IFRIC 1, 2, 17, 19 Flashcards
What does IFRIC 1 provide guidance on?
IFRIC 1 provides guidance on accounting for changes in decommissioning, restoration, and similar liabilities recognized as part of property, plant, and equipment under IAS 16 and as a provision under IAS 37.
What is an example of a liability addressed by IFRIC 1?
An example is a liability recognized by the operator of a nuclear power plant for future costs expected when the plant is decommissioned.
What types of changes does IFRIC 1 address regarding existing liabilities?
IFRIC 1 addresses changes arising from (a) a revision in the timing or amount of estimated decommissioning or restoration costs or (b) a change in the current market-based discount rate.
What does IFRIC 1 confirm about the measurement of liabilities?
IFRIC 1 confirms that the liabilities should be measured using a current market-based discount rate.
What happens to a decrease in decommissioning liability?
A decrease in decommissioning liability is deducted from the cost of the asset.
What happens to an increase in decommissioning liability?
An increase in decommissioning liability is added to the cost of the asset.
What characteristics do members’ shares in co-operative entities have?
Members’ shares have some characteristics of equity and give the holder the right to request redemption for cash.
Under IFRIC 2, when are shares classified as liabilities?
Shares for which the member has the right to request redemption are normally classified as liabilities.
Under IFRIC 2, when are shares classified as equity?
Shares are classified as equity if the entity has an unconditional right to refuse redemption or if local law, regulation, or the entity’s governing charter imposes prohibitions on redemption.
Does the existence of law or regulation prohibiting redemption always classify shares as equity?
No, the mere existence of law, regulation, or charter provisions does not classify shares as equity if conditions are not met.
What does IFRIC 17 apply to?
IFRIC 17 applies to the entity making the distribution of non-cash assets to owners.
When should a dividend payable be recognized under IFRIC 17?
A dividend payable should be recognized when it is appropriately authorized and is no longer at the discretion of the entity.
How should an entity measure the dividend payable under IFRIC 17?
An entity should measure the dividend payable at the fair value of the net assets to be distributed.
What should an entity do with the liability at each reporting date under IFRIC 17?
An entity should remeasure the liability at each reporting date and at settlement, with changes recognized directly in equity.
What should an entity recognize in profit or loss under IFRIC 17?
An entity should recognize the difference between the dividend paid and the carrying amount of the net assets distributed in profit or loss.
