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Transcript of IFRS Pocket Guide 2010
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International Financial Reporting Standards
Pocket guide 2010
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This pocket guide provides a summary o the recognition and measurement
requirements o International Financial Reporting Standards (IFRS) issued
up to August 2010. It does not address in detail the disclosure requirements;
these can be ound in the PwC publication IFRS disclosure checklist.
The inormation in this guide is arranged in six sections:
Accountingrulesandprinciples
Incomestatementandrelatednotes
Balancesheetandrelatednotes
Consolidatedandseparatenancialstatements
Othersubjects
Industry-specictopics
More detailed guidance and inormation on these topics can be ound in the
IFRS Manual o Accounting 2010 and other PwC publications. A list o PwCs
IFRS publications is provided on the inside ront and back covers.
International Financial Reporting Standards
Pocket guide 2010
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PricewaterhouseCoopers IFRS pocket guide 2010 ii
Contents
Consolidated and separate nancial statements 51
24. Consolidatedandseparatenancialstatements 51
25. Businesscombinations 53
26. Disposalsofsubsidiaries,businessandnon-currentassets 56
27. Associates 58
28. Jointventures 59
Other subjects 60
29. Related-partydisclosures 60
30. Cash fow statements 62
31. Interim reports 63
32. Serviceconcessionarrangements 65
Industry-specic topics 66
33. Agriculture 66
34. Retirementbenetplans 67
35. Extractiveindustries 68
Index by standards and interpretation 70
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Accounting rules and principles
1PricewaterhouseCoopers IFRS pocket guide 2010
Accounting rules and principles
1 Introduction
Therehavebeenmajorchangesinnancialreportinginrecentyears.Most
obvious is the continuing adoption o IFRS worldwide. Many territories have
beenusingIFRSforsomeyears,andmoreareplanningtocomeonstream
from2011.ThenextwaveoftransitioningcountriesincludesKorea,India,
Japan,muchofSouthandCentralAmericaandCanada.Thekeycountryin
this regard is the US. The decision about adoption o IFRS in the US is still
tobetaken.Despitethis,alikelyadoptiondateisnowmoreoftenquotedas
2016 rather than 2014. Convergence between IFRS and US GAAP continues
in the meantime.
An important recent development is the extent to which IFRS is aected
bypolitics.Thecreditcrunch,theproblemsinthebankingsectorandthe
attempts o politicians to resolve these questions have resulted in pressure
onstandardsetterstoamendtheirstandards,primarilythoseonnancial
instruments.Thispressureisunlikelytodisappear,atleastintheshort
term.TheIASBisworkinghardtorespondtothis;wecanthereforeexpect
a continuous stream o changes to the standards in the next ew monthsand years.
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Accounting rules and principles
2 Accounting principles and applicability o IFRS
TheIASBhastheauthoritytosetIFRSandtoapproveinterpretationsof
those standards.
IFRSsareintendedtobeappliedbyprot-orientatedentities.Theseentities
nancialstatementsgiveinformationaboutperformance,positionandcash
owthatisusefultoarangeofusersinmakingnancialdecisions.These
usersincludeshareholders,creditors,employeesandthegeneralpublic.A
completesetofnancialstatementsincludesa:
Balancesheet.
Statementofcomprehensiveincome.
Cashowstatement.
Statementofchangesinequity.
Adescriptionofaccountingpolicies.
Notestothenancialstatements.
The concepts underlying accounting practices under IFRS are set out
intheIASBsFrameworkforthepreparationandpresentationof
nancialstatements.
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Accounting rules and principles
3 First-time adoption o IFRS IFRS 1
An entity moving rom national GAAP to IFRS should apply the requirements
ofIFRS1.ItappliestoanentitysrstIFRSnancialstatementsandinterim
reportspresentedunderIAS34,Interimnancialreporting,thatarepart
o that period. The basic requirement is or ull retrospective application
ofallIFRSseffectiveatthereportingdate.However,thereareanumber
o optional exemptions and mandatory exceptions to the requirement or
retrospective application.
TheexemptionscoverstandardsforwhichtheIASBconsidersthat
retrospectiveapplicationcouldprovetobetoodifcultorcouldresultinacostlikelytoexceedanybenetstousers.Theexemptionsareoptional.Any,
all or none o the exemptions may be applied.
The optional exemptions relate to:
Businesscombinations.
Deemedcost.
Employeebenets.
Cumulativetranslationdifferences. Compoundnancialinstruments.
Assetsandliabilitiesofsubsidiaries,associatesandjointventures.
Designationofpreviouslyrecognisednancialinstruments.
Share-basedpaymenttransactions.
Insurancecontracts.
Decommissioningliabilitiesincludedinthecostofproperty,
plant and equipment.
Leases.
Serviceconcessionarrangements. Borrowingcosts.
Investmentsinsubsidiaries,jointlycontrolledentitiesandassociates.
Transfersofassetsfromcustomers.
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Accounting rules and principles
The exceptions cover areas in which retrospective application o the IFRS
requirements is considered inappropriate. The ollowing exceptions are
mandatory,notoptional:
Hedgeaccounting.
Estimates.
Non-controllinginterests.
Comparative inormation is prepared and presented on the basis o IFRS.
Almostalladjustmentsarisingfromtherst-timeapplicationofIFRSare
againstopeningretainedearningsoftherstperiodthatispresentedonan
IFRS basis.
Certain reconciliations rom previous GAAP to IFRS are also required.
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Accounting rules and principles
Thefollowingitems,asaminimum,arepresentedonthefaceofthe
balance sheet:
Assetsproperty,plantandequipment;investmentproperty;intangible assets;nancialassets;investmentsaccountedforusingtheequity
method; biological assets; deerred tax assets; current tax assets;
inventories; trade and other receivables; and cash and cash equivalents.
Equityissuedcapitalandreservesattributabletotheparentsowners;
andnon-controllinginterest.
Liabilitiesdeferredtaxliabilities;currenttaxliabilities;nancial
liabilities; provisions; and trade and other payables.
Assetsandliabilitiesheldforsalethetotalofassetsclassiedas
heldforsaleandassetsincludedindisposalgroupsclassiedas
heldforsale;andliabilitiesincludedindisposalgroupsclassiedasheld
forsaleinaccordancewithIFRS5,Non-currentassetsheldforsaleand
discontinued operations.
Currentandnon-currentassetsandcurrentandnon-currentliabilitiesare
presentedasseparateclassicationsinthestatementunlesspresentation
based on liquidity provides inormation that is reliable and more relevant.
Statement o comprehensive income
The statement o comprehensive income presents an entitys perormance
overaspecicperiod.Entitieshaveachoiceofpresentingthisinasingle
statement or as two statements. The statement o comprehensive income
underthesingle-statementapproachincludesallitemsofincomeand
expense and includes each component o other comprehensive income
classiedbynature.Underthetwo-statementapproach,allcomponents
ofprotorlossarepresentedinanincomestatement,followedimmediately by a statement o comprehensive income. This begins with
thetotalprotorlossfortheperiodanddisplaysallcomponentsofother
comprehensive income and ends with total comprehensive income or
the period.
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Accounting rules and principles
Items to be presented in statement o comprehensive income
Thefollowingitems,asaminimum,arepresentedinthestatementof
comprehensive income:
Revenue.
Financecosts.
Shareoftheprotorlossofassociatesandjointventuresaccountedfor
using the equity method.
Taxexpense.
Post-taxprotorlossofdiscontinuedoperationsaggregatedwithany
post-taxgainorlossrecognisedonthemeasurementtofair
value less costs to sell (or on the disposal) o the assets or disposal
group(s) constituting the discontinued operation.
Protorlossfortheperiod.
Eachcomponentofothercomprehensiveincomeclassiedbynature.
