Illustrative example of disclosure of the nature, extent and financial effects of interests in associates. All associates are measured using the equity method. The financial statements of all associates have the same reporting date as the group. D Limited The Group has a 25% interest in the ownership and voting rights of D Limited, which is held by a subsidiary, H Limited. D Limited”s principal […]

The effect of determining the principal market [IFRS 13.IE19-20] An asset is sold in two different active markets at different prices. An entity enters into transactions in both markets and can access the price in those markets for the asset at the measurement date. Market A CU Market B CU Price that would be received 26 25 Transaction costs in that market (3) (1) Costs […]

Illustrative example of disclosure of the income from and assets transferred to structured entities in a reporting period The Group has sponsored a number of unconsolidated structured entities to dispose of its interests in collateralised mortgage obligations, collateralised mortgage-backed securities and credit card receivables. In respect of those entities in which the group no longer has an interest at the reporting date, details of income […]

Determining the principal market The following three markets exist for a particular asset. The company has the ability to transact in all three markets (and has historically done so). Market Price A CU 30,000 B CU 25,000 C CU 22,000 Under the principal market concept, it would not be appropriate to value identical assets at different prices solely because management intends to the sell the […]

Maximum exposure to and ranking of loss exposure by type of structured entity The following table shows the maximum exposure to loss for the Group by type of structured entity and by seniority of interest, where the Group”s interest ranks lower than those of other investors and so the Group absorbs losses before other parties. E”000 Subordinated interests Seniority of interests Mezzanine interests Senior interests […]

Restrictions on assets [IFRS 13.IE28] An entity holds an equity instrument for which sale is legally restricted for a specified period. The restriction is a characteristic of the instrument that would transfer to market participants. As such, the fair value of the instrument would be measured based on the quoted price for an otherwise identical unrestricted equity instrument that trades in a public market, adjusted […]

Entity-specific restrictions on assets [IFRS 13.IE29] A donor of land specifies that the land must be used by a sporting association as a playground in perpetuity. Upon review of relevant documentation, the association determines that the donor”s restriction would not transfer to market participants if the association sold the asset (i.e. the restriction on the use of the land is specific to the association). Furthermore, […]

Security Don has reviewed both the corporate policy and the facility program on access control. The corporate policy mandates a security officer to be posted at the front gate that serves as the entrance to each facility. Rather than posting a security officer at the front gate, the facility utilizes electronic access that is monitored by a camera. An intercom is present in a visitor […]

Fire Martha has made arrangements with the chief to conduct interviews in the break room. He has ensured Martha that only she and those being interviewed will be in the area, so no one will overhear the interview. Her first interview is with Sue, a second-year firefighter and the first female to be hired by the department. As Martha begins the interview, she explains that […]

Accounting for rights to assets and obligations for liabilities D and E establish a joint arrangement (F) using a separate vehicle, but the legal form of the separate vehicle does not confer separation between the parties and the separate vehicle itself. That is, D and E have rights to the assets and obligations for the liabilities of F (F is a joint operation). Neither the […]