CHAPTER ONE

IFRS disclosure

IN THE FIRST PART OF THE BOOK we focused on providing an overview of the administrative set-up of the IFRS Foundation (IFRSF), an organisation that is responsible for creating IFRS, the complete set of standards, and also touched on XBRL linkage to those standards.

Besides measurement, recognition and de-recognition, as related to the IFRS, it must be stated that disclosures are a very important part of IFRS. These disclosures can be presented in the body of financial statements, or can appear in the footnotes associated with such reports.

As might well be apparent, there is a vast amount of data in disclosures. Furthermore, it is worth noting that the type, and volume, of disclosures varies significantly between the standards. However, nearly all standards have a section on disclosure. Some standards, such as IAS 1 Presentation of Financial Statements, as the name of that standard suggests, provide guidance on presentation of financial reports. Similarly, and as stands to reason, IAS 24 Related Party Disclosure makes it mandatory to disclose specific information on related parties.

Nevertheless, it is particularly interesting, as well as very important, to understand that there is no pattern on how much disclosure is required. Essentially, everything in relation to the application of disclosures, and the extent of any connected information provided thereby, depends on the particular standard. Historically, as a related matter of interest, when the various standards were developed, the analysts on the IASB always pushed for more disclosure in order to feed their particular valuation models.

The outcome, therefore, in terms of the application of standards and the use that is made of associated disclosures, has led to considerable concern as to the usefulness of that added information, which is compounded by the need to address the specific requirements associated with particular industries and events. More so, a prevalent view is that too much information can overwhelm the users of assorted financial reports. As a direct result, these users are likely to have a lower level of appreciation, and understanding, of what is provided by the disclosures. This does seem counterintuitive. But, in an increasingly complex environment, users of business reports might not have the necessary finesse to appreciate, fully, the purpose or content of all disclosures. In addition, there is the risk that so-called ‘information overload' prompts people to skip the additional detail that is available in disclosures and focus, thereby, only on what is presented in the main body of financial statements. In either case, potentially critical information is missed. Poor decision making can be the related outcome.

Due to the aforementioned information overload, as well as a flood of non-financial information of debatable value, there is every reason why poor decision making is a strong possibility. It is hardly surprising, therefore, that concerned members of the accounting profession, as well as allied academics and observers, have commented upon this area of apprehension; and it is increasingly apparent that this should not be overlooked by people who draft and set IFRS, nor by those who utilise standards and disclosure in the preparation of financial reports. In effect, disclosures can be considered as the means of addressing financial and non-financial aspects that are identified in IFRS, and also standards and requirements that evolve entirely in the non-financial domain.

It is appropriate, at this point, to review the following publications that focus upon disclosures.

Researching financial disclosure, as per Disclosure overload and complexity: hidden in plain sight

See www.kpmg.com/us/en/issuesandinsights/articlespublications/pages/disclosure-overload-complexity.aspx and also www.financialexecutives.org/ferf/download/2011 Final/2011-029.pdf.

This publication is quite interesting and, although US-centric, the conclusion of that report still resonates well within the broader global business community. Particularly, the executive summary of that publication suggests that disclosure has increased significantly in terms of volume and complexity. This increase poses a dilemma, especially so for smaller investors who may make suboptimal investment decisions due to their inability to absorb the volume and complexity of disclosures and any related explanations. Further, footnotes are considered to be the most significant source or cause of complexity. According to the respondents of an associated survey, fair value, derivatives and hedging also complicate disclosures.

Cutting Clutter: Combating Clutter in Annual Reports

This publication was produced by the Financial Reporting Council, in April 2011, and is available at www.frc.org.uk/images/uploaded/documents/Cutting clutter report April 20113.pdf.

In relation to the title of that publication, and as an appropriate aside, investors have long called for less clutter in audit reports. But, at the same time, they want auditors to provide more clarity in their statements. Quite often, the audit report was described as a statement of compliance with accounting standards, with this making it difficult for investors to assess the quality of individual auditor performance, or to differentiate between audit firms.

Therefore, in 2004, the International Auditing and Assurance Standards Board (IAASB) began a comprehensive programme to enhance the clarity of its International Standards on Auditing (ISA). This programme involved the application of new drafting conventions to all ISA, either as part of a substantive revision, or through a limited redrafting, to reflect the new conventions and matters of clarity generally. On 27 February 2009, the Clarity Project reached its completion when the Public Interest Oversight Board approved the due process for the last several clarified ISA. Auditors worldwide now have access to newly updated and clarified ISA and a clarified International Standard on Quality Control (ISQC). For related details, see www.ifac.org/auditing-assurance/clarity-center/clarified-standards.

Getting to the Heart of the Issue: Can Financial Reporting Be Made Simpler and More Useful?

This publication was produced by Global Accounting Alliance, in 2008, and is available at www.globalaccountingalliance.com/GAA_heart_of_the_issue.pdf.

Complexity, Relevance and Clarity of Corporate Reporting

Produced by the Chartered Institute of Management Accountants, in 2009, this publication is available at www.cimaglobal.com/Documents/ImportedDocuments/cid_techrep_complexity_relevance_and_clarity_of_corporate_reporting_feb09.pdf .

1.1 SUMMARY OF DISCLOSURES

The summary in Table 1.1 provides an overview of the sections in each of the IFRS that relate specifically to disclosure.

TABLE 1.1 Summary of disclosures – by IFRS.

