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rm hw Slilemert of Financial Peosilion AL DUMP - Inventory even though expected to be sold beyond 12 months, still current : NCAHFS are reported as current asset ve * ~ FA at AC includes investment in bonds & other debt instruments - non-current - Deposit for delivery exceeding 1 year should be removed from prepaid expenses and thus are non-current - Proceeds from the issuance of x and borrowed funds ol y - ignore y - The selling price of unsold goods out on consignment - removed from AR (at SP); added to inventory (at cost) - NR Discounted account should be alice to NR account (conditional sale) - Equity of assignee in assigned should not be offset inst assigned - included in current babies oacinst AR assig - Advances to subsidiary - noncurrent investment - Deferred charges - noncurrent {technically expire in more than 1 year) - Employees’ account-current: Receivable from Employees - current - Claims against shipper for goods lost in transit Claims Receivable - current - Bank overdratt is not “netted” against the cash in bank but should be classified as current liability + Writeotf of AJR has no effect on current assets - Cash surrender value - noncurrent invesiment - Discount on BP is deducted from Bonds Payable + Deferred Tax Liability classified as noncurrent - In absence of contrary statement, BP plus premium on BP shall be classified as noncurrent - Contingent liability - not a current asset (e.g. pending lawsuit); not yet a liability : Stock Dividend Payable is not an accounting liability but presented as part of SHE in addition to Share Capital - it Bonds Payable is noncurrent, compute interest portion for current liability + Tax Computation: Current Tax Expense - Estimated Tax Payment - PAS 1, paragraph #2 . - obligation that matures within 1 year from the end of RP is classified as current even if i is refinanced on a long-term basis AFTER the reporting period and BEFORE issuance of the FS - PAS 1, paragraph #3 - ian entity has the discretion fo refinance/roll over an obligation for at least 12 months after the RP under an existing loan facility, the obligation shall be dassified as noncurrent, even if it would otherwise be due within a shorter pd - Hf the refinancing occurs on or before the end of the RP, the refinancing is an adjusting event, meaning, the obligation is dassified as noncurrent lability BRAIN DUMP —— « AJR with credit balance - current liability - Cost of own shares - treasury shares « Credit in cumulative translation adjustment - translation gain - H Bonds Payable is current (lability), it follows that the Bond Sinking Fund is current fasset) 44 Premium ¢- Oiscount } - Unreplenished Petty Cash Expenses are deducted to get correct PCF balance - Debit balances of AP : Current Asset = Credit balances of AR : Current Liability - Prepaid Taxes - not a current asset but rather, represents the current tax expense for the year and should therefore be charged to Income Tax Expense - Fe jennsation Adjustment is a component of OC! and not of RE but both forms part re + “Billings in excess of cost of LTCC” - current liability - "Costin ss of bilings on LTCC" - current asset ue cost - deduction from related financial bability payment from a customer for goods to be delivered nex! year - deducted trom AiR but should be a liability account “Advances from Customers” + NR is presumed to be current - PAS 24 Related Party Disclosures) P14, requires disclosure of key management personnel compensation - Sales to affliated entities shall be disclosed in separate FS but eliminated in consolidated FS - Reimbursement of Travel Expenses - not key management personnel compensation - Intercompany sales