IFRS Update 2020
Presenters : Milan van Wyk
Learning objectives
By the end of this event the participant should:
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Understand the impact of COVID-19 on effective standards (IFRS 9, IFRS 15 and IFRS 16)
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Understand IFRS 9 Financial Instruments (excluding de-recognition and hedging);
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Understand IFRS 15 Revenue from Contracts with Customers;
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Understand IFRS 16 Leases; and
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Get an overview of IFRS 17 Insurance Contracts, and the Conceptual Framework.
Content
The webinar will cover the following topics:
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IFRS 15 - Introduction: How COVID 19 impacts revenue recognition.
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IFRS 15 - The 5 step approach to achieve clarity.
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Step 1 – Identify the contract with the customer:
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Importance of the contract.
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Criteria for a valid contract for revenue recognition.
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Treatment of money received in advance.
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Contract modifications.
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Step 2 – Identify performance obligations in the contract:
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The starting point – promises in the contract.
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Distinct goods and services in the contract.
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Illustrative examples of determining whether goods and services are distinct.
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Step 3 – Determine the Transaction Price:
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What is the transaction price?
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Is it different from current standards?
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How to account for variable consideration.
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How to identify a financing component in the transaction price.
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Step 4 – Allocation of the transaction price to the performance obligations:
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Understanding the basis of the allocation.
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Step 5 – When & how should revenue be recognised?
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Understanding the notion of control.
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Testing whether goods and services should be recognized over a period of time.
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How to measure progress over a period of time.
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Indicators of control being transferred at a point in time.
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IFRS 15: Disclosure of Revenue.
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The importance of relevance and materiality.
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Presentation.
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Disclosure:
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Disaggregation of the contracts.
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Significant judgements.
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IFRS 9 Financial Instruments:
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Recognition.
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Classification of assets and liabilities:
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Classification criteria for amortised cost and fair value through OCI.
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Decision tree for classification of financial assets.
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Measurement:
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Initial and measurement.
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Transaction costs.
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Fair value adjustments.
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Expected credit losses (ECLs):
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General approach vs simplified approach.
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Significant increase in credit risk.
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Measurement of ECLs.
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Derivative accounting.
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IFRS 16 Leases:
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Identifying a lease.
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Recognition of lease for lessee accounting.
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Lease modifications.
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Lessor accounting.
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