Background In previous blog we had seen what property, plant and equipment (PPE) is and its recognition and initial measurement principles under International Financial Reporting Standards (IFRS) as per IAS 16 – PPE. In this blog we will understand accounting for an equally important resource or asset for a business, however, which does not have physical substance, called as intangible asset. Intangible assets cannot be seen or touched because they lack physical substance for e.g. brands, copyrights, patents, trademarks, trade names, Customer relations etc. Intangible assets are crucial for businesses in some sectors because they provide competitive advantage, innovative capabilities and long-term value, in the business.   IAS 38 – Intangible assets under IFRS framework  provides the detailed accounting for such intangible resources. It provides in depth guidance on the topics like which resources can be considered as intangible assets (IA), when entity is eligible...

A. Background: In recent times, many companies have chosen to raise money by issuing convertible instruments. A convertible instrument is a hybrid instrument that offers investors the option to  redeem the security for cash  at the end of (or during) its term  or convert it to equity shares  of the entity. Convertible instruments generally offer lower interest rates (because of the additional consideration by way of conversion option) than comparable conventional instruments, making them a cost-effective way for the entity to raise money. Convertible instruments are typically issued by companies that have high growth expectations and relatively lower credit ratings. The companies get access to money for expansion at a lower cost than they would have to pay for conventional instruments. Investors, in turn, get the flexibility of turning their convertible instruments into cash or equity shares of the entity. Examples of convertible instruments are optionally convertibl...

  Executive Summary Since April 2019, due to the introduction of  IFRS 16 / Ind AS 116  – Leases, there has been a significant change in how leases are accounted for, especially by the lessees. As per the earlier leasing standard, lessees were required to account for lease transactions as operating or finance leases depending on the rules and tests of classification. As per the new leasing standard, this classification is done away with, and lessees are now required to recognize nearly all leases (except short-term and low-value leases) on the Balance Sheet which will reflect their Right-to-use an asset for a period of time and the associated lease liability for rent payments. The accounting of operating leases as per the earlier standard was relatively straightforward, which required lessees to recognize lease payments as operating lease expenses on a straight-line basis over the lease term. The accounting of operating leases as per the earlier standard was relatively st...