are no longer disclosed when consolidated FS pared “Key Officer’ Scleries - dedoee (RPT) om pre - Officers’ Expenses - ignore (not RPT) - Loans to Officers - disclose (RPT) - Receivable is a non-adjusting event f the amount is sill collectible ~ AIR under Speciok ierms -¥non-tradé (segregate cutrent 2 non current) ~Contingant Asset i¢ probabl® only, not virtually ceriain -¥disdosed onky ~ Redeemable Precerence Shares -P Current Liobitty ~ Dividends are recognized upon deciorariOn (if declared of ter year-end. not on adjusting event? “Fire 1ogs 15 NO AM adjusting event since condition dogs not Exist on BS date ~ NVR Discounted - conditional sale Crransfer *HHe) ~ deduction to N/R - — I PAS 1, 10; PRS 5 Slalemerit of Conyrichensive Jncome @ RAIN OUP + Distribution Expenses { Selling Expense - Advertising, Freight-out, Rent (portion), Sales Salaries & Commissions - General & Admin Expenses - Accounting & Legal Fees, Officers’ Salaries, Rent (portion), insurance - Interest on inventory loan, loss on abandoned equipment - non-G&A, non S/D Exp : Margin = Net Sales - Cost of Sales Gross Margin « (Ave AR x ARTO) - (Ave MI x INTO) - Unrealized loss on FC translation - not part of NI but of Few of OCI + Adjustment of Profit of Prior Year for error - not part of Ni but part of RE - Change in Accounting Policy - ©.g. inventory cosi flow changes + retrospective - effect not in P/l but rather in RE - reported net of tax - Change in Accounting Estimate - ©.g. change in residual value, depreciation method + prospective ~Iniergegmem Prof ars not removed under Segment Reportin > Common costs that ate not allocared are disregarded under Segment Reporting BIOLOGICAL ASSETS BIOLOGICAL ASSETS 7 Fring aos animals and plants AGRICULTURAL PRODUCE - product of biological assets Ws the proce grows on the Biological Asset - BKOLOGICAL ASSET - 2. When harvesied - INVENTORY - FVLCOD at the point of harvest - alter harvest + recreational activities (e.g. z00 animals) - breeding (not for the asset to be sold, but incidental to providing recreational activity - PPE - before: biological assets - alter amendment: PPE a. in supply or production of agricultural produce b. expected to bear produce for more than 1 year ©. remote likelihood that the plant itsell will be sold as agricultural produce except for incidental scrap sales BEARER ANIMALS “ 7 purpose: give offspring - ow oa bearer plants, becomes complex [BIOLOGICAL AS BRR DUMP — - Gain on BA and Gain on AP are reported separately - CV of BA at year-end = CV beg + Gain on BA FAD #, 32, 39; PRS #9 Cash and Cash Equivalerits CASH AND NON-CASH ITEMS CASH - available for current purposes; no restriction on withdrawal 1, Cash on Hand a. Bills and Coins b. Checks (Customer, Traveler, Manager/Cashier, Co's Undelivered, Co's PDC, Co's Stale) c. Bank Dratts d, Postal Money Orders 2. Cash in Bank a. Savings Account b, Checking Account cc. Bank Account in Foreign Currency d. Compensating Balance 3, Working Funds Payroll, Dividend, Payroll, Tax, Interest, Change, Pag IBIG, PCF) NOT CASH 1. Receivables a. Cash in Closed Bank b. Customer's PDC, Customer's Stale, Customer's NSF, (OUs cc. Restricted Compensating Balance: 2. Prepaid Assets (Advances, Postages, Supplies) 3. Temporary Investment noe”? Securities short-term papers acquired more than 3 mos bel maturity) 4. a. Restricted Foreign Bank Account b. Bond Sinking Fund °. §, Insurance Fund @. Contingent Fund 5. Current Liability (Bank Overdraft, Unreplenished Expense Vouchers) PETTY CASH FUND CASH SHORT/OVER Tote berm Counted Jotd bara in PCF x e ‘ Checks Call . Envelope/tindgpas sted collections G2 Vouchers (al x To hems rep x tou; a Cashiers Accountabity — Cash SHORTIOVER x PCF per ledger x