CHAPTER FOUR

Framework, standards and interpretations of IFRS

THE WORK ON STANDARDS, as explained in the preface to the standards, can be segmented into the following areas:

  • updating of the Framework, a joint effort with the US FASB;
  • IFRS (including IAS) which occupies most of the board time;
  • IFRS for SMEs, a streamlining and codification effort at particular intervals;
  • interpretations, a technical effort, addressing feedback from the market channelled through the large accounting firms.

In trying to become familiar with IFRS, the reader is encouraged to first look at IFRS for SMEs in order to gain an initial understanding and guidance. The IFRS Foundation provides access free of charge to the current year's consolidated unaccompanied IFRS in English as issued by the IASB and published in the Bound Volume.

Access to the accompanying documents, illustrative examples, implementation guidance and bases for conclusions is available via subscription-based services or by purchasing print versions of IFRS via the IFRS store (see www.ifrs.org/ifrss). You may download the content of this site for your personal, non-commercial use only. See www.iasb.org/home.htm for ­copyright notices.

4.1 FRAMEWORK

The current Framework (see content outline below) is outdated and the IASB jointly with the FASB is working on a new version as part of the IASB/FASB Conceptual Framework project. The different phases of the project are:

  • Phase A: Objective and qualitative characteristics;
  • Phase B: Elements and recognition;
  • Phase C: Measurement;
  • Phase D: Reporting entity;
  • Phase E: Presentation and disclosure;
  • Phase F: Purpose and status of framework;
  • Phase G: Applicability to not-for-profit entities;
  • Phase H: Other issues, if necessary.

Several discussions papers (DPs) and exposure drafts (EDs) were issued in relation to these phases. For the current status see www.iasplus.com/agenda/framework.htm. The total project is expected to be completed by 2012.

Current Framework for the Preparation and Presentation of Financial Statements

The IASB Framework was approved by the IASC Board in April 1989 for publication in July 1989, and adopted by the IASB in April 2001. The Framework defines the objective of general-purpose financial statements. The objective is to provide information about the financial position, performance and changes in financial position of an entity that is useful to a wide range of users in making economic decisions. The Framework identifies the qualitative characteristics that make information in financial statements useful. There are four principal qualitative characteristics:

  • understandability;
  • relevance;
  • reliability;
  • comparability.

The Framework defines the basic elements of financial statements and the concepts for recognising and measuring them. Elements directly related to financial position are assets, liabilities and equity. Elements directly related to performance are income and expenses. There is more information on the detailed text of the standard at www.iasb.org/IFRSs/IFRS.htm.

Available information is summarised in the following list. It is worthwhile reviewing this to foster an appreciation of what is associated with appropriately prepared financial statements.

  • Preface introduction
    • Purpose and status
    • Scope
    • Users and their information needs
  • The objective of financial statements
    • Financial position, performance and changes in financial position
    • Notes and supplementary schedules
  • Underlying assumptions
    • Accrual basis
    • Going concern
  • Qualitative characteristics of financial statements
    • Understandability
    • Relevance
      • Materiality
    • Reliability
      • Faithful representation
      • Substance over form
      • Neutrality
      • Prudence
      • Completeness
    • Comparability
    • Constraints on relevant and reliable information
      • Timeliness
      • Balance between benefit and cost
      • Balance between qualitative characteristics
    • True and fair view/fair presentation
  • The elements of financial statements
    • Financial position
    • Assets
    • Liabilities
    • Equity
    • Performance
    • Income
    • Expenses
    • Capital maintenance adjustments
  • Recognition of the elements of financial statements
    • The probability of future economic benefit
    • Reliability of measurement
    • Recognition of assets
    • Recognition of liabilities
    • Recognition of income
    • Recognition of expenses
  • Measurement of the elements of financial statements
  • Concepts of capital and capital maintenance
    • Concepts of capital
    • Concepts of capital maintenance and the determination of profit

IFRS word count comparison

The overall size of the related publication of the accounting standards is well over 1 million words, with the actual standards amounting to most of that, as summarised in Table 4.1. This not only helps to identify the size of standard, in terms of text, but also indicates the comparative importance, as well as the associated complexity.

Table 4.1 Accounting standards word count.

Standard Description Words
IFRS 1 First-Time Adoption of International of International Financial Reporting Standards 41,730
IFRS 2 Share-Based Payment 67,576
IFRS 3 Business Combinations 91,214
IFRS 4 Insurance Contracts 54,977
IFRS 5 Noncurrent Assets Held for Sale and Discontinued Operations 20,896
IFRS 6 Exploration for and Evaluation of Mineral Resources 10,078
IFRS 7 Financial Instruments Disclosures 30,466
IFRS 8 Operating Segments 23,158
IFRS 9 Financial Instruments 76,393
IFRS 10 Consolidated Financial Statements 43,464
IFRS11 Joint Arrangements 22,477
IFRS12 Disclosure of Interests in Other Entities 19,848
IFRS13 Fair Value Measurement 62,066
IFRS total 564,343
IAS 1 Presentation of Financial Statements 30,135
IAS 2 Inventories 5,981
IAS 7 Cash Flow Statements 6,706
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors 10,265
IAS 10 Events After the Balance Sheet Date 3,343
IAS 11 Construction Contracts 4,638
IAS 12 Income Taxes 25,595
IAS 16 Property, Plant and Equipment 12,983
IAS 17 Leases 10,716
IAS 18 Revenue 7,186
IAS 19 Employee Benefits 47,755
IAS 20 Accounting for Government Grants and Disclosure of Assistance 3,712
IAS 21 Effects of Change in Foreign Exchange Rates 12,510
IAS 23 Borrowing Costs 5,784
IAS 24 Related Party Disclosures 9,425
Standard Description Words
IAS 26 Accounting and Reporting by Retirement Benefit Plans 3,380
IAS 27 Consolidated and Separate Financial Statements 20,353
IAS 28 Investments in Associates 8,734
IAS 29 Financial Reporting in Hyperinflationary Economies 3,212
IAS 31 Interest in Joint Ventures 8,499
IAS 32 Financial Instruments Presentation 36,072
IAS 33 Earnings per Share 15,360
IAS 34 Interim Financial Reporting 9,537
IAS 36 Impairment of Assets 63,394
IAS 37 Provisions, Contingent Liabilities, and Contingent Assets 12,224
IAS 38 Intangible Assets 28,963
IAS 39 Financial Instruments: Recognition and Measurement 81,771
IAS 40 Investment Property 18,586
IAS 41 Agriculture 16,038
IAS total 522,857
Overall (IFRS and IAS) 1087,200

Accessing IFRSs – HTML and PDF

As indicated earlier, the IFRS are available online through eIFRS. This avenue provides the electronic consolidated edition of International Financial Reporting Standards (including International Accounting Standards and Interpretations) and accompanying documents, shown in Figure 4.1.

FIGURE 4.1 The electronic edition of IFRS.

Note: Access to this web page requires subscription.

For convenience, information is presented in two parts:

  • Part A (the requirements) contains the latest version of IFRS, IAS, and IFRIC and SIC Interpretations.
  • Part B contains the accompanying documents, such as illustrative examples, implementation guidance, bases for conclusions and dissenting opinions.

IFRS can be accessed in HTML (Hyper Text Markup Language) or PDF (Portable Document Format).

Note also that past versions of IFRS are available, which will be of particular use to accounting, auditing and business reporting professionals.

HTML

The figures show how IFRS information is presented online. As can be seen in Figure 4.2, the latest version of the IFRS book is available in easily accessible sections, whereby an individual IFRS can be selected.

FIGURE 4.2 Latest version of the IFRS book online.

Note: Access to this web page requires subscription.

Once a specific IFRS is selected, all associated sections are provided for further access, as shown in Figure 4.3.

FIGURE 4.3 Sections of the IFRS online.

Note: Access to this web page requires subscription.

When any IFRS is accessed in this manner, the related text is presented in a way that allows for rapid access to sought-after sections by way of hyperlinks, as shown by way of bold text in Figure 4.4.

FIGURE 4.4 Hyperlinks through the IFRS.

Note: Access to this web page requires subscription.

Within any selected area of an IFRS, various hyperlinks provide rapid access to highlighted sections or related definitions. This approach facilitates research and learning.

PDF

Printable PDF language versions of IFRS are accessible via the IFRS website.

To become familiar with the way that IFRS are presented, as well as to gain an appreciation of the format and content, see Appendix A, which contains an entire standard.

4.2 INTERNATIONAL FINANCIAL REPORTING STANDARDS

Introduction

As indicated previously, the process of developing financial reporting standards is long and involved. The end result is deemed to be worthy of strong consideration and subsequent implementation, to ensure that financial reporting is ­reliable, as well as comparable. In effect, two groups of financial standards (IFRS 1–9 and IAS 1–41) exist, and a summary of each standard is provided next, including the objective and scope, among other relevant details.

International Accounting Standards were issued by the IASC from 1973 to 2000. The IASB replaced the IASC in 2001. Since then, the IASB has amended some IAS and has proposed to amend others, has replaced some IAS with new IFRS, and has adopted or proposed certain new IFRS on topics for which there was no previous IAS. Through committees, both the IASC and the IASB have issued Interpretations of Standards. Due to these changes, some numbered standards and interpretations have been deleted and the numbering is not consecutive at this time. As of November 2012, the following standards and interpretations are effective, or earlier adoption is encouraged.

International Financial Reporting Standards (IFRS 1–13)

IFRS 1 First-Time Adoption of International Financial Reporting Standards

Objective

The objective of this IFRS is to ensure that an entity's first IFRS financial statements, and its interim financial reports for part of the period covered by those financial statements, contain high-quality information that:

(a) is transparent for users and comparable over all periods presented;
(b) provides a suitable starting point for accounting in accordance with IFRS;
(c) can be generated at a cost that does not exceed the benefits.

Scope

An entity shall apply this IFRS in:

(a) its first IFRS financial statements;
(b) each interim financial report, if any, that it presents in accordance with IAS 34 Interim Financial Reporting for part of the period covered by its first IFRS financial statements.

An entity's first IFRS financial statements are the first annual financial statements in which the entity adopts IFRS, by an explicit and unreserved statement in those financial statements of compliance with IFRS. Financial statements in accordance with IFRS are an entity's first IFRS financial statements if, for example, the entity:

(a) presented its most recent previous financial statements:
(i) in accordance with national requirements that are not consistent with IFRS in all respects;
(ii) in conformity with IFRS in all respects, except that the financial statements did not contain an explicit and unreserved statement that they complied with IFRS;
(iii) containing an explicit statement of compliance with some, but not all, IFRS;
(iv) in accordance with national requirements inconsistent with IFRS, using some individual IFRS to account for items for which national requirements did not exist; or
(v) in accordance with national requirements, with a reconciliation of some amounts to the amounts determined in accordance with IFRS;
(b) prepared financial statements in accordance with IFRS for internal use only, without making them available to the entity's owners or any other external users;
(c) prepared a reporting package in accordance with IFRS for consolidation purposes without preparing a complete set of financial statements as defined in IAS 1 Presentation of Financial Statements (as revised in 2007); or
(d) did not present financial statements for previous periods.

This IFRS applies when an entity first adopts IFRS. It does not apply when, for example, an entity:

(a) stops presenting financial statements in accordance with national requirements, having previously presented them as well as another set of financial statements that contained an explicit and unreserved statement of compliance with IFRS;
(b) presented financial statements in the previous year in accordance with national requirements and those financial statements contained an explicit and unreserved statement of compliance with IFRS; or
(c) presented financial statements in the previous year that contained an explicit and unreserved statement of compliance with IFRS, even if the auditors qualified their audit report on those financial statements.

This IFRS does not apply to changes in accounting policies made by an entity that already applies IFRS. Such changes are the subject of:

(a) requirements on changes in accounting policies in IAS 8 Accounting ­Policies, Changes in Accounting Estimates and Errors; and
(b) specific transitional requirements in other IFRS.

Summary

In addition to the objective, scope and related introduction, a summary of IFRS 1 appears below:

  • Recognition and measurement
    • Opening IFRS statement of financial position
    • Accounting policies
    • Exceptions to the retrospective application of other IFRS
      • Estimates
    • Exemptions from other IFRS
  • Presentation and disclosure
    • Comparative information
      • Non-IFRS comparative information and historical summaries
    • Explanation of transition to IFRS
      • Reconciliations
      • Designation of financial assets or financial liabilities
      • Use of fair value as deemed cost
      • Use of deemed cost for investments in subsidiaries, jointly controlled entities and associates
      • Use of deemed cost for oil and gas assets
      • Interim financial reports
  • Effective date
  • Withdrawal of IFRS 1 (issued 2003)
  • Appendices:
    • A Defined terms
    • B Exceptions to the retrospective application of other IFRS
    • C Exemptions for business combinations
    • D Exemptions from other IFRS
    • E Short-term exemptions from IFRS

Last changed

July 2011

Interpretations

IFRS 1 supersedes SIC 8, First-time Application of IASs as the Primary Basis of Accounting. More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL is an international standard for communicating business data simply and quickly. Consequently, this language for the electronic communication of business data partners perfectly with IFRS. Figure 4.5 shows an introductory fragment of XBRL tagging related to this standard.

FIGURE 4.5 Fragment of XBRL tagging related to IFRS 1.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IFRS 2 Share-Based Payment

Objective

The objective of this IFRS is to ensure that an entity's first IFRS financial statements, and its interim financial reports for part of the period covered by those financial statements, contain high-quality information that:

(a) is transparent for users and comparable over all periods presented;
(b) provides a suitable starting point for accounting in accordance with IFRS;
(c) can be generated at a cost that does not exceed the benefits.

Scope

An entity shall apply this IFRS in:

(a) its first IFRS financial statements;
(b) each interim financial report, if any, that it presents in accordance with IAS 34 Interim Financial Reporting for part of the period covered by its first IFRS financial statements.

An entity's first IFRS financial statements are the first annual financial statements in which the entity adopts IFRS, by an explicit and unreserved statement in those financial statements of compliance with IFRS. Financial statements in accordance with IFRS are an entity's first IFRS financial statements if, for example, the entity:

(a) presented its most recent previous financial statements:
(i) in accordance with national requirements that are not consistent with IFRS in all respects;
(ii) in conformity with IFRS in all respects, except that the financial statements did not contain an explicit and unreserved statement that they complied with IFRS;
(iii) containing an explicit statement of compliance with some, but not all, IFRS;
(iv) in accordance with national requirements inconsistent with IFRS, using some individual IFRS to account for items for which national requirements did not exist; or
(v)in accordance with national requirements, with a reconciliation of some amounts to the amounts determined in accordance with IFRS;
(b) prepared financial statements in accordance with IFRS for internal use only, without making them available to the entity's owners or any other external users;
(c) prepared a reporting package in accordance with IFRS for consolidation purposes without preparing a complete set of financial statements as defined in IAS 1 Presentation of Financial Statements (as revised in 2007); or
(d) did not present financial statements for previous periods.

This IFRS applies when an entity first adopts IFRS. It does not apply when, for example, an entity:

(a) stops presenting financial statements in accordance with national requirements, having previously presented them as well as another set of financial statements that contained an explicit and unreserved statement of compliance with IFRS;
(b) presented financial statements in the previous year in accordance with national requirements and those financial statements contained an explicit and unreserved statement of compliance with IFRS; or
(c) presented financial statements in the previous year that contained an explicit and unreserved statement of compliance with IFRS, even if the auditors qualified their audit report on those financial statements.

This IFRS does not apply to changes in accounting policies made by an entity that already applies IFRS. Such changes are the subject of:

(a) requirements on changes in accounting policies in IAS 8 Accounting ­Policies, Changes in Accounting Estimates and Errors; and
(b) specific transitional requirements in other IFRS.

Summary

In addition to the objective, scope and related introduction, a summary of IFRS 2 appears next:

  • Recognition
  • Equity-settled share-based payment transactions
    • Overview
    • Transactions in which services are received
    • Transactions measured by reference to the fair value of the equity instruments granted
      • Determining the fair value of equity instruments granted
      • Treatment of vesting conditions
      • Treatment of non-vesting conditions
      • Treatment of a reload feature
      • After vesting date
      • If the fair value of the equity instruments cannot be estimated reliably
    • Modifications to the terms and conditions on which equity Instruments were granted, including cancellations and settlements
  • Cash-settled share-based payment transactions
  • Share-based payment transactions with cash alternatives
    • Share-based payment transactions in which the terms of the arrangement provide the counterparty with a choice of settlement
    • Share-based payment transactions in which the terms of the arrangement provide the entity with a choice of settlement
  • Share-based payment transactions among group entities
  • Disclosures
  • Transitional provisions
  • Effective date
  • Withdrawal of interpretations
  • Appendices:
    • A Defined terms
    • B Application guidance
    • C Amendments to other IFRS

Last changed

January 2010

Interpretations

None

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm

XBRL tags

XBRL is an international standard for communicating business data simply and quickly. Consequently, this language for the electronic communication of business data partners perfectly with IFRS. Figure 4.6 shows an introductory fragment of XBRL tagging related to this standard.

FIGURE 4.6 Fragment of XBRL tagging related to IFRS 2.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IFRS 3 Business Combinations

Objective

The objective of this IFRS is to improve the relevance, reliability and comparability of the information that a reporting entity provides in its financial statements about a business combination and its effects. To accomplish that, this IFRS establishes principles and requirements for how the acquirer:

(a) recognises and measures in its financial statements the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquiree;
(b) recognises and measures the goodwill acquired in the business combination or a gain from a bargain purchase;
(c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination.

Scope

This IFRS applies to a transaction or other event that meets the definition of a business combination. This IFRS does not apply to:

(a) the formation of a joint venture;
(b) the acquisition of an asset or a group of assets that does not constitute a business. In such cases the acquirer shall identify and recognise the individual identifiable assets acquired (including those assets that meet the definition of, and recognition criteria for, intangible assets in IAS 38 Intangible Assets) and liabilities assumed. The cost of the group shall be allocated to the individual identifiable assets and liabilities on the basis of their relative fair values at the date of purchase. Such a transaction or event does not give rise to goodwill;
(c) a combination of entities or businesses under common control.

