Actually watched this video early this morning Very insightful really 🙏 I've always known there's a difference per definition but I thought the accounting treatment was the same. Thanks for shedding more light Sir.
What!!!! this is eye-opening. The fair value aspect is quite confusing...Like why would I give an employee N5,000.00 loan and in my books it will be less
Hi Henrietta! Thanks for your comment. Yeah, it can be confusing. The idea about fair value is that it considers the time value of money. Fair value is a fancy name for present value of future cash flows. What this means is that the expected cash flows to be received from the staff based on the cash given to the staff will be discounted over the period of payment. And by the time you do that, you'll have a lower amount. The lower amount initially recognized will then grow each year by the interest rate initially used to discount, until it becomes the actual amount originally given out.
@@ms.arthur5386 Thanks for always dropping comments after watching. So I made the financial instruments into a series of videos. Just released the first to explain each concept in the standard (IFRS 9). You can check my channel playlist or via link 👇🏾 ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-pcMyTR8xzsw.html
Thanks for your comment. So what the company is expected to do is to consider the requirements of IAS 8 in terms of prior period errors and to establish that the impact is material. The loan will be retrospectively restated for as far back as possible as though the correct adjustment has always been made. This will lead to having a third balance sheet in the current reporting period. This means the difference in the amount to be reported in profit or loss as at the third balance sheet will directly affect the opening retained earnings of the comparative year. It is as good as saying, adjust your opening retained earnings of your third balance sheet to accommodate the difference in what it used to be and what it currently is as at the reporting date of your third balance sheet, then continue to present your financial statements appropriate going forward for the comparative year and the current year.
Hey Demola, Good day, Please I have a question regarding IAS 16. Foremost, is componentization of significant parts of item of PPE optional? Secondly, How do treat the replacement of an existing building roof assuming the entity did not treat the said element as a separate item at initial recognition and measurement? I will be waiting for your response. Thanks
Hello. For other questions, you can ask them via the IFRS IS EASY Quora platform. Other participants too will be able to share their thoughts and learn from them. You can use this link: ifrsiseasy.quora.com/?ch=10&oid=2752917&share=396067ef&srid=33i0u&target_type=tribe
Click on the drop-down button beside the title of the video (this sign ^ pointing down), then look for "more" and click on it. You'll see all the links including the google docs link. Try and do this so that you can access the description box of other videos subsequently.