1.2 DISCLOSURE CHECKLISTS

As is very evident from the preceding commentary, and especially from the summary table, the matter of disclosures is complex and, potentially, is a confounding one. Therefore it is no surprise that major accounting service firms have issued checklists to manage information to do with disclosures. Effectively, disclosure checklists are a tool for auditors and were developed, originally, to make sure that auditors did not miss anything when conducting audits. In addition, such checklists are valuable when used as evidence, such as in potential law suits, to show that auditors have done the work.

Of course, the primary focus of accounting services firms, and their various checklists, is on financial reporting, rather than non-financial reporting. This is due to reasons of financial requirements being the predominant focus of audit work, as required by assorted laws and regulations. In addition, consider that the financial side of client work is where the money is. Industry sources, for example, indicate that fees from corporate audit work for a major corporation could be as much $50m for all financial aspects whereas, in comparison, the fees for non-financial audit work could be in the vicinity of only $100,000.

In relation to the aforementioned magnitude of audit fees, it is interesting to note that, for Deutsche Bank in 2010, Principal Accountant Fees and Services totalled €71m, the details of which are as follows:

• Audit Fees, totalled €53m, which are fees for professional services for the audit of annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years;
• Audit-Related Fees, were €9m, which are fees for assurance and related services that are reasonably related to the performance of the audit or review of financial statements and are not reported as Audit Fees;
• Tax-Related Fees, were €7m, which are fees for professional services rendered for tax compliance, tax consulting and tax planning;
• All Other Fees, €2m, which are fees for products and services other than Audit Fees, Audit-Related Fees and Tax-Related Fees.

(See annualreport.deutsche-bank.com/2010/ar/supplementaryinformation/corporategovernancereport/auditing.html.)

Of course, it cannot be forgotten that Big 4 revenue, worldwide, is now in excess of $100 billion. A large part of that immense amount is derived from auditing. This is very procedural. Although the assurance process for financials is very systematic, this is much less likely for non-financial business reporting. Usually, this is because related standards lack adequate sophistication, are rather general and, often, only offer guidelines. The overall result is that data are split – financial and non-financial – and there is no method of presentation for non-financial information. Frequently, this leads to the dissemination of unqualified nonsense.

With the help of tools, such as XBRL, accounting firms have developed compliance questionnaires, as well as presentation and disclosure checklists to help their clients in the adoption and reporting under IFRS. Many of these guidelines are available in languages other than English. Model financial statements, usually, are available for industry sector statements, such as for banks, manufacturing and investment trust groups.

What follows is a cursory overview of IFRS disclosure checklists made available by four global accounting firms. Specifically:

• KPMG
• Ernst & Young
• Deloitte
• PricewaterhouseCoopers.

These checklists are indicative as to what is available to assist accounting professionals, especially the preparers of financial reports. This section does not, therefore, constitute the sum of what is available overall in this regard, nor for each of the four firms presented here. Even so, each of these firms, and their related publications, offer a rich source of information related to the background and use of disclosures.

KPMG

The IFRS Disclosure checklist from KPMG is available at www.kpmg.com/global/en/issuesandinsights/articlespublications/ifrs-disclosure-checklists/pages/ifrs-disclosure-checklist-2011.aspx.

Also, KPMG publishes disclosure checklists for interim financial statements, as well as disclosure checklists for specific industries, such as automotive, and investment funds.

In relation to the IFRS Disclosure checklist, the contents of this document are reproduced by permission of KPMG, as follows:

• General presentation
  • Presentation of financial statements
  • Changes in equity
  • Statement of cash flows
  • Basis of accounting
  • Consolidation
  • Business combinations
  • Foreign currency translation and hyperinflationary economies
  • Prior period adjustments and other accounting changes
  • Events after the reporting period
• Specific statement of financial position items
  • Property, plant and equipment
  • Intangible assets and goodwill
  • Investment property
  • Investments in associates and interests in joint ventures
  • Financial instruments
  • Inventories
  • Biological assets
  • Impairment
  • Equity
  • Provisions
  • Income taxes
  • Contingent assets and liabilities
• Specific statement of comprehensive income items
  • Revenue
  • Government grants
  • Employee benefits
  • Share-based payments
  • Borrowing costs
• Special topics
  • Leases
  • Service concession arrangements
  • Operating segments
  • Earnings per share
  • Non-current assets held for sale or distribution to owners
  • Related party disclosures
  • Insurance contracts
  • Exploration for and evaluation of mineral resources
• First-time adoption of IFRS
• Voluntary early adoption of IFRS
  • Amendments to IFRS 7 Financial Instruments: Disclosures
  • IFRS 9 Financial Instruments (2010)
  • IFRS 9 Financial Instruments (2009)
  • IFRS 10 Consolidated Financial Statements
  • IFRS11 Joint Arrangements
  • IFRS12 Disclosure of Interests in Other Entities
  • IAS 27 Separate Financial Statements
  • IAS 28 Investments in Associates and Joint Ventures
  • IFRS13 Fair Value Measurement
  • Amendments to IFRS 1 First-Time Adoption of International Financial Reporting Standards
  • Amendments to IAS 1 Presentation of Financial Statements
  • IAS 19 Employee Benefits (2011)
• Appendix

Ernst & Young

The Ernst & Young disclosure checklist is entitled International GAAP Disclosure Checklist Based on International Financial Reporting Standards in issue at March 31 2012. This publication can be found at www.ey.com/Publication/vwLUAssets/Disclosure_checklist/$FILE/Disclosure_checklist.pdf. Note that the International GAAP Disclosure Checklist Based on International Financial Reporting Standards was authored by EYGM Limited, 2012, and is reprinted with permission.