Summary

In addition to the objective, scope and related introduction, a summary of IFRS 3 appears below:

  • Identifying a business combination
  • The acquisition method
    • Identifying the acquirer
    • Determining the acquisition date
    • Recognising and measuring the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquiree
      • Recognition principle
Recognition conditions
Classifying or designating identifiable assets acquired and liabilities assumed in a business combination
  • Measurement principle
  • Exceptions to the recognition or measurement principles
    • Exception to the recognition principle
      • Contingent liabilities
    • Exceptions to both the recognition and measurement principles
      • Income taxes
      • Employee benefits
      • Indemnification assets
    • Exceptions to the measurement principle
      • Reacquired rights
      • Share-based payment awards
      • Assets held for sale
    • Recognising and measuring goodwill or a gain from a bargain purchase
      • Bargain purchases
      • Consideration transferred
      • Contingent consideration
    • Additional guidance for applying the acquisition method to particular types of business combinations
      • A business combination achieved in stages
      • A business combination achieved without the transfer of consideration
    • Measurement period
    • Determining what is part of the business combination transaction
      • Acquisition-related costs
  • Subsequent measurement and accounting
    • Reacquired rights
    • Contingent liabilities
    • Indemnification assets
    • Contingent consideration
  • Disclosures
  • Effective date and transition
    • Effective date
    • Transition
      • Income taxes
  • Withdrawal of IFRS 3 (2004)
  • Appendices:
    • A Defined terms
    • B Application guidance
    • C Amendments to other IFRS

Last changed

July 2010

Interpretations

None

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL is an international standard for communicating business data simply and quickly. Consequently, this language for the electronic communication of business data partners perfectly with IFRS. Figure 4.7 shows an introductory fragment of XBRL tagging related to this standard.

FIGURE 4.7 Fragment of XBRL tagging related to IFRS 3.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IFRS 4 Insurance Contracts

Objective

The objective of this IFRS is to specify the financial reporting for insurance contracts by any entity that issues such contracts (described in this IFRS as an insurer) until the board completes the second phase of its project on insurance contracts. In particular, this IFRS requires:

(a) limited improvements to accounting by insurers for insurance contracts;
(b) disclosure that identifies and explains the amounts in an insurer's financial statements arising from insurance contracts and helps users of those financial statements understand the amount, timing and uncertainty of future cash flows from insurance contracts.

Scope

An entity shall apply this IFRS to:

(a) insurance contracts (including reinsurance contracts) that it issues and reinsurance contracts that it holds;
(b) financial instruments that it issues with a discretionary participation feature. IFRS 7 Financial Instruments: Disclosures requires disclosure about financial instruments, including financial instruments that contain such features.

This IFRS does not address other aspects of accounting by insurers, such as accounting for financial assets held by insurers and financial liabilities issued by insurers (see IAS 32 Financial Instruments: Presentation, IAS 39 Financial ­Instruments: Recognition and Measurement, IFRS 7 and IFRS 9 Financial ­Instruments), except in the transitional provisions in paragraph 45.

An entity shall not apply this IFRS to:

(a) product warranties issued directly by a manufacturer, dealer or retailer (see IAS 18 Revenue and IAS 37 Provisions, Contingent Liabilities and ­Contingent Assets);
(b) employers' assets and liabilities under employee benefit plans (see IAS 19 Employee Benefits and IFRS 2 Share-based Payment) and retirement benefit obligations reported by defined benefit retirement plans (see IAS 26 Accounting and Reporting by Retirement Benefit Plans);
(c) contractual rights or contractual obligations that are contingent on the future use of, or right to use, a non-financial item (for example, some licence fees, royalties, contingent lease payments and similar items), as well as a lessee's residual value guarantee embedded in a finance lease (see IAS 17 Leases, IAS 18 Revenue and IAS 38 Intangible Assets);
(d) financial guarantee contracts unless the issuer has previously asserted explicitly that it regards such contracts as insurance contracts and has used accounting applicable to insurance contracts, in which case the issuer may elect to apply either IAS 32, IFRS 7 and IFRS 9 or this IFRS to such financial guarantee contracts. The issuer may make that election contract by contract, but the election for each contract is irrevocable;
(e) contingent consideration payable or receivable in a business combination (see IFRS 3 Business Combinations);
(f) direct insurance contracts that the entity holds (i.e. direct insurance contracts in which the entity is the policyholder). However, a cedant shall apply this IFRS to reinsurance contracts that it holds.

For ease of reference, this IFRS describes any entity that issues an insurance contract as an insurer, whether or not the issuer is regarded as an insurer for legal or supervisory purposes.

A reinsurance contract is a type of insurance contract. Accordingly, all references in this IFRS to insurance contracts also apply to reinsurance contracts.

Embedded derivatives

IFRS 9 requires an entity to separate some embedded derivatives from their host contract, measure them at fair value and include changes in their fair value in profit or loss. IFRS 9 applies to derivatives embedded in an insurance contract unless the embedded derivative is itself an insurance contract.

As an exception to the requirements in IFRS 9, an insurer need not separate, and measure at fair value, a policyholder's option to surrender an insurance contract for a fixed amount (or for an amount based on a fixed amount and an interest rate), even if the exercise price differs from the carrying amount of the host insurance liability. However, the requirements in IFRS 9 do apply to a put option or cash surrender option embedded in an insurance contract if the surrender value varies in response to the change in a financial variable (such as an equity or commodity price or index), or a non-financial variable that is not specific to a party to the contract. Furthermore, those requirements also apply if the holder's ability to exercise a put option or cash surrender option is triggered by a change in such a variable (for example, a put option that can be exercised if a stock market index reaches a specified level). This applies equally to options to surrender a financial instrument containing a discretionary participation feature.

Unbundling of deposit components

Some insurance contracts contain both an insurance component and a deposit component. In some cases, an insurer is required or permitted to unbundle those components:

(a) Unbundling is required if both the following conditions are met:
(i) the insurer can measure the deposit component (including any embedded surrender options) separately (i.e. without considering the insurance component);
(ii) the insurer's accounting policies do not otherwise require it to recognise all obligations and rights arising from the deposit component.
(b) Unbundling is permitted, but not required, if the insurer can measure the deposit component separately as in (a)(i) but its accounting policies require it to recognise all obligations and rights arising from the deposit component, regardless of the basis used to measure those rights and obligations.
(c) Unbundling is prohibited if an insurer cannot measure the deposit component separately as in (a)(i).

The following is an example of a case when an insurer's accounting policies do not require it to recognise all obligations arising from a deposit component. A cedant receives compensation for losses from a reinsurer, but the contract obliges the cedant to repay the compensation in future years. That obligation arises from a deposit component. If the cedant's accounting policies would otherwise permit it to recognise the compensation as income without recognising the resulting obligation, unbundling is required.

To unbundle a contract, an insurer shall:

(a) apply this IFRS to the insurance component;
(b) apply IFRS 9 to the deposit component.

Summary

In addition to the objective, scope and related introduction, a summary of IFRS 4 appears next:

  • Recognition and measurement
    • Temporary exemption from some other IFRS
      • Liability adequacy test
      • Impairment of reinsurance assets
    • Changes in accounting policies
      • Current market interest rates
      • Continuation of existing practices
      • Prudence
      • Future investment margins
      • Shadow accounting
    • Insurance contracts acquired in a business combination or portfolio transfer
    • Discretionary participation features
      • Discretionary participation features in insurance contracts
      • Discretionary participation features in financial instruments
  • Disclosure
    • Explanation of recognised amounts
    • Nature and extent of risks arising from insurance contracts
  • Effective date and transition
    • Disclosure
    • Re-designation of financial assets
  • Appendices:
    • A Defined terms
    • B Definition of an insurance contract
    • C Amendments to other IFRS

Last changed

August 2005

Interpretations

None

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL is an international standard for communicating business data simply and quickly. Consequently, this language for the electronic communication of business data partners perfectly with IFRS. Figure 4.8 shows an introductory fragment of XBRL tagging related to this standard.

FIGURE 4.8 Fragment of XBRL tagging related to IFRS 4.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IFRS 5 Non-current Assets Held for Sale and Discontinued Operations

Objective

The objective of this IFRS is to specify the accounting for assets held for sale, and the presentation and disclosure of discontinued operations. In particular, the IFRS requires:

(a) assets that meet the criteria to be classified as held for sale to be measured at the lower of carrying amount and fair value less costs to sell, and depreciation on such assets to cease;
(b) assets that meet the criteria to be classified as held for sale to be presented separately in the statement of financial position and the results of discontinued operations to be presented separately in the statement of comprehensive income.

Scope

The classification and presentation requirements of this IFRS apply to all recognised non-current assets and to all disposal groups of an entity. The measurement requirements of this IFRS apply to all recognised non-current assets and disposal groups which shall continue to be measured in accordance with the Standard noted.

Assets classified as non-current in accordance with IAS 1 Presentation of Financial Statements shall not be reclassified as current assets until they meet the criteria to be classified as held for sale in accordance with this IFRS. Assets of a class that an entity would normally regard as non-current that are acquired exclusively with a view to resale shall not be classified as current unless they meet the criteria to be classified as held for sale in accordance with this IFRS.

Sometimes an entity disposes of a group of assets, possibly with some directly associated liabilities, together in a single transaction. Such a disposal group may be a group of cash-generating units, a single cash-generating unit, or part of a cash-generating unit. The group may include any assets and any liabilities of the entity. If a non-current asset within the scope of the measurement requirements of this IFRS is part of a disposal group, the measurement requirements of this IFRS apply to the group as a whole, so that the group is measured at the lower of its carrying amount and fair value less costs to sell.

The measurement provisions of this IFRS do not apply to the following assets, which are covered by the IFRS listed, either as individual assets or as part of a disposal group:

(a) deferred tax assets (IAS 12 Income Taxes);
(b) assets arising from employee benefits (IAS 19 Employee Benefits);
(c) financial assets within the scope of IFRS 9 Financial Instruments;
(d) non-current assets that are accounted for in accordance with the fair value model in IAS 40 Investment Property;
(e) non-current assets that are measured at fair value less costs to sell in accordance with IAS 41 Agriculture;
(f) contractual rights under insurance contracts as defined in IFRS 4 Insurance Contracts.

The classification, presentation and measurement requirements in this IFRS applicable to a non-current asset (or disposal group) that is classified as held for sale apply also to a non-current asset (or disposal group) that is classified as held for distribution to owners acting in their capacity as owners (held for distribution to owners).

This IFRS specifies the disclosures required in respect of non-current assets (or disposal groups) classified as held for sale or discontinued operations. ­Disclosures in other IFRS do not apply to such assets (or disposal groups) unless those IFRS require:

(a) specific disclosures in respect of non-current assets (or disposal groups) classified as held for sale or discontinued operations; or
(b) disclosures about measurement of assets and liabilities within a disposal group that are not within the scope of the measurement requirement of IFRS 5 and such disclosures are not already provided in the other notes to the financial statements.

Summary

In addition to the objective, scope and related introduction, a summary of IFRS 5 appears next:

  • Classification of non-current assets (or disposal groups) as held for sale or as held for distribution to owners
    • Non-current assets that are to be abandoned
  • Measurement of non-current assets (or disposal groups) classified as held for sale
    • Measurement of a non-current asset (or disposal group)
    • Recognition of impairment losses and reversals
    • Changes to a plan of sale
  • Presentation and disclosure
    • Presenting discontinued operations
    • Gains or losses relating to continuing operations
    • Presentation of a non-current asset or disposal group classified as held for sale
    • Additional disclosures
  • Transitional provisions
  • Effective date
  • Withdrawal of IAS 35
  • Appendices:
    • A Defined terms
    • B Application supplement
      • Extension of the period required to complete a sale
    • C Amendments to other IFRS

Last changed

January 2010

Interpretations

None

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL is an international standard for communicating business data simply and quickly. Consequently, this language for the electronic communication of business data partners perfectly with IFRS. Figure 4.9 shows an introductory fragment of XBRL tagging related to this standard.

FIGURE 4.9 Fragment of XBRL tagging related to IFRS 5.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IFRS 6 Exploration for and Evaluation of Mineral Resources

Objective

The objective of this IFRS is to specify the financial reporting for the exploration for and evaluation of mineral resources. In particular, the IFRS requires:

(a) limited improvements to existing accounting practices for exploration and evaluation expenditures;
(b) entities that recognise exploration and evaluation assets to assess such assets for impairment in accordance with this IFRS and measure any impairment in accordance with IAS 36 Impairment of Assets;
(c) disclosures that identify and explain the amounts in the entity's financial statements arising from the exploration for and evaluation of mineral resources and help users of those financial statements understand the amount, timing and certainty of future cash flows from any exploration and evaluation assets recognised.

Scope

An entity shall apply the IFRS to exploration and evaluation expenditures that it incurs. The IFRS does not address other aspects of accounting by entities engaged in the exploration for and evaluation of mineral resources.

An entity shall not apply the IFRS to expenditures incurred:

(a) before the exploration for and evaluation of mineral resources, such as expenditures incurred before the entity has obtained the legal rights to explore a specific area;
(b) after the technical feasibility and commercial viability of extracting a mineral resource are demonstrable.

Summary

In addition to the objective, scope and related introduction, a summary of IFRS 6 appears next:

  • Recognition of exploration and evaluation assets
  • Measurement of exploration and evaluation assets
    • Measurement at recognition
    • Elements of cost of exploration and evaluation assets
    • Measurement after recognition
    • Changes in accounting policies
  • Presentation
    • Classification of exploration and evaluation assets
    • Reclassification of exploration and evaluation assets
  • Impairment
    • Recognition and measurement
    • Specifying the level at which exploration and evaluation assets are assessed for impairment
  • Disclosure
  • Effective date
  • Transitional provisions
  • Appendices:
    • A Defined terms
    • B Amendments to other IFRS

Last changed

June 2005

Interpretations

None

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL is an international standard for communicating business data simply and quickly. Consequently, this language for the electronic communication of business data partners perfectly with IFRS. Figure 4.10 shows an introductory fragment of XBRL tagging related to this standard.

FIGURE 4.10 Fragment of XBRL tagging related to IFRS 6.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IFRS 7 Financial Instruments Disclosures

Objective

The objective of this IFRS is to require entities to provide disclosures in their financial statements that enable users to evaluate:

(a) the significance of financial instruments for the entity's financial position and performance;
(b) the nature and extent of risks arising from financial instruments to which the entity is exposed during the period and at the end of the reporting period, and how the entity manages those risks.

The principles in this IFRS complement the principles for recognising, measuring and presenting financial assets and financial liabilities in IAS 32 Financial Instruments: Presentation and IFRS 9 Financial Instruments.

Scope

This IFRS shall be applied by all entities to all types of financial instruments, except:

(a) those interests in subsidiaries, associates or joint ventures that are accounted for in accordance with IAS 27 Consolidated and Separate Financial Statements, IAS 28 Investments in Associates or IAS 31 Interests in Joint Ventures. However, in some cases, IAS 27, IAS 28 or IAS 31 permits an entity to account for an interest in a subsidiary, associate or joint venture using IFRS 9; in those cases, entities shall apply the requirements of this IFRS. Entities shall also apply this IFRS to all derivatives linked to interests in subsidiaries, associates or joint ventures unless the derivative meets the definition of an equity instrument in IAS 32;
(b) employers' rights and obligations arising from employee benefit plans, to which IAS 19 Employee Benefits applies;
(c) insurance contracts as defined in IFRS 4 Insurance Contracts. However, this IFRS applies to derivatives that are embedded in insurance contracts if IFRS 9 requires the entity to account for them separately. Moreover, an issuer shall apply this IFRS to financial guarantee contracts if the issuer applies IFRS 9 in recognising and measuring the contracts, but shall apply IFRS 4 if the issuer elects, in accordance with paragraph 4(d) of IFRS 4, to apply IFRS 4 in recognising and measuring them;
(d) financial instruments, contracts and obligations under share-based payment transactions to which IFRS 2 Share-based Payment applies, except that this IFRS applies to contracts within the scope of IFRS 9;
(e) instruments that are required to be classified as equity instruments in accordance with paragraphs 16A and 16B or paragraphs 16C and 16D of IAS 32.

This IFRS applies to recognised and unrecognised financial instruments. Recognised financial instruments include financial assets and financial liabilities that are within the scope of IFRS 9. Unrecognised financial instruments include some financial instruments that, although outside the scope of IFRS 9, are within the scope of this IFRS (such as some loan commitments).

This IFRS applies to contracts to buy or sell a non-financial item that are within the scope of IFRS 9.

Summary

In addition to the objective, scope and related introduction, a summary of IFRS 7 appears below:

  • Classes of financial instruments and level of disclosure
  • Significance of financial instruments for financial position and performance
    • Statement of financial position
      • Categories of financial assets and financial liabilities
      • Financial assets or financial liabilities at fair value through profit or loss
      • Financial assets measured at fair value through other comprehensive income
      • Reclassification
      • Collateral
      • Allowance account for credit losses
      • Compound financial instruments with multiple embedded derivatives
      • Defaults and breaches
    • Statement of comprehensive income
      • Items of income, expense, gains or losses
    • Other disclosures
      • Accounting policies
      • Hedge accounting
      • Fair value
  • Nature and extent of risks arising from financial instruments
    • Qualitative disclosures
    • Quantitative disclosures
  • Credit risk
    • Financial assets that are either past due or impaired
    • Collateral and other credit enhancements obtained
    • Liquidity risk
  • Market risk
    • Sensitivity analysis
    • Other market risk disclosures
  • Transfers of financial assets
    • Transferred financial assets that are not recognised in their entirety
    • Transferred financial assets that are derecognised in their entirety
    • Supplementary information
  • Effective date and transition
  • Withdrawal of IAS 30
  • Appendices:
    • A Defined terms
    • B Application guidance
    • C Amendments to other IFRS

Last changed

December 2011

Interpretations

None

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL is an international standard for communicating business data simply and quickly. Consequently, this language for the electronic communication of business data partners perfectly with IFRS. Figure 4.11 shows an introductory fragment of XBRL tagging related to this standard.