Proceeds from cash sales (sales invores, ail x W CASH (SHORT) | OVER x BALANCE OF PCF (1) Entry Method - Check vouchers: deduct all expenses NOTE Prepaid Exp & Office Supplies Exp - Deduct lOUs & Receivables from Employees - Deduct Shortage (2) Alternative Method » Bils(Currency & Coins + Checks dated Current Gncl, to PCO) + Vouchers dated Next Period - Sales Invoices Unremitted Dated Current BANK RECONCILIATION DEPOSITS IN TRANSIT QUTSTANDING CHECKS OMT, beg x OIC, beg x Deposis x Check issuances x Total x Uncecorded checks rox Ack by bank w I. x end x Checks paid by bank x Error WW DIT, end x - Customer's PDC are netted against DIT (deducted to per books as well) - Company's PDC, Co's unreleased checks, C. i 3 vig POC, Co's une leased cl ertified Checks are netted against + Book ) Bank = Shortage: - Net Adjustment to Cash = Book Unadj - Book Adj PAS 32, 39; PFRS 7,9 Trade & (Cher Qeceivables Recoveries | NSF Check | sD Write-off | Recoveries Notes Received ALLOWANCE FOR DOUBTFUL ACCOUNTS _ _ AGING a Required Allow we Beg Lege — Recoraien ap ants On Hg NOTES RECEIVABLE 1, SHORT-TERM N/R e Gonceptualy « Present Value Practical - Face Value (discount is immaterial 2. LONG-TERM NR a. Interes!-Bearing - Present Value b. Non-Interest Bearing - Present Value Discount - Uneared Interest Income (amortize using eff int method) IMPAIRMENT OF NOTES RECEIV ABLE LCA ot Loan Rec'l + Any Acc Int } PY of Est FCFs (using orig eff rate) 2. Imp Loss is maintained through a valuation account: Allow for Imp Loss. 3, Interest Income - CA of Loan Rec'l net of allowance for imp loss (amortized over using effective rate) ACCOUNTS RECEIV ABLE RECEIV ABLE FINANCING scours ae RUE ING PENERAL ASSIGNMENT OF AR Seles on Accoun | Cobecton 2. SPECIFIC ASSIGNMENT OF AIR = Only a portion is assigned * Cath Received = Face Value - Finance Charge = Ho gain or loss © Carying Amount of NP = NP - (Remitance - Interest) - Amount disclosed as equity of assignee = AR Assigned - HP Balance 3. DISCOUNTING OF NOTE a, Without Recourse Principal x Net Proceeds x Annual Interest x Principal x MV x Accrued Int. Rec’! a Discount w Gain (Loss) on Discounting x (NET PROCEEDS. x - Note that discount period is one year less holding period ~ Applicable only fo interest-bearing nole. If non-interest ree bearing the rincipal = + W the note is 6-month only, the interest is computed for 692, and discount period is 6-n - Accrued Int Rec’! is based on holding period b. With Recourse Same w! discounting wjo recourse excep! thal the loss on discounting is {rected as interes! expense - Hthe note is dis! Maturity Value x Protest Fee x Total Amount Due x Interest x Total Amt Doe x int % x nfl? ‘Amount 1o be colected x om dahonorng 1 calecsions cc. Discounting Own Note (discount is regardless of period) Notes Payable Notes Payable x Discount 4) Rem Discount w Net Proceeds x x “fess on Factoring = Soting Price (AR - Karginion CV of AIR = Cash intioly received from factori + Fartor’s Holdback - Factoring Fee - Interest - Cost of Factoring = Factoring Fee + acne, + When the amount of selling price is not given, loss on factoring = finance fee - Foclor’s Holdback is not included in the loss on foctoring & cost of factoring PAS 32, 39; PERS 7,9 Tiadle & (Other Qeceivables | ® ka UME “Thole Otter Receneb : & ‘eceivables - (customers & officers), DR balances - Creditors minus Allowance for Bod Doos™ - Overpayment are removed from collections + ART and Other Receivables to be presented in SFP is net of allowance - Even i the receivable is not impaired, i is included in the accounts not individually significant - Only BD Expense, decreases WC; write-off has no eflect + Under aging method, the required allowance (end) is the amount