Impairment of financial assets - II (Simplified approach)

[@mukhtarolaoye5074]

Thank you so much for this video. You are immensely helping peoples lives

[@rohitgupta7260]

Very nicely explained always. Regarding probability %, will it work if we develop a matrix explaining the default from one bucket (0-90) to another (91-180) and so on for balance o/s at every quarter end uptown 4 years back? The only objective is to develop a probability%. Please suggest or advise some other way to arrive at probability%.

[@nikkaxyzaobenario7565]

Sir when the asset becomes credit-impaired, what is the accounting treatment for "interest accrued (interest receivable) before the impairment happens"? Does it increase or decrease the Loss Allowance?

[@mukhtarolaoye5074]

Please we need clarification on the contract asset

[@firozsamsungnew786lalawala2]

Hi Sir....can you explain why trade receivables are measures at amortised cost? They do not have the ALL characteristics of getting recovered on specified dates and recovery of Interest and Principal amounts.

[@AVCLearning]

Credit period includes amount of profit and interest based on the time period. Most of the trade receivables have this attribute. That's why amortized cost is applicable

[@suganyagp7731]

Can you tell me what are all a bank should change in their core software to adapt IFRS 9?

[@riazahamed9776]

If we are not having any write off for past 3 years & if the customers are financed by Banks do we need to do a provisioning. It will also be good to show with an eg how the % is arrived for both the scenario for a write off and without write off

[@AVCLearning]

You consider probabilities of write off from future perspective. Earlier experiences of good receivables is not an excuse to not do provisioning

[@joeyhcmc]

what is the name of the other approach?

[@asfandyarkhan9465]

Very thoroughly explained Sir!

[@kevalpatel5998]

Thanks

[@jabarsonsamuel5542]

Respected sir, Could u please solve DS Rawat books. Problems in this regard is differ from the books.

[@sachinr896]

sir can you please specify how we can substantiate the provisioning percentages on different age buckets.

[@AVCLearning]

+Sachin R hi. You need to use the past trends and include future expected recoverable amounts for all major customer balances. This sounds theoretical but is the probable right manner to achieve provisioning acceptable also to auditors

[@joeyhcmc]

Not only past events but also future ones. Problem is anything can happen in the future. Who will be the police to enforce this rule? Company A might not recognize the future event of Company B and because of this their FS reports will have different outcome which might favor 1 company over the other. Also, more expected losses means pay less income tax.

[@uzairahmed3048]

normally, tax laws disallow such provisions or they only allow write-off of receivables / financial assets.

[@AVCLearning]

So as a consequence, you may create DTA for that

[@SilverRose253]

Nice content but OMG the quality of the video is very bad, such a pity we cant read whats on the board and its quite dark

[@AVCLearning]

I agree and thanks for your comment. I hope to improve in further lectures

[@tahamoin1279]

Thank you!!

[@joeyhcmc]

How far into the future do they need to look out for in respect to impairment? 2 years, 5 years or 10 years or beyond 10 years? If this company has a competitor and does not follow the same provision model, his company's Financial Statements might look more profitable which will in turn get him more investors than you. How to prevent imaginary conservative outlook?

[@AVCLearning]

This requires detailed insight of business. Yes, it opens up the scope for manipulation, but then... it raises questions auditors on managing their work as well

[@taxsavvysolutions]

Respected sir! you are doing very good. Don't mind but sir kindly take measure relating to video quality. i am facing little issue . Thanks

[@AVCLearning]

+Muhammad Furqan thanks.. point well taken.

[@taxsavvysolutions]

Thank you sir'

[@taxsavvysolutions]

Sir will you please solve one example of impairment of financial assets and compound financial instruments. Including almost every concept relating above mentioned topic .

[@muhammadhussam2718]

Salam Sir kindly can u also upload videos with relevent kaplan/BPP kit Queations and answers. it will be more clear to us then pls..

[@AVCLearning]

+hussam qazi what topics are you looking for

[@muhammadhussam2718]

AVC Learning . Hedging. IFRS 9 impairment of finamcial assets.share based payment . only bpp kit questions and answers.

[@AVCLearning]

+hussam qazi I will try to arrange for the material access

[@muhammadhussam2718]

AVC Learning . thanks sir.. Because as a student. i will consider it more easy , reliable and understandable, for me if relevent proper solved questions are there with relevent standard.

[@ashishjain3318]

Very nicely explained.. Thank u.. U need to improve the camera quality

[@AVCLearning]

Hi Ashish.. many thanks. Yes, this is now taken care of