FIGURE 4.11 Fragment of XBRL tagging related to IFRS 7.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IFRS 8 Operating Segments

Objective

An entity shall disclose information to enable users of its financial statements to evaluate the nature and financial effects of the business activities in which it engages and the economic environments in which it operates.

Scope

This IFRS shall apply to:

(a) the separate or individual financial statements of an entity:
(i) whose debt or equity instruments are traded in a public market (a domestic or foreign stock exchange or an over-the-counter market, including local and regional markets); or
(ii) that files, or is in the process of filing, its financial statements with a securities commission or other regulatory organisation for the purpose of issuing any class of instruments in a public market; and
(b) the consolidated financial statements of a group with a parent:
(i) whose debt or equity instruments are traded in a public market (a domestic or foreign stock exchange or an over-the-counter market, including local and regional markets); or
(ii)that files, or is in the process of filing, the consolidated financial statements with a securities commission or other regulatory organisation for the purpose of issuing any class of instruments in a public market.

If an entity that is not required to apply this IFRS chooses to disclose information about segments that does not comply with this IFRS, it shall not describe the information as segment information.

If a financial report contains both the consolidated financial statements of a parent that is within the scope of this IFRS and the parent's separate financial statements, segment information is required only in the consolidated financial statements.

Summary

In addition to the objective, scope and related introduction, a summary of IFRS 8 appears below:

  • Operating segments
  • Reportable segments
    • Aggregation criteria
    • Quantitative thresholds
  • Disclosure
    • General information
    • Information about profit or loss, assets and liabilities
  • Measurement
    • Reconciliations
    • Restatement of previously reported information
  • Entity-wide disclosures
    • Information about products and services
    • Information about geographical areas
    • Information about major customers
  • Transition and effective date
  • Withdrawal of IAS 14
  • Appendices:
    • A Defined term
    • B Amendments to other IFRS

Last changed

January 2010

Interpretations

None

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL is an international standard for communicating business data simply and quickly. Consequently, this language for the electronic communication of business data partners perfectly with IFRS. Figure 4.12 shows an introductory fragment of XBRL tagging related to this standard.

FIGURE 4.12 Fragment of XBRL tagging related to IFRS 8.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IFRS 9 Financial Instruments

Objective

The objective of this IFRS is to establish principles for the financial reporting of financial assets and financial liabilities that will present relevant and useful information to users of financial statements for their assessment of the amounts, timing and uncertainty of an entity's future cash flows.

Scope

An entity shall apply this IFRS to all items within the scope of IAS 39 Financial Instruments: Recognition and Measurement.

Summary

In addition to the objective, scope and related introduction, a summary of IFRS 9 appears next:

  • Recognition and derecognition
  • Classification
  • Measurement
  • Hedge accounting
  • Effective date and transition
  • Appendices:
    • A Defined terms
    • B Application guidance
    • C Amendments to other IFRS

Last changed

December 2011

Interpretations

None

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL (eXtensible Business Reporting Language), is an international standard for communicating business data simply and quickly. ­Consequently, this language for the electronic communication of business data partners perfectly with IFRSs. Please note that, currently, no XBRL tagging is related directly to this standard.

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IFRS 10 Consolidated Financial Statements

Objective

The objective of this IFRS is to establish principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities. To meet the objective, this IFRS:

(a) requires an entity (the parent) that controls one or more other entities (subsidiaries) to present consolidated financial statements;
(b) defines the principle of control, and establishes control as the basis for ­consolidation;
(c) sets out how to apply the principle of control to identify whether an investor controls an investee and therefore must consolidate the investee;
(d) sets out the accounting requirements for the preparation of consolidated financial statements.

This IFRS does not deal with the accounting requirements for business combinations and their effect on consolidation, including goodwill arising on a business combination (see IFRS 3 Business Combinations).

Scope

An entity that is a parent shall present consolidated financial statements. This IFRS applies to all entities, except as follows:

(a) A parent need not present consolidated financial statements if it meets all the following conditions:
(i) it is a wholly owned subsidiary or is a partially owned subsidiary of another entity and all its other owners, including those not otherwise entitled to vote, have been informed about, and do not object to, the parent not presenting consolidated financial statements;
(ii) its debt or equity instruments are not traded in a public market (a domestic or foreign stock exchange or an over-the-counter market, including local and regional markets);
(iii) it did not file, nor is it in the process of filing, its financial statements with a securities commission or other regulatory organisation for the purpose of issuing any class of instruments in a public market;
(iv) its ultimate or any intermediate parent produces consolidated financial statements that are available for public use and comply with IFRSs.
(b) Post-employment benefit plans or other long-term employee benefit plans to which IAS 19 Employee Benefits applies.

Summary

In addition to the objective, scope and related introduction, a summary of IFRS 10 appears next:

  • Control
    • Power
    • Returns
    • Link between power and returns
  • Accounting requirements
    • Non-controlling interests
    • Loss of control
  • Appendices:
    • A Defined terms
    • B Application guidance
      • Assessing control
Purpose and design of an investee
Power
Exposure, or rights, to variable returns from an investee
Link between power and returns
Delegated power
Relationship with other parties
Control of specified assets
Continuous assessment
  • Accounting requirements
Consolidation procedures
Uniform accounting policies
Measurement
Potential voting rights
Reporting date
Non-controlling interests
Changes in the proportion held by non-controlling interests
Loss of control
  • C Effective date and transition
  • D Amendments to other IFRS
  • Basis for conclusions
  • Appendix:
    • Amendments to the Basis for Conclusions on other IFRS

Last changed

May 2011

Interpretations

IFRS 10 superseded SIC-12 Consolidation – Special Purpose Entities

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL (eXtensible Business Reporting Language), is an international standard for communicating business data simply and quickly. ­Consequently, this language for the electronic communication of business data partners perfectly with IFRSs. Please note that, currently, no XBRL tagging is related directly to this standard.

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IFRS 11 Joint Arrangements

Objective

The objective of this IFRS is to establish principles for financial reporting by entities that have an interest in arrangements that are controlled jointly (i.e. joint arrangements).

To meet the objective, this IFRS defines joint control and requires an entity that is a party to a joint arrangement to determine the type of joint arrangement in which it is involved by assessing its rights and obligations and to account for those rights and obligations in accordance with that type of joint arrangement.

Scope

This IFRS shall be applied by all entities that are a party to a joint arrangement.

Summary

In addition to the objective, scope and related introduction, a summary of IFRS 11 appears below:

  • Joint arrangements
    • Joint control
    • Types of joint arrangement
  • Financial statements of parties to a joint arrangement
    • Joint operations
    • Joint ventures
  • Separate financial statements
  • Appendices:
    • A Defined terms
    • B Application guidance
    • C Effective date, transition and withdrawal of other IFRS
    • D Amendments to other IFRS
  • Approval by the Board of IFRS 11 issued in May 2011
  • Basis for conclusion
  • Appendix:
    • Amendments to the Basis for Conclusions on other IFRS
  • Illustrative examples

Last changed

May 2011

Interpretations

IFRS 11 superseded SIC-13 Jointly Controlled Entities – Non-Monetary Contributions by Venturers

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm

XBRL tags

XBRL (eXtensible Business Reporting Language), is an international standard for communicating business data simply and quickly. ­Consequently, this language for the electronic communication of business data partners perfectly with IFRSs. Please note that, currently, no XBRL tagging is related directly to this standard.

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IFRS 12 Disclosure of Interests in Other Entities

Objective

The objective of this IFRS is to require an entity to disclose information that enables users of its financial statements to evaluate:

(a) the nature of, and risks associated with, its interests in other entities;
(b) the effects of those interests on its financial position, financial performance and cash flows.

To meet the objective, an entity shall disclose:

(a) the significant judgements and assumptions it has made in determining the nature of its interest in another entity or arrangement, and in determining the type of joint arrangement in which it has an interest;
(b) information about its interests in:
(i) subsidiaries;
(ii) joint arrangements and associates;
(iii) structured entities that are not controlled by the entity (unconsolidated structured entities).

If the disclosures required by this IFRS, together with disclosures required by other IFRS, do not meet the objective stated above, an entity shall disclose whatever additional information is necessary to meet that objective.

An entity shall consider the level of detail necessary to satisfy the disclosure objective and how much emphasis to place on each of the requirements in this IFRS. It shall aggregate or disaggregate disclosures so that useful information is not obscured by either the inclusion of a large amount of insignificant detail or the aggregation of items that have different characteristics.

Scope

This IFRS shall be applied by an entity that has an interest in any of the following:

(a) subsidiaries;
(b) joint arrangements (i.e. joint operations or joint ventures);
(c) associates;
(d) unconsolidated structured entities.

This IFRS does not apply to:

(a) post-employment benefit plans or other long-term employee benefit plans to which IAS 19 Employee Benefits applies;
(b) an entity's separate financial statements to which IAS 27 Separate Financial Statements applies. However, if an entity has interests in unconsolidated structured entities and prepares separate financial statements as its only financial statements, it shall apply the requirements when preparing those separate financial statements;
(c) an interest held by an entity that participates in, but does not have joint control of, a joint arrangement unless that interest results in significant influence over the arrangement or is an interest in a structured entity;
(d) an interest in another entity that is accounted for in accordance with IFRS 9 Financial Instruments. However, an entity shall apply this IFRS:
(i) when that interest is an interest in an associate or a joint venture that, in accordance with IAS 28 Investments in Associates and Joint Ventures, is measured at fair value through profit or loss; or
(ii) when that interest is an interest in an unconsolidated structured entity.

Summary

In addition to the objective, scope and related introduction, a summary of IFRS 12 appears next:

  • Significant judgements and assumptions
  • Interests in subsidiaries
    • The interest that non-controlling interests have in the group's activities and cash flows
    • The nature and extent of significant restrictions
    • Nature of the risks associated with an entity's interests in consolidated structured entities
    • Consequences of changes in a parent's ownership interest in a subsidiary that do not result in a loss of control
    • Consequences of losing control of a subsidiary during the reporting period
  • Interests in joint arrangements and associates
    • Nature, extent and financial effects of an entity's interests in joint arrangements and associates
    • Risks associated with an entity's interests in joint ventures and associates
  • Interest in unconsolidated structured entities
    • Nature of interests
    • Nature of risks
  • Appendices:
    • A Defined terms
    • B Application guidance
    • C Effective date and transition
    • D Amendments to other IFRS
  • Approval by the Board of IFRS 12 issued in May 2011
  • Basis for conclusion on IFRS 12

Last changed

May 2011

Interpretations

None

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL is an international standard for communicating business data simply and quickly. Consequently, this language for the electronic communication of business data partners perfectly with IFRS. Figure 4.13 shows an introductory fragment of XBRL tagging related to this standard.

FIGURE 4.13 Fragment of XBRL tagging related to IFRS 12.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IFRS 13 Fair Value Measurement

Objective

This IFRS defines fair value, sets out in a single IFRS a framework for measuring fair value, and requires disclosures about fair value measurements.

Fair value is a market-based measurement, not an entity-specific measurement. For some assets and liabilities, observable market transactions or market information might be available. For other assets and liabilities, observable market transactions and market information might not be available. However, the objective of a fair value measurement in both cases is the same – to estimate the price at which an orderly transaction to sell the asset or to transfer the liability would take place between market participants at the measurement date under current market conditions (i.e. an exit price at the measurement date from the perspective of a market participant that holds the asset or owes the liability).

When a price for an identical asset or liability is not observable, an entity measures fair value using another valuation technique that maximises the use of relevant observable inputs and minimises the use of unobservable inputs. Because fair value is a market-based measurement, it is measured using the assumptions that market participants would use when pricing the asset or liability, including assumptions about risk. As a result, an entity's intention to hold an asset or to settle or otherwise fulfil a liability is not relevant when measuring fair value.

The definition of fair value focuses on assets and liabilities because they are a primary subject of accounting measurement. In addition, this IFRS shall be applied to an entity's own equity instruments measured at fair value.

Scope

This IFRS applies when another IFRS requires or permits fair value measurements or disclosures about fair value measurements (and measurements, such as fair value less costs to sell, based on fair value or disclosures about those measurements), except as specified below.

The measurement and disclosure requirements of this IFRS do not apply to the following:

(a) share-based payment transactions within the scope of IFRS 2 Share-based Payment;
(b) leasing transactions within the scope of IAS 17 Leases;
(c) measurements that have some similarities to fair value but are not fair value, such as net realisable value in IAS 2 Inventories or value in use in IAS 36 Impairment of Assets.

The disclosures required by this IFRS are not required for the following:

(a) plan assets measured at fair value in accordance with IAS 19 Employee Benefits;
(b) retirement benefit plan investments measured at fair value in accordance with IAS 26 Accounting and Reporting by Retirement Benefit Plans;
(c) assets for which the recoverable amount is fair value less costs of disposal in accordance with IAS 36.

The fair value measurement framework described in this IFRS applies to both initial and subsequent measurement if fair value is required or permitted by other IFRS.

Summary

In addition to the objective, scope and related introduction, a summary of IFRS 13 appears below:

  • Measurement
    • Definition of fair value
    • The asset or liability
    • The transaction
    • Market participants
    • The price
    • Application to non-financial assets
    • Application to liabilities and an entity's own equity instruments
    • Application to financial assets and financial liabilities with offsetting positions
    • in market risks or counterparty credit risk
    • Fair value at initial recognition
    • Valuation techniques
    • Inputs to valuation techniques
    • Fair value hierarchy
  • Disclosure
  • Appendices:
    • A Defined terms
    • B Application guidance
    • C Effective date and transition
    • D Amendments to other IFRS
  • Approval by the Board of IFRS 13 issued in May 2011
  • Basis for conclusions
  • Appendix:
  • Amendments to the Basis for Conclusions on other IFRS
  • Illustrative examples
  • Appendix:
    • Amendments to the guidance on other IFRS

Last changed

May 2011

Interpretations

None

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL is an international standard for communicating business data simply and quickly. Consequently, this language for the electronic communication of business data partners perfectly with IFRS. Figure 4.14 shows an introductory fragment of XBRL tagging related to this standard.

FIGURE 4.14 Fragment of XBRL tagging related to IFRS 13.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

International Accounting Standards (IAS 1–41)

IAS 1 Presentation of Financial Statements

Objective

This Standard prescribes the basis for presentation of general purpose financial statements to ensure comparability both with the entity's financial statements of previous periods and with the financial statements of other entities. It sets out overall requirements for the presentation of financial statements, guidelines for their structure and minimum requirements for their content.

Scope

An entity shall apply this Standard in preparing and presenting general purpose financial statements in accordance with International Financial Reporting Standards. Other IFRS set out the recognition, measurement and disclosure requirements for specific transactions and other events.

This Standard does not apply to the structure and content of condensed interim financial statements prepared in accordance with IAS 34 Interim Financial Reporting. This Standard applies equally to all entities, including those that present consolidated financial statements and those that present separate financial statements as defined in IAS 27 Consolidated and Separate Financial Statements.

This Standard uses terminology that is suitable for profit-oriented entities, including public sector business entities. If entities with not-for-profit activities in the private sector or the public sector apply this Standard, they may need to amend the descriptions used for particular line items in the financial statements and for the financial statements themselves.

Similarly, entities that do not have equity as defined in IAS 32 Financial Instruments: Presentation (e.g. some mutual funds) and entities whose share capital is not equity (e.g. some cooperative entities) may need to adapt the financial statement presentation of members' or unit holders' interests.

Summary

In addition to the objective, scope and related introduction, a summary of IAS 1 appears next:

  • Definitions
  • Financial statements
    • Purpose of financial statements
    • Complete set of financial statements
    • General features
      • Fair presentation and compliance with IFRS
      • Going concern
      • Accrual basis of accounting
      • Materiality and aggregation
      • Offsetting
      • Frequency of reporting
      • Comparative information
      • Consistency of presentation
  • Structure and Content
    • Introduction
    • Identification of the financial statements
    • Statement of financial position
      • Information to be presented in the statement of financial position
      • Current/non-current distinction
      • Current assets
      • Current liabilities
      • Information to be presented either in the statement of financial position or in the notes
    • Statement of comprehensive income
      • Information to be presented in the statement of comprehensive income
      • Profit or loss for the period
      • Other comprehensive income for the period
      • Information to be presented in the statement of comprehensive income or in the notes
    • Statement of changes in equity
      • Information to be presented in the statement of changes in equity
      • Information to be presented in the statement of changes in equity or in the notes
    • Statement of cash flows
    • Notes
      • Structure
      • Disclosure of accounting policies
      • Sources of estimation uncertainty
      • Capital
      • Puttable financial instruments classified as equity
      • Other disclosures
  • Transition and effective date
  • Withdrawal of IAS 1 (revised 2003)
  • Appendix:
    • Amendments to other pronouncements

Last changed

June 2011

Interpretations

IAS 1 (2003) supersedes SIC 18 Consistency – Alternative Methods

IFRIC 17 Distributions of Non-cash Assets to Owners

SIC 27 Evaluating the Substance of Transactions in the Legal Form of a Lease

SIC 29 Disclosure – Service Concession Arrangements

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL (eXtensible Business Reporting Language), is an international standard for communicating business data simply and quickly. ­Consequently, this language for the electronic communication of business data partners perfectly with IFRS. Figure 4.15 shows an introductory fragment of XBRL tagging related to this standard.

FIGURE 4.15 Fragment of XBRL tagging related to IAS 1.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IAS 2 Inventories

Objective

The objective of this Standard is to prescribe the accounting treatment for inventories. A primary issue in accounting for inventories is the amount of cost to be recognised as an asset and carried forward until the related revenues are recognised. This Standard provides guidance on the determination of cost and its subsequent recognition as an expense, including any write-down to net realisable value. It also provides guidance on the cost formulas that are used to assign costs to inventories.

Scope

This Standard applies to all inventories, except:

(a) work in progress arising under construction contracts, including directly related service contracts (see IAS 11 Construction Contracts);
(b) financial instruments (see IAS 32 Financial Instruments: Presentation and IFRS 9 Financial Instruments);
(c) biological assets related to agricultural activity and agricultural produce at the point of harvest (see IAS 41 Agriculture).