Shareoftheothercomprehensiveincomeofassociatesandjoint
ventures accounted or using the equity method.
Totalcomprehensiveincome.
Protorlossfortheperiodandtotalcomprehensiveincomeareallocatedinthestatementofcomprehensiveincometotheamountsattributabletonon-
controlling interest and to the parents owners.
Additionallineitemsandsub-headingsarepresentedinthisstatement
when such presentation is relevant to an understanding o the entitys
nancialperformance.
Material items
The nature and amount o items o income and expense are disclosed
separately,wheretheyarematerial.Disclosuremaybeinthestatementorin
the notes. Such income/expenses may include items such as restructuring
costs;write-downsofinventoriesorproperty,plantandequipment;litigation
settlements;andgainsorlossesondisposalsofnon-currentassets.
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Accounting rules and principles
5 Accounting policies, accounting estimates and
errors IAS 8
An entity ollows the accounting policies required by IFRS that are relevant
totheparticularcircumstancesoftheentity.However,forsomesituations,
standards oer choice; there are other situations where there is no
guidance.Inthesesituations,managementshouldselectappropriate
accounting policies.
Managementusesitsjudgementindevelopingandapplyinganaccounting
policy that results in inormation that meets the qualitative characteristics
ofrelevanceandreliability,includingfaithfulrepresentation,substanceoverform,neutrality,prudenceandcompleteness.IfthereisnoIFRSstandardor
interpretationthatisspecicallyapplicable,managementshouldconsider
theapplicabilityoftherequirementsinIFRSonsimilarandrelatedissues,
andthenthedenitions,recognitioncriteriaandmeasurementconceptsfor
assets,liabilities,incomeandexpensesintheFramework.Managementmay
alsoconsiderthemostrecentpronouncementsofotherstandard-setting
bodies,otheraccountingliteratureandacceptedindustrypractices,where
these do not confict with IFRS.
Accounting policies should be applied consistently to similar transactions
and events.
Changes in accounting policies
Changes in accounting policies made on adoption o a new standard are
accounted or in accordance with the transition provisions (i any) within that
standard.Ifspecictransitionprovisionsdonotexist,achangeinpolicy
(whetherrequiredorvoluntary)isaccountedforretrospectively(thatis,by
restatingallcomparativegurespresented)unlessthisisimpracticable.
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Accounting rules and principles
Issue o new/revised standards not yet eective
Standards are normally published in advance o the required implementation
date.Intheinterveningperiod,whereanew/revisedstandardthatisrelevanttoanentityhasbeenissuedbutisnotyeteffective,theentitydisclosesthis
act. It also provides the known or reasonably estimable inormation relevant
to assessing the impact that the application o the standard might have on
theentitysnancialstatementsintheperiodofinitialrecognition.
Changes in accounting estimates
An entity recognises prospectively changes in accounting estimates by
includingtheeffectsinprotorlossintheperiodthatisaffected(theperiod
ofthechangeandfutureperiods),exceptifthechangeinestimategives
risetochangesinassets,liabilitiesorequity.Inthiscase,itisrecognisedby
adjustingthecarryingamountoftherelatedasset,liabilityorequityinthe
period o the change.
Errors
Errors may arise rom mistakes and oversights or misinterpretation oinormation.
Errorsthatarediscoveredinasubsequentperiodareprior-perioderrors.
Materialprior-perioderrorsareadjustedretrospectively(thatis,byrestating
comparativegures)unlessthisisimpracticable.
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Accounting rules and principles
Nature and characteristics o nancial instruments
Financialinstrumentsincludeawiderangeofassetsandliabilities,such
astradedebtors,tradecreditors,loans,nanceleasereceivablesandderivatives.TheyarerecognisedandmeasuredaccordingtoIAS39s
requirements and are disclosed in accordance with IFRS 7.
Financial instruments represent contractual rights or obligations to receive or
paycashorothernancialassets.Non-nancialitemshaveamoreindirect,
non-contractualrelationshiptofuturecashows.
Anancialassetiscash;acontractualrighttoreceivecashoranother
nancialasset;acontractualrighttoexchangenancialassetsorliabilities
with another entity under conditions that are potentially avourable; or an
equity instrument o another entity.
Anancialliabilityisacontractualobligationtodelivercashoranother
nancialasset;ortoexchangenancialinstrumentswithanotherentity
under conditions that are potentially unavourable.
An equity instrument is any contract that evidences a residual interest in theentitys assets ater deducting all o its liabilities.
Aderivativeisanancialinstrumentthatderivesitsvaluefromanunderlying
price or index; requires little or no initial net investment; and is settled at a
uture date.
Embedded derivatives in host contracts
Somenancialinstrumentsandothercontractscombineaderivativeandanon-derivativeinasinglecontract.Thederivativepartofthecontract
isreferredtoasanembeddedderivative.Itseffectisthatsomeofthe
contractscashowsvaryinasimilarwaytoastand-alonederivative.For
example,theprincipalamountofabondmayvarywithchangesinastock
marketindex.Inthiscase,theembeddedderivativeisanequityderivativeon
the relevant stock market index.
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Accounting rules and principles
Embeddedderivativesthatarenotcloselyrelatedtotherestofthe
contractareseparatedandaccountedforasstand-alonederivatives(that
is,measuredatfairvalue,generallywithchangesinfairvaluerecognisedin
protorloss).Anembeddedderivativeisnotcloselyrelatedifitseconomiccharacteristics and risks are dierent rom those o the rest o the contract.
IAS39setsoutmanyexamplestohelpdeterminewhenthistestis(andis
not) met.
Analysing contracts or potential embedded derivatives is one o the more
challengingaspectsofIAS39.
Classication o nancial instruments
ThewaythatnancialinstrumentsareclassiedunderIAS39driveshow
they are subsequently measured and where changes in measurement are
accounted or.
Undernancialinstrumentsaccounting,priortotheimpactofIFRS9,there
arefourclassesofnancialasset(underIAS39):fairvaluethroughprot
orloss,heldtomaturity,loansandreceivablesandavailableforsale.The
factorstotakeintoaccountwhenclassifyingnancialassetsinclude:
Arethecashowsarisingfromtheinstrumentxedordeterminable?
Doestheinstrumenthaveamaturitydate?
Aretheassetsheldfortrading?Doesmanagementintendtoholdthe
instrumentstomaturity?
Istheinstrumentaderivative,ordoesitcontainan
embeddedderivative?
Istheinstrumentquotedonanactivemarket?
Hasmanagementdesignatedtheinstrumentintoaparticular classicationatinception?
Financialliabilitiesareatfairvaluethroughprotorlossiftheyare
designatedassuch(subjecttovariousconditions),iftheyareheldfortrading
oriftheyarederivatives(exceptforaderivativethatisanancialguarantee
contract or a designated and eective hedging instrument). They are
otherwiseclassiedasotherliabilities.
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Accounting rules and principles
entityceasestorecognisetheassets)orwhethernancehasbeensecured
on the assets (and the entity recognises a liability or any proceeds received).
Thisevaluationmightbestraightforward.Forexample,itisclearwithlittleor
noanalysisthatanancialassetisderecognisedinanunconditionaltransferofittoanunconsolidatedthirdparty,withnorisksandrewardsoftheasset
beingretained.Conversely,derecognitionisnotallowedwhereanassethas
been transerred but substantially all the risks and rewards o the asset have
beenretainedthroughthetermsoftheagreement.However,theanalysis
may be more complex in other cases. Securitisation and debt actoring
are examples o more complex transactions where derecognition will need
careul consideration.