computed based on percentage - Allowance to customers for shipping customers - SRA - Accounts written off but recovered - DR side of AR - Collediion of pledged AJR - CR in AR T-account but the amount pledged is ignored - Percentage of Sales Method Rate = Write-olfs - Recoveries of prior years Credit Sales DR Expense =CR Sales, CY x Rate - Change of ADA estimate: Adjustment = Exp new - Exp old - Gain (Loss) on Sale = PV of note received - CV given up - No gainfloss is recognized in pledge and assignment of AJR since it is a secured borrowing and not a sale - Gain (Loss) on Factoring = SP - CV of AR (SP is not reduced by Fadior’s Holdback) - Cash initially received from factoring = AR - FH - Factoring Fee - Interest "Total Cost of Factoring = Factoring Fee » interest - Loss on factoring fee is tantamount fe financing expense or finance fee - lt Bad Debts Expense is asked based on % of AR, include AR-unassigned the AR-assigned but not the fadored/sold - Customary trade terms within 1 year: CV = Face Value - rt beginning of the year, use annuity due factor - CV of note receivable annuity due = PV of NR annuity due - Down Payment but asked is Sales Revenue, don't deduct first payment - Interest Income = FY of rem payments - PV of rem nis, + Ht note is payable within 1 year Interest Income = Face Value x % x n/I2 + Interest Income 2nd Year = PV + Interest Income YD x % ~ Equal installment: CV = NR - (Annual Payment - Interest) BRAIN DUMP ————— ~tmpairment ef Loan Receivable : . C¥.beg = Principal Amount 4 (Origination Fee ~ Direct Originahon) J Origingtion Fee -uneamed int income ¥ Direct origination Cost - operred Chorg?, preterab Set-Oft Against Origination Fer INVENTORY COST FLOW PURCHASE COMMITMENT. ‘1. SPECIFIC IDENTIRCATION ~ nol ordinarily interchangeable - B = Units on Hand x Specific Unit Cost 2.FFO - COGS: first purchases; reports lowest COGS and highest and GP + = Units on Hand x Unit Cosi of Latest Purchases - WAU » CGAS | UAS - 8 = Units on Hand x WAUC = new unit cost every (1) purchase (2) purchase return { WAVE : Average Periodic = MAVE : Average Perpe Even faverone pert neat ox WAVE Mecbeds are kept in unde on” Silent: Moving Average lor Average Coi | Retum of good by curtomer't Body damaged thal be excluded from inty - fixed price or fixed number of units - application of LONRV 1, Market Price ( Fixed Price » Loss on PC 2. Subsequent Increase in MP = Gain on PC but extent up to loss only 3. Purchase: Market Price on the date of purchase or Fixed Price in the contract "LOWER" 4, Payment: Always at Fixed Price INVENTORY ESTIMATION MEASUREMENT OF INVENTORIES - LCNRY on an tem-bytem basis ~ NRV = Est SP - Ext Cost to Complete - Est Cost to Sell iW 2D Cost of Sales x Inventor x 2. ALL Loss on Inventory WD x Allowance for Inventory WD x Allowance for Inventory WD x Recovery in NRV of Inventory x NRV may foll below becouse of @ errors, (2) physical deterioration (3) inerease in ECTC Increase in Replacement Cost increases NRV Moccirs & other supplies held for use in production ore not WD Direct: COGS + Loss - Neorey = Adj COGS Loss = Req - Alowance: End in Prot, beg of current 1.GROSS PROFIT METHOD + lor interim purposes + relationship between GP and Sdles remain stable over fime (if no trend, use average - Net Purchases Purchases + Foightin - PRA-PD - Net Sales = Sales Est Cost of El (CGAS-COGS) x Cost of undamagedinventory & Realzable value of partially damaged Q) INVENTORY LOSS x - tems to consider: @. SA, SD - ignore b. Freightn - add fo purch at cost ¢. PR-deduct to purch at cost & of retail d. Dept iranster-in (DR) - add to purch at cost & at retail . Depr'l transter-out (CR) - deduct to purch at cost & at retail £. Abnormal losses - deduct