Standards Flashcards
IAS 2 - Inventories
• Held for sale in the ordinary course of business
IAS 1 - Presentation of Financial Statements
???
IAS 7 - Statement of Cash Flows
- Unrealised gains and loses arising from changes in foreign exchange rates are NOT cash flows.
- However its effect is reported in statement of cashflow in order to reconcile cash at beginning and end of period
- Presented separately from CF from operating, investing and Finance activities.
- Includes differences had CF been reported at end of period EX rates
IAS 8 - Accounting policies, changes in Accounting Estimates and Errors
- Change in accounting estimate is different from prior period error
- Changes in accounting estimates should be recognised prospectively by including in PL in period of change
- Should also correct in retrospectively in first set of Financial Statements after discovery by reinstating comparative amounts
IAS 10 - EARP
Events After Reporting Date
• Adjusting Events
- Additional evidence of conditions existing at the reporting date
- Need to be incorporated into the financial statements
• Non Adjusting Events
- Do not exist at the reporting date
- Disclose if non disclosure will affect the users ability to make proper evaluations and decisions
DISCLOSURE: Nature of event, estimate of financial effect (or statement that estimate cannot be made)
- Provisions and Contingencies
IAS 12 - Income Taxes
- Separate disclosure of major components of tax expense. including adjustments for current tax of prior periods and deferred tax expense
- Deferred tax assets can be recognised for the carry forward of unused tax losses to the extent that future taxable profit will be available against which it can be utilised.
IAS 16 - Property, Plant and Equipment
DEFINITION
Tangible items that are
(a) held for use in production or supply or goods or services, for rental to others or admin purposes
(b) expected to be used for more than 1 period
RECOGNITION
(a) Future economic benefits probable
(b) Cost can be measured reliably
DEPRECIATION
- Land normally has unltd useful life
- At least annual review of UL and depcn method
MEASUREMENT AT RECOGNITION
Include
Purchase price, directly attributable costs, finance costs and subsequent costs
MEASUREMENT AFTER RECOGNITION
Cost model or Revaluation model
IAS 17 - Leases
UK GAAP has 90% rule
‘PV of Minimum Lease Payments, discounted at interest rate implicit in the lease, amounts to substantially all (90%) of FV of leased asset’ - to classify as Finance Lease
Lease that includes land and buildings must be assessed (whether finance or operating) separately. Land normally has indefinite economic life. Minimum Lease Payments allocated in proportion to relative FV of interest in each element.
Leased Asset is recognised at the lower of FV of asset OR PV of Minimum Lease Payments (MLP) discounted at interest rate implicit in lease.
Determining whether lease:
- Risk and rewards of arrangements
- Right to use assets or direct others to use
- Right to control the use of the asset
- Who obtains much of the benefit
IAS 18 - Revenue
Inventory charged to production as part of the cost of sales
IAS 19 - Employee Benefits
Employee Benefits
(A) Short Term Benefits
- Salaries, Annual leave etc
- Accumulating and Non acc absences
(B) Post Employment Benefits
- Defined Benefit Plans
- Defined Contribution Plans
(C) Other Long Term Benefits
(D) Termination Benefits
IAS 21 - The Effects of Changes in Foreign Exchange Rates
- Monetary and Non-Monetary assets and liabilities translated at closing rate
- Income and expense items translated at rate at date of the transaction or an average rate that approximates to the actual exchange rates.
- All EX differences recognised in OCI and presented as separate component of equity until disposal where they are reclassified to PL
IAS 20 - Accounting for Government Grants and Disclosure of Government Assistance
- Qualify as Government Grants when - represent assistance by government in form of resources provided in return for past compliance with certain conditions relating to operating activities
- Determine, apply and disclose appropriate policies covering the acquisition, presentation and measurement in its Financial Statements
- Recognise when reasonable assurance compliance with any conditions
- Income is match against related cost intended to compensate
IAS 23 - Borrowing cost
N/A
IAS 24 - Related Party Disclosures
Disclosure of entity transactions with related parties Related parties - Parents - Subsidiaries - Members of key management personnel - Post employment benefit plan
Disclose
- Nature of relationship
- Info on transactions and outstanding balances and commitments; necessary for users to understand impact of relationship on Financial Statements
- Disclose by category of related party and by major type of transaction
EXEMPTION
Government related entities (GRE) exempt from disclosing all transactions between related entity and government and other GRE’s. Instead need to disclose:
~ Name of government and nature of relationship
~ Nature and amount or individually significant transactions
IAS 28 - Associates and Joint Ventures
??