Derecognition o liabilities
Anentitymayonlyceasetorecognise(derecognise)anancialliabilitywhen
itisextinguishedthatis,whentheobligationisdischarged,cancelledor
expired,orwhenthedebtorislegallyreleasedfromtheliabilitybylaworby
the creditor agreeing to such a release.
Measurement o nancial assets and liabilities
Allnancialassetsandnancialliabilitiesaremeasuredinitiallyatfair
valueunderIAS39.Thefairvalueofanancialinstrumentisnormallythe
transactionpricethatis,theamountoftheconsiderationgivenor
received.However,insomecircumstances,thetransactionpricemaynot
beindicativeoffairvalue.Insuchasituation,anappropriatefairvalueis
determined using data rom current observable transactions in the same
instrument or based on a valuation technique whose variables include only
data rom observable markets.
Themeasurementofnancialinstrumentsafterinitialrecognition
dependsontheirinitialclassication.Allnancialassetsaremeasuredat
fairvalueexceptforloansandreceivables,held-to-maturityassetsand,
inrarecircumstances,unquotedequityinstrumentswhosefairvalues
cannotbemeasuredreliably,orderivativeslinkedtoandthatmustbe
settled by the delivery o such unquoted equity instruments that cannot be
measured reliably.
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Accounting rules and principles
Loansandreceivablesandheld-to-maturityinvestmentsaremeasuredat
amortisedcost.Theamortisedcostofanancialassetornancialliabilityis
measuredusingtheeffectiveinterestmethod.
Available-for-salenancialassetsaremeasuredatfairvalue,withchangesin
fairvaluerecognisedinothercomprehensiveincome.Foravailable-for-sale
debtsecurities,interestisrecognisedinincomeusingtheeffectiveinterest
method.Dividendsonavailable-for-saleequitysecuritiesarerecognisedin
protorlossastheholderbecomesentitledtothem.Derivatives(including
separated embedded derivatives) are measured at air value. All air value
gainsandlossesarerecognisedinprotorlossexceptwheretheyqualifyas
hedging instruments in cash fow hedges.
Financial liabilities are measured at amortised cost using the eective
interestmethodunlesstheyareclassiedatfairvaluethroughprotorloss.
Financialassetsandnancialliabilitiesthataredesignatedashedgeditems
mayrequirefurtheradjustmentsunderthehedgeaccountingrequirements.
Allnancialassetsaresubjecttoreviewforimpairment,exceptthose
measuredatfairvaluethroughprotorloss.Wherethereisobjective
evidencethatsuchanancialassetmaybeimpaired,theimpairmentlossiscalculatedandrecognisedinprotorloss.
Hedge accounting
Hedgingistheprocessofusinganancialinstrument(usuallyaderivative)
tomitigateallorsomeoftheriskofahedgeditem.Hedgeaccounting
changes the timing o recognition o gains and losses on either the hedged
itemorthehedginginstrumentsothatbotharerecognisedinprotorloss
in the same accounting period in order to record the economic substance othe combination o the hedged item and instrument.
Toqualifyforhedgeaccounting,anentitymust(a)formallydesignateand
document a hedge relationship between a qualiying hedging instrument
and a qualiying hedged item at the inception o the hedge; and (b) both
atinceptionandonanongoingbasis,demonstratethatthehedgeis
highly eective.
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Accounting rules and principles
There are three types o hedge relationship:
Fairvaluehedgeahedgeoftheexposuretochangesinthefairvalue
ofarecognisedassetorliability,orarmcommitment. Cashowhedgeahedgeoftheexposuretovariabilityincashows
ofarecognisedassetorliability,armcommitmentorahighlyprobable
orecast transaction.
Netinvestmenthedgeahedgeoftheforeigncurrencyriskonanet
investment in a oreign operation.
Forafairvaluehedge,thehedgeditemisadjustedforthegainorloss
attributable to the hedged risk. That element is included in the income
statement where it will oset the gain or loss on the hedging instrument.
Foraneffectivecashowhedge,gainsandlossesonthehedging
instrument are initially included in other comprehensive income. The amount
included in other comprehensive income is the lesser o the air value o the
hedginginstrumentandhedgeitem.Wherethehedginginstrumenthasafair
valuegreaterthanthehedgeditem,theexcessisrecordedwithintheprot
or loss as ineectiveness. Gains or losses deerred in other comprehensive
incomearereclassiedtoprotorlosswhenthehedgeditemaffectstheincomestatement.Ifthehedgeditemistheforecastacquisitionofanon-
nancialassetorliability,theentitymaychooseanaccountingpolicyof
adjustingthecarryingamountofthenon-nancialassetorliabilityforthe
hedginggainorlossatacquisition,orleavingthehedginggainsorlosses
deferredinequityandreclassifyingthemtoprotandlosswhenthehedged
itemaffectsprotorloss.
Hedges o a net investment in a oreign operation are accounted or similarly
to cash fow hedges.
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Income statement and related notes
Tocalculatethedenedbenetobligation,estimates(actuarialassumptions)
about demographic variables (such as employee turnover and mortality) and
nancialvariables(suchasfutureincreasesinsalariesandmedicalcosts)are
inputintoavaluationmodel.Thebenetisthendiscountedtopresentvalue.This normally requires the expertise o an actuary.
Wheredenedbenetplansarefunded,theplanassetsaremeasuredatfair
value using discounted cash fow estimates i market prices are not available.
Planassetsaretightlydened,andonlyassetsthatmeetthedenitionof
planassetsmaybeoffsetagainsttheplansdenedbenetobligations
thatis,thenetsurplusordecitisshownonthebalancesheet.
There-measurementateachbalancesheetdateoftheplanassetsand
thedenedbenetobligationgivesrisetoactuarialgainsandlosses.There
arethreepermissiblemethodsunderIAS19forrecognisingactuarialgains
and losses:
UndertheOCIapproach,actuarialgainsandlossesarerecognised
immediately in other comprehensive income.
Underthecorridorapproach,anyactuarialgainsandlossesthatfall
outsidethehigherof10percentofthepresentvalueofthedened benetobligationor10percentofthefairvalueoftheplanassets
(i any) are amortised over no more than the remaining working lie o
the employees.
Undertheincomestatementapproach,actuarialgainsandlossesare
recognisedimmediatelyinprotorloss.
IAS19analysesthechangesintheplanassetsandliabilitiesintovarious
components,thenettotalofwhichisrecognisedasanexpenseorincomein
the income statement. These components include:
currentservicecost(thepresentvalueofthebenetsearnedbyactive
employees in the current period);
interestcost(theunwindingofthediscountonthedenedbenet
obligation);
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Income statement and related notes
12 Share-based payment IFRS 2
Share-basedpaymenttransactionsaretransactionsinwhichentitiesreceive
goods or services as consideration or either:
equityinstrumentsoftheentity(ortheentitysparentoranotherentity
withinthesamegroup)equity-settledshare-basedpayment;or
cashorotherassets,wheretheamountisbasedonthepriceorvalueof
theentityssharescash-settledshare-basedpayment.
Themostcommonapplicationistoemployeeshareschemes,suchasshare
optionschemes.However,entitiessometimesalsopayforotherexpenses such as proessional ees and or the purchase o assets by means o
share-basedpayment.
The accounting treatment under IFRS 2 is based on the air value o the
instruments.Boththevaluationofandtheaccountingforawardscanbe
difcult,duetothecomplexmodelsthatneedtobeusedtocalculatethe
fairvalueofoptions,andalsoduetothevarietyandcomplexityofschemes.
Inaddition,thestandardrequiresextensivedisclosures.Theresultgenerally
istoreducereportedprots,especiallyinentitiesthatuseshare-basedpayment extensively as part o their remuneration strategy.
Alltransactionsinvolvingshare-basedpaymentarerecognisedasexpenses
or assets over any vesting period.
