Companies have a certain level of discretion concerning the methods they use to evaluate and report their financial performance. Investors are often concerned with whether the accounting method is more aggressive or conservative, as this will affect their ability to…

Companies have a certain level of discretion concerning the methods they use to evaluate and report their financial performance. Investors are often concerned with whether the accounting method is more aggressive or conservative, as this will affect their ability to…

Financial reporting quality relates to the quality of the information contained in financial reports, including note disclosures. High-quality reporting provides relevant, decision-useful information wahich objectively represents the economic reality of a company’s activities during the reporting period. Further, high-quality reporting…

Presentation and Disclosure of Leases Both IFRS and US GAAP aim to disclose lease information, enabling users to assess cash flow amount, timing, and uncertainty. The balance sheet’s non-current part typically holds “right of use” assets and lease liabilities. Depending…

Employee Compensation Employee compensation packages are structured to meet objectives like employee liquidity needs, retention, and motivation. Standard components include salary, bonuses, insurance, pensions, and shares. Compensation amount and composition depend on labor markets influenced by skills, geography, cycle, and…

A lease is a contract between a lessor, the owner of an asset, and a lessee, the other party seeking to use the asset. Through a lease, the lessor grants the lessee the right to use the asset. In exchange…

Users of financial statements can use financial statement disclosures to deepen their understanding of a company’s investments in tangible and intangible assets. Financial statement disclosures divulge such details as how those investments have changed during a reporting period, how the…

The impairment and derecognition of a company’s property, plant, equipment, and intangible assets can significantly affect its financial statements and the resulting ratios. The Effect of Impairment and Derecognition on Financial Statements and Ratios Impairment of Finite Life Intangible Assets…

Intangible assets may be acquired in three primary ways: purchased in situations other than business combinations, developed internally, and acquired in business combinations. The accounting treatment accorded to an asset depends on which of these methods is used in its…

Disclosures benefit users of financial statements, especially when analyzing a company’s performance. The disclosure and presentation requirements are similar under IFRS and US GAAP. Presentation and Disclosures Relating to Inventories Under IFRS, the following financial statement disclosures concerning inventories are…