International Regulations

International Financial Reporting Standards

Introduction & Presentation of IFRS Financial Statements
IASB Standards & Interpretations IFRS in Europe & Belgium
IASB Objectives
Develop, in the public interest, a single set of high quality, understandable 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 various capital
markets of the world and other users of the information to make economic decisions
!o promote the use and rigorous application of those standards" and
!o work actively with national standard setters to bring about convergence of national
accounting standards and IFRSs to high quality solutions
IASB Structure
Standards and interpretations
#$%& to '(((
International )ccounting Standards *I)S+
Interpretations , Standing Interpretations -ommittee *SI-+
'((# onwards
International Financial Reporting Standards *IFRS+
International Financial Reporting Interpretations -ommittee *IFRI-+
IFRS in Europe
.uropean Regulation #/(/0'((' dated 1uly #$, '(('
)ll .2 companies listed on a regulated market have to prepare their consolidated financial
statements in accordance with International Financial Reporting Standards as from '((3 at the
latest
4ossibility to e5tend the obligation or to permit the application of IFRS to6
7on8listed companies for consolidated financial statements
Individual financial statements
9ut :.ndorsement ;echanism< in order to pre8approve all I)S9 standards and interpretations to
be applied in the .2
Europe in Europe Endorsements
IFRS in Belgium Overvie
IFRS in Belgium
Royal Decree = December '((&
-onsolidated financial statements of listed entities
)llowed before '((3
!
Required from '((3 onwards
Individual financial statements >? not permitted
.ntities with only interest bearing securities listed and entities that are listed in a third country
are e5empted from IFRS8application until '((%
Royal Decree 3 December '((=
7on8listed credit institutions shall apply IFRS for their consolidated financial from '((/ onwards
Royal Decree #@ 1anuary '((3
7on8listed entities are allowed to use IFRS for their consolidated financial statements
Decision is irrevocable
Royal Decree '# 1une '((/
)ll 9elgian listed Real .state Investment !rusts *SI-)F ImmobiliAres 0 Bastgoed 9.B)C+ shall
apply IFRS also for the preparation of their individual financial statements as from '((%
Refres" of accounting concepts
#"e Balance S"eet $B%S&
> a froDen picture at one point in time
) > Resources needed to operate the business
EF. > Sources of financing of the assets
. > Residual interest in the assets after
deducting all the liabilities
> 7et worth07et assets0shareholders equity
!he fundamental balance sheet equation
Asset ' a resource controlled by the entity, as a result of past events, from which future economic
benefits are e5pected to flow
(iabilit) ' a present obligation of the entity, arising from past events, settlement of which is
e5pected to result in an outflow of resources embodying economic benefits
E*uit) > the residual interest in the assets of the enterprise after deducting all its liabilities
+ ,e) aggregates
!he right financial balance depends on an adequate
balance of financing
> the optimal financing structure *of the assets+ by a mi5 of
equity, S! and E! debts+
(in, it" detailed accounting records and terminolog)
-
!wo balance sheet transactions6
Incorporate the company, by funding the initial capital with #((((( 2SD
4urchase of inventories for resale from a supplier" his invoice is payable in =3 days" !otal cost6
#/((( 2SD
!ransactions in a balance sheet format6
Assets (iabilities and e*uit)

-ash6 F #(((((
-apital6 F#(((((

!hen6
Assets (iabilities and e*uit)
Inventories6 F #/(((
-ash6 F #(((((
-apital6 F#(((((
!rade payable 6 F #/(((
!ransaction nG#
-ash asset 6 F #((((( ??? Is a resource, financed by equity
.quity capital6 F#((((( ??? Is a financing
)ccounting Hournal entry6
Debit6 -ash #((((( -redit6 -apital #(((((
!ransaction nG'
Inventories asset6 F #/((( ??? Increase of assets funded by the *still unpaid+ supplier
!rade payable liability6 F #/((( ??? ) liability financing the asset inventories
)ccounting Hournal entry6
Debit6 Inventories #/((( -redit6 !rade payables #/(((
.onclusion for dail) accounting $/ accounting entries 0&1
)sset > debit
)sset ^ > credit
Eiabilities or equity > credit
Eiabilities or equity ^ > debit
!ransaction nG&6
)fter =3 days, we pay the supplier6
)ccounting Hournal entry6
Debit6 trade payable6 #/((( -redit6 cash6 #/(((
2
(ast step1 based on t"e accounting trial balance3 preparation of t"e financial statements
9alance sheet as of day =36
Assets E*uit)
Current Assets -apital #(((((
Inventories #/((( Eiabilities
-ash @=((( !rade payables (
!I!)E #((((( !I!)E #(((((
#"e income statement
Balance s"eet ' a froDen picture at one point in time
Income statement ' the summary schedule of the flows of transactions increasing*a+ and
decreasing*b+ the equity over a period of time *the accounting period+
JJJ *a+ Ither than capital increases or revaluations of assets
*b+ Ither than distribution of equity to the shareholders
Income
> increases in economic benefits during the accounting period, in the form of inflows *or
enhancements+ of assets or decreases of liabilities, that result in increases in equity, other than
those relating to contributions from equity participants
.5penses
> decreases in economic benefits during the accounting period, in the form of outflows *or
depletions+ of assets or incurrence of liabilities, that result in decreases in equity, other than
those relating to distributions to equity participants
#"e matc"ing principle 1
> the income elements have to be matched with the related e5penses *needed to generate the
income elements+
> within the same accounting period
>? !rue and fair view of the net result of the period
(in, it" t"e 4etailed Accounting Records
EetKs start from the balance sheet at day =36
9etween day =3 and 336
!ransaction nG=6 the whole inventory is sold for a price of ''((( *invoiced but not collected+
!ransaction nG36 the shipping costs *#3((+ to the client are paid cash by the company
.ffect on the balance sheet as of day 336
5
Income statement for the #( days period ended on day 336
7et turnover *sales+ ''(((
-ost of goods sold *#/(((+
Lross profit /(((
Ither operating e5penses *#3((+
4rofit from operations =3((
7et profit =3((
> increase of equity between the two balance sheets
)n income directly increases equity >? increases the sources of financing assets *or enables to
reduce liability+
-onclusion6 in the accounting records6
, Income accounts have to be credited
, .5penses accounts have to be debited
)s a result of the Hournal entries, the trial balance has become6
Summar) of Relations"ip beteen B%S and P%(
)t all times, between assets, liabilities, income and charges, 4EBI# ' .RE4I#
Since6 6et result ' Inc7 E8p7
Since6 E ' A (
Me can write6 9E ' 9 $ A (& ' 6et Result ' Inc7 E8p7
!hus6 9 A : E8p7 ' 9 ( : Inc7
> the mathematical equation summariDing the double entry accounting system
;
IAS ! Presentation of Financial Statements
Objective
8 to prescribe basis for presentation of financial statements
8 in order to ensure comparability
Scope
8 all general purpose financial statements prepared under IFRS
8 not condensed interim financial information *I)S &=+
.omponents of a complete set of FS
8 9alance sheet
8 Income statement
8 Statement of changes in equity showing6
8 )ll changes in equity
8 -hanges in equity other that those with equity holders *statement of recognised income and
e5penses+
8 -ash flow statement *I)S %+
8 7otes comprising
8 )ccounting policies
8 .5planatory notes
Overall considerations
8 Fair presentation
8 achieved through application of IFRS
8 disclose compliance with IFRS
8 full compliance with all I)S, IFRS, SI- and IFRI- required