Equity-settledshare-basedpaymenttransactionsaremeasuredatthegrant
datefairvalueforemployeeservices;and,fornon-employeetransactions,
at the air value o the goods or services received at the date on which
the entity recognises the goods or services. I the air value o the goodsor services cannot be estimated reliably such as employee services
andcircumstancesinwhichthegoodsorservicescannotbespecically
identiedtheentityusesthefairvalueoftheequityinstrumentsgranted.
Additionally,managementneedstoconsiderifthereareanyunidentiable
goodsorservicesreceivedortobereceivedbytheentity,asthesealsohave
to be recognised and measured in accordance with IFRS 2.
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Income statement and related notes
13 Taxation IAS 12
IAS12onlydealswithtaxesonincome,comprisingcurrenttaxand
deerred tax.
Current tax expense or a period is based on the taxable and deductible
amounts that will be shown on the tax return or the current year. An entity
recognises a liability in the balance sheet in respect o current tax expense
or the current and prior periods to the extent unpaid. It recognises an asset
i current tax has been overpaid.
Current tax assets and liabilities or the current and prior periods are
measured at the amount expected to be paid to (recovered rom) the
taxationauthorities,usingthetaxratesandtaxlawsthathavebeen
enacted or substantively enacted by the balance sheet date.
Taxpayablebasedontaxableprotseldommatchesthetaxexpensethat
mightbeexpectedbasedonpre-taxaccountingprot.Themismatchcan
occur because IFRS recognition criteria or items o income and expense
are dierent rom the treatment o items under tax law.
Deerred tax accounting seeks to deal with this mismatch. It is based on
the temporary dierences between the tax base o an asset or liability and
itscarryingamountinthenancialstatements.Forexample,aproperty
isrevaluedupwardsbutnotsold,therevaluationcreatesatemporary
difference(thecarryingamountoftheassetinthenancialstatements
isgreaterthanthetaxbaseoftheasset),andthetaxconsequenceisa
deerred tax liability.
Deerred tax is provided in ull or all temporary dierences arising betweenthe tax bases o assets and liabilities and their carrying amounts in the
nancialstatements,exceptwhenthetemporarydifferencearisesfrom:
initialrecognitionofgoodwill(fordeferredtaxliabilitiesonly);
initialrecognitionofanassetorliabilityinatransactionthatisnota
businesscombinationandthataffectsneitheraccountingprotnor
taxableprot;and
investmentsinsubsidiaries,branches,associatesandjointventures,
but only where certain criteria apply.
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Income statement and related notes
Deerred tax assets and liabilities are measured at the tax rates that are
expected to apply to the period when the asset is realised or the liability
issettled,basedontaxrates(andtaxlaws)thathavebeenenactedor
substantively enacted by the balance sheet date. The discounting o deerredtax assets and liabilities is not permitted.
The measurement o deerred tax liabilities and deerred tax assets refects
the tax consequences that would ollow rom the manner in which the
entityexpects,atthebalancesheetdate,torecoverorsettlethecarrying
amount o its assets and liabilities. The expected manner o recovery or
landwithanunlimitedlifeisalwaysthroughsale.Forotherassets,the
mannerinwhichmanagementexpectstorecovertheasset(thatis,through
use or through sale or through a combination o both) is considered at each
balance sheet date.
Management only recognises a deerred tax asset or deductible temporary
differencestotheextentthatitisprobablethattaxableprotwillbeavailable
against which the deductible temporary dierence can be utilised. This also
applies to deerred tax assets or unused tax losses carried orward.
Currentanddeferredtaxisrecognisedinprotorlossfortheperiod,unlessthe tax arises rom a business combination or a transaction or event that is
recognisedoutsideprotorloss,eitherinothercomprehensiveincomeor
directly in equity in the same or dierent period. The tax consequences that
accompany,forexample,achangeintaxratesortaxlaws,areassessment
o the recoverability o deerred tax assets or a change in the expected
mannerofrecoveryofanassetarerecognisedinprotorloss,excepttothe
extentthattheyrelatetoitemspreviouslychargedorcreditedoutsideprot
or loss.
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Income statement and related notes
14 Earnings per share IAS 33
Earningspershare(EPS)isaratiothatiswidelyusedbynancialanalysts,
investorsandotherstogaugeanentitysprotabilityandtovalueitsshares.EPS is normally calculated in the context o ordinary shares o the entity.
Earnings attributable to ordinary shareholders are thereore determined by
deducting rom net income the earnings attributable to holders o more
senior equity instruments.
An entity whose ordinary shares are listed on a recognised stock exchange
or are otherwise publicly traded is required to disclose both basic and diluted
EPSwithequalprominenceinitsseparateorindividualnancialstatements,
orinitsconsolidatednancialstatementsifitisaparent.Furthermore,
entitiesthatleorareintheprocessoflingnancialstatementswitha
securities commission or other regulatory body or the purposes o issuing
ordinaryshares(thatis,notaprivateplacement)arealsorequiredtocomply
with the standard.
BasicEPSiscalculatedbydividingtheprotorlossfortheperiod
attributable to the equity holders o the parent by the weighted average
numberofordinarysharesoutstanding(includingadjustmentsforbonusandrights issues).
DilutedEPSiscalculatedbyadjustingtheprotorlossandtheweighted
average number o ordinary shares by taking into account the conversion
o any dilutive potential ordinary shares. Potential ordinary shares are those
nancialinstrumentsandcontractsthatmayresultinissuingordinaryshares
such as convertible bonds and options (including employee share options).
BasicanddilutedEPSforbothcontinuingandtotaloperationsarepresentedwith equal prominence in the statement o comprehensive income or in
the separate income statement where one is presented or each class
ofordinaryshares.SeparateEPSguresfordiscontinuedoperationsare
disclosed in the same statements or in the notes.
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Balancesheetandrelatednotes
18 Impairment o assets IAS 36
Nearlyallassetscurrentandnon-currentaresubjecttoanimpairment
test to ensure that they are not overstated on balance sheets.
The basic principle o impairment is that an asset may not be carried on the
balancesheetaboveitsrecoverableamount.Recoverableamountisdened
as the higher o the assets air value less costs to sell and its value in use.
Fair value less costs to sell is the amount obtainable rom a sale o an asset
inanarmslengthtransactionbetweenknowledgeable,willingparties,less
costs o disposal. Value in use requires management to estimate the uture
cashowstobederivedfromtheassetanddiscountthemusingapre-tax
market rate that refects current assessments o the time value o money and
therisksspecictotheasset.
Allassetssubjecttotheimpairmentguidancearetestedforimpairment
where there is an indication that the asset may be impaired. Certain assets
(goodwill,indenitelivedintangibleassetsandintangibleassetsthatarenot
yet available or use) are also tested or impairment annually even i there is
no impairment indicator.
Assessment o whether an asset is impaired involves consideration o
bothexternalindicators(forexample,signicantadversechangesinthe
technological,market,economicorlegalenvironmentorincreasesinmarket
interestrates)andinternalindicators(forexample,evidenceofobsolescence
or physical damage o an asset or evidence rom internal reporting that the
economicperformanceofanassetis,orwillbe,worsethanexpected).
Recoverableamountiscalculatedattheindividualassetlevel.However,an
assetseldomgeneratescashowsindependentlyofotherassets,andmostassetsaretestedforimpairmentingroupsofassetsdescribedascash-
generatingunits(CGUs).ACGUisthesmallestidentiablegroupofassets
that generates infows that are largely independent rom the cash fows rom
other CGUs.
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Balancesheetandrelatednotes
19 Leases IAS 17
A lease gives one party (the lessee) the right to use an asset over an agreed
periodoftimeinreturnforpaymenttothelessor.Leasingisanimportantsourceofmedium-andlong-termnancing;accountingforleasescanhave
asignicantimpactonlesseesandlessorsnancialstatements.
