MAKE IT REAL: IFRS ACCOUNTING AND FINANCE FOR REAL ESTATE - Softcover

Uso, Mr Etim O; Ejekukor, Ms Gloria O

Softcover

ISBN 13: 9798884837218

Publisher: Independently published, 2020

Synopsis

The Real Estate industry has remained one of the most vibrant all over the world and it will remain so for as long as human beings keep multiplying on earth. Despite a few occasional hiccups, this industry has a way of adjusting itself and bouncing back with renewed vigour. However, despite its vibrancy, we have observed that one area that does not seem to experience this vibrancy is accounting. This is based on our field experience implementing software solutions for Real Estate over the past ten years.

Real Estate accounting demands holistic compliance with all the relevant provisions of the International Financial Reporting Standards (IFRS). The core Standards applicable to Real Estate include IAS 40 (Investment Property), IAS 16 (Property, Plant, and Equipment), IAS 2 (Inventory), IFRS 16 (Leases—formerly IAS 17), IFRS 15 (Revenue from Contracts with Customers—which merges what was formerly Revenue (IAS 18) with The Construction Contract (IAS 11) and all the previous Interpretations (IFRICs) on Revenue.

Some of the parameters that determine the appropriate Standards and policies to apply in any given situation are:

• Ownership of the property, and whether it is an investment property or owner-occupied.
• Whether the property is meant for sale or lease.
• Whether the property is meant for Operating or Finance Lease.

Apart from accounting for Investment Properties meant for sale or lease, Real Estate entities that are also engaged in the construction of Real Estate projects must comply with IFRS 15 in accounting for these projects—from Work-in-Progress to completion.

Real Estate accounting is so onerous that only a handful of companies can meet the disclosure requirements of the IFRS. This book is an effort to collate all the Standards and Interpretations that apply to real estate entities in one volume and present them in a coherent way that aligns with the operational workflow of real estate transactions.

The book is a response to our observations while implementing custom information management solutions for real estate companies over the past ten years. We have noticed the absence of a comprehensive guide or manual that provides holistic treatment for real estate accounting and bookkeeping. This book is meant to fill that gap. We have not invented any new rule or method. All we have done is to provide a clear, simple, and practical guide on how to account for real estate transactions in accordance with the provisions of the International Financial Reporting Standards (IFRS).

This book is not about the administrative and legal issues involved in Real Estate accounting and finance. Our goal is to provide computational guidance that can lead to the design and implementation of effective and reliable financial information management systems for the Real Estate sector.

The last chapter of this book focuses on financial calculations relevant to Real Estate—something many people find intimidating. We have simplified these calculations by providing detailed explanations and solved examples to aid practical understanding for both professionals and non-professionals. The list of calculations included in this book are as follows: Future Value (FV), Sinking Fund Factor (SFF) and Sinking Fund Schedule, Present Value (PV), Annuity, Discounted Cash Flow (DCF), and Internal Rate of Returns (IRR).

We hope this book will add tremendous value to your skill and expertise as a player in the Real Estate sector.

Edition details

• Publisher: Independently published
• Publication date: 2020
• Language: English
• ISBN 13: 9798884837218
• Binding: Paperback
• Number of pages: 67