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exchange difference on payment to contractor for development on fixed assets

ca.lokeshjain — Sun, 08 Nov 2009 16:22:08 +0000

we have a contract for development of a fixed assets, as per the contract:-

Total Contract amount = 260 Million AED

We have to pay this amount in Euro that is already fixed as per the contract it is 4.49 AED per Euro

whatever is the rate prevailing currently doesnt matter bcoz it has been already fixed in contract,

so my concern is exchange loss on payment will be added to the value of fixed Assets or

will have to transferred to P&L A/c

Accounting issues in marine industry?

adey786 — Thu, 05 Nov 2009 06:47:36 +0000

Can someone please share thoughts around generic accounting issues in the marine industry. The nature of activities will involve using small ships (bareboat) to provide marine terminal services to clients on ports around the world ? From the top of my head, I can see following major issues to be considered:

- Revenue recognition

- Repair cost of ships and capitalisation of subsequent cost

- Treatment of lease income /expense if boats are let out/taken on lease

- Derivative accounting issues (long term fuel contracts ?)

Any other issues or more light on above highlighted areas?

IFRS treatment for interest free loans

77Quarterback — Wed, 04 Nov 2009 21:36:35 +0000

ACo, an offshore company, makes non-interest bearing loans of $10m in FY00, to ZCo a related entity in a tax paying jurisdiction. Repayment terms are 5 equal annual installments from FY05, ending FY10.

Whilst i agree that one would generally FV the loan by discounting the future receivables to PV using market rates, what would one do with the difference between the PV (say $8m) and the $10m? I think one would immediately recognise that “unearned interest” of $2m in the income statement as a Dr, and in future years recognise the PV would accrete back to $10m, with the income statement credited with interest receivable for the FV movements?

Or would you recognise unearned interest receivable on the balance sheet?

Construction Contract

amit3.jain — Wed, 04 Nov 2009 13:57:24 +0000

Case:

Party gets into a long term construction contract to prepare the machinery which takes 2 years to complete

Cost elements – Labor $ 3mm and Materials $ 5mm Total $ 8mm

Revenue against – Labor $ 10mm and Materials $ 10mm Total $ 20mm

Margin – Labor 70% Material 50% on total project 60%

Year 1 Cost incurred Labor $ 4mm and Material $ 2mm

What should be the revenue that can be recognized against the same? The policy is % completion method.

Business contention to recognize revenue on 70 and 50% margins respectively.

What the point of contention is can the revenue at any stage go beyond the average contribution of the project.

Please provide ref to the IFRS or any other literature.

Project costs-Land lease

Hussain78 — Wed, 04 Nov 2009 11:43:18 +0000

Dear all,

This is my first participation in this forum. i have questions regarding the land as an operating lease.

We have a leased land used for a project. Currently the lease rent is being capitalised as land costs- Property Under Development, on the basis that this cost was incurred to bring the assets into operations.

My questions are:

1- Can the above treatment considered correct in anyway?

2- We want to transfer the land and building from PUD to Investment Property- what options do we have?

3- Are there any conditions to have the combination of land and building as Investment Property e.g land comprise more 20% of the total project value..etc

Regards

Sale of subsidiary

bchew69 — Mon, 02 Nov 2009 09:39:14 +0000

Company ABC and Company DEF both own Company XYZ (50%0 each). Company XYZ in turn owns subsidiary GHI (100%) and subsidiary XYZ (100%). Company ABC sells it s share in Company XYZ to Company DEF for a consideration of $1 and in turn buys 100% share of subsidiary GHI for $100,000. How do I account for sale of subsidiary GHI in Company XYZ’s accounts?

Please help!

Example of Financial Statement (Model IFRS financial statements for 2009)

admin — Tue, 27 Oct 2009 21:47:49 +0000

Dear all
this is just to inform you about an useful pdf file provided by www.iasplus.com that could help you to better understand the impacts on Financial Statement of last IFRS changes. In detail, this file illustrate the application of the presentation and disclosure requirements of International Financial Reporting Standards (IFRSs) by an entity that is not a first-time adopter of IFRSs. They also contain additional disclosures that are considered to be best practice, particularly where such disclosures are included in illustrative examples provided with a specific Standard.
I suggest you to download this file.
Here is the link - http://www.iasplus.com/fs/2009modelfs.pdf

IFRSPMI.it - New IFRS Portal in Italian

admin — Thu, 22 Oct 2009 16:54:27 +0000

Dear all
This is just to inform you that a new IFRS Portal is now available in Italian.

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Regards
IFRSPMI.it

audit engagement contract, non-profit non-stock entity

annsilvers — Thu, 22 Oct 2009 09:39:20 +0000

1. is it possible for an audit engagement agreement as a tripartite audit engagement contract:

auditor, auditee (non-stock non-profit) and funder (funding agency)?

2. Can a funder (funding agency) enter into a bilateral audit engagement contract with an external auditor

to audit a third party a non-stock non profi entity?

3. The new standard for SME’s . do these standars apply to non-stock non profit entities?

Deferrement of arrangement fee for obtaining loan

admin — Wed, 21 Oct 2009 12:14:27 +0000

Can the arrangement fee (agengy fees, structuring fee and legal charges) paid to obtain a long term loan be deferred and subsequently amortised over the tenure of the Loan?

Kindly give references from IFRS.

Regards,

Ali