Shipping & Maritime Knowledge Center
Explore our verified library of Shipping & Maritime transactions. Every entry is reviewed for IFRS compliance and real-world accuracy by our technical accounting team.
Voyage Charter — Freight Revenue Recognized Over the Voyage Duration
Recognizing freight revenue on a voyage charter contract — where the shipowner carries a specific cargo from load port to discharge port for a fixed freight rate, with revenue recognized ratably from load completion to discharge.
Time Charter — Hire Revenue Recognized Ratably Over the Charter Period
Recognizing time charter hire revenue — where the shipowner leases the vessel to a charterer for a fixed daily rate over a defined period, with revenue recognized daily as the vessel is made available.
Bareboat Charter — Lessee Accounting (ASC 842 / IFRS 16 Finance Lease)
Recording a bareboat charter from the lessee's perspective — the charterer operates a vessel with full control, recognizing a right-of-use asset and lease liability under the new lease standards.
Demurrage — Revenue from Charterer's Delay in Loading/Discharging (Beyond Allowed Laytime)
Accruing demurrage income when a charterer uses more time loading or discharging cargo than the charter party allows — a critical and frequently disputed revenue source unique to maritime shipping.
Dispatch — Income for Early Completion of Loading/Discharging (Laytime Saved)
Recording dispatch money earned when a vessel completes loading or discharging faster than the allowed laytime — typically paid at half the demurrage rate for time saved.
Contract of Affreightment (CoA) — Volume Commitment Revenue Over Multiple Voyages
Recognizing revenue under a Contract of Affreightment — a long-term volume commitment where the charterer agrees to ship a minimum quantity of cargo over a defined period at agreed freight rates.
Dead Freight — Revenue When Charterer Fails to Load the Contracted Cargo Quantity
Recognizing dead freight income when a charterer loads less cargo than the minimum quantity committed in the charter party — compensation for the unused vessel capacity.
Shipping Pool — Revenue Sharing Among Pool Members (Weighted Pool Points)
Recording revenue participation in a vessel pool arrangement — where multiple shipowners contribute vessels to a centrally managed pool that distributes net pool revenue based on vessel-specific pool points.
Vessel Acquisition — Recording a Second-Hand Vessel Purchase at Cost
Recording the purchase of a second-hand vessel — recognizing the asset at total acquisition cost including purchase price, inspection costs, delivery voyage expenses, and initial class survey.
Drydock — Capitalization of Scheduled Maintenance Under Component Approach
Capitalizing drydock costs as a vessel component — replacing the previously depreciated drydock component with the new drydock expenditure, which is then depreciated over the next drydock cycle.
Vessel Depreciation — Straight-Line to Scrap Value Over Useful Life
Computing annual depreciation on a vessel — using straight-line method from cost minus scrap value over the vessel's estimated useful life, with separate treatment of each vessel component.
Vessel Impairment Test — Value-in-Use vs. Fair Value Less Costs to Sell
Testing vessels for impairment when freight market downturns or other indicators suggest the carrying value may exceed the recoverable amount — recognizing impairment when the higher of VIU and FVLCS falls below NBV.
Vessel Scrapping / Disposal — Gain or Loss on Sale to Recycling Yard
Recording the disposal of a vessel to a ship recycling yard — derecognizing the carrying value, recognizing scrapping proceeds, and computing the gain or loss on disposal.
Newbuilding Vessel — Stage Payments to Shipyard (Vessel Under Construction)
Recording progress payments made to a shipyard for a vessel under construction — classified as a vessel under construction (capital asset in progress) until delivery.
Sale and Leaseback of Vessel — Gain Recognition and Right-of-Use Asset
Recording a sale-and-leaseback transaction where a shipowner sells a vessel to a Chinese or Japanese lessor and immediately bareboat charters it back — testing whether the transfer qualifies as a sale under IFRS 16 / ASC 842.
Bunker Fuel Inventory — FIFO Valuation and Fuel Consumption in Voyage Costs
Recording the purchase and consumption of bunker fuel — the largest variable cost in shipping, tracked at vessel level using FIFO or weighted average, and expensed as a voyage cost.
Bunker Fuel Hedge — Cash Flow Hedge Accounting (Forward Bunker Swap)
Applying IFRS 9 / ASC 815 cash flow hedge accounting to a forward bunker swap — deferring the effective portion of fair value changes in OCI until the hedged bunker purchase occurs.
IMO 2020 Scrubber Installation — CAPEX and Payback Analysis
Capitalizing the cost of an Exhaust Gas Cleaning System (EGCS/scrubber) installation — enabling the vessel to burn cheaper high-sulfur fuel oil in compliance with IMO 2020 sulfur regulations.
EU Emissions Trading System — Shipping Carbon Allowances (ETS Compliance 2024)
Recording the obligation to surrender EU Emission Trading System (EU ETS) allowances for CO2 emissions from voyages in European waters — purchasing allowances and recognizing the compliance cost.
P&I Club Insurance — Protection and Indemnity Premium and Call Accounting
Recording Protection and Indemnity (P&I) club insurance premiums — the mutual insurance system covering third-party liabilities unique to maritime operations — including advance calls and supplementary calls.
General Average — Maritime Law Loss Sharing Between Shipowner and Cargo Interests
Recording a General Average event — an extraordinary sacrifice or expenditure made for the common safety of ship and cargo, where losses are shared proportionally among all parties with an interest in the voyage.
Daily Vessel Operating Expenses — Crew, Maintenance, Insurance, Management Fees
Recording the daily operating expenses of a vessel — crew wages, P&I and H&M insurance, maintenance, lubricating oil, stores, spares, and ship management fees — the fixed cost base of owning a vessel.
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