Other Reporting Issues Flashcards
What is IAS 20?
Accounting for Government Grants and Disclosure of Government Assistance
When should a company recognise a grant?
When there is reasonable assurance that it will comply with the conditions attaching a grant and that the grant will be received
What are the two types of grant?
Those relating to income and those relating to assets
Explain the grant relating to income
The grant should be recognised as other income in the same periods relation to the costs. Alternatively it can be deducted from the relevant expense
Explain the grant relating to assets
Either as deferred income and amortised over the asset’s li fe or by deducting the grant from the cost of the asset acquired and reporting the net amount on the S)FP
How should the repayment of grants be accounted for?
Income as an expense
Assets by increased the carrying amount or reducing deferred income
Explain the key points of IAS 41 Agriculture?
Entities that grow or rear biological assets such as cows and plants
What is the accounting standard for Agriculture?
IAS 41
Explain how a biological asset is measured?
At fair value less costs to sell at initial recognition
Explain how agricultural produce is measured?
At fair value less costs to sell at initial harvest. It then becomes inventory and then is subsequently valued in accordance with IAS 2. The sale is dealt with in accordance with IFRS 13.
Explain what bearer plants are
Bearer plants are living plants that are; used in production or supply of agricultural produce; are expected to bear produce for more than one period; and have a remote likelihood of being sold as agricultural produce
How are bearer plants treated
Tangible non current assets in accordance with IAS 16
How are the produce of bearer plants treated?
Agricultural produce under IAS 41
What should the minimum components of an interim financial report contain?
- condensed SOFP
- condensed SPLOCI
- condensed SOCE
- condensed Statements of cashflows
- selected explanatory notes
What is the accounting standard for Accounting Policies. Changes in Accounting Estimates and Errors?
IAS 8
What does IAS 8 require?
That an entity selects its accounting policy by applying the relevant IFRSs
When is a change in accounting policy allowed?
- it is required by an IFRS
- it results in the FS providing reliable and more relevant information
How are changes in accounting policy applied?
Retrospectively (as if it has always been in place)
How are changes in accounting policy applied if it is a new IFRS?
Follow and transitional rules set out in that IFRS
How are changes in accounting estimates adjusted for?
In the period in which they arise
How are prior period errors adjusted for?
Retrospectively
What are prior period errors?
Omission from and misstatements in FS for one or more period periods arising from a failure to use or misuse of reliable information that:
- was available at the time
- could reasonably be expected to have been obtained
Explain the change in the ED 2018/1 Accounting Policy Changes
If an entity choose to change an accounting policy as a result of explanations included in an agenda decision it need only apply the change retrospectively to the extent that the benefit to users exceeds the cost of determining the period specific effects or the cumulative effect of the change
What accounting standard is for First time adoption of international financial reporting standard?
IFRS 1
Explain IFRS 1
An entity applies IFRS 1 when it prepares its first IFRS financial statements
- must prepare an opening IFRS SOFP at the date of the transition
- use same accounting throughout all periods
- estimates must be consistent
- allows a number of exemptions
- include disclosures explain the affect of transitioning
