IFRS Presentation. ppt.ppt

1、WELCOME,INTERNATIONAL FINANCIAL REPORTING STANDARDS (I F R S),INTRODUCTION TO,WHY IFRS ?,A single set of accounting standards would enable internationally to standardize training and assure better quality on a global screen, it would also permit international capital to flow more freely, enabling co

2、mpanies to develop consistent global practices on accounting problems. It would be beneficial to regulators too, as a complexity associated with needing to understand various reporting regimes would be reduced.,OBJECTIVES OF IFRS,to develop, in the public interest, a single set of high quality, unde

3、rstandable and enforceable global accounting standards that require high quality, transparent and comparable information in financial statements and other financial reporting to help participants in the worlds capital markets and other users make economic decisions; to promote the use and rigorous a

4、pplication of those standards; in fulfilling the objectives associated with (1) and (2), to take account of, as appropriate, the special needs of small and medium-sized entities and emerging economies. to bring about convergence of national accounting standards and International Accounting standards

5、 and IFRS to high quality solutions.,SCOPE OF IFRS,IASB Standards are known as International Financial Reporting Standards (IFRSs). All International Accounting Standards (IASs) and Interpretations issued by the former IASC (International Accounting Standard Committee) and SIC (Standard Interpretati

6、on Committee) continue to be applicable unless and until they are amended or withdrawn. IFRSs apply to the general purpose financial statements and other financial reporting by profit-oriented entities - those engaged in commercial, industrial, financial, and similar activities, regardless of their

7、legal form. Entities other than profit-oriented business entities may also find IFRSs appropriate.,SCOPE OF IFRS,General purpose financial statements are intended to meet the common needs of shareholders, creditors, employees, and the public at large for information about an entitys financial positi

8、on, performance, and cash flows. 6.Other financial reporting includes information provided outside financial statements that assists in the interpretation of a complete set of financial statements or improves users ability to make efficient economic decisions. 7.IFRS apply to individual company and

9、consolidated financial statements. 8.A complete set of financial statements includes a balance sheet, an income statement, a cash flow statement, a statement showing either all changes in equity or changes in equity other than those arising from investments by and distributions to owners, a summary

10、of accounting policies, and explanatory notes.,SCOPE OF IFRS,9.If an IFRS allows both a benchmark and an allowed alternative treatment, financial statements may be described as conforming to IFRS whichever treatment is followed. 10.In developing Standards, IASB intends not to permit choices in accou

11、nting treatment. Further, IASB intends to reconsider the choices in existing IASs with a view to reducing the number of those choices. 11.IFRS will present fundamental principles in bold face type and other guidance in non-bold type (the black-letter/grey-letter distinction). Paragraphs of both type

12、s have equal authority. 12.The provision of IAS 1 that conformity with IAS requires compliance with every applicable IAS and Interpretation requires compliance with all IFRSs as well.,LIST OF IFRS,IFRS 1 First-time Adoption of International Financial Reporting Standards IFRS 2 Share-based Payment IF

13、RS 3 Business Combinations IFRS 4 Insurance Contracts IFRS 5 Non-current Assets Held for Sale and Discontinued Operations IFRS 6 Exploration for and evaluation of Mineral Resources IFRS 7 Financial Instruments: Disclosures IFRS 8 Operating Segments,FRAMEWORK FOR THE PREPARATION AND PRESENTATION OF F

14、INANCIAL STATEMENTS,The IASB Framework was approved by IASC Board in April, 1989 for publication in July 1989, and adopted by the IASB in April, 2001. This Framework sets out the concepts that underlie the preparation and presentation of financial statements for external users. The Framework deals w

15、ith: The objective of financial statements; The qualitative characteristics that determine the usefulness of information in financial statement; The Definition, recognition and measurement of the elements from which financial statements are constructed; and Concept of capital and capital maintenance

16、.,The Objective of Financial statements is to provide useful information to users of financial statements in making economic decision. Financial Statements are prepared to provide information on Financial Position, Operating Performance and changes in financial position of an entity Financial Statem

17、ents are normally prepared on the assumption that entity is a going concern and will continue in operation for the foreseeable future, and prepared on accrual basis of accounting. The four Qualitative characteristics are Understandability, relevance, reliability and comparability are the attributes

18、that make the financial information useful to users. The elements directly related to the measurement of financial position are assets, liabilities and equity.,An item that meets the definition of an element should be recognized if: it is probable that any future economic benefit associated the item

19、 will flow to or from the entity. the item has a cost or value that can be measured with reliability. Measurement is the process of determining the monetary amounts at which each element in the financial statements are to be recognized and carried in the Balance Sheet and Income statement. The conce