This Standard does not apply to the measurement of inventories held by:

(a) producers of agricultural and forest products, agricultural produce after harvest, and minerals and mineral products, to the extent that they are measured at net realisable value in accordance with well-established practices in those industries. When such inventories are measured at net realisable value, changes in that value are recognised in profit or loss in the period of the change;
(b) commodity broker-traders who measure their inventories at fair value less costs to sell. When such inventories are measured at fair value less costs to sell, changes in fair value less costs to sell are recognised in profit or loss in the period of the change.

The inventories referred to in paragraph (a) immediately above are measured at net realisable value at certain stages of production. This occurs, for example, when agricultural crops have been harvested or minerals have been extracted and sale is assured under a forward contract or a government guarantee, or when an active market exists and there is a negligible risk of failure to sell. These inventories are excluded from only the measurement requirements of this Standard.

Broker-traders are those who buy or sell commodities for others or on their own account. The inventories referred to in paragraph (b) are principally acquired with the purpose of selling in the near future and generating a profit from fluctuations in price or broker-traders' margins. When these inventories are measured at fair value less costs to sell, they are excluded from only the measurement requirements of this Standard.

Summary

In addition to the objective, scope and related introduction, a summary of IAS 2 appears below:

  • Definitions
  • Measurement of inventories
    • Cost of inventories
      • Costs of purchase
      • Costs of conversion
      • Other costs
      • Cost of inventories of a service provider
      • Cost of agricultural produce harvested from biological assets
      • Techniques for the measurement of cost
    • Cost formulas
    • Net realisable value
  • Recognition as an expense
  • Disclosure
  • Effective date
  • Withdrawal of other pronouncements
  • Appendix:
    • Amendments to other pronouncements

Last changed

January 2005

Interpretations

IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine

SIC 1 Consistency – Different Cost Formulas for Inventories

SIC 1 was superseded by and incorporated into IAS 2 (Revised 2003)

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL (eXtensible Business Reporting Language), is an international standard for communicating business data simply and quickly. Consequently, this language for the electronic communication of business data partners perfectly with IFRSs. Figure 4.16 shows an introductory fragment of XBRL tagging related to this standard.

FIGURE 4.16 Fragment of XBRL tagging related to IAS 2.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IAS 7 Cash Flow Statements

Objective

Information about the cash flows of an entity is useful in providing users of financial statements with a basis to assess the ability of the entity to generate cash and cash equivalents and the needs of the entity to utilise those cash flows. The economic decisions that are taken by users require an evaluation of the ability of an entity to generate cash and cash equivalents and the timing and certainty of their generation.

The objective of this Standard is to require the provision of information about the historical changes in cash and cash equivalents of an entity by means of a statement of cash flows which classifies cash flows during the period from operating, investing and financing activities.

Scope

An entity shall prepare a statement of cash flows in accordance with the requirements of this Standard and shall present it as an integral part of its financial statements for each period for which financial statements are presented.

This Standard supersedes IAS 7 Statement of Changes in Financial Position, approved in July 1977.

Users of an entity's financial statements are interested in how the entity generates and uses cash and cash equivalents. This is the case regardless of the nature of the entity's activities and irrespective of whether cash can be viewed as the product of the entity, as may be the case with a financial institution. ­Entities need cash for essentially the same reasons however different their principal revenue-producing activities might be. They need cash to conduct their operations, to pay their obligations and to provide returns to their investors. Accordingly, this Standard requires all entities to present a statement of cash flows.

Summary

In addition to the objective, scope and related introduction, a summary of IAS 7 appears below:

  • Benefits of cash flow information
  • Definitions
    • Cash and cash equivalents
  • Presentation of a statement of cash flows
    • Operating activities
    • Investing activities
    • Financing activities
  • Reporting cash flows from operating activities
  • Reporting cash flows from investing and financing activities
  • Reporting cash flows on a net basis
  • Foreign currency cash flows
  • Interest and dividends
  • Taxes on income
  • Investments in subsidiaries, associates and joint ventures
  • Changes in ownership interests in subsidiaries and other businesses
  • Non-cash transactions
  • Components of cash and cash equivalents
  • Other disclosures
  • Effective date

Last changed

January 2010

Interpretations

None

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL (eXtensible Business Reporting Language), is an international standard for communicating business data simply and quickly. ­Consequently, this language for the electronic communication of business data partners perfectly with IFRSs. Figure 4.17 shows an introductory fragment of XBRL tagging related to this standard.

FIGURE 4.17 Fragment of XBRL tagging related to IAS 7.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IAS 8 Accounting Policies, Changes in Accounting Estimates, and Errors

Objective

The objective of this Standard is to prescribe the criteria for selecting and changing accounting policies, together with the accounting treatment and disclosure of changes in accounting policies, changes in accounting estimates and corrections of errors. The Standard is intended to enhance the relevance and reliability of an entity's financial statements, and the comparability of those financial statements over time and with the financial statements of other entities.

Disclosure requirements for accounting policies, except those for changes in accounting policies, are set out in IAS 1 Presentation of Financial Statements.

Scope

This Standard shall be applied in selecting and applying accounting policies, and accounting for changes in accounting policies, changes in accounting estimates and corrections of prior period errors.

The tax effects of corrections of prior period errors and of retrospective adjustments made to apply changes in accounting policies are accounted for and disclosed in accordance with IAS 12 Income Taxes.

Summary

In addition to the objective, scope and related introduction, a summary of IAS 8 appears next:

  • Definitions
  • Accounting policies
    • Selection and application of accounting policies
    • Consistency of accounting policies
    • Changes in accounting policies
      • Applying changes in accounting policies
Retrospective application
Limitations on retrospective application
Disclosure
  • Changes in accounting estimates
    • Disclosure
  • Errors
    • Limitations on retrospective restatement
    • Disclosure of prior period errors
  • Impracticability in respect of retrospective application and retrospective restatement
  • Effective date
  • Withdrawal of other pronouncements
  • Appendix:
    • Amendments to other pronouncements

Last changed

January 2005

Interpretations

IAS 8(2003) supersedes SIC 2 Consistency – Capitalisation of Borrowing Costs

IAS 8(2003) supersedes SIC 18 Consistency – Alternative Methods

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm

XBRL tags

XBRL (eXtensible Business Reporting Language), is an international standard for communicating business data simply and quickly. ­Consequently, this language for the electronic communication of business data partners perfectly with IFRSs. Figure 4.18 shows an introductory fragment of XBRL tagging related to this Standard.

FIGURE 4.18 Fragment of XBRL tagging related to IAS 8.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IAS 10 Events After the Balance Sheet Date

Objective

The objective of this Standard is to prescribe:

(a) when an entity should adjust its financial statements for events after the reporting period;
(b) the disclosures that an entity should give about the date when the financial statements were authorised for issue and about events after the reporting period.

The Standard also requires that an entity should not prepare its financial statements on a going concern basis if events after the reporting period indicate that the going concern assumption is not appropriate.

Scope

This Standard shall be applied in the accounting for, and disclosure of, events after the reporting period.

Summary

In addition to the objective, scope and related introduction, a summary of IAS 10 appears below:

  • Definitions
  • Recognition and measurement
    • Adjusting events after the reporting period
    • Non-adjusting events after the reporting period
    • Dividends
  • Going concern
  • Disclosure
    • Date of authorisation for issue
    • Updating disclosure about conditions at the end of the reporting period
    • Non-adjusting events after the reporting period
  • Effective date
  • Withdrawal of IAS 10 (revised 1999)
  • Appendix:
    • Amendments to other pronouncements

Last changed

September 2007

Interpretations

None

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL (eXtensible Business Reporting Language), is an international standard for communicating business data simply and quickly. ­Consequently, this language for the electronic communication of business data partners perfectly with IFRSs. Figure 4.19 shows an introductory fragment of XBRL tagging related to this standard.

FIGURE 4.19 Fragment of XBRL tagging related to IAS 10.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IAS 11 Construction Contracts

Objective

The objective of this Standard is to prescribe the accounting treatment of revenue and costs associated with construction contracts. Because of the nature of the activity undertaken in construction contracts, the date at which the contract activity is entered into and the date when the activity is completed usually fall into different accounting periods. Therefore, the primary issue in accounting for construction contracts is the allocation of contract revenue and contract costs to the accounting periods in which construction work is performed. This Standard uses the recognition criteria established in the Framework for the Preparation and Presentation of Financial Statements to determine when contract revenue and contract costs should be recognised as revenue and expenses in the statement of comprehensive income. It also provides practical guidance on the application of these criteria.

Scope

This Standard shall be applied in accounting for construction contracts in the financial statements of contractors.

This Standard supersedes IAS 11 Accounting for Construction Contracts, approved in 1978.

Summary

In addition to the objective, scope and related introduction, a summary of IAS 11 appears below:

  • Definitions
  • Combining and segmenting construction contracts
  • Contract revenue
  • Contract costs
  • Recognition of contract revenue and expenses
  • Recognition of expected losses
  • Changes in estimates
  • Disclosure
  • Effective date

Last changed

January 1995

Interpretations

IFRIC 15 Agreements for the Construction of Real Estate

IFRIC 12 Service Concession Arrangements

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL (eXtensible Business Reporting Language), is an international standard for communicating business data simply and quickly. Consequently, this language for the electronic communication of business data partners perfectly with IFRSs. Figure 4.20 shows an introductory fragment of XBRL tagging related to this standard.

FIGURE 4.20 Fragment of XBRL tagging related to IAS 11.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IAS 12 Income Taxes

Objective

The objective of this Standard is to prescribe the accounting treatment for income taxes. The principal issue in accounting for income taxes is how to account for the current and future tax consequences of:

(a) the future recovery (settlement) of the carrying amount of assets (liabilities) that are recognised in an entity's statement of financial position;
(b) transactions and other events of the current period that are recognised in an entity's financial statements.

It is inherent in the recognition of an asset or liability that the reporting entity expects to recover or settle the carrying amount of that asset or liability. If it is probable that recovery or settlement of that carrying amount will make future tax payments larger (smaller) than they would be if such recovery or settlement were to have no tax consequences, this Standard requires an entity to recognise a deferred tax liability (deferred tax asset), with certain limited exceptions.

This Standard requires an entity to account for the tax consequences of transactions and other events in the same way that it accounts for the transactions and other events themselves. Thus, for transactions and other events recognised in profit or loss, any related tax effects are also recognised in profit or loss. For transactions and other events recognised outside profit or loss (either in other comprehensive income or directly in equity), any related tax effects are also recognised outside profit or loss (either in other comprehensive income or directly in equity, respectively). Similarly, the recognition of deferred tax assets and liabilities in a business combination affects the amount of goodwill arising in that business combination or the amount of the bargain purchase gain recognised.

This Standard also deals with the recognition of deferred tax assets arising from unused tax losses or unused tax credits, the presentation of income taxes in the financial statements and the disclosure of information relating to income taxes.

Scope

This Standard shall be applied in accounting for income taxes.

For the purposes of this Standard, income taxes include all domestic and foreign taxes which are based on taxable profits. Income taxes also include taxes, such as withholding taxes, which are payable by a subsidiary, associate or joint venture on distributions to the reporting entity.

This Standard does not deal with the methods of accounting for government grants (see IAS 20 Accounting for Government Grants and Disclosure of Government Assistance) or investment tax credits. However, it does deal with the accounting for temporary differences that may arise from such grants or investment tax credits.

Summary

In addition to the objective, scope and related introduction, a summary of IFRS 9 appears below:

  • Definitions
    • Tax base
  • Recognition of current tax liabilities and current tax assets
  • Recognition of deferred tax liabilities and deferred tax assets
    • Taxable temporary differences
      • Business combinations
      • Assets carried at fair value
      • Goodwill
      • Initial recognition of an asset or liability
    • Deductible temporary differences
      • Goodwill
      • Initial recognition of an asset or liability
    • Unused tax losses and unused tax credits
    • Reassessment of unrecognised deferred tax assets
    • Investments in subsidiaries, branches and associates and interests in joint ventures
  • Measurement
  • Recognition of current and deferred tax
    • Items recognised in profit or loss
    • Items recognised outside profit or loss
    • Deferred tax arising from a business combination
    • Current and deferred tax arising from share-based payment transactions
  • Presentation
    • Tax assets and tax liabilities
      • Offset
    • Tax expense
      • Tax expense (income) related to profit or loss from ordinary activities
      • Exchange differences on deferred foreign tax liabilities or assets
  • Disclosure
  • Effective date

Last changed

December 2010

Interpretations

SIC 21 Income Taxes – Recovery of Revalued Non-Depreciable Assets

SIC 25 Income Taxes – Changes in the Tax Status of an Enterprise or its Shareholders

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL (eXtensible Business Reporting Language), is an international standard for communicating business data simply and quickly. Consequently, this language for the electronic communication of business data partners perfectly with IFRSs. Figure 4.21 shows an introductory fragment of XBRL tagging related to this standard.

FIGURE 4.21 Fragment of XBRL tagging related to IAS 12.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IAS 16 Property, Plant, and Equipment

Objective

The objective of this Standard is to prescribe the accounting treatment for property, plant and equipment so that users of the financial statements can discern information about an entity's investment in its property, plant and equipment and the changes in such investment. The principal issues in accounting for property, plant and equipment are the recognition of the assets, the determination of their carrying amounts and the depreciation charges and impairment losses to be recognised in relation to them.

Scope

This Standard shall be applied in accounting for property, plant and equipment except when another Standard requires or permits a different accounting treatment.

This Standard does not apply to:

(a) property, plant and equipment classified as held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations;
(b) biological assets related to agricultural activity (see IAS 41 Agriculture);
(c) the recognition and measurement of exploration and evaluation assets (see IFRS 6 Exploration for and Evaluation of Mineral Resources); or
(d) mineral rights and mineral reserves such as oil, natural gas and similar non-regenerative resources.

However, this Standard applies to property, plant and equipment used to develop or maintain the assets described in (b) – (d).

Other Standards may require recognition of an item of property, plant and equipment based on an approach different from that in this Standard. For example, IAS 17 Leases requires an entity to evaluate its recognition of an item of leased property, plant and equipment on the basis of the transfer of risks and rewards. However, in such cases other aspects of the accounting treatment for these assets, including depreciation, are prescribed by this Standard.

An entity using the cost model for investment property in accordance with IAS 40 Investment Property shall use the cost model in this Standard.

Summary

In addition to the objective, scope and related introduction, a summary of IAS 16 appears below:

  • Definitions
  • Recognition
    • Initial costs
    • Subsequent costs
  • Measurement at recognition
    • Elements of cost
    • Measurement of cost
  • Measurement after recognition
    • Cost model
    • Revaluation model
    • Depreciation
      • Depreciable amount and depreciation period
      • Depreciation method
    • Impairment
    • Compensation for impairment
  • Derecognition
  • Disclosure
  • Transitional provisions
  • Effective date
  • Withdrawal of other pronouncements
  • Appendix:
    • Amendments to other pronouncements

Last changed

January 2009

Interpretations

IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine

SIC 6 Costs of Modifying Existing Software

SIC 6 was superseded by and incorporated into IAS 16 (2003).

SIC 14 Property, Plant and Equipment – Compensation for the Impairment or Loss of Items

SIC 14 was superseded by and incorporated into IAS 16 (2003).

SIC 23 Property, Plant and Equipment – Major Inspection or Overhaul Costs

SIC 23 was superseded by and incorporated into IAS 16 (2003)

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL (eXtensible Business Reporting Language), is an international standard for communicating business data simply and quickly. Consequently, this language for the electronic communication of business data partners perfectly with IFRSs. Figure 4.22 shows an introductory fragment of XBRL tagging related to this standard.

FIGURE 4.22 Fragment of XBRL tagging related to IAS 16.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IAS 17 Leases

Objective

The objective of this Standard is to prescribe, for lessees and lessors, the appropriate accounting policies and disclosure to apply in relation to leases.

Scope

This Standard shall be applied in accounting for all leases other than:

(a) leases to explore for or use minerals, oil, natural gas and similar non-regenerative resources;
(b) licensing agreements for such items as motion picture films, video recordings, plays, manuscripts, patents and copyrights.

However, this Standard shall not be applied as the basis of measurement for:

(a) property held by lessees that is accounted for as investment property (see IAS 40 Investment Property);
(b) investment property provided by lessors under operating leases (see IAS 40);
(c) biological assets held by lessees under finance leases (see IAS 41 ­Agriculture); or
(d) biological assets provided by lessors under operating leases (see IAS 41).

This Standard applies to agreements that transfer the right to use assets even though substantial services by the lessor may be called for in connection with the operation or maintenance of such assets. This Standard does not apply to agreements that are contracts for services that do not transfer the right to use assets from one contracting party to the other.

Summary

In addition to the objective, scope and related introduction, a summary of IAS 17 appears next:

  • Definitions
  • Classification of leases
  • Leases in the financial statements of lessees
    • Finance leases
      • Initial recognition
      • Subsequent measurement
      • Disclosures
    • Operating leases
      • Disclosures
  • Leases in the financial statements of lessors
    • Finance leases
      • Initial recognition
      • Subsequent measurement
      • Disclosures
    • Operating leases
      • Disclosures
  • Sale and leaseback transactions
  • Transitional provisions
  • Effective date
  • Withdrawal of IAS 17 (revised 1997)
  • Appendix:
    • Amendments to other pronouncements

Last changed

January 2010

Interpretations

IFRIC 4 Determining Whether an Arrangement Contains a Lease

SIC 15 Operating Leases – Incentives

SIC 27 Evaluating the Substance of Transactions in the Legal Form of a Lease

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL (eXtensible Business Reporting Language), is an international standard for communicating business data simply and quickly. ­Consequently, this language for the electronic communication of business data partners perfectly with IFRSs. Figure 4.23 shows an introductory fragment of XBRL tagging related to this standard.

FIGURE 4.23 Fragment of XBRL tagging related to IAS 17.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IAS 18 Revenue

Objective

Income is defined in the Framework for the Preparation and Presentation of Financial Statements as 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. Income encompasses both revenue and gains. Revenue is income that arises in the course of ordinary activities of an entity and is referred to by a variety of names, including sales, fees, interest, dividends and royalties. The objective of this Standard is to prescribe the accounting treatment of revenue arising from certain types of transactions and events.

