Entries by Natascha

CREDIT CARDS – Cash equivalent or Trade creditor?

Diversity has been noted in practice with regard to the classification of credit cards on the Statement of Financial Position. Some includes these as “trade” or “other” payables while others reflect these as an integral part of bank overdrafts within cash and cash equivalents. We discuss the considerations which should be made to ensure this balance is classified correctly for financial statement purposes. View PDF

Equity vs liability classification of loans

Entities often enter into financing arrangements. Certain of these arrangements contain complex terms, which may complicate the classification of the transaction. The terms of each agreement should be carefully analysed when making the classification of the transaction as either equity or liability. View PDF

IFRS 9: ECL on intercompany loans with low credit risk

IFRS 9 introduced the application of the “excpected credit loss” model which differs from the incurred loss model applied in terms of the predecessor standard IAS 39 Financial Instruments. The excepted credit loss model is applicable to all financial assets which are subsequently measured at amortised cost or fair value through other comprehensive income. This also includes intercompany loans. View PDF