Figure 1.1 Format of the KPMG checklist for reconciliations. Reproduced by permission of KPMG.

The contents of this document are as follows:

• General
• First-time adoption
• Financial review by management
• Statement of financial position
• Statement of comprehensive income
• Earnings per share
• Statement of cash flows
• Statement of changes in equity
• Notes to the financial statements
  • Accounting policies, key measurement assumptions and capital
  • Business combinations
  • Borrowing costs
  • Changes in accounting estimates
  • Consolidated financial statements
  • Correction of errors
  • Dividends
  • Employee benefits
  • Equity
  • Events after the reporting period
  • Financial guarantee contracts
  • Financial instruments
  • Foreign currency
  • Fourth quarter information
  • Goodwill
  • Government grants
  • Hyperinflation
  • Impairment of assets
  • Income taxes
  • Intangible assets
  • Interests in joint ventures
  • Inventories
  • Investment property
  • Investments in associates
  • Lease disclosures by lessees
  • Non-current assets held for sale and discontinued operations
  • Operating segments
  • Property, plant and equipment
  • Provisions, contingent liabilities and contingent assets
  • Related parties
  • Revenue
  • Share-based payments
• Agriculture
• Construction contracts
• Extractive industries
• Insurance contracts
• Lease disclosures by lessors
• Financial statements of retirement benefit plans
• Interim reporting
• New pronouncements
• Adoption of IFRS 9 Financial Instruments (issued in 2009)
• Adoption of IFRS 9 Financial Instruments (issued in 2010)
• Adoption of IFRS 10 Consolidated Financial Statements
• Adoption of IFRS 11 Joint Arrangements
• Adoption of IFRS 12 Disclosure of interests in other entities
• Adoption of IFRS 13 Fair Value Measurement
• Adoption of IAS 19 (Revised in 2011) Employee Benefits
• Appendix – Commentary

Figure 1.2 Format of the checklist.

Deloitte

The IFRS Compliance, Presentation and Disclosure Checklist is reproduced by permission of Deloitte. It is is presented as an interactive Excel file and is available at www.iasplus.com/fs/fs.htm#2011checklist. This can be accessed via www.iasplus.com/fs/fs.htm and, then, click on IFRS Compliance, Presentation and Disclosure Checklist for 2011. This leads to the screen shown in Figure 1.3).

Figure 1.3 Deloitte International Financial Reporting Standards Workbook.

The contents of this file are multifaceted, as seen in Figure 1.4.

Figure 1.4 Deloitte IFRS Checklist Worksheet index.

Particularly, in this instance, the IFRS are listed on the left-hand side of the worksheet, and hotlinks are evident in the two columns on the far right (as is shown in the following two figures). Also, note the tabs along the bottom of the screen.

Figure 1.5 Questions – Deloitte checklist.

Figures 1.5 and 1.6 provide an indication of the format of this Excel-based checklist.

Figure 1.6 Inventories – Deloitte checklist.

In turn, as shown in Figure 1.7, this feeds into an overall summary of the answers provided in response to the checklist.

Figure 1.7 First-time Adoption of IFRS – Deloitte checklist.

PricewaterhouseCoopers

The IFRS disclosure checklist from PricewaterhouseCoopers (PWC) is available from pwcinform.pwc.com/inform2/show?action=informContent&id=1147112611163808. Hardcopies can be ordered via www.ifrspublicationsonline.com

The contents of this document are reproduced with permission from PricewaterhouseCoopers LLP, as follows:

• Disclosures for consideration by all entities
  • General disclosures
    • General disclosures
    • Presentation and functional currency
    • Other disclosures
  • Accounting policies
    • General disclosures
    • Specific policies
    • Changes in accounting policy
  • Income statement and related notes
    • General disclosures
    • Individual items
    • Income tax
    • Extraordinary items
  • Statement of changes in shareholders' equity and related notes
    • Statement of changes in equity
    • General disclosures
  • Balance sheet and related notes
• General disclosures
  • Measurement uncertainty
  • Property, plant and equipment
  • Investment property
  • Intangible assets (excluding goodwill)
  • Impairment of assets
  • Associates
  • Joint ventures
  • Subsidiaries
  • Investments – financial assets
  • Inventory
  • Trade and other receivables
  • Income taxes
  • Trade and other payables
  • Provisions
  • Post-employment benefits – defined benefit plans
  • Lease liabilities
  • Borrowings and other liabilities
  • Government grants
  • Related-party transactions
  • Commitments
  • Contingencies
  • Events after the reporting period
• Statement of cash flows
  • General presentation
  • Individual items
  • Changes in ownership interests in subsidiaries and other businesses
• Business combinations
  • General disclosures
  • Adjustments
  • Measurement period
  • Contingent consideration
  • Contingent liabilities
  • Goodwill
  • Evaluation of the financial effects of gains and losses recognised in the current reporting period
  • Other disclosures impacted by IFRS 3 – income taxes
• Financial instruments
  • General disclosures
  • Categories of financial assets and financial liabilities
  • Financial assets or financial liabilities at fair value through profit or loss
  • Reclassification
  • Derecognition
  • Collateral
  • Allowance account for credit losses
  • Compound financial instruments with multiple embedded derivatives
  • Defaults and breaches
  • Items of income, expense, gains or losses
  • Other disclosures
  • Nature and extent of risks arising from financial instruments
  • Qualitative disclosures
  • Quantitative disclosures
  • Capital disclosures
  • Financial guarantees
• Distribution of non-cash assets to owners – IFRIC 17
  • Non-current assets held for sale and discontinued operations
• Disclosures required of all entities but only in certain situations
  • Correction of prior-period errors
  • Reporting in the currency of a hyperinflationary economy
  • Uncertainties about going concern
  • Departure from IFRS
  • Change of year-end
  • Intermediate parent company – consolidated financial statements not presented
  • Share-based payments
  • First-time adoption of IFRS
• Industry-specific disclosures
  • Construction contracts
  • Agriculture
  • Public service concession arrangements
  • Accounting by a lessor
  • Decommissioning, restoration and environmental rehabilitation funds
• Additional disclosures required of listed companies
  • Operating segments
  • Earnings per share
• Additional disclosures required of entities that issue insurance contracts
• Disclosures required for retirement benefit plans
• Suggested disclosures for financial review outside the financial statements
• Disclosures required of entities that early-adopt IFRS effective for annual periods beginning after 1 January 2011
  • Amendment to IFRS 7, ‘Disclosures – transfer of financial assets'
  • IFRS 9, ‘Financial instruments' 2010
  • IFRS 9, ‘Financial instruments' 2009
  • IFRS 10, ‘Consolidated financial statements'
  • IFRS 11, ‘Joint arrangements'
  • IFRS 12 ‘Disclosure of interest in other entities'
  • IAS 27, ‘Separate financial statements'
  • IAS 28, ‘Investment in associates and joint ventures'
  • IFRS 13, ‘Fair value measurement'
  • IFRS 1, ‘First-time adoption of International Financial Reporting Standards'
  • IAS 1, ‘Presentation of items of other comprehensive income' – amendment to IAS 1
  • IAS 19, ‘Employee benefits'

Figure 1.8 provides an indication as to the format of this checklist.

Figure 1.8 General disclosures – PWC.

PricewaterhouseCoopers also has an Automated Disclosure Checklist, at submit.pwc.com/extweb/abas/comperio/comperioorders.nsf (see Figure 1.9).

Figure 1.9 PwC automated disclosure checklist.

1.3 IFRS DISCLOSURE EXAMPLES

Information in business reports has grown dramatically in the last 20 years. Whereas the basic financial information of any entity has stayed the same, additional disclosures have added to the complexity of analysing financial information. It is, for that reason, no surprise that besides the disclosure checklists shown in the previous section, other literature, tools and examples were developed in the marketplace to foster a better understanding of disclosures. For instance, the American Institute of Certified Public Accountants (AICPA), for more than 60 years, has published a book entitled Accounting Trends & Techniques that presents selected excerpts from audited financial statements of US companies.

This important reference source is now available in the specialised form of IFRS Accounting Trends & Techniques, published in 2011. See Publications tab on www.aicpa.org or go to www.cpa2biz.com/AST/AICPA_CPA2BiZ_Nav/Top/Browse/Primary/Publications.jsp.

This publication presents actual examples of IFRS-based company reports from the audited annual reports of 170 international public companies across 43 industries and 38 countries to illustrate current reporting techniques and various presentation and disclosure practices. This is a significant publication that presents, among many other things, carefully selected reporting examples that show presentation and disclosure techniques. Such examples are provided by type (e.g. inventories, fixed asset, pensions, etc.) and by industry. It also includes comparisons of reporting requirements under IFRS and US GAAP, statistical tables tracking reporting trends and illustrative excerpts from annual reports. This invaluable reference book provides a close look at the reporting practices of numerous international companies that had prepared financial statements in conformity with IFRS as issued by the IASB.

The contents of this important publication, reproduced by permission of the American Institute of CPAs, are as follows:

• General Topics and Related Disclosures
  • Statistical Profile information on Survey Entities Used in This Edition
  • The Conceptual Framework for Financial Reporting
  • IAS 1, Presentation of Financial Statements
  • IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors
    • IFRS Overview and Comparison to US GAAP
    • Recognition and Measurement
    • Presentation
    • Disclosure
  • Presentation and Disclosure Excerpts
    • Comprehensive IAS 1 and IAS 8 Disclosures
    • General Information, Regulatory Environment
    • Basis of Presentation, Statement of Compliance, Going Concern Assessment
    • Offsetting – Deferred Tax assets and Liabilities
    • Offsetting – Pension Obligations
    • Change in Presentation
    • Reclassifications and Restatements
    • Capital Disclosures
    • Capital Disclosures – Regulatory Capital
    • Dividends Declared and Not Recognised as a Liability
    • Change in Accounting Estimate
    • Correction of an Error
  • IAS 27, Consolidated and Separate Financial Statements
  • SIC 12, Consolidation – Special Purpose Entities
    • IFRS Overview and Comparison to US GAAP
      • Recognition and Measurement
      • Disclosure
    • Presentation and Disclosure Excerpts
      • Change in Accounting Policy – Revaluation of Previously Held Interests
      • Restriction on Dividend Payments to Shareholders by Subsidiaries
      • Additional Parent Company Information Disclosed in a Note to the Consolidated Financial Statements
      • Parent's Separate Financial Statements Presented Side-by-Side With Related Parent Company's Consolidated Financial ­Statements
  • IAS 10, Events after the Reporting Period
    • IFRS Overview and Comparison to US GAAP
      • Recognition and Measurement
      • Presentation
      • Disclosure
    • Presentation and Disclosure Excerpts
      • Cash Dividend Declaration and Distribution
      • Binding Offer to Acquire Another Company and Extension of Credit Lines
      • Initial Public Offering and Private Placement
      • Tender Offer
      • Financial Statements Subject to Approval of Shareholders
      • Issue of Court Opinion in Litigation and Agreement to Acquire Credit Card Assets
      • Business Combinations
      • Property Sales and Capital Contribution by Swiss Federal Tax Authorities
      • Withdrawal of Tax Reduction by Hungarian Government
      • Early Repayment of Bonds and Declaration of Taxable Bonus Share Issue to Shareholders
      • Divestiture of Controlling Interest in Subsidiary, Announcement of Share Buy Back Programme, Received Binding Offer to Buy Talc Business
      • Announcement of Quarterly Dividend and Bond Issue
      • Increase in Shareholding in Associate, Sale and Leaseback and Sale of Building
  • IAS 21, The Effects of Changes in Foreign Exchange Rates
    • IFRS Overview and Comparison to US GAAP
      • Recognition and Measurement
      • Disclosure
    • Presentation and Disclosure Excerpts

