Dear Reader,

before diving into the technical topics, I would like to share a short personal story. Ten years ago, I was a member of an amateur rowing club. We had regular rowing sessions once a week, plus additional sessions at the weekend, in all kinds of weather. The club had members of all ages: good sportspeople who were serious about rowing technique — we were in Germany, after all.

After two years of membership, I decided to move to Switzerland, which meant leaving “my” rowing club as well.

On my last rowing session, on a freezing cold Saturday in December, I was assigned to a boat steered by a man named Peter, nicknamed Muk — an older gentleman who translated expert articles and product manuals from English into German.

At the start of the trip, he announced, “We are rowing as far as the ‘Auf Wiedersehen’ (“See You Again”) pole on the river.” And so we did. Despite the cold, grey weather, it was a wonderful row through a peaceful winter landscape. After the training, I said farewell to everyone, without thinking much about that unusual destination. Years had to pass before I understood the lesson. Muk, a master of languages, did not use words. He was saying: live well, and come back if you like — in the language of water.

I never had the opportunity to return to that club and row there again. But I hope that one day, perhaps, I will visit the “See You Again” marker on the river.

Speaking of revisiting, the IFRS Interpretations Committee (IFRIC) has taken another look at the categorization of foreign exchange differences arising on an intragroup monetary item, such as a loan, for the purposes of IFRS 18 Presentation and Disclosure in Financial Statements.

The topic was first introduced to the IFRIC agenda in September 2025. At present, most companies include the foreign exchange differences on intragroup monetary items in the financing category of profit and loss.

Here is a short summary based on the IFRIC podcast as of April 2, 2026:

The IFRIC concludes there are two reasonable readings of paragraph B65 of IFRS 18 for this fact pattern:

View 1 - categorize all FX differences by default in the operating category of profit and loss, applying paragraph 52 of IFRS 18.

View 2 - categorize the FX differences item by item in the category in which the income and expenses from the intragroup loan would have been classified before their elimination on consolidation. If this approach requires too much effort or cost, an entity is permitted to use the default operating category.

IFRIC did not reach a unanimous decision supporting either of the two views. Rather, it recommends that entities develop their own accounting policies by selecting either View 1 or View 2 and applying them consistently.

The controversy surrounding this topic leads me to believe that entities should implement an accounting policy by wearing economic rather than academic lenses.

Factors to consider:

• Materiality of FX differences arising on intragroup items

• Costs of internal reporting of such FX differences

• Impact on operating result if choosing View 1. Does it fit the entity’s business model?

Another topic on the IFRIC agenda in March was the presentation in the statement of profit or loss of taxes or other charges that are not tax expense or tax income under IAS 12 Income Taxes.

Currently, non-income taxes are also presented in the same category as, or close to, the income tax category in the statement of profit and loss.

Examples of taxes that are not income taxes in accordance with IAS 12 are:

• Capital gains taxes

• Carbon taxes

• Excise duties on products

• Governmental levies

• Production-based royalty payments (IFRIC Agenda Decision 2012)

• Tonnage taxes (IFRIC Agenda Decision 2009)

The Committee confirmed that only income taxes under IAS 12, and related foreign exchange differences are permitted to be presented as income tax line items as specified by paragraph 75(a)(iv) of IFRS 18 or in the income tax category of profit and loss.

In this regard, an interesting topic — the presentation of Zakat, an Islamic assessment considered a type of income tax in the Kingdom of Saudi Arabia — was brought to the attention of IFRIC and consequently the IASB.

As a result, and before finalizing this Agenda Decision, further analysis including stakeholders feedback must be conducted to conclude whether taxes similar in nature to income tax will be permitted in the same category.

A short reminder to preparers: entities will be required to implement the final IFRIC Agenda Decisions when preparing their financial statements in accordance with IFRS 18.

Understand the Infinite vs. Indefinite Useful Life of Intangible Assets

Last week I came across one of the best explainers concerning the difference between infinite and indefinite in the context of the useful lives of intangible assets (IAS 38): https://shorturl.at/ychlt

I believe the distinction between infinite and indefinite can be particularly challenging for non-native English speakers. The word infinite combines the prefix in-, meaning not, opposite of with finitus, meaning defining, definite derived from finis, end. Thus, infinite means never-ending.

Compare this to indefinite, which comes from the Latin indefinitus, combining the prefix in-, meaning not, opposite of, with definitus, meaning defined, set within limits. It therefore refers to something without a fixed limit, boundary, or clear definition.

To illustrate the concept with a real-world example, I use the example of Compaq Computer Corporation, established in February 1982 in Houston, Texas. Compaq was acquired by Hewlett-Packard in 2002 for $24 billion. At acquisition, HP recorded an intangible asset - the Compaq trade name - was valued at $1.4 billion. The trade name “Compaq” was assigned an indefinite useful life based on this rationale: Indefinite useful life is based on many factors and considerations, including the length of time that the Compaq name has been in use, the Compaq brand awareness and market position, and the plans for continued use of the Compaq brand within HP’s overall product portfolio. Ten years later, in 2012, HP decided to revise its assumption as to the useful life from an indefinite-lived intangible asset to a finite-lived one with a remaining useful life of approximately five years. HP also recorded an impairment charge of $1.4 billion on the Compaq trade name.

HP never thought of the Compaq trade name as having a never-ending — infinite — useful life. Considering the economic and market reality at that time, and past experience with the solid, well-positioned brand, management made a forward-looking judgment not to assign the trade name a boundary or a fixed limit.

Does it help you to understand the difference between almost identical written and sounding words? Drop me a short answer.

Have a great accounting week.

What is the one place you wish to be able to visit again?

Best,

Barbora