Related Standards concerning Non-Current Asset are:
IAS 16 Property, plant and equipment
IAS 20 Accounting for government grants and disclosure of government assistance
IAS 23 Borrowing costs
IAS 36 Impairment of assets
IAS 38 Intangible assets
IAS 40 Investment property
and
IFRS 5 Non-current assets held for sale and discontinued operations
Application of International Financial Reporting Standards (IFRS) in presentation of Financial Statements.
Tuesday, December 31, 2013
Tuesday, January 29, 2013
The elements of financial statements
The Framework
lays out these elements as follows:
A. Measurement of financial position in the statement
of financial position
-Asset
-Liabilities
-Equity
B. Measurement of performance in the income statement
-Income
-Expenses
Definition
Asset. A resource controlled by an entity as a result of past events and from
which future economic benefits are expected to flow to the entity.
Liability.
A present obligation of the entity arising from past events, the settlement of
which is expected to result in an outflow from the entity of resources
embodying economic benefits.
Equity.
The residual interest in the assets of the entity after deducting all its
liabilities. (Framework)
Income.
Increases in economic benefits during the accounting period in the form of
inflows or enhancements of assets or decreases of liabilities that result in
increases in equity, other than those relating to contributions from equity
participants.
Expenses.
Decreases in economic benefits during the accounting period in the form of
outflows or depletions of assets or incurrences of liabilities that result in
decreases in equity, other than those relating to distributions to equity
participants.
Saturday, January 26, 2013
IAS 1 (2007) Presentation of Financial Statements
Objective
To set out the
overall framework for presenting general purpose financial statements,
including guidelines for their structure and the minimum content.
Summery
• Fundamental
principles established for the preparation of financial statements, including going
concern assumption, consistency in presentation and classification, accrual
basis of accounting, and materiality.
• Assets and
liabilities, and income and expenses, are not offset unless offsetting is permitted
or required by another IFRS.
• Comparative
prior-period information is presented for amounts shown in the financial statements
and notes.
• Financial
statements are generally prepared annually. If the end of the reporting period changes,
and financial statements are presented for a period other than one year, additional
disclosures are required.
• A complete set of
financial statements comprises:
– a statement of
financial position;
– a statement of
profit or loss and other comprehensive income;
– a statement of
changes in equity;
– a statement of
cash flows;
– notes; and
– a statement of
financial position as at the beginning of the earliest comparative period.
• Entities may use
titles for the individual financial statements other than those used above.
• Specifies minimum
line items to be presented in the statement of financial position, statement of
profit or loss and other comprehensive income and statement of changes in
equity, and includes guidance for identifying additional line items. IAS 7
provides guidance on line items to be presented in the statement of cash flows.
• In the statement
of financial position, current/non-current distinction is used for assets and
liabilities unless presentation in order of liquidity provides reliable and
more relevant information.
• The statement of
profit or loss and other comprehensive income includes all items of income and
expense – (i.e. all ‘non-owner’ changes in equity) including (a) components of
profit or loss and (b) other comprehensive income (i.e. items of income and
expense that are not recognised in profit or loss as required or permitted by
other IFRSs). These items may be presented either:
– in a single
statement of profit or loss and other comprehensive income (in which there is a
sub-total for profit or loss); or
– in a separate
statement of profit or loss (displaying components of profit or loss) and a
statement of profit or loss and other comprehensive income (beginning with profit
or loss and displaying components of other comprehensive income).
• Items of other
comprehensive income should be grouped based on whether or not they are potentially
reclassifiable to profit or loss at a later date.
• Analysis of
expenses recognised in profit or loss may be provided by nature or by function.
If presented by function, specific disclosures by nature are required in the
notes.
• The statement of
changes in equity includes the following information:
– total
comprehensive income for the period;
– the effects on
each component of equity of retrospective application or retrospective restatement
in accordance with IAS 8; and
– for each
component of equity, a reconciliation between the opening and closing balances,
separately disclosing each change.
• Specifies minimum
note disclosures which include information about
– accounting
policies followed;
– the judgements
that management has made in the process of applying the entity’s accounting
policies that have the most significant effect on the amounts recognized in the
financial statements;
–sources of
estimation uncertainty; and
–information about
management of capital and compliance with capital requirements.
• Implementation
guidance for IAS 1 includes illustrative financial statements other than the statement
of cash flows (see IAS 7).
Friday, January 18, 2013
IFRS 10 Consolidated Financial Statements
Objective
To introduce a single consolidation model for
all entities based on control, irrespective of the nature of the investee
(i.e., whether an entity is controlled through voting rights of investors or through
other contractual arrangements as is common in special purpose entities).
SIC-12 was, as a result, withdrawn.
Summary
• A subsidiary is an entity controlled by
another entity, the parent.
• Control is based on whether an investor has
1.
power over the investee;
2.
exposure, or rights, to variable returns from its involvement with the
investee; and
3.
the ability to use its power over the investee to affect the amount of the
returns.
• IFRS 10 includes guidance on the assessment
of control, including material on: protective rights; delegated power; de facto
control; and de facto agency arrangements.
• Consolidated financial statements are
financial statements of a group (parent and subsidiaries) presented as
those of a single economic entity.
• When a parent-subsidiary relationship
exists, consolidated financial statements are required (subject to certain
specified exceptions).
• Consolidated financial statements include
all subsidiaries. No exemption for ‘temporary control’, ‘different lines of business’
or ’subsidiary that operates under severe longterm funds transfer
restrictions’. However, if, on acquisition, a subsidiary meets the criteria to
be classified as held for sale under IFRS 5, it is accounted for under that
Standard.
• Intragroup balances, transactions, income
and expenses are eliminated in full.
• All entities in the group use the same
accounting policies and, if practicable, the same reporting date.
• Non-controlling interests (NCI) are
reported in equity in the statement of financial position separately from the
equity of the owners of the parent. Total comprehensive income is allocated
between NCI and the owners of the
parent even if this results in the NCI having
a deficit balance.
• Partial disposal of an investment in a
subsidiary while control is retained is accounted for as an equity transaction
with owners, and no gain or loss is recognised in profit or loss.
• Acquisition of a further ownership interest
in a subsidiary after obtaining control is accounted for as an equity transaction
and no gain, loss or adjustment to goodwill is recognised.
• Partial disposal of an investment in a
subsidiary that results in loss of control triggers remeasurement of the
residual holding to fair value. Any difference between fair value and carrying
amount is a gain or loss on the
disposal, recognised in profit or loss.
Thereafter, IAS 28, IAS 31 or IFRS 9/IAS 39 is applied, as appropriate, to the
residual holding.
Effective date
Annual periods beginning on or after 1
January 2013. Earlier application permitted – but only if IFRSs 11 & 12 and
IASs 27 & 28 (2011) are applied from the same date.
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