20、pt of capital maintenance is concerned with how an entity defines the capital that it seeks to maintain. It provides the linkage between the concepts of capital and the concepts of profit because it provides the point of reference by which profit is measured.,OBJECTIVE OF THE STANDARD: The objective

21、 of this IFRS is to ensure that an entitys first IFRS financial statements, and its interim financial reports for part of the period covered by those financial statements, contain high quality information that: it is transparent for users and comparable over all the periods presented. Provides a sui

22、table starting point for accounting under International Financial Reporting Standards (IFRS); and Can be generated at a cost that does not exceed the benefits to users.,IFRS -1 : FIRST TIME ADOPTION OF I F R S,POINTS: An entity shall prepare and present an opening IFRS statement of financial positio

23、n at the date of transition to IFRSs. This is the starting point for its accounting under IFRSs. An entity shall prepare an opening IFRS balance sheet at the date of transition to IFRSs. This is the starting point for its accounting under IFRSs. An entity need not present its opening IFRS balance sh

24、eet in its first IFRS financial statements. In general, the IFRS requires an entity to comply with each IFRS effective at the end of its first IFRS reporting period. In particular, the IFRS requires an entity to do the following in the opening IFRS statement of financial position that it prepares as

25、 a starting point for its accounting under IFRSs: recognize all assets and liabilities whose recognition is required by IFRSs. not to recognize items as assets or liabilities if IFRSs do not permit such recognition;,IFRS-1,IFRS-1,reclassify items that it recognized under previous GAAP as one type of

26、 asset, liability or component of equity, but are different type of asset, liability or component of equity under IFRSs. Apply IFRSs in measuring all recognized assets and liabilities. The IFRS grants limited exemptions from these requirements in specified areas where the cost of complying with them

27、 would be likely to exceed the benefits to users of financial statements. The IFRS also prohibits retrospective application of IFRSs in some areas; particularly where retrospective application would require judgments by management about past conditions after the outcome of a particular transaction i

28、s already known. The IFRS requires disclosures that explain how the transition from previous GAAP to IFRSs affected the entities reported financial position, financial performance and cash flows.,OBJECTIVE OF THIS STANDARD: The objective of this IFRS is to specify the financial reporting by an entit

29、y when it undertakes a share-based payment transaction. In particular, it requires an entity to reflect in its profit or loss and financial position the effects of share-based payment transactions, including expenses associated with transactions in which share options are granted to employees.,IFRS

30、-2 : SHARE-BASED PAYMENTS,POINTS: The IFRS requires an entity to recognize share-based payment transactions in its financial statements, including transactions with employees or other parties to be settled in cash, other assets, or equity instruments of the entity. There are no exceptions to the IFR

31、S, other than for transactions to which other Standards apply. This also applies to transfers of equity instruments of the entitys parent, or equity instruments of another entity in the same group as the entity, to parties that have supplied goods or services to the entity.,IFRS-2,The IFRS sets out

32、measurement principles and specific requirements for three types of share-based payment transactions: equity-settled share-based payment transactions, in which the entity receives goods or services as consideration for equity instruments of the entity (including shares or share options); (b) cash-se

33、ttled share-based payment transactions, in which the entity acquires goods or services by incurring liabilities to the supplier of those goods or services for amounts that are based on the price (or value) of the entitys shares or other equity instruments of the entity; and (c) transactions in which

34、 the entity receives or acquires goods or services and the terms of the arrangement provide either the entity or the supplier of those goods or services with a choice of whether the entity settles the transaction in cash or by issuing equity instruments.,IFRS-2,For equity-settled share-based payment

35、 transactions, the IFRS requires an entity to measure the goods or services received, and the corresponding increase in equity, directly, at the fair value of the goods or services received, unless that fair value cannot be estimated reliably. If the entity cannot estimate reliably the fair value of

36、 the goods or services received, the entity is required to measure their value, and the corresponding increase in equity, indirectly, by reference to the fair value of the equity instruments granted. Furthermore: for transactions with employees and others providing similar services, the entity is re

37、quired to measure the fair value of the equity instruments granted, because it is typically not possible to estimate reliably the fair value of employee services received. The fair value of the equity instruments granted is measured at grant date. for transactions with parties other than employees (

38、and those providing similar services), there is a rebut table presumption that the fair value of the goods or services received can be estimated reliably. That fair value is measured at the date the entity obtains the goods or the counterparty renders service. In rare cases, if the presumption is re