Leasesareclassiedasnanceoroperatingleasesatinception,depending
on whether substantially all the risks and rewards o ownership transer to
thelessee.Underanancelease,thelesseehassubstantiallyalloftherisks
andrewardofownership.Allotherleasesareoperatingleases.Leasesof
land and buildings are considered separately under IFRS.
Underanancelease,thelesseerecognisesanassetheldunderanance
lease and a corresponding obligation to pay rentals. The lessee depreciates
the asset.
The lessor recognises the leased asset as a receivable. The receivable is
measuredatthenetinvestmentintheleasetheminimumleasepayments
receivable,discountedattheinternalrateofreturnofthelease,plusthe
unguaranteed residual which accrues to the lessor.
Underanoperatinglease,thelesseedoesnotrecogniseanassetand
lease obligation. The lessor continues to recognise the leased asset
and depreciates it. The rentals paid are normally charged to the income
statement o the lessee and credited to that o the lessor on a
straight-linebasis.
Linkedtransactionswiththelegalformofaleaseareaccountedforonthe
basisoftheirsubstanceforexample,asaleandleasebackwheretheselleris committed to repurchase the asset may not be a lease in substance i the
sellerretainstherisksandrewardsofownershipandsubstantiallythesame
rights o use as beore the transaction.
Equally,sometransactionsthatdonothavethelegalformofaleaseare
in substance leases i they are dependent on a particular asset that the
purchaser can control physically or economically.
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Balancesheetandrelatednotes
20 Inventories IAS 2
Inventories are initially recognised at cost. Cost o inventories includes
importduties,non-refundabletaxes,transportandhandlingcosts,andanyotherdirectlyattributablecostslesstradediscounts,rebatesand
similar items.
Inventoriesarevaluedatthelowerofcostandnetrealisablevalue(NRV).
NRVistheestimatedsellingpriceintheordinarycourseofbusiness,lessthe
estimated costs o completion and estimated selling expenses.
IAS2,Inventories,requiresthecostforitemsthatarenotinterchangeable
orthathavebeensegregatedforspeciccontractstobedeterminedonan
individual-itembasis.Thecostofotheritemsofinventoryusedisassigned
byusingeithertherst-in,rst-out(FIFO)orweightedaveragecostformula.
Last-in,rst-out(LIFO)isnotpermitted.Anentityusesthesamecost
ormula or all inventories that have a similar nature and use to the entity.
Adifferentcostformulamaybejustiedwhereinventorieshaveadifferent
nature or use. The cost ormula used is applied on a consistent basis rom
period to period.
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Balancesheetandrelatednotes
I an entity has an onerous contract (the unavoidable costs o meeting the
obligationsunderthecontractexceedtheeconomicbenetsexpectedto
bereceivedunderit),thepresentobligationunderthecontractisrecognised
as a provision. Impairments o any assets dedicated to the contract arerecognised beore making a provision.
Restructuring provisions
Therearespecicrequirementsforrestructuringprovisions.Aprovision
is recognised when there is: (a) a detailed ormal plan identiying the main
eatures o the restructuring; and (b) a valid expectation in those aected that
the entity will carry out the restructuring by starting to implement the plan or
by announcing its main eatures to those aected.
A restructuring plan does not create a present obligation at the balance
sheetdateifitisannouncedafterthatdate,evenifitisannouncedbefore
thenancialstatementsareapproved.Noobligationarisesforthesaleofan
operationuntiltheentityiscommittedtothesale(thatis,thereisabinding
sale agreement).
The provision includes only incremental costs necessarily resulting rom therestructuring and not those associated with the entitys ongoing activities.
Any expected gains on the sale o assets are not considered in measuring a
restructuring provision.
Reimbursements
An obligation and any anticipated recovery are presented separately as a
liabilityandanassetrespectively;however,anassetcanonlybe
recognised i it is virtually certain that settlement o the obligation will resultinareimbursement,andtheamountrecognisedforthereimbursement
should not exceed the amount o the provision. The amount o any
expectedreimbursementisdisclosed.Netpresentationispermittedonlyin
the income statement.
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Balancesheetandrelatednotes
Subsequent measurement
Management perorms an exercise at each balance sheet date to identiy the
best estimate o the expenditure required to settle the present obligation atthebalancesheetdate,discountedatanappropriaterate.Theincreasein
provision due to the passage o time is recognised as interest expense.
Contingent liabilities
Contingent liabilities are possible obligations whose existence will be
conrmedonlyontheoccurrenceornon-occurrenceofuncertainfuture
eventsoutsidetheentityscontrol,orpresentobligationsthatarenot
recognised because: (a) it is not probable that an outfow o economic
benetswillberequiredtosettletheobligation;or(b)theamountcannotbe
measured reliably.
Contingent liabilities are not recognised but are disclosed and described in
thenotestothenancialstatements,includinganestimateoftheirpotential
nancialeffectanduncertaintiesrelatingtotheamountortimingofany
outow,unlessthepossibilityofsettlementisremote.
Contingent assets
Contingentassetsarepossibleassetswhoseexistencewillbeconrmed
onlyontheoccurrenceornon-occurrenceofuncertainfutureevents
outsidetheentityscontrol.Contingentassetsarenotrecognised.Whenthe
realisationofincomeisvirtuallycertain,therelatedassetisnotacontingent
asset; it is recognised as an asset.
Contingentassetsaredisclosedanddescribedinthenotestothenancialstatements,includinganestimateoftheirpotentialnancialeffectifthe
inowofeconomicbenetsisprobable.
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Balancesheetandrelatednotes
22 Events ater the reporting period and nancial
commitments IAS 10
Itisnotgenerallypracticableforpreparerstonalisenancialstatements
without a period o time elapsing between the balance sheet date and
thedateonwhichthenancialstatementsareauthorisedforissue.The
question thereore arises as to the extent to which events occurring between
thebalancesheetdateandthedateofapproval(thatis,eventsafterthe
reportingperiod)shouldbereectedinthenancialstatements.
Eventsafterthereportingperiodareeitheradjustingeventsornon-adjusting
events.Adjustingeventsprovidefurtherevidenceofconditionsthatexistedatthebalancesheetdateforexample,determiningaftertheyearendthe
considerationforassetssoldbeforetheyearend.Non-adjustingevents
relatetoconditionsthataroseafterthebalancesheetdateforexample,
announcing a plan to discontinue an operation ater the year end.
The carrying amounts o assets and liabilities at the balance sheet date are
adjustedonlyforadjustingeventsoreventsthatindicatethatthegoing-
concern assumption in relation to the whole entity is not appropriate.
Signicantnon-adjustingpost-balance-sheetevents,suchastheissueofsharesormajorbusinesscombinations,aredisclosed.
Dividends proposed or declared ater the balance sheet date but beore
thenancialstatementshavebeenauthorisedforissuearenotrecognised
asaliabilityatthebalancesheetdate.Detailsofthesedividendsare,
however,disclosed.
Anentitydisclosesthedateonwhichthenancialstatementswere
authorisedforissueandthepersonsauthorisingtheissueand,wherenecessary,thefactthattheownersorotherpersonshavetheabilityto
amendthenancialstatementsafterissue.
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Balancesheetandrelatednotes
23 Equity (share capital and reserves)
Equity,alongwithassetsandliabilities,isoneofthethreeelements
usedtoportrayanentitysnancialposition.EquityisdenedintheIASBsFrameworkastheresidualinterestintheentitysassetsafter
deductingallitsliabilities.Thetermequityisoftenusedtoencompassan
entitys equity instruments and reserves. Equity is given various
descriptionsinthenancialstatements.Corporateentitiesmayrefertoit
asownersequity,shareholdersequity,capitalandreserves,shareholders
unds and proprietorship. Equity includes various components with
dierent characteristics.