from purch af cost & at retail g. Normal losses, shortage, shrinkage - deduct from GAS at retail h. Discounts to employees - deduct to GAS at retail CONVENTIONAL | AVERAGE FIFO Net Markdown, Exclude Deduct Deduct Inventory, beg include Include Exclude rave BRR DUMP RAL OUP + Freight is on account of seller - FOB Destination INCLUSIONS an EyCLUSIONS: - Goods out on consignment: Sales Revenue = Units sold x Selling Pri ={nwgice wos an hand entry for purchases and AP waremade 9 * 4 ye price - i : held on consignment: Sales Revenue = (Units sold x SP) - Commission cere is aa hose ceeaeted bus nore wot se toni sit cluded, should - Hl there are additional costs to be paid by buyer, apply firs! the net amount before be excluded p i q Hd "4 . but reloted goeds art SR ine dered adding odditional cost Prepayments on FOB Shipping Point) Sold “iccooye ft wasshipped at a later daie than BS date becouse fis com - Accounts Payable balance alter conversion from gross to net = AP gross - Disc Avail = Credit tema i$sued. deduct both 40 Nid Sales - Under Perpetual System, purchase discount is credited to inventory account = In FOR Destination what is important ig the date when goods are recewed because - The recognition of sale of inventory is the dale when the common carrier picked up doods will nat be recognized even if InvoiCé was already received the goods or the date of shipment, whichever is clearly determinable - Goods sold fo customer for convenience and goods specifically segregated for customer are excluded from inventory - Hold for shipping instructions - included in the inventory count - General Administration Cost is not used in the compulation of NRV : Ignore normal avg Percentage & replacement cost in NRV - Total Cost - LCNRY = Req Allowance for WD - Allowance beg = Increase in Allow - Adjusted COGS - deduct incorrectly recorded and sold inventory and add inventory losses and loss on inventory write-down - Sales Discounts and Sales Allowances are ignored in the estimation under GP and Retail Method - When there are 2 or more periods given, and the GP rate is not given, add COGS for all the periods except the current period fo get GP rate - Markups and markdowns are before GAS computation = Discount Lost is based on Purchases, net of Returns & Allowances - H Cost } NRV, there is loss on inventory WD - Physical inventory considered rather than perpetual inventory if shortages are included in COS (originally perpetual) ~ Original markup - ignored ~ Materials in transi : Buyer = Finished Goods in transit : Seller - Goods in process, at cost of materials and cost of DL (FGI 20% is OH) the amount included in inventory is the amount divided by 80% because the goods in process must also include OH - Finished goods out on approval - excluded from inventory - Shipping supplies - excluded in inventory - Gasoline & oil machine lubricants - included in inventory (lactory supplies) - Alter-sales warranty costs - excluded from inventory - Gross Method's COGS is always higher than Net Method’s = Gross Liab x % Sold x % Discount BRR DUMP - lgnore disposal cost d there i no invesiment sold = Portlolio (mony securities) - offsetting alowed - Share Dividend Onvestor) - assume of the same doss + not considered as income + prepare memo entry + Shares in feu of cash - dividend income (D FV ol the shores (2) Measurement of cash dividend - Liquidating Dividend - retum of invesiment; not income + A) least 20% Significan Influence Dividend (Equéy Method) - Squidating dividend - Dividend in kind or Property Dividend - Income (at FY of issuing co.) (D FV of the property + OR balonce in FV adjustment account implies o net increase in the volue of securities Required FV Adjusimen x FV (OR) CR bolance: @ UG (UD lor the period x - FAFVTOCI » OCI: for the period = SHE/SFP : Cumulative + Possive interest’ - FV method - Adjust @ FV ond not ob FVLCTS of FV-TC + CR Bal in Morke! Adj - net unreatzed holding loss - Check purchases if dividendson (DOD & DOR) - Recognize financial asset when became o party BRAIN OUMP — CONCEPTS AND JOURNAL ENTRIES RELEVANT TRANSACTIONS + 20% - 50% of the outstanding ordinary shares of another entity INVESTMENT IN PREFERENCE SHARES = Significant influence Nonvoting shares therefore cannot exercise significant influence = equity method - Passive Interest (FV method or at rare instance, Cost method? B.CASH DIVIDEND : Eauty rape hes rata Prete: Dividends . . + Deduct the annual/current year Preference Investment in Associate Cath estmert in Assoctte a, Cumulative - whether dedared or not ‘2. SHARE IN Ni 6 SHARE b, Noncumulative - only when declared Investment in Associate Memo Ey SHARE IN NC**t™ET Income SLAMORIZATION CE E1285 COST 2. Positive Goodwill - induded in the CA; not separated (no journal entry) Investment Loss Investment in Associate Investment in Agsocicte ‘8 EXCESS FY Investment in Associate (RS) Investment Income Investment in Associate Revaluation Surplus - Inverter FORMULA Purch Price x Purch Price x SOPA x CV of NA Acquired (x) SOPA (SOLA) x soci x Excess x SOct x Excess (x20%+EUD (x) Plant (x20%) G) Cash, Prop Div & ive x Inventory (x20%) = (x) Add inv x INCOME x GOODWILL x Disposal of Inv ie) Impairment G) CA of HA x b. Negative Goodwill - excluded from the CA; recognized TRANSACTIONS WITH. ASSOCIATES . . «a, Upstream - unrealized (eliminated up to investor's interest) b. Downstream - realized (recognized) {) Previous interest a. FVPL - remeasured af FV (adjustment: P/L) b, FYOC! - remeasured af FV (adjustment: OCD (cumulative amount in OC! transferred to RE) (2) FV of the previous interest Cost of Addr’ Inv Initial Cost - HA CA of NA Acquired Excess Cost Adjustments Goodwill (Excess FV) INFLUENCE {1 FV of retained investment x CA of retained investment w Gain (loss) - P/L x (2) Passive interest; reclassify to the ft: a FVPL b. FYOCI « Cost LOSSES IN EXCESS OF INVESTOR'S SHARE (D Discontinue recognizing further share in losses (2) Recognize addtional losses only # a ‘provision’ is incurred (rare) (3) Recognize subsequent profits only when recovering ‘unrecognized’ loss > fo» Bo PFRS 9 - CLASSIFICATION & MEASUREMENT TYPES OF DEBT INVESTMENTS CLASSIFICATION CATEGORY | DERIVATIVE | TYPE | SPPI BM FY OPTION Debt Y FAFVTPL Yes or NO Equity No” | Others NA Debtor | Yes or | Collection & FAFVTOCI No Eau Ne Sue No FAAC No Debt | Yes | Collection No only MEASUREMENT CATEGORY | INITIAL | SUBSEQUENT | FV CHANGES FAFVTPL WV FV PAL FAFVOC! FV¥+TC | FV Gw/amort'n) | OCI Equity) FAAC FY+TC AC Ignore 1. HELD FOR TRADING (FYPL) - TC on Purchase - Exp - FV Changes - P/L - No impairment Interest Income - nominal interest (Face Amount x NR? * no discount/premium amortization 2. HELD FOR COLLECTING CONTRACTUAL CASH FLOWS (INT & PRIN) a. Amortized Cost - TC - capitalized - Interest Income - effective interes! method - amortization of discountipremium - Impairment Loss applies b. FVPL IFY OPTION! - trevocable (cannot reclassify out) = same rules for (D 3, HELD FOR COLLECTING CONTRACTUAL CASH FLOWS (INT & PRIN) & ‘SELL THE INVESTMENT a FVOX! + TC - capitalized - Interest Income - effective interest method - FV changes - - Impairment Loss applies - On Disposal - recycling to P/L Proceeds x Amortized Cost i) in on Disposal x b. EVPL IFY OPTION! + irrevocable (cannot reclassify oul) + same rules for (1) Wthe CA is from the Amortization Table, it is HC ‘Change in Business Mode! to FYAC (allowed) Bye -- 1 “"Recloss Date” (1 1 