Accounting Policy Disclosure

Change in Functional Currency

IAS 21 Disclosures With Convenience Translation

• IAS 20, Accounting for Government Grants and Disclosure of ­Government Assistance
  • IFRS Overview and Comparison to US GAAP

Recognition and Measurement

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Initial Recognition at Nominal Amount

Initial Recognition as Reduction of Carrying Value of Depreciable Assets

Initial Recognition at Fair Value, Change in Accounting Policy for Government Grants

Government Grant Contingencies

• IAS 24, Related Party Disclosures
  • IFRS Overview and Comparison to US GAAP

Recognition and Measurement

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Disaggregation by Category of Related Party

Management Compensation

• IFRIC 13, Customer Loyalty Programmes
  • IFRS Overview and Comparison to US GAAP

Recognition and Measurement

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Frequent Flyer Programme

• Statement of Financial Position and Related Disclosures
  • IAS 1, Presentation of Financial Statements
  • IAS 27 Consolidated and Separate Financial Statements
  • The Conceptual Framework for Financial Reporting
    • IFRS Overview and Comparison to US GAAP

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Classified Presentation – Decreasing Liquidity

Classified Presentation – Increasing Liquidity

Liquidity Order Presentation – Decreasing Liquidity

Liquidity Presentation – Increasing Liquidity

One Class of Share Capital

Multiple Classes of Common Share Capital

Capital Structure – Equalisation Agreement

Convertible Redeemable Preference Shares, Suppliers' Investment Shares, Members' Shares, New Ordinary Shares

Multiple Classes of Preference Shares ,Treasury Shares, Minority Interest

Ordinary and Deferred Shares

Current Assets – Prepaid Expenses

Current Assets – Advances and Progress Payments

Current and Non-Current Assets – Prepaid Expenses and Prepaid Lease Payments

Current Liabilities – Premiums and Discounts to Suppliers, Sales Commissions, Deferred Revenue and Advances From Customers

Current and Non-Current Liabilities – Deferred Income

Liabilities in Liquidity Order – Insurance Liabilities, Unallocated Divisible Surplus

• IAS 2, Inventories
  • IFRS Overview and Comparison to US GAAP

Recognition and Measurement

Presentation

Disclosure

• Presentation and Disclosure Excerpts

First-In, First-Out

Weighted Average Cost and Specific Identification

Fair Value Less Cost to Sell – Broker Trader Exemption from IAS 2

Specific Identification – Properties Under Development for Resale

• IAS 16, Property, Plant and Equipment
  • IFRS Overview and Comparison to US GAAP

Recognition and Measurement

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Cost Model – Buildings and Structures Production and Other Equipment

Revaluation Model – All Property, Plant and Equipment

Revaluation Model – Real Estate Properties and Ducts Infrastructure

• IAS 38, Intangible Assets
• IFRS 3, Business Combinations
  • IFRS Overview and Comparison to US GAAP

Recognition and Measurement

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Goodwill

Brand Names and Customer Lists

Software Development Costs (Internal and External) and Software

Acquired R&D, Trademarks, Technology, and Brand Name

Core Deposit Intangibles, Other Acquired Intangibles, and Computer Software

Development Costs

Domains, Brands, Water Rights, Easement Rights, IT Programs

• IAS 40, Investment Property
  • IFRS Overview and Comparison to US GAAP

Recognition and Measurement

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Investment Property Carried at Cost

Investment Property Carried at Fair Value

• IAS 28, Investments in Associates
  • IFRS Overview and Comparison to US GAAP

Recognition and Measurement

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Significant Influence – Less Than 50% Voting Power

Significant Influence – Between 20% and 50% Voting Power, Contingent Liabilities

• IAS 31, Interests in Joint Ventures
  • IFRS Overview and Comparison to US GAAP

Recognition and Measurement

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Jointly Controlled Entities – Proportionate Consolidation

Jointly Controlled Entities – Equity Method, Jointly Controlled Operations

Jointly Controlled Assets

• IAS 41, Agriculture
  • IFRS Overview and Comparison to US GAAP

Recognition and Measurement

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Current and Non-current Assets – Growing Crops, Sugarcane, Coffee, Growing Herd, and Cattle Held for Sale

