EY In Balance – Issue 6/2021
Welcome valued client, to EY In Balance, providing you with the latest insights in financial reporting.
IFRIC discussions highlight that net realisable value estimates for inventory should not stop at just considering incremental costs. The IFRIC also discussed trade receivables settled through electronic funds transfer, noting that derecognition occurs only when the contractual right to payment has expired.
ASIC has further updated its FAQs, with a focus on accounting considerations created by proposed aged care reforms.
We have also released publications to assist with lease considerations for renewable energy power purchase agreements, interim reporting consequences from applying AASB 17 and accounting for SPACs.
The team
Featured
What costs determine NRV?
The IFRIC has clarified that entities should estimate NRV after deducting costs necessary to make a sale, not just incremental costs. This may trigger a change in practice for some entities in the retail sector.
Derecognising trade receivables settled via electronic transfer
The IFRIC’s tentative agenda decision emphasises that trade receivables are replaced with cash only when the contractual right to receive cash expires, which usually happens only when the cash is received. For some entities, this could lead to major changes.
Energy transition: is there a lease in your power purchase agreements (PPAs)?
The use of PPAs in the supply of renewable energy is on the rise. Entities need to assess whether such PPAs contain a lease or other standards such as financial instruments apply. Our publication provides an overview.
Interim reporting and AASB 17 - Insurance
As part of implementing AASB 17, entities should consider the complex relationship between accounting policy choices, and the consequences for their interim and year-end reporting. Our publication helps navigate this journey, explaining “year-to-date” and “period-to-date” approaches.
Accounting for SPACs – not so simple!
Stakeholders, including regulators, expect high quality financial reporting which appropriately addresses many financial reporting matters for special purpose acquisition company (SPAC) transactions. Our publication provides an overview.
Aged care reform – are your bed licence assets impacted?
ASIC’s updated FAQs consider some accounting impacts of the proposed discontinuation of aged care bed licenses. Aged care providers need to consider amortisation, impairments, revaluation and disclosures.