8 application before effective date
disclose that fact
8 true and fair override
only in e5tremely rare circumstances when compliance would be misleading
8 Loing concern
8 7o intention to liquidate or to cease trading
8 )ccrual basis 8 transactions and events
8 are recognised when they occur, and
8 in the periods to which they relate
8 -onsistency
8 presentation N classification be retained
8 ;ateriality N aggregation
8 material ?? present separately
8 immaterial ?? aggregate with other items
8 Iffsetting
8 -omparative information
8 incl narrative N descriptive information
Structure and content
9alance sheet
8 -urrent vs non8current distinction required >? liquidity presentation permitted if more relevant
and reliable
8 Disclosure required on face or in notes
relevant sub8classifications of items on the face
information on share capital
8 -ompulsory line items on face of 90S
property, plant and equipment"
investment property"
+
intangible assets"
financial assets"
investments accounted for using the equity method"
biological assets"
inventories"
trade and other receivables"
cash and cash equivalents"
trade and other payables"
provisions"
financial liabilities"
liabilities and assets for current ta5"
deferred ta5 liabilities and deferred ta5 assets"
minority interest, presented within equity" and
issued capital and reserves attributable to equity holders of the parent
8 O-urrent vs non8current
8 9ased on the nature of operations
8 -oncept of Poperating cycleK
8 -urrent assets N liabilities
realised0settled in the normal course of operating cycle"
held for trading purpose"
realised0settled within #' months of the balance sheet date" or
it is cash or cash equivalent not restricted in use for at least #' months
8 4ost8balance sheet events *refinancing, correction of defaults+ do not affect the classification
as current
Income statement
8 -ompulsory line items on face of I0S6
revenue"
finance costs"
share of the profit or loss of associates and Hoint ventures accounted for using the equity
method"
ta5 e5pense"
a single amount comprising the total of
- the post8ta5 profit or loss of discontinued operations and
- the post8ta5 gain or loss recognised on the measurement to fair value less costs to sell
or on the disposal of the assets or disposal group*s+ constituting the discontinued
operation" and
profit or loss
8 O.5penses analysed on basis of
nature" or
function *F disclosure on the nature+
Statement of changes in equity
8 Separate component of financial statements
8 Items of income and e5penses directly recogniDed in equity
8 )lso in statement or in the notes
transactions with equity holders
movements in retained earnings *ie accumulated profit or loss+
<
movements in capital and reserves
7otes to the financial statements
8 9asis of preparation of financial statements
8 )ccounting policies selected
8 )dditional disclosure to present fairly
8 Significant Hudgments in applying accounting policies
8 Cey sources of estimation uncertainty that could cause material adHustments in the future
8 .ntityKs obHectives, policies and processes for managing capital
8 )mount of dividends proposed or declared
8 Ither sundry disclosures *eg domicile, entityKs operation, name of the parent,Q+
IAS ! revised -==<
Issued in September '((%
;ain changes6
8 )ll non8owner changes in equity to be presented in a statement of comprehensive income
8 Iwner changes in equity to be presented in the notes
8 Income and e5penses to be presented in
one statement *statement of comprehensive income+" or
two statements *income statement and statement of comprehensive income+
8 Mording
9alance sheet > Statement of financial position
Income statement > Statement of comprehensive income
-ash flow statement > Statement of cash flows
)pplicable as of 1anuary #st '(($
Fi8ed Assets
IAS !+ Propert)3 Plant and E*uipment
Objective
8 !o prescribe the accounting treatment for 44N.
8 4rincipal issues
timing of recognition of assets
determination of carrying amount
depreciation charges to be recognised
Scope
8 !he Standard applies to all 44N., e5cept where another standard requires or permits a different
treatment
8 !he standard does not apply to6
44. held for sale according to IFRS 3 , 7on8current )ssets Reld for Sale and Discontinued
Iperations
9iological assets related to agricultural activity *see I)S =# , )griculture+
Source
8 I)S #/ , 4roperty, 4lant and .quipment
8 IFRI- # , -hanges in .5isting Decommissioning, Restoration and Similar Eiabilities
Propert)3 plant and e*uipment $PP&E& > tangible assets that6
8 )re held for use in the production or supply of goods or services, for rental to others, or for
administrative purposes" and
8 )re e5pected to be used during more than one period
>
.ost > !he amount of cash or cash equivalents paid and the fair value of the other consideration
given to acquire an asset at the time of its acquisition or construction
4epreciation > !he systematic allocation of the depreciable amount of an asset over its useful life
?seful life ' !he period over which an asset is e5pected to be available for use by an entity" or
the number of production or similar units e5pected to be obtained from the asset from the asset by
an entity
4epreciable amount ' !he cost of an asset, or other amount substituted for cost, less its residual
value
Residual value of an asset ' .stimated amount that an entity would currently obtain from the
disposal of the asset, after deducting the estimated costs of disposal, if the asset were already of
the age and in the condition e5pected at the end of its useful life
Fair value ' !he amount for which an asset could be e5changed between knowledgeable, willing
parties in an armKs length transaction
Impairment loss ' !he amount by which the carrying amount of an asset e5ceeds its recoverable
amount
.arr)ing amount ' !he amount at which an asset is recogniDed after deducting any accumulated
depreciation and accumulated impairment losses
Recoverable amount ' !he higher of an assetKs net selling price and its value in use
Recognition
!he cost of an item of 44N. shall be recogniDed as an asset if, and only if6
8 It is probable that future economic benefits associated with the item will flow to the entity" and
8 !he cost of the item can be measured reliably
Same recognition principle for6
8 -osts incurred initially to acquire or construct an item of 44.
8 -osts incurred subsequently to add to, replace part of, or service an item
:-omponent accounting<
8 )llocation of the amount initially recogniDed in respect of an item of 44. to its significant parts
8 Separate depreciation of significant parts with different useful life and0or depreciation method
8 Recognition of the cost to replace a significant part and de8recognition of the replaced part
8 )pproach also applicable to maHor inspections *see later+
Repair N maintenance S distinction between6
8 -ost of day8to8day servicing
costs of labour, consumables and eventually small parts S e5pensed as incurred
8 -ost of maHor inspection
does not include the cost to replace significant parts identified
is treated as a separate significant part whose cost *services, small parts, labour Q+ is
deducted from the remainder of the item of 44. *ie part with the longest useful life+ S so
they are not recorded in addition to the costs of the assets
@easurement at recognition
44N. initially measured at cost
A
.lements of cost
# 4urchase price, import duties and purchase ta5es, less trade discounts N rebates
' Directly attributable costs of bringing asset to the location and condition necessary for it to be
capable of operating in the manner intended by management
.5amples of Directly attributable costs
8 -osts of employee benefits arising directly from the construction or acquisition of the item of
44.
