Pound and Extinguishment: Difference between pages
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1. | 1. ''Financial reporting - financial liabilities - International Financial Reporting Standards (IFRS) - IFRS 9.'' | ||
Under IFRS 9 the extinguishment of a financial liability means that the obligation is discharged, cancelled or has expired. | |||
Under paragraph 3.3.2 of IFRS 9 the following changes are accounted for as an extinguishment of the original financial liability: | |||
:(1) An exchange between an existing borrower and lender of debt instruments | |||
with substantially different terms; or | |||
:(2) A substantial modification of the terms of an existing financial liability or a part of it. | |||
Under paragraph 3.3.3 of IFRS 9, the difference between the carrying amount of a financial liability (or part of a financial liability) extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss. | |||
This difference may be a modification gain or loss. | |||
A | :<span style="color:#4B0082">'''''Accounting and tax surprises under IFRS 9'''''</span> | ||
:"Corporate borrowers often need to renegotiate their existing loan liabilities, and in many companies this responsibility will fall on the treasurer. | |||
:Although treasurers may not necessarily be accounting experts, they still need to carefully consider the potential accounting impacts when renegotiating loan terms. | |||
:Under IFRS 9: Financial Instruments, loan modifications can trigger gains and losses for financial reporting purposes and may even have tax implications." | |||
:''Renegotiating a loan? Get the accounting right - Kern Roberts, managing director, global accounting practice lead Chatham Financial.'' | |||
2. ''Set-off.'' | |||
A situation in which a claim or demand is set against an opposite claim or demand, reducing or eliminating the first demand. | |||
== See also == | == See also == | ||
* [[ | * [[Derecognition]] | ||
* [[ | * [[Derivative instrument]] | ||
* [[ | * [[Fair Value Adjustment]] | ||
* [[ | * [[Financial instrument]] | ||
* [[ | * [[Hedge accounting]] | ||
* [[ | * [[IAS 32]] | ||
* [[ | * [[IAS 39]] | ||
* [[ | * [[IFRS 9]] | ||
* [[ | * [[IFRS 9 hedge accounting reforms: a closer reflection of risk management?]] | ||
* [[ | * [[IFRS 15]] | ||
* [[ | * [[Impairment]] | ||
* [[ | * [[Modification]] | ||
* [[Modification gain or loss]] | |||
* [[Non-substantial modification]] | |||
* [[Recognition]] | |||
* [[Set-off]] | |||
* [[Substantial modification]] | |||
==Other resources== | |||
*[https://www.iasplus.com/en/standards/ifrs/ifrs9 IFRS 9 summary - IAS Plus] | |||
*[https://www.ifrs.org/content/dam/ifrs/publications/pdf-standards/english/2022/issued/part-a/ifrs-9-financial-instruments.pdf?bypass=on IFRS 9 full text - IFRS webpage] | |||
*[https://www.treasurers.org/hub/treasurer-magazine/renegotiating-loan-get-accounting-right-warns-adviser Renegotiating a loan? Get the accounting right - Kern Roberts, managing director, global accounting practice lead Chatham Financial] | |||
[[Category:Accounting,_tax_and_regulation]] | |||
[[Category:Corporate_finance]] | |||
[[Category:Corporate_financial_management]] | |||
[[Category:Financial_management]] | |||
[[Category:Financial_products_and_markets]] | |||
[[Category:Financial_risk_management]] | |||
[[Category:Long_term_funding]] | |||
[[Category:The_business_context]] | [[Category:The_business_context]] | ||
Revision as of 21:29, 30 October 2024
1. Financial reporting - financial liabilities - International Financial Reporting Standards (IFRS) - IFRS 9.
Under IFRS 9 the extinguishment of a financial liability means that the obligation is discharged, cancelled or has expired.
Under paragraph 3.3.2 of IFRS 9 the following changes are accounted for as an extinguishment of the original financial liability:
- (1) An exchange between an existing borrower and lender of debt instruments
with substantially different terms; or
- (2) A substantial modification of the terms of an existing financial liability or a part of it.
Under paragraph 3.3.3 of IFRS 9, the difference between the carrying amount of a financial liability (or part of a financial liability) extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
This difference may be a modification gain or loss.
- Accounting and tax surprises under IFRS 9
- "Corporate borrowers often need to renegotiate their existing loan liabilities, and in many companies this responsibility will fall on the treasurer.
- Although treasurers may not necessarily be accounting experts, they still need to carefully consider the potential accounting impacts when renegotiating loan terms.
- Under IFRS 9: Financial Instruments, loan modifications can trigger gains and losses for financial reporting purposes and may even have tax implications."
- Renegotiating a loan? Get the accounting right - Kern Roberts, managing director, global accounting practice lead Chatham Financial.
2. Set-off.
A situation in which a claim or demand is set against an opposite claim or demand, reducing or eliminating the first demand.
See also
- Derecognition
- Derivative instrument
- Fair Value Adjustment
- Financial instrument
- Hedge accounting
- IAS 32
- IAS 39
- IFRS 9
- IFRS 9 hedge accounting reforms: a closer reflection of risk management?
- IFRS 15
- Impairment
- Modification
- Modification gain or loss
- Non-substantial modification
- Recognition
- Set-off
- Substantial modification