Current Assets – Biological Assets, No Reliable Fair Value, Pledged a Guarantee

Non-Current Assets – Crops and Nurseries

Non-Current Assets – Timber

• IAS 17, Leases
  • IFRS Overview and Comparison to US GAAP

Recognition and Measurement

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Lessee – Operating and Finance Leases

Lessee and Lessor – Operating and Finance Leases, Lease Commitments

• IAS 37, Provisions, Contingent Liabilities and Contingent Assets
  • IFRSs Overview and Comparison to US GAAP

Recognition and Measurement

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Warranty, Restructuring, Product Infringement, Project Loss and Tax Provisions

Onerous Contracts, Store Closings, and Insurance Provisions

Environmental Rehabilitation and Decommissioning Provisions

Environmental and Litigation Provisions

Disclosure – Contingent Liability and Contingent Asset

Reimbursement Asset for Environmental Costs

• IAS 19, Employee Benefits
• IFRIC 14, IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and Their Interaction
  • IFRS Overview and Comparison to US GAAP

Recognition and Measurement

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Current Liabilities: Employee Entitlements

Defined Contribution Benefit Plans, Funded and Unfunded Defined Benefit Plans, Immediate Recognition of Actuarial Gains and Losses in Other Comprehensive Income, Recognition of Assets

Defined Contribution Plans, Defined Benefit Plans, Recognition of Actuarial Gains and Losses Using the Corridor Approach, Curtailment and Settlement of a Defined Benefit Plan

Senior Management Remuneration and Employment Termination Benefits

• IFRS 2, Share-Based Payment
  • IFRS Overview and Comparison to US GAAP

Recognition and Measurement

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Cash-Settled Share Appreciation Rights

Cash-Settled Phantom Shares

• IAS 12, Income Taxes
• SIC 21, Income Taxes – Recovery of Revalued Non-Depreciable Assets
  • IFRS Overview and Comparison to US GAAP

Recognition and Measurement

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Current and Non-current Tax Payables, Deferred Tax Liabilities and Tax Loss Carryforwards

Current Tax Receivables and Payables, Deferred Tax Assets and Liabilities

• Statement of Comprehensive Income and Related Disclosures
  • IAS 21, Presentation of Financial Statements
  • IAS 27, Consolidated and Separate Financial Statements
  • The Conceptual Framework for Financial Reporting
    • IFRS Overview and Comparison to US GAAP

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Single Statement – Statement of Comprehensive Income, Expenses by Nature

Two Statements – Income Statement and Statement of Other Comprehensive Income, Expenses by Function, Disaggregation of Expenses by Nature in Note Disclosure

Analysis of Expenses by Function, Disaggregation of Cost of Sales in Note Disclosure

• IAS 18, Revenue
• SIC 31, Revenue – Barter Transactions Involving Advertising Services
  • IFRS Overview and Comparison to US GAAP

Recognition and Measurement

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Revenue – Sales of Goods and Contracts to Provide Services

Revenue – Sales of Services and Barter Transactions

Revenue – Bill and Hold Transactions

Revenue – Software, Support, Subscription, Consulting Revenues and Multiple Element Arrangements

Revenue – Sale of Gold, Copper and Silver; Gold and Silver Bullion; and Interest Revenue

Revenue – Rental Revenue, Land and Home Sales

Royalty Income and Dividend Income

Interest Income, Fees and Commissions, Insurance Net Premium Income

Income – Emissions Rights

• IAS 11, Construction Contracts
• IFRIC 15, Agreements for the Construction of Real Estate
  • IFRS Overview and Comparison to US GAAP

Recognition and Measurement

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Construction Contracts

• IAS 2, Inventories
  • IFRS Overview and Comparison to US GAAP

Recognition and Measurement

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Analysis of Expenses by Function (Cost of Sales) – First-In, First-Out Cost Flow Assumption, Write-Downs and Reversal of Write-Downs of Inventory

Analysis of Expenses by Function (Cost of Sales) – Weighted Average Cost, Inventories Stated at Net Realisable Value

Analysis of Expenses by Function (Cost of Sales) – Multiple Cost Flow Assumptions, Provision for Inventory Obsolescence

Analysis of Expenses by Nature – Multiple Cost Flow Assumptions, Write-Down and Reversal of Write-Downs of Inventory

• Depreciation and amortisation
  • IFRS Overview and Comparison to US GAAP

Recognition and Measurement

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Property, Plant and Equipment – Cost Model, Straight Line Method

Property, Plant and Equipment – Cost Model, Declining Balance Method at Varying Rates

Property, Plant and Equipment – Cost Model, Straight Line Method, Capitalisation of Major Overhaul Expenditures

Property, Plant and Equipment – Revaluation Model Applied to Multiple Asset Classes

Intangible Assets

Depreciation and Depletion

• IAS 19, Employee Benefits
  • IFRS Overview and Comparison to US GAAP

Recognition and Measurement

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Short-Term Benefits

Postemployment Benefits – Actuarial Gains and Losses Recognised Immediately in Equity, Effect of the Asset Ceiling, Special Contributions

Postemployment Benefits – Change in Accounting Policy for Actuarial Gains and Losses, Termination Benefits

• Postemployment Benefits – Corridor Method, Retirement Healthcare and Life Insurance Benefits
• IFRS 2, Share-Based Payment
• IFRS Overview and Comparison to US GAAP

