Finance & Acccounting

  IAS 18 , issued by the International Accounting Standards Board (IASB), was the key standard for revenue recognition before it was replaced by IFRS 15 – Revenue from Contracts with Customers . However, understanding IAS 18 remains important, especially for those studying accounting or analyzing historical financial statements. What Is IAS 18? IAS 18 – Revenue provided guidance on when and how revenue should be recognized in the financial statements. It applied to all types of revenue from ordinary activities, such as: Sale of goods Rendering of services Interest, royalties, and dividends Key Principles of IAS 18 IAS 18 focused on recognizing revenue when it is probable that economic benefits will flow to the entity and the amount can be reliably measured . Here's how it applied to different activities: Sale of Goods Revenue is recognized when: Significant risks and rewards of ownership are transferred The seller retains neither continuing managerial in...

 Before IFRS took center stage in global accounting, the International Accounting Standards (IAS) laid the foundation. One of those early standards was IAS 22 – Business Combinations . But here's the catch: IAS 22 was withdrawn in 2004 and replaced by IFRS 3 – Business Combinations . Still, understanding IAS 22 is important from a historical perspective — especially for those studying the evolution of international accounting standards or reviewing older financial statements. 🧾 What Was IAS 22 All About? IAS 22 dealt with business combinations — in simple terms, when one company takes over or merges with another. The standard focused on: Identifying the acquirer in a merger Valuing assets and liabilities acquired in the combination Handling goodwill or negative goodwill Providing disclosure requirements 💡 Key Concepts in IAS 22 Acquisition Method IAS 22 required the use of the purchase method (as opposed to the pooling of interests method), where one...

 Before IFRS 3 took its place, IAS 22 – Business Combinations was the international standard that governed how companies reported mergers and acquisitions. It played a crucial role in ensuring transparency and consistency in financial reporting when businesses joined forces. What Was IAS 22 About? IAS 22 defined how to account for a business combination , such as a merger or acquisition. The core focus was to: Determine whether goodwill (the excess paid over the fair value of net assets) should be recognized. Provide rules for the amortization of goodwill (usually over a maximum of 20 years). Identify the acquirer in a transaction. Recognize and measure the assets and liabilities of the acquired entity. Why Was IAS 22 Replaced? Over time, the limitations of IAS 22 became apparent: Its amortization approach to goodwill did not reflect real economic value. There was a need for more clarity in complex combinations like reverse acquisitions or step acquisi...