduction to IFRS – Chapter 1 analysed in order to evaluate a particular entity's performance relative to the performance of its peers. Amortisation commences once the intangible asset is available for use and not when it is put into use. Introduction to ifrs 7th edition pdf book. Buildings and vehicles are depreciated on a straight-line basis over their expected remaining useful lives (at year end): • Buildings – 24 years • Vehicles – 6 years Rates are considered appropriate for reducing the carrying amounts of the assets to estimated residual values (Rnil) over their expected useful lives. The interest that will actually be paid annually by the issuer (coupon interest) is "nominal rate × nominal value" (10% × R1 000 = R100).

  1. Introduction to ifrs 7th edition pdf 2021
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Introduction To Ifrs 7Th Edition Pdf 2021

17 Asset (refer to IAS 16. The initial costs incurred to set up the technology platform are as follows: R Hardware costs 220 000 Software costs 40 000 Comments: The R20 000 selling commission paid by Comp Ltd is an incremental cost of obtaining the contract, and is recognised as an asset in terms of IFRS 15 since it cannot be capitalised in terms of another IFRS. 2 Lease liability: Office building R 0 15 279 504 (1 527 950) xx xxx xx xxx. An onerous contract is a contract in which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. Determining the boundary of a reporting entity can be difficult if the reporting entity is not a legal entity and does not comprise only of legal entities linked by a parent-subsidiary relationship. If such inventories are still unsold at the end of the following reporting period, the cost is compared with the latest NRV, and the carrying amount is adjusted accordingly. 1 100 288 888 240 1 204. Peglarea Ltd will process the following journals for the year ended 31 December 20. 15) 400 000 Repairs and maintenance to investment property for the year 50 000 (The property is used as the company's administrative head office (approximately 6% of the floor space). The fair value of the computer system is virtually impossible to determine, as these items are seldom sold, but the following can be estimated reliably: Probability Fair value R Possibility 1 30% 200 000 2 10% 250 000 3 20% 230 000 4 40% 210 000 The fair value of the manufacturing plant is R222 000, and is readily determinable and more clearly evident since an active market for these used assets exists. Introduction to ifrs 7th edition pdf file. Investment property Example 16. They are also appropriate when the effectiveness of the asset is expected to decline gradually. 364 Introduction to IFRS – Chapter 14 In the case of a provision, no doubt exists regarding identification: a provision is a liability because it has the characteristics of a liability, as stated in the Conceptual Framework.

8 000 (shares) x 0, 67 (closing price 31 December) = 5 360. It follows that when the tax rate changes, the deferred tax balance will be adjusted accordingly. Furthermore, this assessment is performed on an absolute basis, meaning that leases of low value assets will qualify for this exemption election regardless of whether those leases are material to the lessee – the assessment is not affected by the size, nature or circumstances of the lessee. 1 Credit losses IFRS 9's requirements for the recognition of a loss allowance is based on expected credit losses and not on incurred credit losses. 5 Disclosure of remuneration. Property, plant and equipment 233 Example Example 8. It is obvious that it will prove quite difficult to determine such an obligation. Deferred tax was recognised in respect of all the other temporary differences. 1 Liabilities and equity IAS 32. Two types of obligations can thus exist in terms of a provision, namely: legal obligations; and constructive obligations. 4 Replacement of components at regular intervals Certain components of PPE items are replaced frequently. Inventory and manufacturing software for small maker businesses. The following erection costs were incurred during the year ended 31 December 20.

Introduction To Ifrs 7Th Edition Pdf File

Where write-downs of inventories are reversed due to subsequent increases in NRV, the amount is recognised as a reduction in the cost of sales expense in the statement of profit or loss and other comprehensive income. If the operating cycle cannot be determined reliably, it is assumed to be 12 months. The helicopter was acquired on 1 January 20. 12 Intangible asset – Development cost (SFP) 150 000 Bank (SFP) 150 000 Recognise development cost as an intangible asset 31 December 20. Fair value is a reflection of the assumptions that market participants would make when allocating a price to the asset, being a market value. 107, the entity must disclose the amount of dividends recognised as distributions to equity holders, as well as the dividends per share, in the statement of changes in equity or in the notes to the financial statements. 13 Mr Y will receive his full gross salary and the employer contributions will continue during his absence. To the major differences between. Introduction to ifrs 7th edition pdf 2020. A deferred tax debit of R4 782 should be created if the debit balance will be recovered in future by means of sufficient taxable profits being earned to utilise the benefit. In addition, management must also consider whether the assumptions on which current cash flows are based are consistent with past actual outcomes, or whether they are adjusted appropriately. 3 A Ltd uses a manufacturing machine to manufacture product X that generates net cash flows of R1 000 000 per annum. When the presentation currency is different from the functional currency, the following must be disclosed: – that fact; – the functional currency; and – the reason for using a different presentation currency.

