AFM 291 - Types of Issues

Timing issue

When should the transaction be recognized?

• often relating to revenue rec

Measurement issue

What is the transaction price? Is there anything that might impact or change transaction price

• includes significant financing

• often relating to revenue rec

Performance Obligation Issue

What is the number of performance obligations?

• often relating to revenue rec

Subsequent events/measurement issue

• adjusting or non-adjusting events

Initial measurement + recognition

Used for inventory, PPE and financial assets

• borrowing costs

• deferred payment terms

• manufacturing fixed overhead

Subsequent Measurement Issue

Inventory issue

to maintain financial statement accuracy after initial transaction date/price?

Updating the value after initial purchase? which might be different from original transaction price?

• • costs relating to begining inv + purchases must = costs relating to ending inv + COGS

• changes in accounting policy

  • FIFO, LIFO, weighted avg

• Impairments (inventory, financial assets, PPE)

Recognition of interest + Dividends

Used for Financial assets

• recognizing the amount of interest and dividends

Disposition / Derecognition Issue

Used for financial assets

• selling the financial asset