Financial Reporting Flashcards
IFRS
Joint Arrangements
- Parties must have joint control
- Determine if joint operation or joint venture
Joint Operations
- Recognizes portion of assets / liabilities / revenues / expenses in F/S
Joint Venture
- Recognize using equity method
- Recognize at the fair value of the consideration given up -If non-cash, gain or loss recorded for portion of the asset that is now owned by third party -Amortize the portion still owned by investor
ASPE
Joint Arrangements
Jointly Controlled Operations
- Each investor uses his own assets and inventory
- Revenue and expenses shared
Jointly Controlled Assets
- Same as IFRS
Jointly Controlled Enterprises
- Uses either:
- Equity method
- Cost method
- Jointly controlled operations
IFRS
Impairment
Determine if CGU
When to test:
- Indicators of impairment
- Annual tests for select assets
Recoverable amount is the higher of:
- Fair value less cost of disposal
- Value in use:
- Estimate future cash flows from: o continuing use o ultimate disposal
- Apply an appropriate discount rate.
Loss = Recoverable amount – Carrying amount If the impairment applies to a CGU:
- The goodwill is written down to nil.
- The remaining balance applied to remaining on prorata basis.
Reversal of impairment
- Impairment on assets other than goodwill can be reversed if there are indications that recoverable amount has increased since loss
- Asset is written up to the lesser of its recoverable amount and the carrying value that would have existed had the asset never been written down.
ASPE
Impairment
Determine if asset groups
When to test:
- Events or changes indicate that carrying amount may not be recoverable
- Compare the carrying amount to undiscounted cash flows (recoverable amount).
- If the carrying amount exceeds recoverable amount, impairment exists; move to Step 2.
- Determine fair value and compare it to the carrying amount.
- Loss = Fair value – Carrying amount
Reversal of impairment not allowed
IFRS
Employee Benefits Interest Cost
DBO Beginning
Past Service
Cost Benefit Payments
x Discount Rate
IFRS
Employee Benefits Interest Income
Fair value plan assets Beginning
Funding payment
Benefit Payments
x Discount Rate
IFRS
Employee Benefits Net Interest Cost
Interest Cost - Interest Income = Net interest cost
IFRS
Employee Benefits Remeasurement Gain or Loss
DBO Beginning
Current Service Cost
Past Service Cost
Interest Cost
-Benefits Paid in the Year
=Expected DBO
-Actual DBO
=Remeasurement Gain or Loss
IFRS
Employee Benefits Plan Asset Loss or Gain
Fair value of plan asset Beginning
Funding payment
Interest Income
-Benefits paid in the year
=Expected Ending Plan Assets
-Actual Ending plan Assets
=Remeasurement Gain or Loss
IFRS
Non-Monetary Transactions
- Determine if definition of NMT met
- Determine if criteria met
- Determine if FV assessment is reasonable
- Use FV of asset received if both available
ASPE
Non-Monetary Transactions
- Determine if definition of NMT met
- Determine if criteria met
- Determine if FV assessment is reasonable
- Use FV of asset given up if both available
ASPE
Contingency
Definition
- Existing Condition
- Uncertainty as to possible gain or loss to an enterprise
- Resolved when future events occur or fail to occur
IFRS Revenue
- Identify Contract
- Combination of contracts
- Contract Modifications
- Identify Transaction Price
- Variable Consideration
- Most likely amount
- Expected amount
- Constraining Estimates
- Identify Performance Obligations
* Distinct Goods - Allocate price to performance obligations
- Determine if performance obligation satisfied
ASPE
Revenue
- Risks and rewards of ownership have transferred.
- Revenue can be measured reliably.
- Collection is reasonably assured.
IFRS
Decommissioning Provision
Meets definition of provision
Recorded if there is a legal liability or reasonably expected that payment will be made
PV of liability recorded as liability
- DR. ASSET
- CR. LIABILITY
Amortized over life
- DR. DEP EXPENSES
- CR. ACCRUED DEP
Interest Expense increases the liability
- DR.INTEREST EXPENSE
- CR.LIABILITY