8 -osts of site preparation
8 Initial delivery and handling costs
8 Installation and assembly costs
8 !esting costs *after deducting the proceeds from the testing phase+
8 4rofessional fees
.5amples of costs e5cluded
8 -osts of opening a new facility
8 -osts of introducing a new product 0 service *including costs of advertising and promotional
activities+
8 -osts of conducting business in new location or with a class of new customer *including
costs of staff training+
8 )dministration and other general overheads
8 -osts incurred while an item capable of operating in the manner intended by management
has yet to be brought into use or is operated at less than full capacity
8 Initial operating losses, such as those incurred while demand for the itemKs output builds up
8 -osts of relocating or reorganising part or all of an entityKs operations
& Initial estimate of the costs of dismantling and removing the item and restoring the site on which
it is located
Recognition and measurement in accordance with I)S &% , 4rovisions, -ontingent Eiabilities
and -ontingent )ssets
Incurred when the item was acquired or as a consequence of having used the item
Depreciated over the remaining useful life of the asset
IFRI- # , -hanges in .5isting Decommissioning, Restoration and Similar Eiabilities applies to
changes that result from changes in the estimated timing or amount of the outflow of resources
required to settle the obligation, or a change in the discount rate
8 Shall be added to *increase of debt+ or deducted from *decrease of debt+ the amount of the
related asset
8 If the amount deducted from the related asset e5ceeds its carrying amount >? e5cess
recogniDed in 4NE
8 Impairment testing in accordance to I)S &/ , Impairment of )ssets
;easurement of cost
8 !he cash price equivalent at the recognition date
8 If payment is deferred beyond normal credit terms
Recognition as interest over the period of the difference between the cash price equivalent
and the total payment
@easurement after recognition
-ost model
-ost less accumulated depreciation N impairment losses
Revaluation model
8 Revalued amount, being the fair value less accumulated depreciation N impairment losses
8 Inly if fair value can be measured reliably
8 Revaluations should be made with sufficient regularity
8 Revaluation should be made for the entire class of 44.
!=
Increase ?? credited directly to equity *revaluation surplus+ but recognised in 4NE to the e5tent
that it reverses a revaluation decrease of the same asset previously recognised in 4NE
Decrease ?? recognised in 4NE but debited directly to equity to the e5tent of any credit balance
e5isting in the revaluation surplus in respect of that asset
Depreciation
.ach significant part depreciated separately
Significant parts having the same useful life and depreciation method may be grouped in
determining the depreciation charge
Separate depreciation of the remainder of the item *ie parts of the item that are individually not
significant+
4epreciation c"arge ?? e5pense unless included in another asset
4epreciable amount1 cost $or substitute& residual value
)llocated on a systematic basis over the useful life of the item
Residual value N useful life reviewed at least at each closing If revision ?? change in accounting
estimate *ie prospective , I)S @+
Residual value
Iften insignificant ?? immaterial in the calculation of the residual value
If residual value ? carrying amount ?? depreciation charge is Dero *no reversal of previous
depreciation+
.5ample , ;achine
8 -ost6 #(( *cost model used+
8 2seful life initially estimated6 3 years *linear+
8 Residual value initially estimated6 '(
8 -hange in estimates as of year &
!otal estimated useful life6 % years
Residual value6 #(
?? Depreciation charge year # N & T
Uear #6 #/ > (,' V *#(( , '(+
Uear &
-arrying amount *opening year &+6 /@ > #(( , &'
Depreciable amount6 3@ > /@ , #(
Remaining useful life6 3 years
Depreciation charge6 ##,/ > 3@ V (,'
Depreciation begins when the asset is available for use *ie capable of operating in the manner
intended by management+
Depreciation does not cease when the asset becomes idle or is retired from active use and held
for disposal
Depreciation method
Reflect the pattern in which the assetKs future economic benefits are e5pected to be consumed
straight8line method
sum8of8the8units
Reviewed at least at each closing If revision ?? change in accounting estimate
!!
Impairment
See I)S &/ , Impairment of assets
-ompensation for items of 44. that were impaired, lost or given up, Included in 4NE when the
compensation becomes receivable
4erecognition
44. eliminated from 90S when
8 disposed of
8 no future economic benefits are e5pected from the use or the disposal
Lains or losses on disposal
8 proceeds less carrying amount
8 recogniDed in the income statement
4isclosures
For each asset class
8 measurement basis used
8 depreciation method used
8 useful life 0 depreciation rate
8 gross carrying amount N accumulated depreciation at beginning and end of period
8 reconciliation of carrying amount, incl
additions and disposals
acquisitions through business combinations
revaluation increases or decreases
impairment losses and reversals
depreciation
e5change differences
)lso
8 restrictions on title and items pledged as security, including amounts
8 accounting policy for restoration costs
8 e5penditure on 44N. under construction
8 commitments for acquisition of 44N.
For revalued 44.
8 basis of revaluation
8 effective date of revaluation
8 use of independent valuer
8 carrying amount using benchmark treatment *ie cost less depreciation+
8 amount of revaluation surplus
IAS 2> Intangible Assets
Objective
!o prescribe the accounting treatment for intangible assets not dealt with in another Standard
Scope
8 )pplies to intangible assets e5cept
those covered by another standard
financial assets
mineral rights and certain e5penditure in e5tractive industry
8 )pplies to e5penditure on
advertising, training, start8up
research and development activities
!-
Source
8 I)S &@ , Intangible )ssets
8 SI- &' , Meb Site -osts
An asset ' a resource controlled by the enterprise as a result of past events from which future
economic benefits are e5pected to flow to the entity
Intangible asset ' an identifiable non8monetary asset without physical substance
Researc" ' Iriginal and planned investigation undertaken with the prospect of gaining new
scientific or technical knowledge and understanding
4evelopment ' )pplication of research findings or other knowledge to a plan or design for the
production of new or substantially improved materials, devices, products, processes, systems or
services before the start of commercial production or use
An asset ' identifiable when it6
8 is separable, ie capable of being separated or divided from the entity and sold, transferred,
licensed, rented or e5changed, either individually or together with a related contract, asset or
liability" or
8 arises from contractual or other legal rights, regardless of whether those rights are transferable
or separable from the entity or from other rights and obligations
An asset meets t"e control criterion when it has the power
8 to obtain the future economic benefits flowing from the underlying resource" and
8 to restrict the access of others to those benefits *7ot for internally skilled staff, training,
customer lists, portfolio of customers,Q+
Recognition and measurement
)n asset meeting the definition of an intangible asset should be recogniDed when
8 it is probable that future economic benefits associated with asset will flow to the enterprise" and
8 cost of asset can be measured reliably
Initial measurement at cost
# Separate acquisition
Recognition
8 4robability criterion >? always satisfied
8 Reliable measurement >? usually satisfied *particularly when payment is in monetary assets+
;easurement
8 )t cost
8 -ost components when purchased
purchase price, import duties and purchase ta5es, directly attributable e5penditure of
preparing the asset for its use and less trade discounts N rebates
.5penditures that are not part of the cost of an intangible asset6
8 -osts of introducing a new product or service *incl advertising and promotional activities+"
8 -osts of conducting business in a new location or with a new class of customers *including costs
of staff training+" and
8 )dministration and other general overhead costs
' )cquisition in a business combination
!2
Recognition
8 4robability criterion >? always satisfied
8 Reliable measurement >? *rebuttable+ presumption when finite useful life
;easurement
)t fair value based on
quoted market prices *active market+
if no active market, use techniques to estimate fair value
8 multiples0profitability
8 discounted future cash flows
& .5changes of assets
= Internally generated goodwill ?? 7ot recognised as an asset *e5pense to 4NE+