Subsequent measurement Items of PPE are subsequently measured using one of two models: The cost model: cost less accumulated depreciation and accumulated impairment losses; or The revaluation model: revalued amount less accumulated depreciation and accumulated impairment losses since the last revaluation. Even though the contract has a significant financing component, it is not necessary to separate the financing component if the period between transfer of the goods or services and receipt of payment is expected to be less than one year. If this rate cannot be readily determined, the lessee shall determine and use its own incremental borrowing rate; subsequently measure a right-of-use asset similarly to other non-financial assets (such as PPE); and subsequently measure the lease liability similarly to other financial liabilities (amortised cost model). Chapter 2: The reporting entity (to be added). The customer has accepted the asset.

Introduction To Ifrs 7Th Edition Pdf 2020

12 were as follows: R Ordinary share capital (1 550 000 shares) 2 350 000 Redeemable preference share capital (200 000 shares) 200 000 Revaluation surplus – Retained earnings 1 200 000 2. In these instances it is not necessary to calculate the value in use, and the recoverable amount is deemed to be the fair value less costs of disposal. These items are excluded from the scope of IFRS 9, as their recoverability is dealt with in the relevant standards. The delivery terms of the contract are free on board shipping point (i. legal title to the motor vehicle passes to the customer when the motor vehicle is handed over to the carrier). 29, 28 R 74 480 7 000 (8 400) (7 350) 65 730. 49, the example is used of new technology that may become available later and may influence the rehabilitation of contaminated land. In addition, short-term employee benefits are measured at an undiscounted basis. 21 – Remaining years ((2 500 000 x 4 years) + 2 000 000). 10 Trade receivables 270 000 240 000 30 000 (8 400) 8 400 7. 2 Voluntary change in accounting policy. An entity must present a third statement of financial position as at the beginning of the preceding period under the following circumstances: the retrospective application of a change in accounting policy; the retrospective restatement of items in financial statements; or the reclassification of items in financial statements.

19 of 10 000 × 2, 62 = R26 200 31 December 20. 2 Disclosure requirements Section 30(4) contains the disclosure requirements in respect of remuneration. Settle at spot rate on settlement date. The revaluation surplus is realised through the use of the asset. 11 (R60 000 × 29%) (17 400) 31 December 20. 18 Trade receivables (SFP) (computer X) Contract asset (SFP) Recognise a trade receivable for unconditional consideration and derecognise the contract asset for computer X Trade receivables (SFP) (computer Y) Revenue (P/L) Recognise a trade receivable for unconditional consideration for computer Y. 28 indicates that it is probable that future taxable profits will be available for utilisation against a deductible temporary difference when: sufficient taxable temporary differences relating to the same tax authority and the same taxable entity are expected to reverse in the same period as the deductible temporary differences; or. The interest recognised in the profit or loss section of the statement of profit or loss and other comprehensive income is at the effective interest rate (based on a marketrelated rate for a similar item) whilst the cash flow takes place at the nominal rate. In such a case an entity allocates the transaction price change to the performance obligations on the same basis as at contract inception. This interest can be paid annually or on any other basis. 71 of 2008 (hereafter referred to as the Companies Act), together with the Regulations of 2011, replaced the Companies Act, No. If ownership of both the land and buildings elements is expected to be transferred to the lessee at the end of the lease term, each of these elements would be classified as a finance lease. 13 R'000 R'000 Carrying amount at beginning of year 9 933 15 878. The asset is amortised on a systematic basis over the term of the contract (five years).

Introduction To Ifrs 7Th Edition Pdf Book

Consequently, the initial carrying amount of such an intangible asset is the sum of the costs incurred from the date on which the asset qualified as an asset for the first time. Present obligation as result of obligating event? 2 Information to be presented in the statement of changes in equity or in the notes An entity shall present: an analysis of each item of other comprehensive income; dividends paid for the period; and dividends per share (IAS 1. The lifetime expected credit losses are all possible default events over the expected life of a financial instrument. 11, Tommy Ltd installed special filters at total cost of R6 000, as required by law, on a machine in order to prevent damage to the environment. For example, an entity that is subject to income taxes would disclose the accounting policies on income taxes, including those pertaining to deferred taxes and tax assets.

6 for more detail) should the lease term be revised (for example, if during the lease term, it becomes reasonably certain that the option to extend the lease will be exercised where this was not reasonably certain at the commencement of the lease; or the extension of the lease is no longer reasonably certain). The customer obtains control of the asset on 20 April 20. Investment properties are derecognised when they have either been disposed of, or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. A loan with a similar term to acquire a similar asset will bear interest at a nominal rate of 10% per annum. The existence of material uncertainties about the possibility of a going concern problem should be disclosed. Gains or losses from fluctuations in the fair value of the residual accrue to the lessee. Termination benefits..................................................................................... 2 Measurement...................................................................................... 3 Disclosure........................................................................................... Short and sweet............................................................................................ 301 302 302 303 304 314 314 314 314 315 315 316 318 318 318 319 319 320 320 323.

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