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Accounting . Auditing . Sustainability
An AI Chatbot for Financial Reporting
Meet GAAPie
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Hello, I'm GAAPie - Your personal Financial Reporting assistant. I'm here to assist you with complex International GAAP relating questions, provide explanations for the correct accounting treatment, and help you understand the disclosure requirements.
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Features
Accounting Advice
GAAPie is your personal financial reporting assistant. It offers immediate and expert accounting advice at a fraction of the cost of external consultants.
Complex Transactions
GAAPie can explain the accounting procedures for complex transactions, including business combinations, group entity mergers, sale and leaseback arrangements, and more.
Disclosure Notes
GAAPie assists you in comprehending disclosure requirements and ensures that you provide accurate disclosures in your financial statements.
Like ChatGPT, But Better
GAAPie delivers more precise and accurate responses to International GAAP inquiries compared to ChatGPT. While GAAPie offers direct and user-specific answers, ChatGPT tends to produce more general, textbook-style responses. Also, GAAPie doesn't 'depreciates' land—pun intended.
You Decide!
We asked the same questions to both GAAPie and ChatGPT (GPT-4 model). One of these was generated by GAAPie, while the other was generated by ChatGPT.
Vote on the one you think is correct and check if it was written by GAAPie or ChatGPT.
1. Can Investment in funds be classified as FVOCI?
Yes, investments in funds (like mutual funds, equity funds, etc.) can be classified as FVOCI (Fair Value Through Other Comprehensive Income) under certain circumstances, according to the International Financial Reporting Standards (IFRS) 9, which deals with the classification and measurement of financial instruments.
Under IFRS 9, financial assets are classified based on two criteria:
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The entity's business model for managing the financial assets. This determines whether the cash flows will be collected through:
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Holding assets to collect contractual cash flows.
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Holding assets to both collect contractual cash flows and sell.
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The contractual cash flow characteristics of the financial asset. This checks if the cash flows represent solely payments of principal and interest (SPPI) on the principal amount outstanding.
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No, investments in funds cannot be classified as Fair Value Through Other Comprehensive Income (FVOCI). This is because such investments meet the definition of puttable instruments in accordance with IAS 32. These instruments do not meet the definition of an equity instrument, and thus are not eligible for the FVOCI option for equity instruments. They are required to be measured at Fair Value Through Profit or Loss (FVTPL) in accordance with IFRS 9, because the units give rise to cash flows that are not solely payments of principal and interest.
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2. Does change in accounting policy from cost to revaluation model of PPE done retrospectively?
No, a change in accounting policy from the cost model to the revaluation model for Property, Plant, and Equipment (PPE) is not applied retrospectively. This change is treated as a revaluation in the period from the date the decision is made and the revaluation is determined. Therefore, the revalued amount of the assets is applicable only from the date of the revaluation, and the depreciation expense prior to the date of the revaluation must remain on the old, historic cost basis.
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3. How to account for a waive-off of a loan by a subsidiary to the Parent company?
When a subsidiary waives off (or forgives) a loan to its parent company, this has implications for both the parent and the subsidiary from an accounting and potentially tax perspective.
Here's a step-by-step approach to account for the waive-off:
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Loan Write-off: The subsidiary will need to write off the loan receivable from its books.
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Debit: Loss on Loan Waive-off (Profit and Loss Statement)
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Credit: Loan to Parent Company (Balance Sheet)
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This write-off will result in a loss for the subsidiary, which will reduce its profit for the period or increase its loss.
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From a tax perspective, depending on jurisdiction, the subsidiary may be able to treat this write-off as a deductible expense. It's essential to consult a tax professional to ensure compliance with local tax laws.
When a subsidiary waives off a loan made to its parent company, the initial difference between the loan amount and fair value is generally recorded as a distribution by the subsidiary. If the distribution comes from post-acquisition accumulated profits of the subsidiary, the parent records it as income. However, if the distribution is made out of pre-acquisition profits, the amount is recorded as a reduction of the cost of investment by the parent, assuming the parent applies the cost method of accounting for that investment.
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Example GAAPie Reponses
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GAAPie is powered by OpenAI technologies. As such, if OpenAI experiences any disruptions or changes in their business, GAAPie's services may be affected. We are not able to issue refunds after a purchase due to the costs associated with the OpenAI API. Kindly take note that if your usage exceeds 100 responses generated by GAAPie within a month, we may have to limit your access. Please understand that GAAPie aims to generate precise and complete information, but there could be times when the responses generated might be incomplete, inaccurate, or conflicting. There may also be instances when GAAPie doesn't have the answer to certain queries. While we strive to improve, not all responses generated by GAAPie surpass those of ChatGPT. Also, it's important to mention that GAAPie doesn't currently offer chat history support. The primary purpose of GAAPie is to provide useful and educational content.
GAAPie Green
GAAPie for Sustainability (Beta)
GAAPie Green is a climate and sustainability chatbot built to empower you with information and guidance on environmental, climate, and sustainability matters. It can answer your questions related to sustainability and provides guidance on disclosures.
Your assistant to a greener and more sustainable future
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