the next acct ) Ga ohoctle merstt nov auned cone ora | TPRD FY Debt Jnvestinerits ad BRaLW DUMP - Bond indenture - covenants & agreements loners, amortization under FAFVPL (initial & subsequent) EPEND + AC to FVTPL reduceseliminotes accounting mismatch + Market Adjustment- x Unrealized Gain x - Gains Trading J Cherry Picking - selling increase, holding decreases FV + FV option allows to record income when FV increases - H FV at year-end is not given, use 101% (lor e.g.) or discount rate through PV computation ~ CV highest in Y1: Premium = Interest higher in Y1: Discount + Redlassifications allowed only on change in business model but is infrequent - Amortized cost is the intial recogn@ion amount of investment minus repayments plus ‘or minus cumulative amortization and net of any reduction for uncollectibility RAL OUME DERIVATIVES FORWARD CONTRACT CHARACTERISTICS OF DERIVATIVES DERIVATIVE ASSET (LIABILITY) 1, Underlying | Notional Market Price x 2. No investment | Small investment Exercise Price io 3. Future date - setllement Diference x EXAMPLES OF DERIVATIVES at xy 1, Interest Rate Swap - Bank Loan DA (OD x 2. Futures - Forecasted Purchase Trans 3, Forward - Forecasted Purchase Trans 4, Options - Forecasted Purchase Tans OPTIONS 5. Foreign Currency Forward Contract CHARACTERISTICS MEASUREMENT (INTIAL & SUBSEQUENT) () value changes in response to change in underlying variable (share price) + Cha ‘os in FV (2) minimal initial investment (option premium) e - OC! (3) to be settled at a future date SETTLEMENT FORMULA - Recycling to PiL Fair Value = Intrinsic Value (benefit) + Time Value (value of rem time) = Cumulative OCI - Pf lenin " intrinsic Value: CALL: MarketSpet Price - Stike/Exercise Pice INTEREST RATE SWAP ee TAT" the money *OUT" of the DERIVATIVE ASSET QIABLITD x PUT: Stnke Pree.» Marker Prise = "MY w Rate Underlying Rat a) Dillerence % Notional xk Net Cash Settlement x PV factor of new rate KK DA (DD x INTEREST EXPENSE Notional x Underlying Rate INVESTMENT PROPERTY TRANSFERS DI EFINITION + Property Gand & building) 9 eam rentals - For capital appreciation PARTIAL OWN USE - Can be separated: 1. Owner-occupied - PPE 2. Rented - Investment Property Cannot be separated: . Insignificant - Investment Property b. Significant - PPE ~ Insignificant (Security & Maintenance Services) - Investment Property ~ Significant (Owner-Managed Hotel - INTRA-COMPANY -RENTALS - Separate FS of Lessor - Investment Property Consolidated FS - PPE MEASUREMENT INITIAL RECOGNITION - Cost Model SU IBSEQUENT TO INITIAL RECOGNITION 1 Cost Model (same w/ PPE but FV is disclosed) 2. FY Model + P is remeasured at FY ~ Gains or Losses arising from changes in FV recognized in P/L - Not depreciated + Not tested for impairment Transters to, or from, investment property should only be made when there is CHANGE IN USE, evidenced by: {1 commencement of owner-cccupation (2) commencement of development with a view fo sale (3) end of owner-occupation {4) commencement of an operating lease to another party TRANSFERS - COST MODEL Now asstication. x (CA) x (CA) “toe hen ‘and Cort (measurement & disclosure purposes! Ho goin loss rpauesean.. Fv 44008 1. Update measurement (PAS 16) 2. Transter New Classification x FV) Old Classification x (CA) OF GAIN/LOSS (FV-CA) RECOGNITION | {D From PP to PPE - Pf. Bee eT cy vn eM ‘Tom Inventory t to transfer step since (4) From PPE to P-OCt RS) Increase - Revaluation Surplus Decrease - Revaluation Loss CASH SURRENDER VALUE (D Lite Insurance Policy (2) Our entity is the beneficiary (3) Insurance Premium - fully paid for 3 years (allowed recording for CSV) (4) Surrender/Cancelled at the vied of 3rd year or any time therealter (5) Long-Term Investment - NC Asset