Factoring Receivables: Can They Be Removed from the Balance Sheet Under MPERS 2025?
A company may sell its trade receivables to a bank or factoring company and receive cash immediately. But does that automatically mean the receivables can be removed from the balance sheet? Not necessarily. Under MPERS 2025 Section 2, the accounting assessment must look beyond the wording of the agreement. The key questions are: This reflects […]
Preference Shares: Equity or Debt? The Answer Depends on the Terms
A preference share is legally a share, but its accounting classification may be different. Under financial reporting standards, the key question is not what the instrument is called. The key question is: Does the issuer have a contractual obligation to deliver cash or another financial asset? This is the principle of substance over legal form. […]
Accounting Principles: Keeping Financial Statements Credible
Accounting principles may appear complicated, but their purpose is straightforward: to ensure that financial information reflects reality rather than becoming “creative fiction”. Consider a few basic examples: Whether an entity applies MFRS or MPERS, the underlying logic remains clear: Recognise what should be recognised, disclose what matters and keep separate what should not be combined. […]