3 Internally generated intangible assets
Internally generated brands, mastheads, publishing titles, customer lists and items similar in
substance ?? .5pense to 4NE
Research
8 7o intangible asset arising form research *or research phase+ should be recogniDed
8 )ll e5penditure on research should be e5pensed when incurred
Development
-apitalisation of development costs if, and only if
definition and recognition criteria are met
a list of other criteria are met
8 technical feasibility
8 intention to complete
8 ability to use or sell the asset
8 probability of future economic benefits
8 availability of resources
.5amples of development activities
Design, construction and testing of pre8production or pre8use prototypes and models
Design of tools, Higs, moulds and dies involving new technology
Design, construction and operation of a pilot plant
Design, construction and testing of a chosen alternative for new or improved materials, devices,
products, processes, systems or services
;easurement of Development
.5penditure incurred from the date when the intangible asset first meets the recognition criteria
4rohibition of reinstatement of e5penditure previously recogniDed as an e5pense
-ost comprises all directly attributable costs necessary to create, produce, and prepare the
asset to be capable of operating in the manner intended by management
.5amples6
8 ;aterials and services used or consumed
8 .mployee benefits
8 Fees to register a legal right
8 )mortisation of patents and licences used to generate the intangible assets
Recognition of an e8pense
8 If definition and recognition criteria are not met ?? e5pense
8 Specific e5amples
8 start8up costs
8 training and advertising costs
8 relocation costs
!5
@easurement after recognition
8 -ost model
8 -ost less accumulated amortisation and impairment losses
8 Revaluation model
8 Revalued amount less accumulated amortisation and impairment losses
8 fair value should be determined by reference to an active market
8 if no active market ?? no revaluation
?seful life
Indefinite useful life ?? 7o amortisation, but annual test of impairment according to I)S &/ ,
Impairment of )ssets
Finite useful life ?? )llocation of the depreciable amount *> cost , residual value+ on a systematic
basis over the useful life
Review at the end of each financial year8end ?? -hange in accounting estimate accounted for
prospectively
Factors to be considered when determining the useful life6
8 !he e5pected usage of the asset by the entity and whether the asset could be managed
efficiently by another management team
8 !ypical product life cycles for the asset and public information on estimates of useful lives of
similar assets that are used in a similar way
8 !echnical, technological, commercial or other types of obsolescence
8 !he stability of the industry in which the asset operates and changes in the market demand for
the products or services output from the asset
8 .5pected actions by competitors or potential competitors
8 !he level of maintenance e5penditure required to obtain the e5pected future economic benefits
from the asset and the entityKs ability and intention to reach such a level
8 !he period of control over the asset and legal or similar limits on the use of the asset
8 Mhether the useful life of the asset
Residual value
)ssumed to be Dero, unless
8 -ommitment by a third party to purchase" or
8 )ctive market and
Residual value can be determined by reference to that market
It is probable that such a market will e5ist at the end of the useful life
Review at the end of each financial year8end ?? -hange in accounting estimate accounted for
prospectively
Amortisation met"od
!he method shall reflect the pattern in which the assetKs economic benefits are e5pected to be
consumed
JJJ Straight8line method, unless another pattern can be determined reliably
-onsistent and permanent application from one year to another
Review at the end of each financial year8end ?? -hange in accounting estimate accounted for
prospectively
)mortisation charge recognised in 4NE
?? 2nless included in the carrying amount of another asset
!;
)mortisation begins when the asset is available for use
)mortisation ceases when
8 !he asset is classified as held for sale in accordance with IFRS 3 , 7oncurrent )ssets held for
Sale and Discontinued Iperations" or
8 !he asset is derecognised
Impairment BB See I)S &/ , Impairment of )ssets
Retirements and disposals
.limination from balance sheet when
8 disposed of
8 7o future economic benefits are e5pected from its use or disposal *ieno sale+
Lains or losses on disposal
8 proceeds less carrying amount
8 recogniDed in the 4NE
4isclosures
For each class of intangible assets *Distinguishing between internally generated intangible assets
and other intangible assets+
8 useful life 0 amortisation rate
8 amortisation method
8 gross carrying amount N accumulated amortisation at beginning and end of period
8 line item*s+ where in the I0S amortisation is included
8 reconciliation of carrying amount, incl
additions *internally and through business combinations+
-lassification as held for sale or included in disposal group
revaluation increases or decreases
impairment losses and reversals
amortisation
net e5change differences
other
8 )lso
Intangibles with indefinite useful life6 carrying amount and reasons
description of individually material items
information on intangible assets granted that have been recognised at fair value restrictions
on title and items pledged as security0commitments for
acquisition
research and development e5penditure recognised as an e5pense
For revalued intangible assets
8 by class of intangible assets
effective date of revaluation
carrying amount of revalued assets
carrying amount using benchmark treatment *ie cost+
8 amount of revaluation surplus, indicating changes and restrictions
8 methods and significant assumptions made in estimating the assetKs fair values
IAS !< (eases
Objective
4rescribe, for lessees and lessors, the appropriate accounting policies and disclosure to apply in
relation to finance and operating leases
Scope >? )pplicable to all leases
!+
.5cept
8 Eeases to e5plore for or use minerals, oil, natural gas and similar no regenerative resources
8 Eicensing agreements for such items as motion picture films, video recordings, plays,
manuscripts, patents and copyrights
8 ;easurement of some leased investment property and leased biological assets
Including agreements that do not take the legal form of a lease but substantially conveys a right to
use an asset *IFRI- =+
Sources
8 I)S #% , Eeases
8 SI- #3 , Iperating Eeases , Incentives
8 SI- '% 8 .valuating the Substance of !ransactions Involving the Eegal Form of a Eease
8 IFRI- = , Determining whether an )rrangement contains a Eease
(ease ' )greement whereby the lessor conveys to the lessee in return for a payment or series of
payments the right to use an asset for an agreed period of time
Finance lease ' Eease that transfers substantially all the risks and rewards incidental to
ownership of an asset !itle may or may not eventually be transferred
Operating lease ' Eease other than a finance lease
.lassification of leases
Impact of the classification *situation of the lessee+
8 In the balance sheet
Iperating lease ?? no item recogniDed
Finance lease ?? asset and corresponding liability recogniDed
8 In the income statement
Iperating lease ?? entire rent recogniDed as an operating e5pense
Finance lease
?? Rent split between a finance e5pense and the reduction of the lease liability
?? )sset depreciated over its useful life *in principle+ S operating e5pense
.5ample
9efore accounting for the lease described below, the financial statements of )9- are following at
closing W#6
Fi5ed assets6 #3(
-ash6 3(
.quity6 @(
Eiabilities6 #'(
4rofit of the year W#6 =3 *operating+
In #0#0W#, )9- concluded the following lease contract6
)sset leased6 44N. with a fair value of 3( and a useful life of 3 years
)nnual rent6 #% *paid at the end of the year+
)ppropriate interest rate6 #( X
Determine the 9S position at &#0#'0W#, the result and the .9I!D) of W#
If the lease is classified as a finance lease
If the lease is classified as an operating lease
.5ample6 operating lease
!<
.5ample6 finance lease
-lassification is based on the e5tent to which risks and rewards incidental to ownership of a
leased asset lie with the lessor or the lessee
>? finance lease if substantially all risks and rewards are transferred to the lessee
JJJ Risks include the possibilities of losses from idle capacity or technological obsolescence and of
variations in return because of changing economic conditions
JJJ Rewards may be represented by the e5pectation of profitable operation over the assetKs
economic life and of gain from appreciation in value or realiDation of a residual value