Determining what constitutes an equity instrument or the purpose o IFRS
andhowitshouldbeaccountedforfallswithinthescopeofthenancial
instrumentstandardIAS32,Financialinstruments:Presentation.
Differentclassesofsharecapitalmaybetreatedaseitherdebtorequity,
or a compound instrument with both debt and equity components. Equity
instruments(forexample,issued,non-redeemableordinaryshares)are
generally recorded at the proceeds o issue net o transaction costs. Equity
instrumentsarenotre-measuredafterinitialrecognition.
Reservesincluderetainedearnings,togetherwithfairvaluereserves,
hedgingreserves,assetrevaluationreservesandforeigncurrencytranslation
reserves and other statutory reserves.
Treasury shares
Treasurysharesaredeductedfromequity.Nogainorlossisrecognisedin
protorlossonthepurchase,sale,issueorcancellationofanentitysownequity instruments.
Non-controlling interests
Non-controllinginterests(previouslytermedminorityinterests)in
consolidatednancialstatementsarepresentedasacomponentofequity,
separately rom the parent shareholders equity.
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Balancesheetandrelatednotes
Disclosures
IAS1,Presentationofnancialstatements,requiresvariousdisclosures.
Theseincludethetotalissuedsharecapitalandreserves,presentationofastatementofchangesinequity,capitalmanagementpoliciesand
dividend inormation
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Consolidated and separate inancial statements
Consolidated and separate nancial statements
24 Consolidated and separate nancial statements IAS 27
IAS27,Consolidatedandseparatenancialstatements,requires
consolidatednancialstatementstobepreparedinrespectofagroup,
subjecttocertainexceptions.Allsubsidiariesshouldbeconsolidated.A
subsidiary is an entity that is controlled by the parent. Control is the power
togovernthenancialandoperatingpoliciesofanentitysoastoobtain
benetsfromitsactivities.Itispresumedtoexistwhentheinvestordirectly
orindirectlyholdsmorethan50percentoftheinvesteesvotingpower;
this presumption may be rebutted i there is clear evidence to the contrary.Controlmayalsoexistwherelessthan50percentoftheinvesteesvoting
power is held and the parent has the power to control through or example
control o the board o directors.
Consolidation o a subsidiary takes place rom the date o acquisition; this
is the date on which control o the acquirees net assets and operations is
effectivelytransferredtotheacquirer.Consolidatednancialstatementsare
prepared to show the eect as i the parent and all the subsidiaries were one
entity.Transactionswithinthegroup(forexample,salesfromonesubsidiaryto another) are eliminated.
An entity with one or more subsidiaries (a parent) presents consolidated
nancialstatements,unlessallthefollowingconditionsaremet:
Itisitselfasubsidiary(subjecttonoobjectionfromanyshareholder).
Itsdebtorequityarenotpubliclytraded.
Itisnotintheprocessofissuingsecuritiestothepublic.
TheultimateorintermediateparentoftheentitypublishesIFRS consolidatednancialstatements.
There are no exemptions i the group is small or i certain subsidiaries are in
a dierent line o business.
Fromthedateofacquisition,theparent(theacquirer)incorporatesintothe
consolidatedstatementofcomprehensiveincomethenancialperformance
o the acquiree and recognises in the consolidated balance sheet the
acquiredassetsandliabilities(atfairvalue),includinganygoodwillarisingon
theacquisition(see,BusinesscombinationsIFRS3,p53).
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Consolidated and separate inancial statements
Theacquireesidentiableassets(includingintangibleassetsnotpreviously
recognised),liabilitiesandcontingentliabilitiesaregenerallyrecognised
at their air value. Fair value is determined by reerence to an arms length
transaction; the intention o the acquirer is not relevant. I the acquisition isforlessthan100percentoftheacquiree,thereisanon-controllinginterest.
Thenon-controllinginterestrepresentstheequityinasubsidiarythatis
notattributable,directlyorindirectly,totheparent.Theparentcanelectto
measurethenon-controllinginterestatitsfairvalueoratitsproportionate
shareoftheidentiablenetassets.
The consideration or the combination includes cash and cash equivalents
andthefairvalueofanynon-cashconsiderationgiven.Anysharesissued
as part o the consideration are air valued. I any o the consideration is
deferred,itisdiscountedtoreectitspresentvalueattheacquisitiondate,
i the eect o discounting is material. Consideration includes only those
amounts paid to the seller in exchange or control o the entity. Consideration
excludesamountspaidtosettlepre-existingrelationships,paymentsthatare
contingentonfutureemployeeservicesandacquisition-relatedcosts.
A portion o the consideration may be contingent on the outcome o uture
eventsortheacquiredentitysperformance(contingentconsideration).Contingent consideration is also recognised at its air value at the date
o acquisition. The accounting or contingent consideration ater the
dateofacquisitiondependsonwhetheritisclassiedasaliability(tobe
re-measuredtofairvalueeachreportingperiodthroughprotandloss)
orequity(nore-measurement),usingtheguidanceinIAS32,Financial
instruments: Presentation.
Goodwillisrecognisedforthefutureeconomicbenetsarisingfromassets
acquiredthatarenotindividuallyidentiedandseparatelyrecognised.Goodwillisthedifferencebetweentheconsiderationtransferred,theamount
ofanynon-controllinginterestintheacquireeandtheacquisition-datefair
value o any previous equity interest in the acquiree over the air value o the
groupsshareoftheidentiablenetassetsacquired.Ifthenon-controlling
interestismeasuredatitsfairvalue,goodwillincludesamountsattributable
tothenon-controllinginterest.Ifthenon-controllinginterestismeasured
atitsproportionateshareofidentiablenetassets,goodwillincludesonly
amounts attributable to the controlling interest that is the parent.
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Consolidated and separate inancial statements
Goodwillisrecognisedasanassetandtestedannuallyforimpairment,or
more requently i there is an indication o impairment.
Inraresituationsforexample,abargainpurchaseasaresultofadistressed sale it is possible that no goodwill will result rom the
transaction.Rather,againwillberecognised.
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Consolidated and separate inancial statements
A discontinued operation is a component o an entity that can be
distinguishedoperationallyandnanciallyfornancialreportingpurposes
rom the rest o the entity and:
representsaseparatemajorlineofbusinessormajorgeographicalarea
o operation;
ispartofasingleco-ordinatedplantodisposeofaseparatemajorline
o business o geographical area o operation; and
isasubsidiaryacquiredexclusivelywithaviewforresale.
Anoperationisclassiedasdiscontinuedonlyatthedateonwhichthe
operationmeetsthecriteriatobeclassiedasheldforsaleorwhenthe
entity has disposed o the operation. There is no retrospective
classicationifthecriteriaforthatclassicationarenotmetuntilafterthe
balance sheet date.
Discontinued operations are presented separately in the income statement
and the cash fow statement. There are additional disclosure requirements in
relation to discontinued operations.
The date o disposal o a subsidiary or disposal group is the date on whichcontrol passes. The consolidated income statement includes the results o
a subsidiary or disposal group up to the date o disposal; the gain or loss
on disposal is the dierence between (a) the carrying amount o the net
assets plus any attributable goodwill and amounts accumulated in other
comprehensiveincome(forexample,foreigntranslationadjustmentsand
available-for-salereserves);and(b)theproceedsofsale.
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Consolidated and separate inancial statements
28 Joint ventures IAS 31
Ajointventureisacontractualarrangementwherebytwoormoreparties
(theventurers)undertakeaneconomicactivitythatissubjecttojointcontrol.Jointcontrolisdenedasthecontractuallyagreedsharingofcontrolofan
economic activity.