The primary issue in accounting for revenue is determining when to recognise revenue. Revenue is recognised when it is probable that future economic benefits will flow to the entity and these benefits can be measured reliably. This Standard identifies the circumstances in which these criteria will be met and, therefore, revenue will be recognised. It also provides practical guidance on the application of these criteria.

Scope

This Standard shall be applied in accounting for revenue arising from the following transactions and events:

(a) the sale of goods;
(b) the rendering of services;
(c) the use by others of entity assets yielding interest, royalties and dividends.

This Standard supersedes IAS 18 Revenue Recognition, approved in 1982.

Goods includes goods produced by the entity for the purpose of sale and goods purchased for resale, such as merchandise purchased by a retailer or land and other property held for resale.

The rendering of services typically involves the performance by the entity of a contractually agreed task over an agreed period of time. The services may be rendered within a single period or over more than one period. Some contracts for the rendering of services are directly related to construction contracts, for example those for the services of project managers and architects. Revenue arising from these contracts is covered in this Standard but is dealt with in accordance with the requirements for construction contracts as specified in IAS 11 Construction Contracts.

The use by others of entity assets gives rise to revenue in the form of:

(a) interest – charges for the use of cash or cash equivalents or amounts due to the entity;
(b) royalties – charges for the use of long-term assets of the entity, for example patents, trademarks, copyrights and computer software;
(c) dividends – distributions of profits to holders of equity investments in proportion to their holdings of a particular class of capital.

This Standard does not deal with revenue arising from:

(a) lease agreements (see IAS 17 Leases);
(b) dividends arising from investments which are accounted for under the equity method (see IAS 28 Investments in Associates);
(c) insurance contracts within the scope of IFRS 4 Insurance Contracts;
(d) changes in the fair value of financial assets and financial liabilities or their disposal (see IFRS 9 Financial Instruments);
(e) changes in the value of other current assets;
(f) initial recognition and from changes in the fair value of biological assets related to agricultural activity (see IAS 41 Agriculture);
(g) initial recognition of agricultural produce (see IAS 41);
(h) the extraction of mineral ores.

Summary

In addition to the objective, scope and related introduction, a summary of IAS 18 appears below:

  • Definitions
  • Measurement of revenue
  • Identification of the transaction
  • Sale of goods
  • Rendering of services
  • Interest, royalties and dividends
  • Disclosure
  • Effective date

Last changed

April 2009

Interpretations

IFRIC 18 Transfers of Assets from Customers

IFRIC 15 Agreements for the Construction of Real Estate

IFRIC 13 Customer Loyalty Programmes

IFRIC 12 Service Concession Arrangements

SIC 27 Evaluating the Substance of Transactions in the Legal Form of a Lease

SIC 31 Revenue – Barter Transactions Involving Advertising Services

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL (eXtensible Business Reporting Language), is an international standard for communicating business data simply and quickly. Consequently, this language for the electronic communication of business data partners perfectly with IFRSs. Figure 4.24 shows an introductory fragment of XBRL tagging related to this standard.

FIGURE 4.24 Fragment of XBRL tagging related to IAS 18.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IAS 19 Employee Benefits

Objective

The objective of this Standard is to prescribe the accounting and disclosure for employee benefits. The Standard requires an entity to recognise:

(a) a liability when an employee has provided service in exchange for employee benefits to be paid in the future;
(b) an expense when the entity consumes the economic benefit arising from service provided by an employee in exchange for employee benefits.

Scope

This Standard shall be applied by an employer in accounting for all employee benefits, except those to which IFRS 2 Share-based Payment applies.

This Standard does not deal with reporting by employee benefit plans (see IAS 26 Accounting and Reporting by Retirement Benefit Plans).

The employee benefits to which this Standard applies include those provided:

(a) under formal plans or other formal agreements between an entity and individual employees, groups of employees or their representatives;
(b) under legislative requirements, or through industry arrangements, whereby entities are required to contribute to national, state, industry or other multi-employer plans; or
(c) by those informal practices that give rise to a constructive obligation. Informal practices give rise to a constructive obligation where the entity has no realistic alternative but to pay employee benefits. An example of a constructive obligation is where a change in the entity's informal practices would cause unacceptable damage to its relationship with employees.

Employee benefits include:

(a) short-term employee benefits, such as wages, salaries and social security contributions, paid annual leave and paid sick leave, profit-sharing and bonuses (if payable within 12 months of the end of the period) and non-monetary benefits (such as medical care, housing, cars and free or subsidised goods or services) for current employees;
(b) post-employment benefits such as pensions, other retirement benefits, post-employment life insurance and post-employment medical care;
(c) other long-term employee benefits, including long-service leave or sabbatical leave, jubilee or other long-service benefits, long-term disability benefits and, if they are not payable wholly within 12 months after the end of the period, profit-sharing, bonuses and deferred compensation;
(d) termination benefits.

Because each category identified in (a) – (d) above has different characteristics, this Standard establishes separate requirements for each category.

Employee benefits include benefits provided to either employees or their dependants and may be settled by payments (or the provision of goods or services) made either directly to the employees, their spouses, children or other dependants, or to others, such as insurance companies.

An employee may provide services to an entity on a full-time, part-time, permanent, casual or temporary basis. For the purpose of this Standard, employees include directors and other management personnel.

Summary

In addition to the objective, scope and related introduction, a summary of IAS 19 appears next:

  • Definitions
  • Short-term employee benefits
    • Recognition and measurement
      • All short-term employee benefits
      • Short-term compensated absences
      • Profit-sharing and bonus plans
    • Disclosure
  • Post-employment benefits: distinction between defined contribution plans and defined benefit plans
    • Multi-employer plans
    • Defined benefit plans that share risks between various entities under common control
    • State plans
    • Insured benefits
  • Post-employment benefits: defined contribution plans
    • Recognition and measurement
    • Disclosure
  • Post-employment benefits: defined benefit plans
    • Recognition and measurement
      • Accounting for the constructive obligation
      • Statement of financial position
      • Profit or loss
    • Recognition and measurement: present value of defined benefit obligations and current service cost
      • Actuarial valuation method
      • Attributing benefit to periods of service
      • Actuarial assumptions
      • Actuarial assumptions: discount rate
      • Actuarial assumptions: salaries, benefits and medical costs
      • Actuarial gains and losses
      • Past service cost
    • Recognition and measurement: plan assets
      • Fair value of plan assets
      • Reimbursements
      • Return on plan assets
    • Business combinations
    • Curtailments and settlements
    • Presentation
      • Offset
      • Current/non-current distinction
      • Financial components of post-employment benefit costs
    • Disclosure
  • Other long-term employee benefits
    • Recognition and measurement
    • Disclosure
  • Termination benefits
    • Recognition
    • Measurement
    • Disclosure
  • Transitional provisions
  • Effective date
  • Appendix:
    • Amendments to other standards

Last changed

June 2011

Interpretations

IFRIC 14: IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL (eXtensible Business Reporting Language), is an international standard for communicating business data simply and quickly. ­Consequently, this language for the electronic communication of business data partners perfectly with IFRSs. Figure 4.25 shows an introductory fragment of XBRL tagging related to this standard.

FIGURE 4.25 Fragment of XBRL tagging related to IAS 19.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IAS 20 Accounting for Government Grants and Disclosure of Assistance

Objective

The objective of IAS 20 is to prescribe the accounting for, and disclosure of, government grants and other forms of government assistance. Scope IAS 20 applies to all government grants and other forms of government assistance. However, it does not cover government assistance that is provided in the form of benefits in determining taxable income. It does not cover government grants covered by IAS 41 Agriculture, either. The benefit of a government loan at a below-market rate of interest is treated as a government grant.

Scope

This Standard shall be applied in accounting for, and in the disclosure of, government grants and in the disclosure of other forms of government assistance.

This Standard does not deal with:

(a) the special problems arising in accounting for government grants in financial statements reflecting the effects of changing prices or in supplementary information of a similar nature;
(b) government assistance that is provided for an entity in the form of benefits that are available in determining taxable profit or tax loss, or are determined or limited on the basis of income tax liability. Examples of such benefits are income tax holidays, investment tax credits, accelerated depreciation allowances and reduced income tax rates;
(c) government participation in the ownership of the entity;
(d) government grants covered by IAS 41 Agriculture.

Summary

In addition to the objective, scope and related introduction, a summary of IAS 20 appears below:

  • Definitions
  • Government grants
    • Non-monetary government grants
    • Presentation of grants related to assets
    • Presentation of grants related to income
    • Repayment of government grants
  • Government assistance
  • Disclosure
  • Transitional provisions
  • Effective date

Last changed

January 2009

Interpretations

SIC 10, Government Assistance – No Specific Relation to Operating Activities

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL (eXtensible Business Reporting Language), is an international standard for communicating business data simply and quickly. ­Consequently, this language for the electronic communication of business data partners perfectly with IFRSs. Figure 4.26 shows an introductory fragment of XBRL tagging related to this standard.

FIGURE 4.26 Fragment of XBRL tagging related to IAS 20.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IAS 21 Effects of Change in Foreign Exchange Rates

Objective

An entity may carry on foreign activities in two ways. It may have transactions in foreign currencies or it may have foreign operations. In addition, an entity may present its financial statements in a foreign currency. The objective of this Standard is to prescribe how to include foreign currency transactions and foreign operations in the financial statements of an entity and how to translate financial statements into a presentation currency.

The principal issues are which exchange rate(s) to use and how to report the effects of changes in exchange rates in the financial statements.

Scope

This Standard shall be applied:

(a) in accounting for transactions and balances in foreign currencies, except for those derivative transactions and balances that are within the scope of IFRS 9 Financial Instruments;
(b) in translating the results and financial position of foreign operations that are included in the financial statements of the entity by consolidation, proportionate consolidation or the equity method;
(c) in translating an entity's results and financial position into a presentation currency.

IFRS 9 applies to many foreign currency derivatives and, accordingly, these are excluded from the scope of this Standard. However, those foreign currency derivatives that are not within the scope of IFRS 9 (e.g. some ­foreign currency derivatives that are embedded in other contracts) are within the scope of this Standard. In addition, this Standard applies when an entity translates amounts relating to derivatives from its functional currency to its presentation currency.

This Standard does not apply to hedge accounting for foreign currency items, including the hedging of a net investment in a foreign operation. IAS 39 applies to hedge accounting.

This Standard applies to the presentation of an entity's financial statements in a foreign currency and sets out requirements for the resulting financial statements to be described as complying with IFRS. For translations of financial information into a foreign currency that do not meet these requirements, this Standard specifies information to be disclosed.

This Standard does not apply to the presentation in a statement of cash flows of the cash flows arising from transactions in a foreign currency, or to the translation of cash flows of a foreign operation (see IAS 7 Statement of Cash Flows).

Summary

In addition to the objective, scope and related introduction, a summary of IAS 21 appears below:

  • Definitions
    • Elaboration on the definitions
      • Functional currency
      • Net investment in a foreign operation
      • Monetary items
  • Summary of the approach required by this standard
  • Reporting foreign currency transactions in the functional currency
    • Initial recognition
    • Reporting at the ends of subsequent reporting periods
    • Recognition of exchange differences
    • Change in functional currency
  • Use of a presentation currency other than the functional currency
    • Translation to the presentation currency
    • Translation of a foreign operation
    • Disposal or partial disposal of a foreign operation
  • Tax effects of all exchange differences
  • Disclosure
  • Effective date and transition
  • Withdrawal of other pronouncements
  • Appendix:
    • Amendments to other pronouncements

Last changed

July 2009

Interpretations

IFRIC 16 Hedge of a Net Investment in a Foreign Operation

SIC 30 Reporting Currency – Translation from Measurement Currency to Presentation Currency

SIC 30 was superseded and incorporated into the 2003 revision of IAS 21.

SIC 19 Reporting Currency – Measurement and Presentation of Financial Statements under IAS 21 and IAS 29

SIC 19 was superseded and incorporated into the 2003 revision of IAS 21.

SIC 11 Foreign Exchange – Capitalisation of Losses Resulting from Severe Currency Devaluations

SIC 11 was superseded and incorporated into the 2003 revision of IAS 21.

SIC 7 Introduction of the Euro

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL (eXtensible Business Reporting Language), is an international standard for communicating business data simply and quickly. ­Consequently, this language for the electronic communication of business data partners perfectly with IFRSs. Figure 4.27 shows an introductory fragment of XBRL tagging related to this standard.

FIGURE 4.27 Fragment of XBRL tagging related to IAS 21.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IAS 23 Borrowing Costs

Objective

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset form part of the cost of that asset. Other borrowing costs are recognised as an expense.

Scope

An entity shall apply this Standard in accounting for borrowing costs. The Standard does not deal with the actual or imputed cost of equity, including preferred capital not classified as a liability.

An entity is not required to apply the Standard to borrowing costs directly attributable to the acquisition, construction or production of:

(a) a qualifying asset measured at fair value, for example a biological asset; or
(b) inventories that are manufactured, or otherwise produced, in large quantities on a repetitive basis.

Summary

In addition to the objective, scope and related introduction, a summary of IAS 23 appears below:

  • Definitions
  • Recognition
    • Borrowing costs eligible for capitalisation
    • Excess of the carrying amount of the qualifying asset over recoverable amount
    • Commencement of capitalisation
    • Suspension of capitalisation
    • Cessation of capitalisation
  • Disclosure
  • Transitional provisions
  • Effective date
  • Withdrawal of IAS 23 (revised 1993)
  • Appendix:
    • Amendments to other pronouncements

Last changed

January 2009

Interpretations

SIC 2 Consistency – Capitalisation of Borrowing Costs

SIC 2 was superseded by and incorporated into IAS 8 in December 2003.

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL (eXtensible Business Reporting Language), is an international standard for communicating business data simply and quickly. ­Consequently, this language for the electronic communication of business data partners perfectly with IFRSs. Figure 4.28 shows an introductory fragment of XBRL tagging related to this standard.

FIGURE 4.28 Fragment of XBRL tagging related to IAS 23.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IAS 24 Related Party Disclosures

Objective

The objective of this Standard is to ensure that an entity's financial statements contain the disclosures necessary to draw attention to the possibility that its financial position and profit or loss may have been affected by the existence of related parties and by transactions and outstanding balances, including commitments, with such parties.

Scope

This Standard shall be applied in:

(a) identifying related party relationships and transactions;
(b) identifying outstanding balances, including commitments, between an entity and its related parties;
(c) identifying the circumstances in which disclosure of the items in (a) and (b) is required;
(d) determining the disclosures to be made about those items.

This Standard requires disclosure of related party relationships, transactions and outstanding balances, including commitments, in the consolidated and separate financial statements of a parent, venturer or investor presented in accordance with IAS 27 Consolidated and Separate Financial Statements. This Standard also applies to individual financial statements.

Related party transactions and outstanding balances with other entities in a group are disclosed in an entity's financial statements. Intra-group related party transactions and outstanding balances are eliminated in the preparation of consolidated financial statements of the group.

Summary

In addition to the objective, scope and related introduction, a summary of IAS 24 appears below:

  • Purpose of related party disclosures
  • Definitions
  • Disclosures
    • All entities
    • Government-related entities
  • Effective date and transition
  • Withdrawal of IAS 24 (2003)
  • Appendix:
    • Amendment to IFRS 8 Operating Segments

Last changed

January 2011

Interpretations

None

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL (eXtensible Business Reporting Language), is an international standard for communicating business data simply and quickly. ­Consequently, this language for the electronic communication of business data partners perfectly with IFRSs. Figure 4.29 shows an introductory fragment of XBRL tagging related to this standard.

FIGURE 4.29 Fragment of XBRL tagging related to IAS 24.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IAS 26 Accounting and Reporting by Retirement Benefit Plans

Objective

The objective of IAS 26 is to specify measurement and disclosure principles for the reports of retirement benefit plans. All plans should include in their reports a statement of changes in net assets available for benefits, a summary of significant accounting policies, and a description of the plan and the effect of any changes in the plan during the period.

Scope

This Standard shall be applied in the financial statements of retirement benefit plans where such financial statements are prepared.

Retirement benefit plans are sometimes referred to by various other names, such as ‘pension schemes', ‘superannuation schemes' or ‘retirement benefit schemes'. This Standard regards a retirement benefit plan as a reporting entity separate from the employers of the participants in the plan. All other Standards apply to the financial statements of retirement benefit plans to the extent that they are not superseded by this Standard.

This Standard deals with accounting and reporting by the plan to all participants as a group. It does not deal with reports to individual participants about their retirement benefit rights.

IAS 19 Employee Benefits is concerned with the determination of the cost of retirement benefits in the financial statements of employers having plans. Hence this Standard complements IAS 19.

Retirement benefit plans may be defined contribution plans or defined benefit plans. Many require the creation of separate funds, which may or may not have separate legal identity and may or may not have trustees, to which contributions are made and from which retirement benefits are paid. This Standard applies regardless of whether such a fund is created and regardless of whether there are trustees.

Retirement benefit plans with assets invested with insurance companies are subject to the same accounting and funding requirements as privately invested arrangements. Accordingly, they are within the scope of this Standard unless the contract with the insurance company is in the name of a specified participant or a group of participants and the retirement benefit obligation is solely the responsibility of the insurance company.

This Standard does not deal with other forms of employment benefits such as employment termination indemnities, deferred compensation arrangements, long-service leave benefits, special early retirement or redundancy plans, health and welfare plans or bonus plans. Government social security type arrangements are also excluded from the scope of this Standard.

Summary

In addition to the objective, scope and related introduction, a summary of IAS 26 appears below:

  • Definitions
  • Defined contribution plans
  • Defined benefit plans
    • Actuarial present value of promised retirement benefits
    • Frequency of actuarial valuations
    • Financial statement content
  • All plans
    • Valuation of plan assets
    • Disclosure
  • Effective date

Last changed

1994

Interpretations

None

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL (eXtensible Business Reporting Language), is an international standard for communicating business data simply and quickly. Consequently, this language for the electronic communication of business data partners perfectly with IFRSs. Figure 4.30 shows an introductory fragment of XBRL tagging related to this standard.

