IFRS 2 5 9 10 11 13
The objective of general purpose financial reporting
The objective of general purpose financial reporting is providing financial info of the reporting entity that is useful to existing or potential investors,lenders and other creditors for making decision about providing resources to the entity.The decision will involve buying,selling and holding equity and debt instrument of the entity,providing or settling loans or other form of credit.
Qualitative Characteristics
Fundamental:
relevance :predictive value,confirmatory value and materiality
faithful representation:financial info. Should be neutral complete and free from error
Enhancing:
Comparability:consistency
Verifiability:faithfully represent economic phenomena
Timeliness:having info in time
Understandability:clear and concisely,complex phenomena should not be excluded out the reports(otherwise incomplete and misleading)
The elements of financial statements
Asset--resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow into the entity
Liability--present obligation of the entity as a result of past events and the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits
Equity--the residual interest of assets after deducting total liability of the entity
Income--increase of economic benefits in the accounting period in the form of inflows,enhancement of assets or decrease of liabilities that result in increase of equity,other than those relating to contributions from equity participants
Expense--decrease of economic benefits in the accounting period in the form of outflows,decrease of assets or increase of liabilities that result in decrease of equity,other than those relating to distributions to equity participants
IAS 12 Current tax
Deferred tax is tax attributable to temporary difference ,which are difference between the carrying amount of assets and liabilities in the SOFP and tax base.
Deductible temporary difference generate a DTA.
Taxable temporary difference generate a DTL.
Group financial statements
1.Fair value adjustment
2.Undistributed profit
A subsidiary’s profits are recognised in the CSF but may subject to additional tax when remitted to the parent’s tax regime as dividend income.
The parent should recognise a DTL unless
1)the parent investor or venture can control the timing of the reversal of temporary difference,or
2)It is probable that temporary difference will not reverse in the foreseeable future
3.Unrealised profit
A deferred tax asset is recognized in the receiving company
Recognition
A DTA and DTL should be recognised for all deductible or taxable temporary difference,unless they arise from:
1)the initial recognition of g/w
2)The recognition of an asset or liability in a transaction which
Is not a biz combination
At the time of transaction,Iaffects neither accounting profit nor taxable profit
Measurement
1.The DTA and DTL are measured at tax rates expected to apply in the period when the tax asset realised and liability settled,based on the tax rate that has been enacted by the year end of reporting period
2.DTA and DTL shouldn’t be discounted
3.DTA can only be recognized to the extent that it is probable that taxable profits are available against which the deductible temporary difference can be utilized.
Presentation
DTL and DTA can only be offset only when
1.the entity has a legally enforceable right to offset the DTA against DTL
2.The deferred tax asset and liability relates to income taxes levied by the same tax authority
IAS 17 Lease
Financial lease is a lease where the lessor transfers substantially risks and rewards incident to the ownership of the leased asset to the lessee.Title may or may not be transferred at the end of the lease term.
Indicators of finance lease:
1.The lease term is the major part of the economic useful life(>75%)
2.The PV of minimum lease payment is substantially proportion of the fair value of the asset
3.The title will be transferred to the lessee at the end of the lease term
4.The lessee can buy the asset at a significantly low price compared to its value
5.The asset is specific for the lessee’s use without major modification
Accounting treatment:Capitalize asset and recognize liability
Asset:depreciated over the shorter term of lease term and economic useful life
Liability:amortized cost
Current issue
The difference of the accounting treatment between finance lease and operating lease has significant impact on the financial performance of FSs,especially on the gearing ratio,ROCE and interest cover.It has been argued that the treatment of operating lease is inconsistent with the definition of assets and liabilities in IASB’s Conceptual Framwork.There is increasing call for the capitalisation of operating lease on the grounds that they meet the definition of assets and liabilities in IASB’s Conceptual Framwork. .
Lease within 12 months
Same as the treatment of operating lease under IAS17
Lease out of 12 months
Type A lease
Where the lessee consumes more than insignificant amount of economic benefit of the assets(vehicle,equippment)
It reflects the finance nature of the transaction and consumption of depreciating assets
Dr right of use asset
Cr liability
(PV of the lese payment and expected residual value guarantee value,discounted at the rate lessor charges lessee)
TypeB lease
Where the lessee consumes not more than insignificant amount of economic benefit of the underlying asset(property)
Reflects that property has a long useful life and the lessor look to earn a yield rather than the lender’s return
Dr right of use asset
Cr liability
IAS18 Revenue
Revenue is that what arises from the normal course of biz ,such as sale of goods or services,dividend royalties.