Jointventuresfallintothreecategories:jointlycontrolledentities,jointly
controlledoperationsandjointlycontrolledassets.Theaccountingtreatment
dependsonthetypeofjointventure.
Ajointlycontrolledentityinvolvestheestablishmentofaseparateentity,
whichmaybe,forexample,acorporationorpartnership.Jointlycontrolled
entitiesareaccountedforunderIAS31,Interestinjointventures,using
eitherproportionateconsolidationorequityaccounting.SIC13,Jointly
controlledentitiesnon-monetarycontributionsbyventurers,addresses
non-monetarycontributionstoajointlycontrolledentityinexchangeforan
equity interest.
Jointlycontrolledoperationsandjointlycontrolledassetsdonotinvolvethe
creationofanentitythatisseparatefromtheventurersthemselves.Inajointoperation,eachventurerusesitsownresourcesandcarriesoutitsownpart
ofajointoperationseparatelyfromtheactivitiesoftheotherventurer(s).
Eachventurerownsandcontrolsitsownresourcesthatitusesinthejoint
operation.Jointlycontrolledassetsinvolvethejointownershipofoneor
more assets.
Whereanentityhasaninterestinjointlycontrolledoperationsorjointly
controlledassets,itaccountsforitsshareoftheassets,liabilities,income
and expenses and cash fows under the arrangement.
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Othersubjects
Other subjects
29 Related-party disclosures IAS 24
Disclosures are required in respect o an entitys transactions with related
parties. Related parties include:
Subsidiaries.
Fellowsubsidiaries.
Associates.
Jointventures.
Theentitysanditsparentskeymanagementpersonnel(includingclosemembers o their amilies).
Partieswithcontrol/jointcontrol/signicantinuenceovertheentity
(includingclosemembersoftheirfamilies,whereapplicable).
Post-employmentbenetplans.
However,theyexclude,forexample,nanceprovidersandgovernmentsin
the course o their normal dealings with the entity.
The name o the ultimate parent entity is disclosed i it is not mentionedelsewhereininformationpublishedwiththenancialstatements.Thenames
o the immediate and the ultimate controlling parties (which could be an
individual or a group o individuals) are disclosed irrespective o whether
there have been transactions with those related parties.
Wheretherehavebeenrelated-partytransactions,managementdiscloses
thenatureoftherelationship,theamountoftransactions,outstanding
balances and other elements necessary or a clear understanding o the
nancialstatements(forexample,volumeandamountsoftransactions,provisions or bad and doubtul debts and pricing policies). Disclosure is
madebycategoryofrelatedpartyandbymajortypeoftransaction.Items
ofasimilarnaturemaybedisclosedinaggregate,exceptwhenseparate
disclosureisnecessaryforanunderstandingoftheeffectsofrelated-party
transactionsonthereportingentitysnancialstatements.
Disclosuresthatrelated-partytransactionsweremadeontermsequivalentto
those that prevail or arms length transactions are made only i such terms
can be substantiated.
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Othersubjects
IAS24,Relatedpartydisclosures,wasrevisedinNovember2009toclarify
thedenitionofarelatedpartyandsimplifythedisclosurerequirementsfor
government-relatedentities.Theamendmentappliesforannualperiods
beginning on or ater 1 January 2011; early adoption is permitted.
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Othersubjects
31 Interim reports IAS 34
ThereisnoIFRSrequirementforanentitytopublishinterimnancial
statements.However,anumberofcountrieseitherrequireorrecommendtheirpublication,inparticularforpubliccompanies.
IAS34,Interimnancialreporting,applieswhereanentitypublishes
aninterimnancialreportinaccordancewithIFRS.IAS34setsoutthe
minimumcontentthataninterimnancialreportshouldcontainandthe
principles that should be used in recognising and measuring the transactions
and balances included in that report.
EntitiesmayeitherpreparefullIFRSnancialstatements(conformingtothe
requirementsofIAS1,Presentationofnancialstatements)orcondensed
nancialstatements.Condensedreportingisthemorecommonapproach.
Condensednancialstatementsincludeacondensedbalancesheet,
acondensedincomestatement(ifpresentedseparately),acondensed
statementofcomprehensiveincome,acondensedcashowstatement,a
condensed statement o changes in equity and selected note disclosures.
An entity generally uses the same accounting policies or recognisingandmeasuringassets,liabilities,revenues,expensesandgainsand
losses at interim dates as those to be used in the current year annual
nancialstatements.
There are special measurement requirements or certain costs that can only
bedeterminedonanannualbasis(forexample,itemssuchastaxthatis
calculatedbasedonafull-yeareffectiverate),andtheuseofestimatesin
theinterimnancialstatements.Animpairmentlossrecognisedinaprevious
interimperiodinrespectofgoodwill,oraninvestmentineitheranequityinstrumentoranancialassetcarriedatcost,isnotreversed.
Asaminimum,currentperiodandcomparativegures(condensedor
complete) are disclosed as ollows:
Balancesheetasofthecurrentinterimperiodendwithcomparatives
or the immediately preceding year end.
Statementofcomprehensiveincome(and,ifpresentedseparately,
incomestatement)currentinterimperiod,nancialyeartodateandcomparatives or the same preceding periods (interim and year to date).
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Othersubjects
Cashowstatementandstatementofchangesinequitynancialyear
to date with comparatives or the same year to date period o the
preceding year.
Explanatorynotes.
IAS 34 sets out some criteria to determine what inormation should be
disclosedintheinterimnancialstatements.Theseinclude:
Materialitytotheoverallinterimnancialstatements.
Unusualorirregularitems.
Changessincepreviousreportingperiodsthathaveasignicanteffect
ontheinterimnancialstatements(ofthecurrentorpreviousreporting
nancialyear).
Relevancetotheunderstandingofestimatesusedintheinterim
nancialstatements.
Theoverridingobjectiveistoensurethataninterimnancialreportincludes
allinformationthatisrelevanttounderstandinganentitysnancialposition
and perormance during the interim period.
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Othersubjects
32 Service concession arrangements SIC 29 and IFRIC 12
ThereisnospecicIFRSthatappliestopublic-to-privateserviceconcession
arrangementsfordeliveryofpublicservices.SIC29,Serviceconcessionarrangements:Disclosures,containsdisclosurerequirementsinrespectof
public-to-privateservicearrangementsbutdoesnotspecifyhowtheyare
accountedfor.IFRIC12,Serviceconcessions,clarieshowIFRSshouldbe
appliedbyaprivatesectorentityinaccountingforpublic-to-privateservice
concession arrangements.
IFRIC12appliestopublic-to-privateserviceconcessionarrangementsin
which the public sector body (the grantor) controls and/or regulates the
services provided with the inrastructure by the private sector entity (the
operator). The regulation also addresses to whom the operator should
providetheservicesandatwhatprice.Thegrantorcontrolsanysignicant
residual interest in the inrastructure.
Astheinfrastructureiscontrolledbythegrantor,theoperatordoesnot
recognisetheinfrastructureasitsproperty,plantandequipment;nordoes
theoperatorrecogniseananceleasereceivableforleasingthepublic
serviceinfrastructuretothegrantor,regardlessoftheextenttowhichtheoperator bears the risk and rewards incidental to ownership o the assets.
Theoperatorrecognisesanancialassettotheextentthatithasan
unconditional contractual right to receive cash irrespective o the usage o
the inrastructure.
The operator recognises an intangible asset to the extent that it receives a
right (a licence) to charge users o the public service.
