IFRS Standards Flashcards
IFRS 3 - Business Combinations
*Governs accounting for acquisitions of one business by another.
*Requires recognition of identifiable assets, liabilities, and goodwill.
*Goodwill = Purchase price - Fair value of net assets acquired.
*Acquisition method used for business combinations.
IFRS 5 - Non-current Assets Held for Sale and Discontinued Operations
*Assets held for sale must be measured at the lower of carrying amount and fair value less costs to sell.
*Operations classified as discontinued when they represent a significant component of the business and are disposed of or held for sale.
IFRS 8 - Operating Segments
*Requires segment reporting based on internal management structure.
*Segments identified based on products/services or geographical areas.
*Key performance metrics disclosed for each segment
IFRS 9 - Financial Instruments
*Covers classification, measurement, and impairment of financial assets and liabilities.
*Categories: Amortized cost, Fair Value Through Profit or Loss (FVTPL), and Fair Value Through Other Comprehensive Income (FVOCI).
*Introduces Expected Credit Loss (ECL) model for impairment.
IFRS 13 - Fair Value Measurement
*Provides a framework for measuring fair value.
*Emphasizes market-based measurements.
*Hierarchy: Level 1 (observable prices), Level 2 (inputs other than prices), Level 3 (unobservable inputs).
IFRS 15 - Revenue from Contracts with Customers
Five-step model for revenue recognition:
*Identify contract(s) with a customer.
*Identify performance obligations.
*Determine transaction price.
*Allocate price to performance obligations.
*Recognize revenue as obligations are satisfied.
IFRS 16 - Leases
*Lessees must recognize almost all leases on the balance sheet (right-of-use asset and lease liability).
*Exceptions for short-term leases and low-value assets.
*Lease payments split into interest and principal repayment.