Sale of goods
Recognition criteria
1.It’s probable that the economic benefit will flow into the entity
2.The cost incurred can bee measured reliably
3.Revenue can be measured reliably
4.Transfer substantial risk and rewards of ownership of the goods to the buyer
5.Maintain no continuing managerial involvement nor effective control over the goods sold
Render of service
1 It’s probable that the economic benefit will flow into the entity
2The cost incurred can bee measured reliably
3Revenue can be measured reliably
4Stage of completion can be measured reliably
If the stage cannot be measured reliably,the revenue can only be recognized to the extent that the cost incurred can be recovered.
Current development-SOFP Approach
1.Identify contract
2.Identify performance obligation
3.Determine transaction price
4.Allocate transaction price to performance obligation
5.Recognize revenue when performance obligation satisfied
IAS 21 The effects of changes in foreign exchange rate
Functional currency is the currency of the primary environment in which the entity opeartes.
Determination factor
1.mainly influences the sale price of goods or services provided
2.Of the country whose competitive forces and regulations mainly influence the price of goods or services provided
3.Mainly influence cost of the labor,material and other cost incurred when providing goods or services
4.The currency in which funds from financing activity are generated
5.The currency in which receipts from operating activities are usually retained
IAS28 Associate
An associate is an entity over which the investor has significant influence.
Significant influence is the power to participate the financial and operating policy decisions of the investee but is not control on or jointly control on those policies.
This could be shown by:
Representation in the BOD of directors
Interchange of management personnel
Provide essential technology info
Participate the decision making of policy
Material transaction between the entity and the investee
IAS 37 Provision,contingent liability and asset
Provion is liability of uncertain timing or amount.
Recognition
1.there is a present obligation as a result of past events
2.It is probable that economic benefits will flow out of the entity to settle the obligation
3.The amount can be measured reliably
Measurement
Generally
If the provision involves a large population of measures-----expected values
Single obligation-------the best estimate,most likely outcome
Discounting of provision----time value of money is material
Discount rate:pre-tax rate and appropriately reflects the risk associated with cash flow
An asset will only be recognised where the present obligation recognised as provision gives access to future economic benefits
Contingent liability is either
(a)a possible obligation arising from past events whose exsitence will be only confirmed by the ocurrence of one or more uncertain future events not wholly within the control of the entity.
(b)a present obligation that arises from past events but is not recognized because
1.the amount cannot be measured reliably or
2.It is not probable that economic benefits will flow out of the entity to settle the obligation
Disclosure
Disclosed until the possibility of an out flow of economic benefits is remote
Description of nature,estimate of financial effect,the possibility of any reimbursement.the indication of uncertainties relating to amount or timing of any
outflow
Contingent liability
a possible asset arising from past events whose exsitence will be only confirmed by the ocurrence of one or more uncertain future events not wholly within the control of the entity.
Disclosure will re required when it is probable.
Restructuring plan
A constructive obligation will arise only when:
1.there is a detailed formal plan and
2.There is a valid expectation that it will carry out the restructuring plan raised in those affected by starting to implement or making announcement its main features to those affected.
IAS 41 Agriculture
Biologic asset is living animal or plant.
Agricultural produce is the harvested product from biologic asset.
Recognition
1.probable economic benefit flow in
2.Under the control of the entity
3.Cost can be measured reliably
Measurement
1.biologic asset will be measured on initial recognition and year end of each reporting period at fair value less cost to sale
2.Agricultural produce is also measured at FVLCTS.The FVLSTS of AP will become cost under IAS 2.After harvest the AP will be measured at lower of cost and NRV in accordance of IAS2
3.When the fair value cannot be measured reliably,the biologic asset should be carried at cost less accumulated depreciation and impairment loss.
Government grant
The treatment of GG relating to BA held at FVLCTS is different from IAS 20
Unconditional--recognized when they are receivable
Conditional--recognized when the conditions are met
The treatment of GG relating to BA held at cost less depreciation is the same as IAS 20
1as deferred income
2deducted from the CA of biological asset
Disclosure
The description of each group
--consumable BA
--bearer BA
The reconciliation of changes in the carrying amount of BA
--seperate disclosure of physical and amount
IFRS 2 Share-based payment
IFRS 5 Non-current asset as held for sale and discontinued operation
Disposal group is a group of assets to be disposed of together as a group in a
single transaction and liabilities directly associated with the assets that will be transferred in the transaction
Classification of NCA held for sale
An entity may shall classify a NCA as held for sale if its carrying amount will be recovered principally in a sale transaction rather than continuing use
To classify NCA as held for sale,the following criteria should be met
1.the assets is available for immediate sale at its present condition,only subject to usual and customary sale term
2.The sale is highly probable
1)The price at which the asset is actively market should be reasonable in respect to it present fair value
2)An active program to locate for potential buyer and complete the plan has been initiated
3)Mgt has been committed to a plan to sell
4)Unlikely that big changes will take place to the plan and plan will be withdrawn
5)Sales expected to qualify for recognition as a complete sale within 12 months after the date of classification of NCAHFS
Measurement and presentation
1.根据原先的准则计量
2.重分类时，should be measured at lower of carrying value or FVLCTS
3.NCAHFS/disposal group shouldn’t be depreciated
4.Subsequent --changes in FVLCTS(impairment loss or reversal of impairment loss) in P/L
Gains should not exceed accumulative impairment loss.