FIGURE 4.30 Fragment of XBRL tagging related to IAS 26.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IAS 27 Consolidated and Separate Financial Statements

Objective

IAS 27 has the twin objectives of setting standards to be applied in the preparation and presentation of consolidated financial statements for a group of entities under the control of a parent, and in accounting for investments in subsidiaries, jointly controlled entities, and associates when an entity elects, or is required by local regulations, to present separate (non-consolidated) financial statements.

Scope

This Standard shall be applied in the preparation and presentation of consolidated financial statements for a group of entities under the control of a parent.

This Standard does not deal with methods of accounting for business combinations and their effects on consolidation, including goodwill arising on a business combination (see IFRS 3 Business Combinations).

This Standard shall also be applied in accounting for investments in subsidiaries, jointly controlled entities and associates when an entity elects, or is required by local regulations, to present separate financial statements.

Summary

In addition to the objective, scope and related introduction, a summary of IAS 27 appears below:

  • Definitions
  • Presentation of consolidated financial statements
  • Scope of consolidated financial statements
  • Consolidation procedures
  • Loss of control
  • Accounting for investments in subsidiaries, jointly controlled entities and associates in separate financial statements
  • Disclosure
  • Effective date and transition
  • Withdrawal of IAS 27 (2003)
  • Appendix:
    • Amendments to other IFRS

Last changed

July 2010

Interpretations

IFRIC 17 Distributions of Non-cash Assets to Owners

SIC 12, Consolidation – Special Purpose Entities

IAS 27 (revised 2003) supersedes SIC 33, Consolidation and Equity Method – Potential Voting Rights and Allocation of Ownership Interest

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL (eXtensible Business Reporting Language), is an international standard for communicating business data simply and quickly. ­Consequently, this language for the electronic communication of business data partners perfectly with IFRSs. Figure 4.31 shows an introductory fragment of XBRL tagging related to this standard.

FIGURE 4.31 Fragment of XBRL tagging related to IAS 27.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IAS 28 Investments in Associates

Objective

For IAS 28 the main objective was to reduce alternatives in the application of the equity method and in accounting for investments in associates in separate financial statements.

Scope

This Standard shall be applied in accounting for investments in associates. However, it does not apply to investments in associates held by:

(a) venture capital organisations; or
(b) mutual funds, unit trusts and similar entities, including investment-linked insurance funds that are measured at fair value through profit or loss in accordance with IFRS 9 Financial Instruments. An entity shall measure such investments at fair value through profit or loss in accordance with IFRS 9.

Summary

In addition to the objective, scope and related introduction, a summary of IFRS 9 appears next:

  • Definitions
    • Significant influence
    • Equity method
  • Application of the equity method
    • Impairment losses
  • Separate financial statements
  • Disclosure
  • Effective date and transition
  • Withdrawal of other pronouncements
  • Appendix:
    • Amendments to other pronouncements

Last changed

July 2009

Interpretations

IAS 28 (2003) superseded SIC 3 Elimination of Unrealised Profits and Losses on Transactions with Associates

IAS 28 (2003) superseded SIC 20 Equity Accounting Method – Recognition of Losses

IAS 28 (2003) superseded SIC 33 Consolidation and Equity Method – Potential Voting Rights and Allocation of Ownership Interest

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL (eXtensible Business Reporting Language), is an international standard for communicating business data simply and quickly. ­Consequently, this language for the electronic communication of business data partners perfectly with IFRSs. Figure 4.32 shows an introductory fragment of XBRL tagging related to this standard.

FIGURE 4.32 Fragment of XBRL tagging related to IAS 28.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IAS 29 Financial Reporting in Hyperinflationary Economies

Objective

The objective of IAS 29 is to establish specific standards for entities reporting in the currency of a hyperinflationary economy so that the financial information provided is meaningful.

Scope

This Standard shall be applied to the financial statements, including the consolidated financial statements, of any entity whose functional currency is the currency of a hyperinflationary economy.

In a hyperinflationary economy, reporting of operating results and financial position in the local currency without restatement is not useful. Money loses purchasing power at such a rate that comparison of amounts from transactions and other events that have occurred at different times, even within the same accounting period, is misleading.

This Standard does not establish an absolute rate at which hyperinflation is deemed to arise. It is a matter of judgement when restatement of financial statements in accordance with this Standard becomes necessary. Hyperinflation is indicated by characteristics of the economic environment of a country, which include, but are not limited to, the following:

(a) the general population prefers to keep its wealth in non-monetary assets or in a relatively stable foreign currency. Amounts of local currency held are immediately invested to maintain purchasing power;
(b) the general population regards monetary amounts not in terms of the local currency but in terms of a relatively stable foreign currency. Prices may be quoted in that currency;
(c) sales and purchases on credit take place at prices that compensate for the expected loss of purchasing power during the credit period, even if the period is short;
(d) interest rates, wages and prices are linked to a price index;
(e) the cumulative inflation rate over three years is approaching, or exceeds, 100 per cent.

It is preferable that all entities that report in the currency of the same hyperinflationary economy apply this Standard from the same date. ­Nevertheless, this Standard applies to the financial statements of any entity from the beginning of the reporting period in which it identifies the existence of hyperinflation in the country in whose currency it reports.

Summary

In addition to the objective, scope and related introduction, a summary of IAS 29 appears next:

  • The restatement of financial statements
    • Historical cost financial statements
      • Statement of financial position
      • Statement of comprehensive income
      • Gain or loss on net monetary position
    • Current cost financial statements
      • Statement of financial position
      • Statement of comprehensive income
      • Gain or loss on net monetary position
    • Taxes
    • Statement of cash flows
    • Corresponding figures
    • Consolidated financial statements
    • Selection and use of the general price index
  • Economies ceasing to be hyperinflationary
  • Disclosures
  • Effective date

Last changed

January 2009

Interpretations

IAS 21 has superseded SIC 19 Reporting Currency – Measurement and Presentation of Financial Statements under IAS 21 and IAS 29

IAS 21 has superseded SIC 30 Reporting Currency – Translation from ­Measurement Currency to Presentation Currency

IFRIC 7 Applying the Restatement Approach under IAS 29 Financial Reporting in Hyperinflationary Economies

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL (eXtensible Business Reporting Language), is an international standard for communicating business data simply and quickly. ­Consequently, this language for the electronic communication of business data partners perfectly with IFRSs. Figure 4.33 shows an introductory fragment of XBRL tagging related to this standard.

FIGURE 4.33 Fragment of XBRL tagging related to IAS 29.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IAS 31 Interest in Joint Ventures

Objective

The objective of this standard is to make the amendments necessary to take account of the extensive changes being made to IAS 27 Consolidated Financial Statements and Accounting for Investments in Subsidiaries and IAS 28 Accounting for Investments in Associates as part of the Improvements project.

Scope

This Standard shall be applied in accounting for interests in joint ventures and the reporting of joint venture assets, liabilities, income and expenses in the financial statements of venturers and investors, regardless of the structures or forms under which the joint venture activities take place. However, it does not apply to venturers' interests in jointly controlled entities held by:

(a) venture capital organisations; or
(b) mutual funds, unit trusts and similar entities, including investment-linked insurance funds that are measured at fair value through profit or loss in accordance with IFRS 9 Financial Instruments. An entity shall measure such investments at fair value through profit or loss in accordance with IFRS 9.

A venturer with an interest in a jointly controlled entity is exempted from paragraphs 30 (proportionate consolidation) and 38 (equity method) when it meets the following conditions:

(a) the interest is classified as held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations;
(b) the exception in IAS 27 Consolidated and Separate Financial Statements allowing a parent that also has an interest in a jointly controlled entity not to present consolidated financial statements is applicable; or
(c) all of the following apply:
(i) the venturer is a wholly owned subsidiary, or is a partially owned subsidiary of another entity and its owners, including those not otherwise entitled to vote, have been informed about, and do not object to, the venturer not applying proportionate consolidation or the equity method;
(ii) the venturer's debt or equity instruments are not traded in a public market (a domestic or foreign stock exchange or an over-the-counter market, including local and regional markets);
(iii) the venturer did not file, nor is it in the process of filing, its financial statements with a securities commission or other regulatory organisation, for the purpose of issuing any class of instruments in a public market;
(iv) the ultimate or any intermediate parent of the venturer produces consolidated financial statements available for public use that comply with IFRS.

Summary

In addition to the objective, scope and related introduction, a summary of IAS 31 appears below:

  • Definitions
    • Forms of joint venture
    • Joint control
    • Contractual arrangement
  • Jointly controlled operations
  • Jointly controlled assets
  • Jointly controlled entities
    • Financial statements of a venturer
      • Proportionate consolidation
      • Equity method
      • Exceptions to proportionate consolidation and equity method
    • Separate financial statements of a venturer
  • Transactions between a venturer and a joint venture
  • Reporting interests in joint ventures in the financial statements of an investor
  • Operators of joint ventures
  • Disclosure
  • Effective date and transition
  • Withdrawal of IAS 31 (revised 2000)
  • Appendix:
    • Amendments to other pronouncements

Last changed

July 2009

Interpretations

SIC 13 Jointly Controlled Entities – Non-Monetary Contributions by Venturers

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL (eXtensible Business Reporting Language), is an international standard for communicating business data simply and quickly. ­Consequently, this language for the electronic communication of business data partners perfectly with IFRSs. Figure 4.34 shows an introductory fragment of XBRL tagging related to this standard.

FIGURE 4.34 Fragment of XBRL tagging related to IAS 31.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IAS 32 Financial Instruments Presentation

Objective

The objective of this Standard is to establish principles for presenting financial instruments as liabilities or equity and for offsetting financial assets and financial liabilities. It applies to the classification of financial instruments, from the perspective of the issuer, into financial assets, financial liabilities and equity instruments; the classification of related interest, dividends, losses and gains; and the circumstances in which financial assets and financial liabilities should be offset.

The principles in this Standard complement the principles for recognising and measuring financial assets and financial liabilities in IFRS 9 Financial Instruments, and for disclosing information about them in IFRS 7 Financial Instruments: Disclosures.

Scope

This Standard shall be applied by all entities to all types of financial instruments except:

(a) those interests in subsidiaries, associates or joint ventures that are accounted for in accordance with IAS 27 Consolidated and Separate Financial Statements, IAS 28 Investments in Associates or IAS 31 Interests in Joint Ventures. However, in some cases, IAS 27, IAS 28 or IAS 31 permit an entity to account for an interest in a subsidiary, associate or joint venture using IFRS 9; in those cases, entities shall apply the requirements of this Standard. Entities shall also apply this Standard to all derivatives linked to interests in subsidiaries, associates or joint ventures;
(b) employers' rights and obligations under employee benefit plans, to which IAS 19 Employee Benefits applies;
(c) insurance contracts as defined in IFRS 4 Insurance Contracts. However, this Standard applies to derivatives that are embedded in insurance contracts if IFRS 9 requires the entity to account for them separately. Moreover, an issuer shall apply this Standard to financial guarantee contracts if the issuer applies IFRS 9 in recognising and measuring the contracts, but shall apply IFRS 4 if the issuer elects to apply IFRS 4 in recognising and measuring them;
(d) financial instruments that are within the scope of IFRS 4 because they contain a discretionary participation feature. However, these instruments are subject to all other requirements of this Standard. Furthermore, this Standard applies to derivatives that are embedded in these instruments (see IFRS 9);
(e) financial instruments, contracts and obligations under share-based payment transactions to which IFRS 2 Share-based Payment applies, except for:
(i) contracts within the scope of this Standard, to which this Standard applies;
(ii) paragraphs of this Standard, which shall be applied to treasury shares purchased, sold, issued or cancelled in connection with employee share option plans, employee share purchase plans, and all other share-based payment arrangements.

This Standard shall be applied to those contracts to buy or sell a non-financial item that can be settled net in cash or another financial instrument, or by exchanging financial instruments, as if the contracts were financial instruments, with the exception of contracts that were entered into and continue to be held for the purpose of the receipt or delivery of a non-financial item in accordance with the entity's expected purchase, sale or usage requirements.

There are various ways in which a contract to buy or sell a non-financial item can be settled net in cash or another financial instrument or by exchanging financial instruments. These include:

(a) when the terms of the contract permit either party to settle it net in cash or another financial instrument or by exchanging financial instruments;
(b) when the ability to settle net in cash or another financial instrument, or by exchanging financial instruments, is not explicit in the terms of the ­contract, but the entity has a practice of settling similar contracts net in cash or another financial instrument, or by exchanging financial instruments (whether with the counterparty, by entering into offsetting contracts or by selling the contract before its exercise or lapse);
(c) when, for similar contracts, the entity has a practice of taking delivery of the underlying and selling it within a short period after delivery for the purpose of generating a profit from short-term fluctuations in price or dealer's margin;
(d) when the non-financial item that is the subject of the contract is readily convertible to cash.

A contract to which (b) or (c) applies is not entered into for the purpose of the receipt or delivery of the non-financial item in accordance with the entity's expected purchase, sale or usage requirements, and, accordingly, is within the scope of this Standard. Other contracts to which the preceding paragraph applies are evaluated to determine whether they were entered into and continue to be held for the purpose of the receipt or delivery of the non-financial item in accordance with the entity's expected purchase, sale or usage requirement, and accordingly, whether they are within the scope of this Standard.

A written option to buy or sell a non-financial item that can be settled net in cash or another financial instrument, or by exchanging financial instruments, in accordance with (a) or (d) of the preceding paragraph is within the scope of this Standard. Such a contract cannot be entered into for the purpose of the receipt or delivery of the non-financial item in accordance with the entity's expected purchase, sale or usage requirements.

Summary

In addition to the objective, scope and related introduction, a summary of IAS 32 appears next:

  • Definitions
  • Presentation
    • Liabilities and equity
    • Puttable instruments
    • Instruments, or components of instruments, that impose on the entity an obligation to deliver to another party a pro rata share of the net assets of the entity only on liquidation
    • Reclassification of puttable instruments and instruments that impose on the entity an obligation to deliver to another party a pro rata share of the net assets of the entity only on liquidation
    • No contractual obligation to deliver cash or another financial asset
    • Settlement in the entity's own equity instruments
    • Contingent settlement provisions
    • Settlement options
  • Compound financial instruments
    • Treasury shares
    • Interest, dividends, losses and gains
    • Offsetting a financial asset and a financial liability
  • Effective date and transition
  • Withdrawal of other pronouncements
  • Appendix
    • Application guidance
  • Definitions
    • Financial assets and financial liabilities
    • Equity instruments
      • The class of instruments that is subordinate to all other classes
      • Total expected cash flows attributed to the instrument over the life of the instrument
      • Transactions entered into by an instrument holder other than as owner of the entity
      • No other financial instrument or contract with total cash flows that substantially fixes or restricts the residual return to the instrument holder
    • Derivative financial instruments
    • Contracts to buy or sell non-financial items
  • Presentation:
    • Liabilities and equity
      • No contractual obligation to deliver cash or another financial asset
      • Settlement in the entity's own equity instruments
      • Contingent settlement provisions
      • Treatment in consolidated financial statements
    • Compound financial instruments
    • Treasury shares
    • Interest, dividends, losses and gains
    • Offsetting a financial asset and a financial liability

Last changed

December 2011

Interpretations

IAS 32 (2003) superseded SIC 5 Classification of Financial Instruments – Contingent Settlement Provisions

IAS 32 (2003) superseded SIC 16 Share Capital – Reacquired Own Equity Instruments (Treasury Shares)

IAS 32 (2003) superseded SIC 17 Equity – Costs of an Equity Transaction

IFRIC 2 Members' Shares in Co-operative Entities and Similar Instruments

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL (eXtensible Business Reporting Language), is an international standard for communicating business data simply and quickly. ­Consequently, this language for the electronic communication of business data partners perfectly with IFRSs.

Please note that, currently, no XBRL tagging is related directly to this standard.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IAS 33 Earnings per Share

Objective

The objective of this Standard is to prescribe principles for the determination and presentation of earnings per share, so as to improve performance comparisons between different entities in the same reporting period and between different reporting periods for the same entity. Even though earnings per share data have limitations because of the different accounting policies that may be used for determining ‘earnings', a consistently determined denominator enhances financial reporting. The focus of this Standard is on the denominator of the earnings per share calculation.

Scope

This Standard shall apply to:

(a) the separate or individual financial statements of an entity:
(i) whose ordinary shares or potential ordinary shares are traded in a public market (a domestic or foreign stock exchange or an over-the-counter market, including local and regional markets); or
(ii) that files, or is in the process of filing, its financial statements with a securities commission or other regulatory organisation for the purpose of issuing ordinary shares in a public market;
(b) the consolidated financial statements of a group with a parent:
(i) whose ordinary shares or potential ordinary shares are traded in a public market (a domestic or foreign stock exchange or an over-the-counter market, including local and regional markets); or
(ii) that files, or is in the process of filing, its financial statements with a securities commission or other regulatory organisation for the purpose of issuing ordinary shares in a public market.

An entity that discloses earnings per share shall calculate and disclose earnings per share in accordance with this Standard.

When an entity presents both consolidated financial statements and separate financial statements prepared in accordance with IAS 27 Consolidated and Separate Financial Statements, the disclosures required by this Standard need be presented only on the basis of the consolidated information. An entity that chooses to disclose earnings per share based on its separate financial statements shall present such earnings per share information only in its statement of comprehensive income. An entity shall not present such earnings per share information in the consolidated financial statements.

If an entity presents the components of profit or loss in a separate income statement as described in IAS 1 Presentation of Financial Statements (as revised in 2007), it presents earnings per share only in that separate statement.

