IFRS defines a financial instrument as a contract that gives rise to a financial asset of one entity, and a financial liability or equity instrument of another entity. Derivatives are financial instruments for which the value is derived based on some underlying factor (Interest rate, exchange rate, commodity price, security price or credit rating) and…
When one company acquires another, the purchase price is allocated to all of the identifiable assets (tangible and intangible) and liabilities acquired, based on fair value. If the purchase price is greater than the fair value of the identifiable assets and liabilities acquired, the excess amount is recognised as an asset, goodwill. The subject of…
Intangible assets are identifiable non-monetary assets without physical substance. An identifiable asset can be acquired on a standalone basis (i.e., can be separated from the entity) or arises from contractual or legal rights and privileges. Common examples include patents, licenses, trademarks, and customer lists. The most common intangible that is not separately identifiable is goodwill, which arises…