5.Presentation
Normarlly as current asset/liabilities
Separately from assets and liabilities
Single amount of assets and liabilities
On the face of SOFP
No longer classified as NCAHFS is measured as the lower of:
1.the recoverable amount of the assets at that date of subsequent decision not to sell
2.The carrying value before the assets was classified ,adjusted by accumulated depreciation,amortisation and revaluation that would have been recognised had the asset not been classified as HFS
Discontinued operation
1.Is a component of entity that either has been disposed of or classified as HFS and
2.represent a major line of the biz or geographical area of operation,or
3.Is part of a single coordinated plan to dispose of a major line of the biz or geographical area of operation
1.a subsidiary acquired exclusively with a view to sale
IFRS 10 Subsidiary
Is an entity that is controlled by the investor.
An investor controls the investee if and only if the investor has all the
following:
1.Power over the investee to direct the relevant activities
E.g.Power--voting rights,right to appoint ,reassign or remove key management personnel,right to appoint or remove another entity that directs relevant activities
Relevant activities---sell and purchase goods and sales,manage financial assets
2.Exposure and rights to the variable return from its involvement with the investee
e.g.Dividends,access to future liquidity
3.Ability to use its power over the investee to influence the amount of the investor’s return
IFRS11 Joint arrangement
Joint arrangement is an arrangement of which two or more parties have joint control.
JC is contractually agrees sharing of control of the arrangement ,which exists only when decisions about relevant activities will require unanimous consent of all
parties sharing the control.
Joint operation is a JA where parties that have joint control of the arrangement have rights to assets and obligation to liabilities relating to the arrangement
JV is a JA where parties that have joint control of the arrangement have rights to the net assets of the arrangement.
Not structured to a separate vehicle------JO
Structured to a separate vehicle
Considering the the legal form,the terms of contractual arrangement,other facts and circumstances-----whether JO or JV
In consolidated FSs
JO---line by line basis
JV---equity method
In individual FSs
JO---line by line basis
Its own assets and liabilities
Its share of assets held and expense and liabilities incurred jointly
Its revenue from the sale of of its share of the output arsing from JO
Its share of revenue from the sale of output by the JO itself
JV---cost/FV
IFRS 13 Fair value measurement
Fair value is the price received to sell and paid to buy between market participants in a active market in an orderly transaction at measurement date.
Fair value is market based,not specific to entity.The valuation techniques used to measure FV maximise the use of observable inputs and minimise use of unobservable inputs.
To increase consistency and comparability in FV measurement and in relating to disclosure,IFRS 13 establishes a FV hierarchy that categorized inputs of valuation techniques into 3 levels.
Level 1 quoted price for the identical asset and liability of the entity in active market
Level 2 inputs other than quoted price within level 1,e.g quoted price for similar assets and liability in active market or quoted price for identical assets
and liability in non-active market,or quoted interest rate
Level 3 unobservable inputs,discounting estimated future cash flow
Level 3 inputs will only be used when the observable inputs are not available or where the entity determines that the transaction price or quoted price cannot represent fair value
A FV measurement assumes the transactions take place :
1.In principal market
2.In most advantageous market in the absence of principal market
The most advantageous market will be assessed after taking into account transport cost and transaction cost.FV also take into account transport cost but exclude transaction cost.
The FV measurement should use assumptions that market participants would use when pricing asset and liability,assuming market participants acting at their own best economic interest
For non-financial assets,the FV should be the value for using the asset in its highest and best use or by selling it to another market participants which would use it in its highest and best use.The highest and best use of the asset should take into account the use that is legally permissible,financially feasible and physically
possible.
The measurement of FV of liability should assumes that the liability remains outstanding and the market participants transferee would be required to fulfill the obligation rather than it being extinguished.The FV should also take into account the non-performance risk,which will include but may not be limited to an entity’own credit risk.
s
因篇幅问题不能全部显示，请点此查看更多更全内容