!>
-lassification depends on the substance of the transaction rather than the legal form of the
contract ?? Substance over form principle ?? !ransactions and other events should be accounted
for and presented in accordance with theirs substance and economic reality and not merely their
legal form
.5amples of situations that individually or in combination would normally lead to a lease being
classified as a finance lease6
#!he lease transfers oners"ip of the asset at the end of the lease term
'!he lessee has the option to purchase the asset at price that is e5pected to be sufficientl)
loer than the fair value when the option becomes e5ercisable for it to be reasonabl) certain,
at inception of the lease, that the option will be e5ercised
&Eease term is for the major part of t"e economic life of the asset even if title is not transferred
=)t inception of the lease, the present value of t"e minimum lease pa)ments amounts to at
least substantially all of the fair value of the leased asset
3!he leased assets are of a such specialised nature that only the lessee can use them without
maHor modifications
Ither indicators of situations that individually or in combination could also lead to a lease being
classified as a finance lease6
#If the lessee can cancel the lease, the lessorKs losses associated with the cancellation are borne
by the lessee
'Lains or losses from the fluctuation in the fair value of the residual accrue to the lessee *for
e5ample, in the form of a rent rebate equaling most of the sales proceeds at the end of the
lease+
!he lessee has the ability to continue the lease for a secondary period at a rent that is
substantially lower than market rent
Eease term is for the maHor part of the economic life of the asset even if title is not transferred
Eease term > non8cancelable period for which the lessee has contracted to lease the asset,
together with
> any further terms for which the lessee has the option to continue to lease the asset,
with or without further payment, when at the inception of the lease it is reasonably
certain that the lessee will e5ercise the option
Economic life ' the period over which an asset is e5pected to be economically usable by one or
more users
:@ajor partC ' benchmark is %3X *but substance over form+
)t inception of the lease, the present value of the minimum lease payments amounts to at least
substantially all of the fair value of the leased asset
;inimum lease payments ?? 4ayments over the lease term that the lessee is or can be required
to make
.5cluding6
8 -ontingent rent6 that portion of the lease payments that is not fi5ed in amount but is based on
the future amount of a factor that changes other than with the passage of time *eg
percentage of future sales, amount of future use, future price indices, future market rates of
interest+
8 -osts for services and ta5es to be paid by and reimbursed to the lessor
Including6
8 For a lessee, any amounts guaranteed by the lessee or by a party related to the lessee Y For a
lessor, any residual value guaranteed to the lessor
8 !he e5ercise price of a bargain purchase option
Discount rate
Interest rate implicit in the lease ?? discount rate that, at the inception of the lease, causes the
aggregate present value of the minimum lease payments" and the unguaranteed residual value
to be equal to the sum of the fair value of the leased asset and any initial direct costs of the
lessor
8 2nguaranteed residual value
!A
Z Determined by reference to the current value >? possible effect of future inflation shall
not be considered
Z 2se of an independent valuer recommended
8 Fair value
Z ;arket price reflecting any volume or trade discounts
Z 7ormal selling price *reflecting any volume or trade discounts+ when the lessor is also
the manufacturer or dealer
8 EesseeKs incremental borrowing rate
Z -an only be used by the lessee when the interest rate implicit in the lease is not
practicable to determine
Z Defined as the rate of interest the lessee would have to pay on a similar lease or, if that
is not determinable, the rate that, at the inception of the lease, the lessee would incur to
borrow over a similar term, and with a similar security, the funds necessary to purchase
the asset
8 :)t least substantially all< > benchmark is $(X *but substance over form+
4rocess
# Determine the minimum lease payments and the unguaranteed residual value *independent
valuer+
' -ompute the interest rate implicit in the lease *lessor approach+
& Determine the present value of the minimum lease payments *lessee approach+
= -ompare the present value of the minimum lease payments with the fair value of the leased
asset
3 -onsider the other indicators 0 risks and rewards factors
-lassification is determined at the inception of the lease *ie date of the lease agreement+ [
recognition at the commencement of the lease *ie start of right to use+
If changes in the provisions of the lease result in a different classification, the modified agreement
is considered as a new lease
-hanges in estimates *eg estimate of the economic life or residual value+ or changes in
circumstances *eg default by the lessee+ do not alter the classification
) lease might be classified differently for the lessee and the lessor
Accounting b) lessees
Finance lease
8 Recognise both an asset and a liability
8 )mount recognised is the lower of
Fair value of the leased asset
4resent value of the minimum lease payments
8 Discount rate is the interest rate implicit in the lease If it is not practicable to determine, the
lesseeKs incremental borrowing rate shall be used
8 !he asset should be depreciated using a policy consistent with that for owned assets *under I)S
#/ , 4roperty, 4lant and .quipment+
8 over the shorter of the lease term and its useful life
8 Eease payments apportioned between
Finance charge Y allocated to produce a constant periodic rate of interest
Reduction of the outstanding liability
Iperating leases
8 Eease payments are e5pensed
8 Straight line basis over the lease term
unless another systematic basis is more representative of the time pattern of the userKs
benefits
Sale and leasebac, transactions
Sale of an asset by the vendor and leasing of the same asset back to the vendor
-=
-lassification criteria6 same as those for leases
8 Finance lease Y amortise any e5cess of sales proceeds over the carrying amount over lease
term
8 Iperating lease and if transaction
at or below fair value Y recognise gain or loss
above fair value Y amortise e5cess over fair value over the period for which the asset is
e5pected to be used
IFRI. 5 4etermining "et"er an Arrangement .ontains a (ease
Bac,ground ?? )rrangements may not take the legal form of a lease but convey the
right to use an asset in return for a payment or a series of payments
E8amples
Iutsourcing arrangements
)rrangements in the !elecom industry *right to network capacity+
!ake8or8pay and similar contracts *power generator+
.onsensus Arrangement is or contains a lease
8 Fulfilment of the arrangement is dependent on the use of a specific asset or assets
8 !he arrangement conveys a right to use the asset
8 !he arrangement conveys a right to use the asset
>? !he arrangement conveys to the purchaser *lessee+ the right to control the use of the
underlying asset, which is the case if6
!he purchaser has the ability0right to operate the asset or direct others to operate the asset in
a manner it determines while obtaining or controlling more than an insignificant amount of the
output or other utility of the asset" IR
!he purchaser has the ability0right to control physical access to the underlying asset while
obtaining or controlling more than an insignificant amount of the output or other utility of the
asset" IR
Facts and circumstances indicate that it is remote that one or more parties other than the
purchaser will take more than an insignificant amount of the output or other utility that will be
produced or generated by the asset during the term of the arrangement, and the price that the
purchaser will pay for the output is neither contractually fi5ed per unit of output nor equal to
the current market price per unit of output as of the time of delivery of the output
4isclosures
.5tensive disclosure requirements *I)S &' F I)S #%+
I)S #% provides for significantly enhanced disclosures
8 lessees with finance leases *I)S #%'&+
8 lessees with operating leases *I)S #%'%+
8 lessors with finance leases *I)S #%&$+
8 lessors with operating leases *I)S #%=@+
Selected disclosures in F0S of lessees
Finance leases
8 net carrying amount by class of assets
8 reconciliation of total minimum lease payments and their present value *\# year" #83 years" ?3
years+
Iperating leases
?? total minimum lease payments *\# year" #83 years" ?3 years+
Selected disclosures in F0S of lessors
Finance leases
-!
