The historic “Asset Settlement” reached a comprehensive agreement that included transferring land rights, settling historical liabilities, including perpetual bonds issued back in the Mandatory period – one of the more complex settlements in the country’s economic history…
Our firm had the privilege of advising the company and its finance team, assisting in the formulation and translation of a complex economic factual framework into a well-reasoned accounting model. We prepared the accounting opinion for the accounting treatment required for all aspects of the asset settlement. This opinion was subsequently attached to the Pre-Ruling application submitted by IEC to the Israel Securities Authority.
The guiding principle was that the set of agreements with the State and the Israel Land Authority should be viewed as a single ‘interlinked transaction.’ More importantly, it was determined that certain aspects of these actions were conducted by the State in its capacity as a sovereign entity rather than as a controlling shareholder. This in-depth analysis, which included examining complex IFRS standards (such as IFRS 9, IAS 20, and IFRIC 19), allowed the company to recognize an unprecedented gain of approximately NIS 2.6 billion in its financial statements and to derecognize the historical perpetual bonds.
We are proud to have been part of a process that required the highest professional standards. The key is simple: proper economic analysis serves as the accounting foundation for resolving complex economic issues and translating them into accounting practice. Whether working on major transactions or providing opinions on complex IFRS issues, we are committed to turning complex economic business reality into clear accounting transparency.
Link to article: https://www.calcalist.co.il/real-estate/article/bj4f8111zkl