Recognition and Measurement

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Stock Option Plan – Cash Settled and Equity Settled

• IAS 23, Borrowing Costs
  • IFRS Overview and Comparison to US GAAP

Recognition and Measurement

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Finance Costs

Capitalised Borrowing Costs

• IAS 28, Investments in Associates
• IAS 31, Interests in Joint Venture
  • IFRS Overview and Comparison to US GAAP

Recognition and Measurement

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Share of Post-Tax Profit or Loss of Associates and Joint Ventures Included in Pre-Tax Operating Profit, Associates and Joint Ventures Designated at Fair Value Through Profit or Loss Impairment Losses

Share of Income From Associates Not Included in Operating Profit and Share of Other Comprehensive Income of Associates

• IAS 17, Leases
  • IFRS Overview and Comparison to US GAAP

Recognition and Measurement

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Lessee – Finance and Operating Leases, Lessor – Operating Leases

Lessor – Finance Leases

• IAS 36, Impairment of Assets
  • IFRS Overview and Comparison to US GAAP

Recognition and Measurement

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Impairment – Losses on Property, Plant and Equipment, Goodwill and Other Intangible Assets

Impairment – Reversal of Losses on Property, Plant and Equipment Held at Revalued Amount

Impairment – Investment in Associate

Impairment – Investment in Jointly Controlled Entities

Impairment – Assets Classified as Held for Sale

• Gains and Losses on Derecognition of Non-current Assets
  • IFRS Overview and Comparison to US GAAP

Recognition and Measurement

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Gain on Sale of Property, Plant and Equipment, Intangible Assets, and Assets Held for Sale

Gain (Loss) on Disposal of Hotels

Profit and Loss on Sales of Property, Plant and Equipment and Waste Products

• Change in Fair Value of Non-financial Assets
  • IFRS Overview and Comparison to US GAAP

Recognition and Measurement

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Changes in Fair Value of Biological assets Recognised in Profit and Loss, Change in Revalued Amount Recognised in Other Comprehensive Income – Property, Plant and Equipment

Changes in Fair Value Recognised in Profit and Loss – Investment Property and Timber, Change in Revalued Amount Recognised in Other Comprehensive Income – Property, Plant and Equipment, including Renewable Power Generation and Utilities, Transport, and Energy Assets

• IAS 12, Income Taxes
  • IFRS Overview and Comparison to US GAAP

Recognition and Measurement

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Effects of Change in Tax Rate, Disaggregation of Tax Effects of Items Recognised in Other Comprehensive Income

Tax Effects of Discontinued Operations, Items Recognised in Other Comprehensive Income Shown Net of Tax

Offsetting of Assets and Liabilities from the Same Tax Authority, Used and Unused Tax Loss Carryforwards, Items Recognised in Other Comprehensive Income Shown Net of Tax

Tax Expense Reconciliation Disclosure – Use of Single Domestic Statutory Tax Rate

Effective Tax Rate Reconciliation Disclosure – Use of Weighted Average Statutory Tax Rate

• IAS 33, Earnings Per Share
  • IFRS Overview and Comparison to US GAAP

Recognition and Measurement

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Basic and Diluted EPS Reported on One Line – No Dilutive Potential Shares

Basic and Diluted EPS – Two Classes of Ordinary Shares, Disclosure of EPS per American Depository Receipt (ADS), Options and Warrants Anti-dilutive in Prior Year

Basic and Diluted EPS – Continuing Operations, Discontinued Operations

Basic and Diluted EPS – Accounting Policy Disclosure, Net Loss, All Potentially Dilutive Shares Anti-dilutive

Basic and Diluted EPS – Net Loss Resulting in Outstanding Convertible Preference Shares, Convertible Debt, Share Options Anti-dilutive in Current Year, Dilutive in Prior Years

• Statement of Changes in Equity and Related Disclosures
  • IAS 1, Presentation of Financial Statements
  • IFRIC 17, Distributions of Non-Cash Assets to Owners
    • IFRS Overview and Comparison to US GAAP

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Issue of Common and Preferred Shares

Rights Issue, Scrip Dividend, Issue of Treasury Shares, Shares Issued in Lieu of Dividends, Issue of Treasury Shares

Dividends of Preference Shares (Classified as Equity), Dividends of Subsidiaries, Transfer of Revaluation Reserve to Retained Earnings on Depreciation and Disposal of Revalued Assets

Reduction in Par Value, Reclassification of Equity Component of Convertible Debt, Capital Contribution from Non-controlling Interests

Fair Value of Net Assets Acquired in Reverse Acquisition, Shares Issued in Private Placement

Proposed Appropriation of Net Income, Equity Component of Convertible Bonds

Adjustment for Hyperinflation, Reduction in Share Capital

• Statement of Cash Flows and related Disclosures
  • IAS 7, Statement of Cash Flows
    • IFRS Overview and Comparison to US GAAP

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Presentation of Operating Activities Using the Direct Method – Interest Paid/Received Presented in Operating, Investing and Financing Activities

Presentation of Operating Activities Using the Direct Method – Reconciliation of Profit (Loss) to Net Cash Flows From Operating Activities Provided in a Note Disclosure

Presentation of Operating Activities Using the Indirect Method – Adjustments to Income Before Tax, Adjustments for Accretion on Financial Liabilities, Dividends on Preferred Stock Subject to Mandatory Redemption