8 reconciliation of total gross investment in the lease and present value of minimum lease
payments receivable *\# y0#83 y0?3 y+
8 unearned finance income
8 unguaranteed residual values of leased assets
Iperating leases
8 information by class of assets
8 future min lease payments *\# y0#83 y0?3 y+
Provisions
IAS 2< Provisions3 .ontingent (iabilities and .ontingent Assets
Objective
!o ensure that6
8 appropriate recognition criteria and measurement bases are being applied
8 there is sufficient disclosure to understand the nature, timing and amount of provisions,
contingent liabilities and contingent assets
Scope
I)S &% scopes out
financial instruments at fair value
non8onerous e5ecutory contracts
policy8holdersK contracts in insurance entities
items covered by another I)S
JJJ Interaction with I)S #$
Provision ' liability of uncertain timing or amount
(iabilit)
> present obligation as a result of past events
> settlement of which is e5pected to result in an outflow of resources
.onstructive obligation
> an obligation that derives from an entityKs actions where6
by an established pattern of past practice, published policies or a sufficiently specific current
statement, the entity has indicated to other parties that it will accept certain responsibilities" and
as a result, the entity has created a valid e5pectation on the part of those other parties that it will
discharge those responsibilities
.ontingent liabilit)
> 4ossible obligation depending on the occurrence0non8occurrence of uncertain future events, or
> 4resent obligation but no probable outflow of economic benefits or amount canKt be reliably
measured
.ontingent asset
> 4ossible asset that arises from past events and whose e5istence will be confirmed only by the
occurrence or nonoccurrence of one or more uncertain future events not wholly within the
control of the entity
--
Provision or contingent liabilit)D
Recognition of a provision
RecogniDe a provision if, and only if
8 present obligation *legal or constructive+
8 as a result of past event *obligating event+
8 probable *Pmore likely than notK+ transfer of economic benefits
8 reliable estimate can be made
)n obligating event is an event that
8 creates a legal *by law or contract+ or constructive obligation
8 results in an enterprise having no realistic alternative but to settle the obligation
4ecision tree
.ontingent liabilit)
8 )n enterprise should not recogniDe a contingent liability
8 Disclosure is required unless a cash outflow is remote
.ontingent assets ' a possible asset depending on the occurrence0non8occurrence of uncertain
future events JJJ Do not recognise contingent assets, disclosure is required if a cash inflow
is probable
@easurement principles
9est estimate
!he amount recogniDed as a provision shall be the best estimate of the e5penditure required to
settle the present obligation at the balance sheet date
> the amount an enterprise would rationally pay to settle or transfer the obligation to a third party
> fair value
JJJ use reports of independent e5perts where necessary *ie lawyers, environmental e5perts,Q+
Discounted value
-2
Mhere the effect of the time value of money is material, the amount of a provision shall be the
present value of the e5penditures e5pected to be required to settle the obligation
4re8ta5 discount rate that reflects current market assessments of time value and risks specific to
the liability *Risk free rate is in practice often used+
-ash flows0discount rate Y be consistentJ
, avoid double counting of risk
, inflation
Future events
Future events that may affect the amount required to settle an obligation shall be reflected in the
amount of a provision where there is sufficient obHective evidence that they will occur
-onsider future cost reductions if increased e5perience in
8 applying e5isting technology
8 the e5pected costs of applying e5isting technology to more comple5 clean8up operation than
previously carried out
-onsider changes in legislation ?? when virtually certain to be enacted
Reduction of obligation
Lains from the e5pected disposal of assets should not be taken into account
Reimbursements should be recognised when, and only when, it is virtually certain that
reimbursement will be received if the enterprise settles the obligation
."anges and use of provisions
Review and adHust provisions at each balance sheet date
??? if outflow no longer probable ?? reverse provision
) provision should be used only for e5penditures for which the provision was originally recogniDed
Future operating losses
4rovisions should not be recogniDed for future operating losses
8 general prohibition6 no present obligation Y no liability
8 specific prohibition6 future operating losses up to the date of a restructuring
Onerous contracts ' a contract in which the unavoidable costs of meeting the obligations under
the contract e5ceed the economic benefits e5pected to be received under it
.5ample6 building under lease contract but not occupied by the company
RecogniDe the present obligation under an onerous contract as a provision > unavoidable costs of
e5iting the contract
Restructuring provisions
Restructuring
> ) program that is planned N controlled by management that materially changes either6
8 the scope of a business undertaken, or
8 the manner in which that business is conducted
.5amples
8 sale or termination of a line of business
8 closure of business locations
8 changes in management structure
-5
8 fundamental reorganiDations
Requirements for recognition6 ) constructive obligation to restructure arises only when there is6
) detailed formal plan identifying at least6
business and locations affected
employees who will be compensated
e5penditure undertaken
timeframe for implementation
) valid e5pectation of implementation of the plan
actually start to implement plan
announce main features of the plan to those affected by it
management or board decision will not, by itself, constitute a constructive obligation to
restructure
Restructuring provisions should include only direct e5penditures necessarily entailed by the
restructuring not associated with the ongoing activities of the enterprise
Provisions not recogniEed via P%(
2nder I)S #/, the cost of an item of property, plant and equipment includes the initial estimate of
the costs of dismantling and removing the item and restoring the site on which it is located
!his part of the cost of the asset is recogniDed via the set up of a provision of the same amount
It is measured based on the prescription of I)S &%
.5ample6 nuclear plant decommissioning obligation
!otal cost *e5cluding cost of decommissioning+6 #(((
;aHor part )6 #3( useful life of #( years
;aHor inspection6 #(( every ' years
2seful life of the remainder6 =( years
-ost of decommissioning6 =((
First maHor inspection performed every ' years 0 cost of ##(
-;
@ain disclosures $eac" class of provision&
Reconciliation
Ipening balance
)dditions
2sed
Released
2nwinding
-losing balance
9rief description of
7ature
!iming
2ncertainties
)ssumptions
Reimbursement
7o prior year comparatives
.5amples of disclosures
IAS 5= Investment Propert)
Objective
!o prescribe the accounting treatment for investment property
Scope
-+
I)S =( also applies to
investment property held under a finance lease *in lessee]s F0S+
investment property leased out under an operating lease *in lessor]s F0S+
Sources
I)S =( , Investment 4roperty
4efinitions
An investment propert) ' property, held to earn rentals or for capital appreciation or both, rather
than for use" or sale in the ordinary course of business
An onerFoccupied propert) ' a property held for use in the production or supply of goods or
services or for administrative purposes
Recognition
)n investment property should be recognised as an asset when
8 future economic benefits to flow from the asset are probable" and
8 cost can be measured reliably
Same criteria are applicable to initial costs and subsequent costs relevant to investment property
@easurement at recognition
)n investment property should be initially measured at its cost
-ost components
8 purchase price
8 directly attributable e5penditure
