What’s a functional and presentation currency under IAS 21?

When preparing financial statement a company must determine its functional and presentation currencies. The functional currency is the currency of the primary economic environment where the entity operates, in most cases this will be the local currency (e.g. Euro in Ireland, GBP in UK) When determining the functional currency, an entity should consider the following …

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Defined Benefit Pension Plans | IAS 19 Employee Benefits

Financial statements of defined benefit pension plans In this post we look over the different areas of the financial statements that are affected by a defined benefit pension plan. Statement of Financial Position Both the pension assets and pension liabilities will be recorded in the statement of financial position. Pension assets Pension assets are the …

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How to Recognise Revenue in Multi Component Sales under IAS 18

What is a Multi-component Sale?

So far we’ve looked at revenue from the viewpoint of selling one good or one service at a time.

However, often goods or services can be packaged together for sale in one deal.

Examples of this include the sale of:

  • A washing machine sold with an additional extended warranty
  • A television service sold with telephone and broadband

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EPS: Rights issues, Options and Warrants | IAS 33 Earnings per Share

Definitions of Rights issues, Options and Warrants

A rights issue is where a company offers existing shareholders a chance to buy new shares in the company at below market rates at a future date.

They’re usually offered to shareholders in proportion to their existing shareholdings.

Options and warrants are similar in the sense that people, often employees can get the opportunity to buy shares at below their market rate.

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Introduction to IAS 18 Revenue

Overview

Revenue is the name given to an entity’s income that arises in the ordinary course of activities and is known by a number of other names including:

  1. Sales
  2. Fees
  3. Interest
  4. Dividends
  5. Royalties
  6. Rent

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Introduction to Business Combinations under IFRS 3

What is a Business Combination?

A Business Combination is a “transaction or other event in which an acquirer obtains control of one or more businesses”. IFRS 3 Business Combinations states how an acquirer should recognise and measure the acquisition of another business, and the recognition and measurement of any goodwill.

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7 Key Points to Study for IAS 11 Construction Contracts

When studying IAS 11 Construction Contracts, you can split the topic into seven key areas:

1.  Definition of a construction contract

A construction contract is a contract specifically negotiated for the design, manufacture or construction of:

  • a single asset such as a bridge, building or road, or
  • a number of related assets. For example, a large factory may have different components

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Update: IAS 23 Borrowing Costs multiple choice quiz

If you’re studying IAS 23 Borrowing Costs, why not test your knowledge with our multiple choice quiz? Click here to take the quiz. By practicing questions you’ll improve your study and recall, ideal for people who learn best by ‘doing’ rather than just reading.

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