39、butted, the transaction is measured by reference to the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders service.,IFRS-2,for goods or services measured by reference to the fair value of the equity instruments granted, the IFR

40、S specifies that vesting conditions, other than market conditions, are not taken into account when estimating the fair value of the shares or options at the relevant measurement date (as specified above). Instead, vesting conditions are taken into account by adjusting the number of equity instrument

41、s included in the measurement of the transaction amount so that, ultimately, the amount recognized for goods or services received as consideration for the equity instruments granted is based on the number of equity instruments that eventually vest. Hence, on a cumulative basis, no amount is recogniz

42、ed for goods or services received if the equity instruments granted do not vest because of failure to satisfy a vesting condition (other than a market condition). the IFRS requires the fair value of equity instruments granted to be based on market prices, if available, and to take into account the t

43、erms and conditions upon which those equity instruments were granted. In the absence of market prices, fair value is estimated, using a valuation technique to estimate what the price of those equity instruments would have been on the measurement date in an arms length transaction between knowledgeab

44、le, willing parties.,IFRS-2,the IFRS also sets out requirements if the terms and conditions of an option or share grant are modified (e.g. an option is reprised) or if a grant is cancelled, repurchased or replaced with another grant of equity instruments. For example, irrespective of any modificatio

45、n, cancellation or settlement of a grant of equity instruments to employees, the IFRS generally requires the entity to recognize, as a minimum, the services received measured at the grant date fair value of the equity instruments granted. For cash-settled share-based payment transactions, the IFRS r

46、equires an entity to measure the goods or services acquired and the liability incurred at the fair value of the liability. Until the liability is settled, the entity is required to re measure the fair value of the liability at each reporting date and at the date of settlement, with any changes in va

47、lue recognized in profit or loss for the period.,IFRS-2,For share-based payment transactions in which the terms of the arrangement provide either the entity or the supplier of goods or services with a choice of whether the entity settles the transaction in cash or by issuing equity instruments, the

48、entity is required to account for that transaction, or the components of that transaction, as a cash-settled share-based payment transaction if, and to the extent that, the entity has incurred a liability to settle in cash (or other assets), or as an equity-settled share-based payment transaction if

49、, and to the extent that, no such liability has been incurred. The IFRS prescribes various disclosure requirements to enable users of financial statements to understand: the nature and extent of share-based payment arrangements that existed during the period; how the fair value of the goods or servi

50、ces received, or the fair value of the equity instruments granted, during the period was determined; and the effect of share-based payment transactions on the entitys profit or loss for the period and on its financial position.,IFRS-2,OBJECTIVE OF THIS STANDARD: The objective of the IFRS is to enhan

51、ce the relevance, reliability and comparability of the information that an entity provides in its financial statements about a business combination and its effects. It does that by establishing principles and requirements for how an acquirer: (a) recognizes and measures in its financial statements t

52、he identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquire; (b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and (c) determines what information to disclose to enable users of the financial

53、statements to evaluate the nature and financial effects of the business combination.,IFRS -3 : BUSINESS COMBINATIONS,POINTS: Core principle An acquirer of a business recognises the assets acquired and liabilities assumed at their acquisition-date fair values and discloses information that enables us

54、ers to evaluate the nature and financial effects of the acquisition. Applying the acquisition method A business combination must be accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control. One of the parties to a business com

55、bination can always be identified as the acquirer, being the entity that obtains control of the other business (the acquiree). Formations of a joint venture or the acquisition of an asset or a group of assets that does not constitute a business are not business combinations.,IFRS-3,The IFRS establis

56、hes principles for recognising and measuring the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquiree. Any classifications or designations made in recognising these items must be made in accordance with the contractual terms, economic conditions, acq

57、uirers operating or accounting policies and other factors that exist at the acquisition date. Each identifiable asset and liability is measured at its acquisition-date fair value. Any non-controlling interest in an acquiree is measured at fair value or as the non-controlling interests proportionate

58、share of the acquirees net identifiable assets.,IFRS-3,The IFRS provides limited exceptions to these recognition and measurement principles: Leases and insurance contracts are required to be classified on the basis of the contractual terms and other factors at the inception of the contract (or when

59、the terms have changed) rather than on the basis of the factors that exist at the acquisition date. Only those contingent liabilities assumed in a business combination that are a present obligation and can be measured reliably are recognized. Some assets and liabilities are required to be recognised or measured in accordance with other IFRSs, rather than at fair value. The assets and liabilities affected are those falling within the scope of IAS 12 Income Taxes, IAS 19 Employee Benefits, IFRS 2 Share-based Payment and IFRS 5 Non-current