property transfer ta5es
professional fees
-osts not included
Start8up costs *unless necessary to bring the property to the condition necessary to be capable
of operating as intended by management+
Iperating losses incurred before the investment property achieves the planned level of
occupancy
)bnormal amounts of wasted material, labour or other resources incurred in constructing or
developing the property
@easurement after recognition
)n enterprise should choose between6
# Fair value model
8 Investment properties are measured at their fair value at each closing
8 )pplicable to all investment properties *no cherry picking+
8 -hange in fair value is recorded in the income statement
8 Determination of fair value
-<
4rice at which the property could be e5changed between knowledgeable, willing parties in
an armKs length transaction
Reflection of market conditions at the balance sheet date
Mithout any deduction for
8 transaction costs it may incur on sale or other disposal
8 future capital e5penditure that will improve or enhance the property

Determination of fair value
' -ost model
.ost Accumulated depreciation and impairment losses
JJJ Same treatment as cost model in accordance with I)S #/
JJJ Disclosure of fair value required
?? Fair value should always be determined, either for measurement or disclosure
4isclosures
Leneral
8 criteria to distinguish investment property from other property
8 the methods and significant assumptions applied in determining fair value
8 use of an independent valuer
8 the amounts included in the I0S for
rental income
direct operating e5penses arising from investment property that
8 generated rental income
8 did not generated rental income
8 !he e5istence of restrictions on the realisability of investment property or the remittance of
income and proceeds of disposal
8 ;aterial contractual obligations
Fair value model
8 Reconciliation of carrying amount
8 If fair value cannot be determined
description of investment property, e5planation why fair value cannot be determined and range
of values
carrying amount and gain or loss recognised of assets disposed
-ost model
8 Depreciation methods used and useful lives or rates used
8 Reconciliation of carrying amount
8 Fair values
if not possible, a description of investment property, e5planation why fair value cannot be
determined and range of values
IFRS ; 6onFcurrent Assets Geld for Sale and 4iscontinued Operations
Objective
->
Specify the accounting for assets and disposal groups held for sale, and the presentation and
disclosure of discontinued operations
Scope
)pplication to all recognised non8current assets, e5cept
Deferred ta5 assets *I)S #'+
)ssets arising from employee benefits *I)S #$+
Financial assets within the scope of I)S &$
7on8current assets under the Fair value model of I)S =(
7on8current assets measured at fair value less estimated point of sale costs under I)S =#
-ontractual rights under insurance contracts *IFRS =+
4iscontinued operation
4isposal group ' ) group of assets to be disposed of, by sale or otherwise, together as a group
in a single transaction, and liabilities directly associated with those assets that will be transferred
in the transaction Disposal groups also include a group of cash8generating units, a single cash8
generating unit, or part of a cash8generating unit
Firm purc"ase commitment ' an agreement with an unrelated party, binding on both parties and
usually legally enforceable, that
specifies all significant terms, including the price and timing of the transactions, and
includes a disincentive for non performance that is sufficiently large to make performance highly
probable
.lassification as "eld for sale
)n entity shall classify a non8current asset *or disposal group+ as held for sale if its carrying
amount will be recovered principally through a sale transaction rather than through continuing use
:Reld for sale< criteria
If non current assets *disposal group+ are acquired e5clusively with a view to disposal they are
classified as held for sale if
8 SubHect to certain e5emptions, sale is e5pected \ #' months
8 highly probable that the full criteria *previous slide+ will be met within a short period after
acquisition *usually & months+
7on current assets that are to be abandoned are not classified as held for sale may be classified
as discontinued operations when eventually abandoned
-A
)t the lower of carrying amount and fair value less costs to sell
8 Impairment losses for write downs 8 profit or loss
8 Subsequent increases in fair value 8 recognised if not in e5cess of the cumulative impairment
loss *under IFRS 3 or I)S &/+
JJJ 7o depreciation
Presentation and disclosure
)ssets *disposal groups+ held for sale
7on8current assets *or the assets of a disposal group+ are shown separately from other assets
!he liabilities of a disposal group classified as held for sale shall be presented separately from
other liabilities
)ssets and liabilities shall not be offset
4rior periods are not reclassified
Lains and losses on fair value adHustments on assets classified as held for sale *and are not
discontinued operations+ recogniDed in profit or loss as a part of continuing operations
Discontinued operations
8 ) single amount on the face of the income statement comprising
the sum of the post8ta5 profit or loss of the discontinued operation and
the post8ta5 gain or loss recognised on the measurement to fair value less costs to sell or on
disposal
8 )n analysis of that amount on the face or in the notes
8 7et cash flows attributable to operating, investing, and financing activities presented separately
on the face of the cash flow statement or in the notes
8 !he disclosures are all represented for prior periods
Impairment of Assets
IAS 2+ Impairment of Assets
Objective
!o prescribe procedures that an enterprise applies to ensure that its assets are not carried at an
impaired value and to harmoniDe how recoverable amount is calculated
Scope
I)S &/ applies to all assets other than6
inventories *I)S '+
assets arising from construction contracts *I)S ##+
deferred ta5 assets *I)S #'+
2=
assets arising from employee benefits *I)S #$+
financial assets *I)S &'+
investment property *I)S =(+
)n asset is impaired when the carrying amount of an asset e5ceeds its recoverable amount
.arr)ing amount ' the amount at which an asset is recogniDed in the balance sheet after
deducting any accumulated depreciation *amortiDation+ and accumulated impairment losses
thereon
Recoverable amount ' the higher of an assetKs fair value less costs to sell and its value in use
Identif)ing t"at an asset ma) be impaired
)t each balance sheet date, a review should be performed to assess whether there is any
indication that an asset may be impaired ?? e5ternal N internal indicators
If there is an indication that an asset may be impaired ?? perform an impairment test
Irrespective of whether there is any indication of impairment, an entity shall also test annually for
impairment6
Intangible assets with an indefinite useful life"
Intangible assets not yet available for use" and
Loodwill
Indications of impairment
.5ternal sources
market value
changes in environment *technological, legal, market, economical+
market interest rates and rates of return
market capitalisation
Internal sources
obsolescence or physical damage
changes in the use *restructuring, disposals etc+
lower economic performance than e5pected
JJJ 7ot an e5haustive list
)n indication that an asset may be impaired, may indicate that the assetKs
useful life
depreciation method
residual value
JJJ may need to be reviewed and adHusted
Fair value less costs to sell
Fair Halue ' !he amount obtainable from the sale of an asset in an armKs length transaction
between knowledgeable, willing parties less the costs of disposal
6et Selling Price $6SP&
If active market ?? 7S4 > market price less costs of disposal
If no active market ?? 7S4 > best estimate of the assetKs selling price *based on recent
transactions in the sector+ less costs of disposal
JJJ -osts of disposal > direct incremental costs only *eg legal costs, stamp duty ta5es, costs of
removing the asset,Q+
2!