Summary

In addition to the objective, scope and related introduction, a summary of IAS 33 appears next:

  • Definitions
  • Measurement
    • Basic earnings per share
      • Earnings
      • Shares
    • Diluted earnings per share
      • Earnings
      • Shares
      • Dilutive potential ordinary shares
Options, warrants and their equivalents
Convertible instruments
Contingently issuable shares
Contracts that may be settled in ordinary shares or cash
Purchased options
Written put options
  • Retrospective adjustments
  • Presentation
  • Disclosure
  • Effective date
  • Withdrawal of other pronouncements
  • Appendices:
    • A Application guidance
    • B Amendments to other pronouncements

Last changed

January 2009

Interpretations

IAS 33 (2003) superseded SIC 24 Earnings Per Share – Financial Instruments and Other Contracts that May Be Settled in Shares

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL (eXtensible Business Reporting Language), is an international standard for communicating business data simply and quickly. ­Consequently, this language for the electronic communication of business data partners perfectly with IFRSs. Figure 4.35 shows an introductory fragment of XBRL tagging related to this standard.

FIGURE 4.35 Fragment of XBRL tagging related to IAS 33.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IAS 34 Interim Financial Reporting

Objective

The objective of this Standard is to prescribe the minimum content of an interim financial report and to prescribe the principles for recognition and measurement in complete or condensed financial statements for an interim period. Timely and reliable interim financial reporting improves the ability of investors, creditors and others to understand an entity's capacity to generate earnings and cash flows and its financial condition and liquidity.

Scope

This Standard does not mandate which entities should be required to publish interim financial reports, how frequently, or how soon after the end of an interim period. However, governments, securities regulators, stock exchanges and accountancy bodies often require entities whose debt or equity securities are publicly traded to publish interim financial reports. This Standard applies if an entity is required or elects to publish an interim financial report in accordance with IFRS. The International Accounting Standards Committee encourages publicly traded entities to provide interim financial reports that conform to the recognition, measurement and disclosure principles set out in this Standard. Specifically, publicly traded entities are encouraged:

(a) to provide interim financial reports at least as of the end of the first half of their financial year;
(b) to make their interim financial reports available not later than 60 days after the end of the interim period.

Each financial report, annual or interim, is evaluated on its own for conformity to IFRS. The fact that an entity may not have provided interim financial reports during a particular financial year or may have provided interim financial reports that do not comply with this Standard does not prevent the entity's annual financial statements from conforming to IFRS if they otherwise do so.

If an entity's interim financial report is described as complying with IFRS, it must comply with all of the requirements of this Standard. Paragraph 19 requires certain disclosures in that regard.

Summary

In addition to the objective, scope and related introduction, a summary of IAS 34 appears next:

  • Definitions
  • Content of an interim financial report
    • Minimum components of an interim financial report
    • Form and content of interim financial statements
    • Significant events and transactions
    • Other disclosures
    • Disclosure of compliance with IFRS
    • Periods for which interim financial statements are required to be presented
    • Materiality
  • Disclosure in annual financial statements
  • Recognition and measurement
    • Same accounting policies as annual
    • Revenues received seasonally, cyclically or occasionally
    • Costs incurred unevenly during the financial year
    • Applying the recognition and measurement principles
    • Use of estimates
  • Restatement of previously reported interim periods
  • Effective date

Last changed

January 2011

Interpretations

IFRIC 10 Interim Financial Reporting and Impairment

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL (eXtensible Business Reporting Language), is an international standard for communicating business data simply and quickly. ­Consequently, this language for the electronic communication of business data partners perfectly with IFRSs. Figure 4.36 shows an introductory fragment of XBRL tagging related to this standard.

FIGURE 4.36 Fragment of XBRL tagging related to IAS 34.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IAS 36 Impairment of Assets

Objective

The objective of this Standard is to prescribe the procedures that an entity applies to ensure that its assets are carried at no more than their recoverable amount. An asset is carried at more than its recoverable amount if its carrying amount exceeds the amount to be recovered through use or sale of the asset. If this is the case, the asset is described as impaired and the Standard requires the entity to recognise an impairment loss. The Standard also specifies when an entity should reverse an impairment loss and prescribes disclosures.

Scope

This Standard shall be applied in accounting for the impairment of all assets, other than:

(a) inventories (see IAS 2 Inventories);
(b) assets arising from construction contracts (see IAS 11 Construction ­Contracts);
(c) deferred tax assets (see IAS 12 Income Taxes);
(d) assets arising from employee benefits (see IAS 19 Employee Benefits);
(e) financial assets that are within the scope of IFRS 9 Financial Instruments;
(f) investment property that is measured at fair value (see IAS 40 Investment Property);
(g) biological assets related to agricultural activity that are measured at fair value less costs to sell (see IAS 41 Agriculture);
(h) deferred acquisition costs, and intangible assets, arising from an insurer's contractual rights under insurance contracts within the scope of IFRS 4 Insurance Contracts;
(i) non-current assets (or disposal groups) classified as held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued ­Operations.

This Standard does not apply to inventories, assets arising from construction contracts, deferred tax assets, assets arising from employee benefits, or assets classified as held for sale (or included in a disposal group that is classified as held for sale) because existing IFRS applicable to these assets contain requirements for recognising and measuring these assets.

This Standard applies to financial assets classified as:

(a) subsidiaries, as defined in IAS 27 Consolidated and Separate Financial ­Statements;
(b) associates, as defined in IAS 28 Investments in Associates;
(c) joint ventures, as defined in IAS 31 Interests in Joint Ventures.

For impairment of other financial assets, refer to IAS 39.

This Standard does not apply to financial assets within the scope of IFRS 9, investment property measured at fair value in accordance with IAS 40, or biological assets related to agricultural activity measured at fair value less costs to sell in accordance with IAS 41. However, this Standard applies to assets that are carried at re-valued amount (i.e. fair value) in accordance with other IFRS, such as the revaluation model in IAS 16 Property, Plant and Equipment. Identifying whether a re-valued asset may be impaired depends on the basis used to determine fair value:

(a) if the asset's fair value is its market value, the only difference between the asset's fair value and its fair value less costs to sell is the direct incremental costs to dispose of the asset:
(i) if the disposal costs are negligible, the recoverable amount of the re-valued asset is necessarily close to, or greater than, its re-valued amount (i.e. fair value). In this case, after the revaluation requirements have been applied, it is unlikely that the re-valued asset is impaired and recoverable amount need not be estimated;
(ii) if the disposal costs are not negligible, the fair value less costs to sell of the re-valued asset is necessarily less than its fair value. Therefore the re-valued asset will be impaired if its value in use is less than its re-valued amount (i.e. fair value). In this case, after the re-valuation requirements have been applied, an entity applies this Standard to determine whether the asset may be impaired;
(b) if the asset's fair value is determined on a basis other than its market value, its re-valued amount (i.e. fair value) may be greater or lower than its recoverable amount. Hence, after the re-valuation requirements have been applied, an entity applies this Standard to determine whether the asset may be impaired.

Summary

In addition to the objective, scope and related introduction, a summary of IAS 36 appears next:

  • Definitions
  • Identifying an asset that may be impaired
  • Measuring recoverable amount:
    • Measuring the recoverable amount of an intangible asset with an indefinite useful life
    • Fair value less costs to sell
    • Value in use
      • Basis for estimates of future cash flows
      • Composition of estimates of future cash flows
      • Foreign currency future cash flows
      • Discount rate
  • Recognising and measuring an impairment loss
  • Cash-generating units and goodwill:
    • Identifying the cash-generating unit to which an asset belongs
    • Recoverable amount and carrying amount of a cash-generating unit
      • Goodwill
      • Allocating goodwill to cash-generating units
      • Testing cash-generating units with goodwill for impairment
      • Timing of impairment tests
      • Corporate assets
    • Impairment loss for a cash-generating unit
  • Reversing an impairment loss:
    • Reversing an impairment loss for an individual asset
    • Reversing an impairment loss for a cash-generating unit
    • Reversing an impairment loss for goodwill
  • Disclosure:
    • Estimates used to measure recoverable amounts of cash-generating units containing goodwill or intangible assets with indefinite useful lives
  • Transitional provisions and effective date
  • Withdrawal of IAS 36 (issued 1998)
  • Appendices:
    • A Using present value techniques to measure value in use
    • B Amendment to IAS 16
    • C Impairment testing cash-generating units with goodwill and non-controlling interests

Last changed

January 2010

Interpretations

None

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL (eXtensible Business Reporting Language), is an international standard for communicating business data simply and quickly. ­Consequently, this language for the electronic communication of business data partners perfectly with IFRSs. Figure 4.37 shows an introductory fragment of XBRL tagging related to this standard.

FIGURE 4.37 Fragment of XBRL tagging related to IAS 36.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IAS 37 Provisions, Contingent Liabilities and Contingent Assets

Objective

The objective of this Standard is to ensure that appropriate recognition criteria and measurement bases are applied to provisions, contingent liabilities and contingent assets and that sufficient information is disclosed in the notes to enable users to understand their nature, timing and amount.

Scope

This Standard shall be applied by all entities in accounting for provisions, contingent liabilities and contingent assets, except:

(a) those resulting from executory contracts, except where the contract is onerous;
(b) those covered by another Standard.

This Standard does not apply to financial instruments (including guarantees) that are within the scope of IFRS 9 Financial Instruments.

Executory contracts are those under which neither party has performed any of its obligations or both parties have partially performed their obligations to an equal extent. This Standard does not apply to executory contracts unless they are onerous.

When another Standard deals with a specific type of provision, contingent liability or contingent asset, an entity applies that Standard instead of this ­Standard. For example, some types of provisions are addressed in Standards on:

(a) construction contracts (see IAS 11 Construction Contracts);
(b) income taxes (see IAS 12 Income Taxes);
(c) leases (see IAS 17 Leases). However, as IAS 17 contains no specific requirements to deal with operating leases that have become onerous, this Standard applies to such cases;
(d) employee benefits (see IAS 19 Employee Benefits);
(e) insurance contracts (see IFRS 4 Insurance Contracts). However, this Standard applies to provisions, contingent liabilities and contingent assets of an insurer, other than those arising from its contractual obligations and rights under insurance contracts within the scope of IFRS 4.

Some amounts treated as provisions may relate to the recognition of revenue, for example where an entity gives guarantees in exchange for a fee. This Standard does not address the recognition of revenue. IAS 18 Revenue identifies the circumstances in which revenue is recognised and provides practical guidance on the application of the recognition criteria. This Standard does not change the requirements of IAS 18.

This Standard defines provisions as liabilities of uncertain timing or amount. In some countries the term ‘provision' is also used in the context of items such as depreciation, impairment of assets and doubtful debts: these are adjustments to the carrying amounts of assets and are not addressed in this Standard.

Other Standards specify whether expenditures are treated as assets or as expenses. These issues are not addressed in this Standard. Accordingly, this Standard neither prohibits nor requires capitalisation of the costs recognised when a provision is made.

This Standard applies to provisions for restructurings (including discontinued operations). When a restructuring meets the definition of a discontinued operation, additional disclosures may be required by IFRS 5 Non-current Assets Held for Sale and Discontinued Operations.

Summary

In addition to the objective, scope and related introduction, a summary of IAS 37 appears next:

  • Definitions
    • Provisions and other liabilities
    • Relationship between provisions and contingent liabilities
  • Recognition:
    • Provisions
      • Present obligation
      • Past event
      • Probable outflow of resources embodying economic benefits
      • Reliable estimate of the obligation
    • Contingent liabilities
    • Contingent assets
  • Measurement:
    • Best estimate
    • Risks and uncertainties
    • Present value
    • Future events
    • Expected disposal of assets
  • Reimbursements
  • Changes in provisions
  • Use of provisions
  • Application of the recognition and measurement rules
    • Future operating losses
    • Onerous contracts
    • Restructuring
  • Disclosure
  • Transitional provisions
  • Effective date

Last changed

June 2005

Interpretations

IFRIC 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities

IFRIC 5 Rights to Interests Arising from Decommissioning, Restoration and Environmental Rehabilitation Funds

IFRIC 6 Liabilities Arising from Participating in a Specific Market – Waste Electrical and Electronic Equipment

IFRIC 17 Distributions of Non-cash Assets to Owners

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm

XBRL tags

XBRL (eXtensible Business Reporting Language), is an international standard for communicating business data simply and quickly. ­Consequently, this language for the electronic communication of business data partners perfectly with IFRSs. Figure 4.38 shows an introductory fragment of XBRL tagging related to this standard.

FIGURE 4.38 Fragment of XBRL tagging related to IAS 37.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IAS 38 Intangible Assets

Objective

The objective of this Standard is to prescribe the accounting treatment for intangible assets that are not dealt with specifically in another Standard. This Standard requires an entity to recognise an intangible asset if, and only if, specified criteria are met. The Standard also specifies how to measure the carrying amount of intangible assets and requires specified disclosures about intangible assets.

Scope

This Standard shall be applied in accounting for intangible assets, except:

(a) intangible assets that are within the scope of another Standard;
(b) financial assets, as defined in IAS 32 Financial Instruments: Presentation;
(c) the recognition and measurement of exploration and evaluation assets (see IFRS 6 Exploration for and Evaluation of Mineral Resources);
(d) expenditure on the development and extraction of minerals, oil, natural gas and similar non-regenerative resources.

If another Standard prescribes the accounting for a specific type of intangible asset, an entity applies that Standard instead of this Standard. For example, this Standard does not apply to:

(a) intangible assets held by an entity for sale in the ordinary course of business (see IAS 2 Inventories and IAS 11 Construction Contracts);
(b) deferred tax assets (see IAS 12 Income Taxes);
(c) leases that are within the scope of IAS 17 Leases;
(d) assets arising from employee benefits (see IAS 19 Employee Benefits);
(e) financial assets as defined in IAS 32. The recognition and measurement of some financial assets are covered by IAS 27 Consolidated and Separate Financial Statements, IAS 28 Investments in Associates and IAS 31 Interests in Joint Ventures;
(f) goodwill acquired in a business combination (see IFRS 3 Business ­Combinations);
(g)deferred acquisition costs, and intangible assets, arising from an insurer's contractual rights under insurance contracts within the scope of IFRS 4 Insurance Contracts. IFRS 4 sets out specific disclosure requirements for those deferred acquisition costs but not for those intangible assets. Therefore the disclosure requirements in this Standard apply to those intangible assets;
(h) non-current intangible assets classified as held for sale (or included in a disposal group that is classified as held for sale) in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations.

Some intangible assets may be contained in or on a physical substance such as a compact disc (in the case of computer software), legal documentation (in the case of a licence or patent) or film. In determining whether an asset that incorporates both intangible and tangible elements should be treated under IAS 16 Property, Plant and Equipment or as an intangible asset under this Standard, an entity uses judgement to assess which element is more significant. For example, computer software for a computer-controlled machine tool that cannot operate without that specific software is an integral part of the related hardware and it is treated as property, plant and equipment. The same applies to the operating system of a computer. When the software is not an integral part of the related hardware, computer software is treated as an intangible asset.

This Standard applies to, among other things, expenditure on advertising, training, start-up, research and development activities. Research and development activities are directed to the development of knowledge. Therefore, although these activities may result in an asset with physical substance (e.g. a prototype), the physical element of the asset is secondary to its intangible component, that is, the knowledge embodied in it.

In the case of a finance lease, the underlying asset may be either tangible or intangible. After initial recognition, a lessee accounts for an intangible asset held under a finance lease in accordance with this Standard. Rights under licensing agreements for items such as motion picture films, video recordings, plays, manuscripts, patents and copyrights are excluded from the scope of IAS 17 and are within the scope of this Standard.

Exclusions from the scope of a Standard may occur if activities or transactions are so specialised that they give rise to accounting issues that may need to be dealt with in a different way. Such issues arise in the accounting for expenditure on the exploration for, or development and extraction of, oil, gas and mineral deposits in extractive industries and in the case of insurance contracts. Therefore, this Standard does not apply to expenditure on such activities and contracts. However, this Standard applies to other intangible assets used (such as computer software) and other expenditure incurred (such as start-up costs) in extractive industries or by insurers.

Summary

In addition to the objective, scope and related introduction, a summary of IAS 38 appears next:

  • Definitions
    • Intangible assets
      • Identifiability
      • Control
      • Future economic benefits
  • Recognition and measurement
    • Separate acquisition
    • Acquisition as part of a business combination
      • Measuring the fair value of an intangible asset acquired in a business combination
      • Subsequent expenditure on an acquired in-process research and development project
    • Acquisition by way of a government grant
    • Exchanges of assets
    • Internally generated goodwill
    • Internally generated intangible assets
      • Research phase
      • Development phase
      • Cost of an internally generated intangible asset
  • Recognition of an expense
    • Past expenses not to be recognised as an asset
  • Measurement after recognition
    • Cost model
    • Revaluation model
  • Useful life
  • Intangible assets with finite useful lives
    • Amortisation period and amortisation method
    • Residual value
    • Review of amortisation period and amortisation method
  • Intangible assets with indefinite useful lives
    • Review of useful life assessment
  • Recoverability of the carrying amount – impairment
  • Losses
  • Retirements and disposals
  • Disclosure
    • General
    • Intangible assets measured after recognition using the revaluation model
    • Research and development expenditure
    • Other information
  • Transitional provisions and effective date
    • Exchanges of similar assets
    • Early application
  • Withdrawal of IAS 38 (issued 1998)

Last changed

July 2009

Interpretations

IFRIC 12 Service Concession Arrangements

IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine

IAS 16 supersedes SIC 6 Costs of Modifying Existing Software

SIC 32 Intangible Assets – Website Costs

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL (eXtensible Business Reporting Language), is an international standard for communicating business data simply and quickly. Consequently, this language for the electronic communication of business data partners perfectly with IFRSs. Figure 4.39 shows an introductory fragment of XBRL tagging related to this Standard.

FIGURE 4.39 Fragment of XBRL tagging related to IAS 38.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IAS 39 Financial Instruments: Recognition and Measurement

Objective

The objective of this Standard is to establish principles for recognising and measuring financial assets, financial liabilities and some contracts to buy or sell non-financial items.

