Latest blogs
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Capitalized Interest: Turning Borrowing Costs Into an Asset
When a company borrows money to finance the construction of a long-term asset, the interest incurred during the construction period is not immediately expensed — it is added to the cost of the asset being built. This process is called capitalisation of borrowing costs. Under IAS 23 (Borrowing Costs), capitalisation is mandatory for qualifying assets,…
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Entity Structures and Reporting Lines: How They Shape Consolidated Results
The consolidation method applied to each entity — whether it’s fully consolidated, equity accounted, or excluded from the group entirely — is determined by the group’s ownership structure. That structure is the first input into every consolidation: before any trial balance is imported, any elimination is posted, or any exchange rate is applied, the system…
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Understanding Amortization of Intangible Assets
Amortization is the systematic allocation of an intangible asset’s cost over its useful life — the period during which the asset is expected to generate economic benefits. It works on the same matching principle as depreciation: the cost of an asset should be recognised as an expense in the periods that benefit from it, not…
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Unmasking Unrealized Profit: The Key to True Group Performance
When one entity in a group sells goods or services to another at a profit, and those goods or services haven’t yet been sold or consumed outside the group, the profit is unrealized from the consolidated perspective. The selling entity has booked a real profit in its own accounts. The group has not — because…
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Foreign Exchange Impact Explained: Turning FX Volatility into Transparent Reporting
The technical accounting for foreign exchange in consolidation — IAS 21, closing vs average rates, CTA in OCI — is well-established. The harder problem is communication: how do you present FX impact to a board, a management team, or an investor in a way that actually helps them understand what the business did, versus what…