Underboththenancialassetandtheintangibleassetmodels,theoperator
accounts or revenue and costs relating to construction or upgrade services
inaccordancewithIAS11,Constructioncontracts.Theoperatorrecognises
revenueandcostsrelatingtooperationservicesinaccordancewithIAS18,
Revenue.Anycontractualobligationtomaintainorrestoreinfrastructure,
exceptforupgradeservices,isrecognisedinaccordancewithIAS37,
Provisions,contingentliabilitiesandcontingentassets.
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Industry-specic topics
33 Agriculture IAS 41
Agriculturalactivityisdenedasthemanagedbiologicaltransformation
and harvest o biological assets (living animals and plants) or sale or or
conversion into agricultural produce (harvested product o biological assets)
or into additional biological assets.
Allbiologicalassetsaremeasuredatfairvaluelesscoststosell,with
thechangeinthecarryingamountreportedaspartofprotorlossfrom
operating activities. Agricultural produce harvested rom an entitys biologicalassets is measured at air value less costs to sell at the point o harvest.
Coststosellincludecommissionstobrokersanddealers,leviesby
regulatory agencies and commodity exchanges and transer taxes and
duties. Costs to sell exclude transport and other costs necessary to get
assets to market.
The air value is measured using an appropriate quoted price where
available. I an active market does not exist or biological assets or harvestedagriculturalproduce,thefollowingmaybeusedindeterminingfairvalue:the
mostrecenttransactionprice(providedthattherehasnotbeenasignicant
change in economic circumstances between the date o that transaction and
thebalancesheetdate);marketpricesforsimilarassets,withadjustments
toreectdifferences;andsectorbenchmarks,suchasthevalueofan
orchardexpressedperexporttray,bushelorhectareandthevalueof
cattleexpressedperkilogramofmeat.Whenanyofthisinformationisnot
available,theentityusesthepresentvalueoftheexpectednetcashows
fromtheassetdiscountedatacurrentmarket-determinedrate.
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34 Retirement benet plans IAS 26
Financialstatementsforretirementbenetplanspreparedinaccordance
withIFRSshouldcomplywithIAS26,Accountingandreportingbyretirementbenetplans.
Thereportforadenedcontributionplanincludes:
Astatementofnetassetsavailableforbenets.
Astatementofchangesinnetassetsavailableforbenets.
Asummaryofsignicantaccountingpolicies.
Adescriptionoftheplanandtheeffectofanychangesintheplan
during the period.
Adescriptionofthefundingpolicy.
Thereportforadenedbenetplanincludes:
Eitherastatementthatshowsthenetassetsavailableforbenets,the
actuarialpresentvalueofpromisedretirementbenetsandtheresulting
excessordecit,orareferencetothisinformationinanaccompanying
actuarial report. Astatementofchangesinnetassetsavailableforbenets.
Acashowstatement.
Asummaryofsignicantaccountingpolicies.
Adescriptionoftheplanandtheeffectofanychangesintheplan
during the period.
The report also explains the relationship between the actuarial present value
ofpromisedretirementbenetsandthenetassetsavailableforbenets,
andthepolicyforthefundingofpromisedbenets.Investmentsheldbyallretirementplans(whetherdenedbenetordenedcontribution)arecarried
at air value.
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35 Extractive industries IFRS 6
IFRS6,Explorationforandevaluationofmineralresources,addresses
thenancialreportingfortheexplorationforandevaluationofmineralresources. It does not address other aspects o accounting by entities
engaged in the exploration or and evaluation o mineral reserves (such as
activities beore an entity has acquired the legal right to explore or ater the
technical easibility and commercial viability to extract resources have been
demonstrated). Activities outside the scope o IFRS 6 are accounted or
accordingtotheapplicablestandards(suchasIAS16,Property,plantand
equipment,IAS37,Provisions,contingentliabilitiesandcontingentassets,
andIAS38,Intangibleassets.)
The accounting policy adopted or the recognition o exploration and
evaluation assets should result in inormation that is relevant and reliable. As
aconcession,certainfurtherrulesofIAS8,Accountingpolicies,changes
inaccountingestimatesanderrors,neednotbeapplied.Thispermits
companiesinthissectortocontinue,forthetimebeing,toapplypolicies
that were ollowed under national GAAP that would not comply with the
requirements o IFRS. The accounting policy may be changed only i the
changemakesthenancialstatementsmorerelevantandnolessreliable,ormorereliableandnolessrelevantinotherwords,ifthenewaccounting
policytakesitclosertotherequirementsintheIASBsFramework.
Exploration and evaluation assets are initially measured at cost. They are
classiedastangibleorintangibleassets,accordingtothenatureofthe
assetsacquired.Managementappliesthatclassicationconsistently.After
recognition,managementapplieseitherthecostmodelortherevaluation
modeltotheexplorationandevaluationassets,basedonIAS16,Property,
plantandequipment,orIAS38,Intangibleassets,accordingtonatureo the assets. As soon as technical easibility and commercial viability are
determined,theassetsarenolongerclassiedasexplorationand
evaluation assets.
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The exploration and evaluation assets are tested or impairment when
acts and circumstances suggest that the carrying amounts may not be
recovered.Theassetsarealsotestedforimpairmentbeforereclassication
outofexplorationandevaluation.Theimpairmentismeasured,presentedanddisclosedaccordingtoIAS36,Impairmentofassets.Exploration
andevaluationassetsareallocatedtocash-generatingunitsorgroupsof
cash-generatingunitsnolargerthanasegment.Managementdiscloses
theaccountingpolicyadopted,aswellastheamountofassets,liabilities,
income and expense and investing cash fows arising rom the exploration
and evaluation o mineral resources.
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Index by standard and interpretation
Standards Page
IFRS 1 First-timeadoptionofInternationalFinancialReportingStandards 3
IFRS 2 Share-basedpayment 31
IFRS 3 Businesscombinations 53
IFRS 4 Insurance contracts 23
IFRS5 Non-currentassetsheldforsaleanddiscontinuedoperations 56
IFRS 6 Exploration or and evaluation o mineral resources 68
IFRS 7 Financial instruments: Disclosures 11
IFRS 8 Operatingsegments 27
IFRS9 Financial instruments 11
IAS 1 Presentationofnancialstatements 5
IAS 2 Inventories 44
IAS 7 Cash fow statements 62
IAS 8 Accountingpolicies,changesinaccountingestimatesanderrors 9
IAS 10 Events ater the balance sheet date 48
IAS 11 Constructioncontracts 25
IAS 12 Income taxes 33
IAS 16 Property,plantandequipment 38
IAS 17 Leases 43
IAS 18 Revenue 24
IAS19 Employeebenets 28
IAS 20 Accounting or government grants and disclosure o government assistance 26
IAS 21 The eects o changes in oreign exchange rates 21
IAS 23 Borrowingcosts 39
IAS 24 Related-partydisclosures 60
IAS 26 Accountingandreportingbyretirementbenetplans 67
IAS 27 Consolidatedandseparatenancialstatements 51
IAS 28 Investmentinassociates 58
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Standards Page
IAS29 Financial reporting in hyperinfationary economies 21
IAS 31 Interestsinjointventures 59
IAS 32 Financial instruments: presentation 11
IAS 33 Earningspershare 35
IAS 34 Interimnancialreporting 63
IAS 36 Impairment o assets 41
IAS 37 Provisions,contingentliabilitiesandcontingentassets 45
IAS 38 Intangible assets 36
IAS39 Financial instruments: Recognition and measurement 11
IAS 40 Investment property 40
IAS 41 Agriculture
Interpretations
IFRIC 12 Serviceconcessionarrangements 65
IFRIC 13 Customerloyaltyprogrammes 25
IFRIC 14 IAS19Thelimitonadenedbenetasset,minimumfundingrequirements
and their interaction 30
IFRIC15 Agreements or the construction o real estate 26
IFRIC 18 Transferofassetsfromcustomers 25,38
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