Turin, Italy

Integrated thinking and reporting in Italy in relation to the ESG world

By Paolo Motto, Three & Partners

Over the years organisations that benefit from the use of integrated reporting have had a key means of improving corporate communication. According to the International Integrated Reporting Council (IIRC), integrated reporting helps SMEs to better understand and communicate how they create value. This framework identifies six corporate capitals, including financial productive, intellectual, human, social and relational, as well as natural capital. When properly cultivated, these can add value over time.

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inventory

LIFO: back in style for US companies

By Jeffrey A. Ford, Grossman Yanak & Ford LLP

With the return of inflation at levels not seen for decades, the LIFO (last-in, first-out) method of inventory costing may be a valuable tax-saving opportunity. LIFO is not permitted by IFRS, but it is still acceptable in the US.

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London, UK

Classifying contingent payments in an acquisition: Contingent consideration or post-acquisition compensation?

By Hari Patel, Theta Global Advisors

Purchase accounting for acquisitions remains an area of complexity and judgement within IFRS, and the accounting implications on amounts paid or payable to sellers are commonly overlooked during commercial negotiations, particularly in relation to contingent payments. The critical step is to determine the correct classification of contingent payments between “contingent consideration” and “post-acquisition compensation” as this leads to different accounting and P&L outcomes.

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Pittsburgh, USA

Effects of reference rate reform on financial reporting

By Jeffrey A. Ford, Grossman Yanak & Ford LLP

Global market participants are transitioning from using or referencing the LIBOR and similar interbank offered rates to alternative reference rates. In response, in the United States, the FASB issued ASUs 2020-04 and 2021-01 to provide optional expedients and exceptions for affected contract modifications, hedge accounting, and held-to-maturity (HTM) debt securities. A high-level summary of the optional expedients follows.

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Tbilisi, Georgia

Georgia Passed a New Law Regulating the Accounting, Reporting, & Auditing of Enterprises

By Giorgi Kutchashvili, TMC LLC

Wondering how developing countries succeed? Then this article is for you. In 2014, Georgia signed an Association Agreement with the European Union, under which it undertook to gradually bring the accounting and auditing sector closer to EU norms and standards. As a result, in 2016, Georgia passed a new law according the enterprises accounting, reports preparation/ publication and auditing. The basic idea of the law is that the financial statements of enterprises should be transparent and public.

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digital transformation

Business Automation and Digital Transformation

By Alan Rajah, Lawrence Grant

In the world of finance and accounting, maintaining the status quo is no longer enough to remain competitive. Today's market requires companies to engage in continuous improvement so that they are always serving clients in faster and more accessible ways. As financial and accounting services look to attract, engage, and retain customers, there's only one solution for climbing the ranks. The digital automation movement is sweeping the field and pushing the limits of what is possible. Companies that embrace automation will find increased profits and productivity. Digital transformation moves manual, repetitive tasks off their employees' checklists and into the metaphorical hands of artificial intelligence.

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Kassel, Germany

The Accounting of Goodwill under German Commercial and Tax Law

By Andreas Gottmann, FACT GmbH

As in most other countries, both German commercial law and German tax law differentiate between goodwill acquired for a consideration and internally generated goodwill. Only goodwill acquired against payment may be capitalised. Under German commercial law, goodwill acquired for a consideration is recognised as an asset with a limited service life and regularly amortised over five years. Longer periods are also conceivable, provided that this is economically credible. If a longer service life is assumed, this must be justified in the notes to the financial statements as part of the annual financial statements. Extraordinary depreciation must be carried out if there is a permanent reduction in value.

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Hamburg, Germany

Accounting Treatment of SaaS at the Level of Both Contractual Parties

By Imke Reich, nbs partners

“I can’t think of anything that isn’t cloud computing (…).” Larry Ellison, Chairman, Oracle

Software as a Service (SaaS), the largest market segment of cloud computing, is typically characterised as a service, where the provider grants the user the right to continuously access a software in a cloud infrastructure managed and controlled by the provider for a certain period. Accounting for SaaS arrangements at the level of the user is not clearly specified under IFRS.

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