IFRS Section - Doing Business

You will find here a series of summaries providing an overview of useful IFRS regulations, processes and IFRS issues for Doing Business in Thailand.

Application of the ‘highly probable’ criterion

IFRS 9 (and IAS 39) permit forecast transactions to be designated as hedged items on condition that they are deemed to be ‘highly probable’.

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Physical settlement of contracts

Contracts to buy or sell non-financial items (such as commodities) are accounted for as IFRS 9 derivatives except when they are entered into and continue to be held for the purpose of the receipt, delivery or usage by the entity of a non-financial item (the ‘own-use scope exception’ defined in IFRS 9.2.4).

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Decision on accounting for SaaS purchases

The IFRS IC has published an agenda decision on how a customer accounts for its right to access software hosted on the cloud (Software as a Service or SaaS). The request submitted to the IFRS IC specified that the software runs on cloud infrastructure managed and controlled by the supplier, the customer accesses the software as needed (over the internet or via a dedicated line), and the contract does not convey to the customer any right to the infrastructure (i.e. the tangible assets).

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Real estate development and borrowing costs (IAS 23)

The IFRS IC has published an agenda decision on the capitalisation of borrowing costs relating to the construction of a residential multi-unit real estate development, sold as individual units.

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Presenting cured credit-impaired financial assets

IFRS 9 specifies that interest revenue from credit-impaired financial assets (i.e. those at Stage 3 of the impairment model) shall be calculated on the basis of the gross carrying amount after impairment. In practice, this means that the interest revenue recognised is less than the contractual revenue, but this is not recognised as impairment. Instead, this results in reduced interest revenue.

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