Scope

This Standard shall be applied by all entities to all types of financial instruments except:

(a) those interests in subsidiaries, associates and joint ventures that are accounted for under IAS 27 Consolidated and Separate Financial Statements, IAS 28 Investments in Associates or IAS 31 Interests in Joint Ventures. ­However, entities shall apply this Standard to an interest in a subsidiary, associate or joint venture that according to IAS 27, IAS 28 or IAS 31 is accounted for under this Standard. Entities shall also apply this Standard to derivatives on an interest in a subsidiary, associate or joint venture unless the derivative meets the definition of an equity instrument of the entity in IAS 32 Financial Instruments: Presentation;
(b) rights and obligations under leases to which IAS 17 Leases applies. ­However:
(i)lease receivables recognised by a lessor are subject to the derecognition and impairment provisions of this Standard;
(ii)finance lease payables recognised by a lessee are subject to the derecognition provisions of this Standard;
(iii)derivatives that are embedded in leases are subject to the embedded derivatives provisions of this Standard;
(c) employers' rights and obligations under employee benefit plans, to which IAS 19 Employee Benefits applies;
(d) financial instruments issued by the entity that meet the definition of an equity instrument in IAS 32 (including options and warrants) or that are required to be classified as an equity instrument in accordance with IAS 32. However, the holder of such equity instruments shall apply this Standard to those instruments, unless they meet the exception in (a) above;
(e) rights and obligations arising under:
(i) an insurance contract as defined in IFRS 4 Insurance Contracts, other than an issuer's rights and obligations arising under an insurance contract that meets the definition of a financial guarantee contract in Appendix A of IFRS 9 Financial Instruments; or
(ii) a contract that is within the scope of IFRS 4 because it contains a discretionary participation feature. However, this Standard applies to a derivative that is embedded in a contract within the scope of IFRS 4 if the derivative is not itself a contract within the scope of IFRS 4. Moreover, if an issuer of financial guarantee contracts has previously asserted explicitly that it regards such contracts as insurance contracts and has used accounting applicable to insurance contracts, the issuer may elect to apply either this Standard or IFRS 4 to such financial guarantee contracts. The issuer may make that election contract by contract, but the election for each contract is irrevocable;
(f) any forward contract between an acquirer and a selling shareholder to buy or sell an acquiree that will result in a business combination at a future acquisition date. The term of the forward contract should not exceed a reasonable period normally necessary to obtain any required approvals and to complete the transaction;
(g) loan commitments other than those described below. An issuer of loan commitments shall apply IAS 37 Provisions, Contingent Liabilities and Contingent Assets to loan commitments that are not within the scope of this Standard. However, all loan commitments are subject to the derecognition provisions of this Standard;
(h) financial instruments, contracts and obligations under share-based payment transactions to which IFRS 2 Share-based Payment applies, except for contracts within the scope of paragraphs 5–7 of this Standard, to which this Standard applies;
(i) rights to payments to reimburse the entity for expenditure it is required to make to settle a liability that it recognises as a provision in accordance with IAS 37, or for which, in an earlier period, it recognised a provision in accordance with IAS 37.

The following loan commitments are within the scope of this Standard:

(a) loan commitments that the entity designates as financial liabilities at fair value through profit or loss (see IFRS 9). An entity that has a past practice of selling the assets resulting from its loan commitments shortly after origination shall apply this Standard to all its loan commitments in the same class;
(b) loan commitments that can be settled net in cash or by delivering or issuing another financial instrument. These loan commitments are derivatives. A loan commitment is not regarded as settled net merely because the loan is paid out in instalments (for example, a mortgage construction loan that is paid out in instalments in line with the progress of construction);
(c) commitments to provide a loan at a below-market interest rate (see IFRS 9).

This Standard shall be applied to those contracts to buy or sell a non-financial item that can be settled net in cash or another financial instrument, or by exchanging financial instruments, as if the contracts were financial instruments, with the exception of contracts that were entered into and continue to be held for the purpose of the receipt or delivery of a non-financial item in accordance with the entity's expected purchase, sale or usage requirements.

There are various ways in which a contract to buy or sell a non-financial item can be settled net in cash or another financial instrument or by exchanging financial instruments. These include:

(a) when the terms of the contract permit either party to settle it net in cash or another financial instrument or by exchanging financial instruments;
(b) when the ability to settle net in cash or another financial instrument, or by exchanging financial instruments, is not explicit in the terms of the contract, but the entity has a practice of settling similar contracts net in cash or another financial instrument or by exchanging financial instruments (whether with the counterparty, by entering into offsetting contracts or by selling the contract before its exercise or lapse);
(c)when, for similar contracts, the entity has a practice of taking delivery of the underlying and selling it within a short period after delivery for the purpose of generating a profit from short-term fluctuations in price or dealer's margin;
(d) when the non-financial item that is the subject of the contract is readily convertible to cash.

A contract to which (b) or (c) applies is not entered into for the purpose of the receipt or delivery of the non-financial item in accordance with the entity's expected purchase, sale or usage requirements and, accordingly, is within the scope of this Standard. Other contracts to which this applies are evaluated to determine whether they were entered into and continue to be held for the purpose of the receipt or delivery of the non-financial item in accordance with the entity's expected purchase, sale or usage requirements and, accordingly, whether they are within the scope of this Standard.

A written option to buy or sell a non-financial item that can be settled net in cash or another financial instrument, or by exchanging financial ­instruments, in accordance with (a) or (d) in the preceding paragraph is within the scope of this Standard. Such a contract cannot be entered into for the purpose of the receipt or delivery of the non-financial item in accordance with the entity's expected purchase, sale or usage requirements.

Summary

In addition to the objective, scope and related introduction, a summary of IAS 39 appears below:

  • Definitions
  • Impairment and uncollectibility of financial assets measured at amortised cost
  • Hedging
    • Hedging instruments
      • Qualifying instruments
      • Designation of hedging instruments
    • Hedged items
      • Qualifying items
      • Designation of financial items as hedged items
      • Designation of non-financial items as hedged items
      • Designation of groups of items as hedged items
    • Hedge accounting
      • Fair value hedges
      • Cash flow hedges
      • Hedges of a net investment
  • Effective date and transition
  • Withdrawal of other pronouncements
  • Appendix A: Application guidance
    • Scope
    • Definitions
      • Effective interest rate
      • Transaction costs
    • Impairment and uncollectibility of financial assets measured at amortised cost
      • Interest income after impairment recognition
    • Hedging
      • Hedging instruments
Qualifying instruments
  • Hedged items
Qualifying items
Designation of financial items as hedged items
Designation of non-financial items as hedged items
Designation of groups of items as hedged items
  • Hedge accounting
Assessing hedge effectiveness
Fair value hedge accounting for a portfolio hedge of interest rate risk
  • Transition
  • Appendix B:
    • Amendments to other pronouncements

Last changed

November 2009

Interpretations

IFRIC 16 Hedge of a Net Investment in a Foreign Operation

IFRIC 12 Service Concession Arrangements

IFRIC 9 Reassessment of Embedded Derivatives

IAS 39 (2003) superseded SIC 33 Consolidation and Equity Method – Potential Voting Rights and Allocation of Ownership Interest

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL (eXtensible Business Reporting Language), is an international standard for communicating business data simply and quickly. ­Consequently, this language for the electronic communication of business data partners perfectly with IFRSs.

Please note that, currently, no XBRL tagging is related directly to this Standard.

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IAS 40 Investment Property

Objective

The objective of this Standard is to prescribe the accounting treatment for investment property and related disclosure requirements.

Scope

This Standard shall be applied in the recognition, measurement and disclosure of investment property.

Among other things, this Standard applies to the measurement in a lessee's financial statements of investment property interests held under a lease accounted for as a finance lease and to the measurement in a lessor's financial statements of investment property provided to a lessee under an operating lease. This Standard does not deal with matters covered in IAS 17 Leases, including:

(a) classification of leases as finance leases or operating leases;
(b) recognition of lease income from investment property (see also IAS 18 Revenue);
(c) measurement in a lessee's financial statements of property interests held under a lease accounted for as an operating lease;
(d) measurement in a lessor's financial statements of its net investment in a finance lease;
(e) accounting for sale and leaseback transactions;
(f) disclosure about finance leases and operating leases.

This Standard does not apply to:

(a) biological assets related to agricultural activity (see IAS 41 Agriculture);
(b) mineral rights and mineral reserves such as oil, natural gas and similar non-regenerative resources.

Summary

In addition to the objective, scope and related introduction, a summary of IAS 40 appears next:

  • Definitions
  • Recognition
  • Measurement at recognition
  • Measurement after recognition
    • Accounting policy
    • Fair value model
      • Inability to determine fair value reliably
    • Cost model
  • Transfers
  • Disposals
  • Disclosure
    • Fair value model and cost model
      • Fair value model
      • Cost model
  • Transitional provisions
    • Fair value model
    • Cost model
  • Effective date
  • Withdrawal of IAS 40 (2000)

Last changed

January 2009

Interpretations

None

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL (eXtensible Business Reporting Language), is an international standard for communicating business data simply and quickly. ­Consequently, this language for the electronic communication of business data partners perfectly with IFRSs. Figure 4.40 shows an introductory fragment of XBRL tagging related to this Standard.

FIGURE 4.40 Fragment of XBRL tagging related to IAS 40.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

IAS 41 Agriculture

Objective

The objective of this Standard is to prescribe the accounting treatment and disclosures related to agricultural activity.

Scope

This Standard shall be applied to account for the following when they relate to agricultural activity:

(a) biological assets;
(b) agricultural produce at the point of harvest;
(c) government grants.

This Standard does not apply to:

(a) land related to agricultural activity (see IAS 16 Property, Plant and Equipment and IAS 40 Investment Property);
(b) intangible assets related to agricultural activity (see IAS 38 Intangible Assets).

This Standard is applied to agricultural produce, which is the harvested product of the entity's biological assets, only at the point of harvest. Thereafter, IAS 2 Inventories or another applicable Standard is applied. Accordingly, this Standard does not deal with the processing of agricultural produce after harvest; for example, the processing of grapes into wine by a vintner who has grown the grapes. While such processing may be a logical and natural extension of agricultural activity, and the events taking place may bear some similarity to biological transformation, such processing is not included within the definition of agricultural activity in this Standard.

Table 4.2 provides examples of biological assets, agricultural produce and products that are the result of processing after harvest.

Table 4.2 Accounting standards word count.

Biological assets Agricultural produce Products that are the result of processing after harvest
Sheep Wool Yarn, carpet
Trees in a plantation forest Felled trees Logs, lumber
Plants Cotton Thread, clothing
Harvested cane Sugar
Dairy cattle Milk Cheese
Pigs Carcass Sausages, cured hams
Bushes Leaf Tea, cured tobacco
Vines Grapes Wine
Fruit trees Picked fruit Processed fruit

Summary

In addition to the objective, scope and related introduction, a summary of IAS 41 appears below:

  • Definitions
    • Agriculture-related definitions
    • General definitions
  • Recognition and measurement
    • Gains and losses
    • Inability to measure fair value reliably
  • Government grants
  • Disclosure
    • General
    • Additional disclosures for biological assets where fair value cannot be measured reliably
    • Government grants
  • Effective date and transition

Last changed

January 2009

Interpretations

None

More information on the detailed text of the Standard is available at www.iasb.org/IFRSs/IFRS.htm.

XBRL tags

XBRL (eXtensible Business Reporting Language), is an international standard for communicating business data simply and quickly. ­Consequently, this language for the electronic communication of business data partners perfectly with IFRSs. Figure 4.41 shows an introductory fragment of XBRL tagging related to this standard.

FIGURE 4.41 Fragment of XBRL tagging related to IAS 41.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

4.3 IFRS FOR SMALL AND MEDIUM-SIZED ENTERPRISES VERSUS PRIVATE COMPANIES

The IFRS for small and medium-sized enterprises is a self-contained Standard of fewer than 230 pages, designed to meet the needs and capabilities of SMEs, which are estimated to account for the large majority of all entities around the world.

Compared with full IFRS (and many national GAAPs), the IFRS for SMEs is less complex in a number of ways. It is the first set of international accounting requirements developed specifically for SMEs. These standards are based on IFRS. But this is a stand-alone product that is separate from the full set of IFRS. The IFRS for SMEs has simplifications that reflect the needs of users of SMEs' financial statements and cost-benefit considerations. Compared with full IFRS, the simplifications have been achieved in a number of ways; topics not relevant to SMEs are omitted.

Where full IFRS allow accounting policy choices, the IFRS for SMEs allows only the easier option. Many of the principles for recognising and measuring assets, liabilities, income and expenses in full IFRS are simplified. Significantly fewer disclosures are required. And the Standard has been written in clear, easily translatable language.

Translations and XBRL taxonomy are available for IFRS for SMEs. ­Actually, a reader trying to familiarise themselves with IFRS is encouraged to first look to IFRS for SMEs in order to gain an initial overview and guidance.

Summary

More information on the detailed text of the Standard is available at www.ifrs.org/IFRS+for+SMEs/IFRS+for+SMEs.htm.

A summary of IFRS for SMEs appears below. Particularly, the IFRS for SMEs is accompanied by a preface, implementation guidance, a derivation table, illustrative financial statements and a presentation and disclosure checklist, and a basis for conclusions. In addition, the related publication has the following contents:

  • Small and medium-sized entities
  • Concepts and pervasive principles
  • Financial statement presentation
  • Statement of financial position
  • Statement of comprehensive income and income statement
  • Statement of changes in equity and statement of income and retained earnings
  • Statement of cash flows
  • Notes to the financial statements
  • Consolidated and separate financial statements
  • Accounting policies, estimates and errors
  • Basic financial instruments
  • Other financial instruments issues
  • Inventories
  • Investments in associates
  • Investments in joint ventures
  • Investment property
  • Property, plant and equipment
  • Intangible assets other than goodwill
  • Business combinations and goodwill
  • Leases
  • Provisions and contingencies
    • Appendix – guidance on recognising and measuring provisions
  • Liabilities and equity
    • Appendix – example of the issuer's accounting for convertible debt
  • Revenue
    • Appendix – examples of revenue recognition under related principles
  • Government grants
  • Borrowing costs
  • Share-based payment
  • Impairment of assets
  • Employee benefits
  • Income tax
  • Foreign currency translation
  • Hyperinflation
  • Events after the end of the reporting period
  • Related party disclosures
  • Specialised activities
  • Transition to the IFRS for SMEs
  • Glossary
  • Derivation table
  • Approval by the board of the IFRS for SMEs issued July 2009
  • Basis for conclusions (as is available in a separate booklet)
  • Illustrative financial statements and presentation and disclosure checklist (available in a separate booklet).

Last changed

Issued 9 July 2009. Revisions to the IFRS are limited to once every three years.

Interpretations

None

XBRL tags

XBRL (eXtensible Business Reporting Language), is an international standard for communicating business data simply and quickly. ­Consequently, this language for the electronic communication of business data partners perfectly with IFRSs. Figure 4.42 shows an introductory fragment of XBRL tagging related to this Standard.

FIGURE 4.42 Fragment of XBRL tagging related to this Standard.

Source: www.ifrs.org/XBRL/IFRS+Taxonomy/IFRS+Taxonomy+2011/IFRS+Taxonomy+2011+files.htm

For additional information, see Part III: XBRL – Using Technology to Implement Standards.

4.4 INTERPRETATIONS TO STANDARDS

Interpretations are part of the IASB's authoritative literature (see IAS 1 Presentation of Financial Statements). Therefore financial statements may not be described as complying with IFRS unless they comply with all the requirements of each applicable Standard and each applicable interpretation.

Changes: interpretations usually supersede when Standards are updated or rewritten. The IASB regularly publishes items not added to the agenda – see www.ifrs.org/Current+Projects/IFRIC+Projects/IFRIC+Projects.htm.

Even though no interpretation is issued on these questions, they provide helpful insight into complex technical areas by Standard. Also, in each introduction to the Standard, amendments and references to interpretations are listed. For examples, go to eifrs.iasb.org/eifrs/bnstandards/en/ias39.pdf.

Only four interpretations (IFRIC 2, 5; SIC 27, 29) are added as additional tags to the taxonomy. The following interpretations are in force as at November 2012:

  • IFRIC 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities
  • IFRIC 2 Members' Shares in Co-operative Entities and Similar Instruments
  • IFRIC 4 Determining Whether an Arrangement Contains a Lease
  • IFRIC 5 Rights to Interests Arising from Decommissioning, Restoration and Environmental Rehabilitation Funds
  • IFRIC 6 Liabilities Arising from Participating in a Specific Market – Waste Electrical and Electronic Equipment
  • IFRIC 7 Applying the Restatement Approach under IAS 29 Financial Reporting in Hyper-inflationary Economies
  • IFRIC 9 Reassessment of Embedded Derivatives
  • IFRIC 10 Interim Financial Reporting and Impairment
  • IFRIC 11 IFRS 2: Group and Treasury Share Transactions
  • IFRIC 12 Service Concession Arrangements
  • IFRIC 13 Customer Loyalty Programmes
  • IFRIC 14 IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction
  • IFRIC 15 Agreements for the Construction of Real Estate
  • IFRIC 16 Hedges of a Net Investment in a Foreign Operation
  • IFRIC 17 Distributions of Non-cash Assets to Owners
  • IFRIC 18 Transfers of Assets from Customers
  • IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments
  • SIC 7 Introduction of the Euro
  • SIC 10 Government Assistance – No Specific Relation to Operating Activities
  • SIC 12 Consolidation – Special Purpose Entities
  • SIC 13 Jointly Controlled Entities – Non-Monetary Contributions by Venturers
  • SIC 15 Operating Leases – Incentives
  • SIC 21 Income Taxes – Recovery of Revalued Non-Depreciable Assets
  • SIC 25 Income Taxes – Changes in the Tax Status of an Enterprise or its Shareholders
  • SIC 27 Evaluating the Substance of Transactions in the Legal Form of a Lease
  • SIC 29 Disclosure – Service Concession Arrangements
  • SIC 31 Revenue – Barter Transactions Involving Advertising Services
  • SIC 32 Intangible Assets – Web Site Costs

Of course, a critical issue related to the development and delivery of IFRS is the worldwide adoption of IFRS and related standards. This is the topic of the next chapter.

..................Content has been hidden....................

You can't read the all page of ebook, please click here login for view all page.
Reset