Operating Activities: Adjustments for Depreciation, Impairments, Inventory Writedowns, Labor Agreements, Litigation Provisions, Recycling of Deferred Hedging Gains

Operating Activities: Adjustment for Repurchase of Bonds and Change in Estimates Related to Debentures

Operating Activities: Note Disclosure of the Reconciliation of Profit Before Tax to Cash From Operating Activities, Adjustments for Fair Value Gains on Forestry Assets, Felling Costs, and Special Items, Change in Net Debt

Operating Activities: Adjustment for Provision for Doubtful Debts, Impairment of Guarantees, Fair Value Gain on Financial Assets Held for Trading

Investing Activities: Purchase and Sale of Non-current assets, Government Subsidies

Investing Activities: Collections and Payments of Forward Arrangements, Collection and Payments of Bank Deposits, Capital Increases in Associates

Investing Activities: Interest and Dividends Received, Interest Paid and Capitalised, Purchase of Subsidiaries and Non-controlling Interest, Decrease (Increase) in Advances and Refundable Deposits

Financing Activities: Issue of Share Capital, Sales and Leaseback of Aircraft, Repayment of Financial Lease Obligations, Refunds of Deposits Pledged for Financial Leases, Receipt and Payment of Restricted Bank Deposits

Financing Activities: Capital Increase, Issue and Repayment of Subordinated Long-Term Debt, Issuances of Preferred Securities, Issue of Capital Shares Under Share-Based Compensation Agreements

Financing Activities: Issue of Securities, Expenditures Paid by Third Party, Exercise of Stock Options

Financing Activities: Commercial Property Debt Issue, Amortisation and Repayment, Trust Unit and Class B Limited Partnership Distributions

• Non-current Assets Held for Sale and Discontinued Operations
  • IFRS 5, Non-current Assets Held for Sale and Discontinued Operations
  • IFRS Overview and Comparison to US GAAP

Recognition and Measurement

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Non-current Assets Held for Sale

Discontinued Operations, Withdrawal of Business from Held for Sale and Reclassification as Continuing Operations

Spinoff, Discontinued Operations, Assets and Associated Liabilities Classified as Held for Sale

• Operating Segments
• IFRS 8, Operating Segments
  • IFRS Overview and Comparison to US GAAP

Recognition and Measurement

Disclosure

• Presentation and Disclosure Excerpts

Operating Segments Defined on the Basis of Business Activities

Operating Segments Defined on the Basis of Business Activities, Segment Information Provided in Separate Asset, Liability, Revenue and Expense Disclosures

Operating Segments Defined on the Basis of Geographical Areas, Revised Based on Change in Organisational Structure

Initial Application of IFRS and IFRS 8, Reconciliation of Segment Information Presented Under Argentine GAAP and IFRS

• Financial Instruments and Related Disclosure
  • IFRS 7, Financial Instruments: Disclosure
  • IAS 32, Financial Instruments: Presentation
  • IAS 39, Financial Instruments: Recognition and Measurement
    • IFRS Overview and Comparison to US GAAP

Recognition and Measurement

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Early Adoption of IFRS 9 – First-time Adoption of IFRS

Financial Assets – Accounts Receivable and Accounts Receivable from Related Parties

Financial Assets – Held to Maturity

Financial Assets and Financial Liabilities – Held for Trading, Designated at FVTPL, Available for Sale, Reclassified to Loans and Receivables, Reclassified to Available for Sale

Financial Liabilities – Accounts Payable, Notes Payable, Warranty Liabilities, Non-current Financial Liabilities

Preference Shares – Redeemable Classified as Liabilities

Compound Financial Instruments – Perpetual Bonds Redeemable for Shares

Transfers of Financial Assets – Securitisation of Receivables

Derivatives and Hedging

• Business combinations
  • IFRS 3, Business Combinations
    • IFRS Overview and Comparison to US GAAP

Recognition and Measurement

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Acquisition Financed Through Issue of Ordinary Shares and Options Over Ordinary Shares, Gain on Bargain Purchases

Prospective Application of IFRS 3 (2008), Non-Controlling Interest Measured as the Proportionate Share of the Net Identifiable Assets of the Aquiree

Prospective Application of IFRS 3 (2008), Revaluation of Previously Held Equity Interest

• Reporting in Hyperinflationary Economies
  • IAS 29, Financial Reporting in Hyperinflationary Economies
    • IFRS Overview and Comparison to US GAAP

Recognition and Measurement

Disclosure

• Presentation and Disclosure Excerpts

Elimination of the Price-Level Adjustment for Subsidiaries on Transition to IFRS

Deconsolidation of Foreign Operations in a Hyperinflationary Economy

Foreign Subsidiary Adjusted for Inflation Prior to Translation into Presentation Currency

• Service Concession Arrangements
  • IFRIC 12, Service Concession Arrangements
  • SIC 29, Service Concession Arrangements: Disclosure
    • IFRS Overview and Comparison to US GAAP

Recognition and Measurement

Disclosure

• Presentation and Disclosure Excerpts

Service Concession – Intangible Assets, Indemnities Receivable

• First-Time Adoption of IFRS
  • IFRS 1, First-Time Adoption of International Financial Reporting Standards
    • IFRS Overview and Comparison to US GAAP

Recognition and Measurement

Presentation

Disclosure

• Presentation and Disclosure Excerpts

Transition From Canadian GAAP to IFRS – IFRS 1 Exemptions Elected

Transition From Argentine GAAP to IFRS – IFRS 1 Exemptions Elected