Halue in use
Halue in use ' !he present value of estimated future cash flows e5pected to arise from the
continuing use of an asset and from its disposal at the end of its useful life
Steps to take6
a .stimate the future -F from continuing use and ultimate disposal
b )pply appropriate discount rate
-ash flow proHections should be based6
In best estimate of economic conditions over the remaining useful life of the asset
reasonable and supportable assumptions
greater weight to e5ternal evidence
In the most recent financial budgets 0 forecasts \ 3 years 9eyond the period covered by the
budgets 0 forecasts, cash flow proHections should be e5trapolated using a steady or declining
growth rate *growing rate allowed if Hustified+
.stimates of future cash flows include
proHections of cash inflows and outflows from the continuing use of the asset
net cash flows to be received *or to be paid+ for the disposal of the asset
allocation of overheads attributable to the asset in the outflows proHections
effects of inflation
.stimates of future cash flows e5clude
cash flows from financing activities
income ta5 receipts or payments
outflows related to obligations that have already been recogniDed as liabilities
inflows generated by other assets, if those inflows are largely independent from those generated
by the asset
Future cash flows
should be estimated for the asset in its current condition
e5clude outflows from6
future restructuring to which an enterprise is not yet committed
future capital e5penditure that will improve or enhance the asset
!he discount rate should be6
pre8ta5 rate *or rates+
that reflects current market assumptions
of the time value of money"
of the risks specific to the asset"
of the considered money
4iscount rate ' return that investors would require if they were to choose an investment that
would generate cash flows of amounts, timing and risk profile equivalent to those e5pected from
the asset *> market discount rate+
If no discount rate available from the market
2se as a starting point6
M)--
incremental borrowing rate
other market borrowing rate
)dHust these rates6
2-
to reflect the risks specific to the asset
to e5clude risks not relevant to the cash flows
.5ample6
-arrying amount of a 44N.6 #(3
Sales price6 ##(
-osts of disposal6 #3
.stimated future cash flows6
Uear #6 33
Uear '6 /(,3 *disposal+
Discount rate6 #(X
?? -arrying amount6 #(3
?? Fair value less costs to sell6 ##( , #3> $3
?? Balue in use6 #(( *> 330*#F(,#+F/(,30*#F(,#+^+
?? Recoverable amount > #((
?? Impairment loss > 3
22
Special cases
If net selling price or value in use ? carrying amount
??? no need to determine the other amount
If net selling price cannot be determined
??? recoverable amount > value in use
)ssets to be disposed of
??? recoverable amount > net selling price
Recognition of an impairment loss
)n impairment loss should be recogniDed whenever recoverable amount \ carrying amount
If net selling price or value in use ? carrying amount
??? no need to determine the other amount
JJJ Impairment loss recognition > e5pense
.as"Fgenerating units
Recoverable amount should be determined for the individual asset
If not possible to determine the recoverable amount for the individual asset
??? determine recoverable amount for the assetKs cash8generating unit *-L2+
.I? ' smallest identifiable group of assets that includes the asset that generates cash inflows
from continuing use that are largely independent of the cash inflows from other assets or
groups of assets
2nderstand how management monitors the enterpriseKs operations
??? siDe of -L2 will often be large
If an active market e5ists for the output produced by an asset *group of assets+
??? this asset *group of assets+ is a -L2
-L2 should be identified consistently from period to period
-L2Ks carrying amount should be determined consistently with the way the -L2Ks recoverable
amount is determined6
Include all assets that contribute to cash inflows *eg goodwill and corporate assets+
.5clude already recogniDed liabilities
)llocating goodwill to -L2Ks
Ioodill shall from the acquisition date be allocated to -L2Ks that are e5pected to benefit from
the synergies of the 9-, irrespective of whether other assets or liabilities of the acquisition are
assigned to those units or groups of units
) -L2 to which LM is allocated shall be tested for impairment annually
.orporate assets ' )ssets other than LM that contribute to the future -4Ks of both the -L2
under review and other -L2Ks Lroup of divisional assets such as headquarters, .D4 equipment,
research centresQ
25
)n impairment loss for a -L2 shall be allocated to reduce the carrying amount of the assets of
the client *group of units+ in the following order6
First to reduce the carrying amount of any LM allocated to the -L2 *Lroup of -L2Ks+
!hen, to the other assets of the unit *group of units+ pro rata the carrying amount of each asset
> the unit *group of units+
!he carrying amount of an asset should not be reduced below the higher of
its net selling price
its value in use
Dero
Reversal of an impairment loss
Same approach as for the identification of impaired assets ?? assess at each balance sheet date
whether there is an indication that an impairment loss may have decreased *same indicators+ if
so, calculate recoverable amount
)n impairment loss should be reversed if, and only if, there has been a change in the estimates
used to calculate the recoverable amount since the last impairment loss was recogniDed
JJJ no reversal recogniDed for6
the PunwindingK of the discount only
minor change in the discount rate
Increased carrying amount due to reversal should be less than depreciated historical cost
Reversal of an impairment loss
??? if asset is revalued ?? revaluation increase
??? otherwise6 income in the income statement
JJJ )dHust depreciation for future periods
)n impairment loss recogniDed for Loodwill shall not be reversed in a subsequent period
4isclosures
Impairment losses recogniDed in the income statement directly in equity
Impairment losses reversed in the income statement directly in equity
Eine item*s+ of the income statement
4isclosures b) segment
Impairment losses recogniDed in income statement in equity
Impairment losses reversed in income statement in equity
Ot"er disclosures
If an impairment loss *reversal+ is material to the financial statements as a whole
events and circumstances, amount
individual asset6 nature N segment
-L26 description, amount of impairment loss *reversal+ by class of assets N segment
if recoverable amount > 7S4 ?? basis for determining 7S4
if recoverable amount > BI2 ?? discount rate
If impairment losses recogniDed *reversed+ are material in aggregate to the financial statements
as a whole
main classes of assets affected
main events and circumstances
2;
.as" flo statements
IAS < .as" Flo Statements
#"e need for cas" flo statements
_uestions related to entities that are not covered by the balance sheet and income statement
Mhat have been sources of cashT
Row has the money been spentT
Mhy are bank balances decreasing although our entity is profitableT
Objective
Information on historical changes in cash and cash equivalents
-lassification of cash flows from
operational activities
investing activities
financing activities
Scope
Integral part of IFRS financial statements no e5emptions on grounds like siDe or activity
4repare cash flow statements at balance sheet date for interim financial reporting *I)S &=+
.as" '
?? cash on hand
?? demand deposits
.as" e*uivalents '
?? short term, highly liquid investments ?? 4resumption6 less than & months
?? readily convertible to known amounts
?? insignificant risk of change in value
.lassification of cas"flos
Operating activities ' principal revenue8producing activities
?? -ash receipts from sale of goods 0 rendering services
Investing activities ' acquisition 0 disposal of long8term assets and other investments
?? 4ayments to acquire 44., intangibles" equity or debt instruments of other entities and interests
in Hoint ventures
Financing activities ' changes in siDe 0 composition of equity and borrowings
?? -ash proceeds from issuing shares 0 equity instruments
Reporting cas" flos from operating activities
2+
Indirect method
.5ample6
Direct method
.ach maHor class of gross cash receipts and gross cash payments disclosed separately
2se entityKs accounting records, or adHust sales and cost of sales for
changes in working capital *Inventories, operating receivables and payables+
non8cash items
items under investing or financing activity
.5ample6
Special reporting items J interest3 dividends3 ta8
Interest and dividends
.ach disclosed separately *no netting of received and paid amounts+
-onsistent classification as financing or operating
Interests paid to be reported as such even if capitaliDed under I)S '&
!a5es on income
!a5es paid
Separate disclosure
Relate normally to operating activities, unless specifically identified with financing or investing
activities
2<
Special reporting items J investments
Special reporting items J ac*uisitions
)cquisition *disposal+ of subsidiaries or other business units
4resented separately and classified as investing activities
cash paid or received, net of cash equivalents in subsidiary or business unit at the date of
acquisition *disposal+
;ain disclosures
!otal purchase *disposal+ consideration and portion discharged in cash0cash equivalents
)cquired *disposed+ cash0cash equivalents
Ither assets and liabilities acquired *disposed+ by maHor categories
Special reporting items J foreign currenc)
-F from transaction in a foreign currency
Recorded in the entityKs functional currency using the e5change rate at the date of the -F *or an
average e5change rate+
Foreign subsidiary
Foreign subsidiaryKs -F statement translated at the e5change rates at the date of the -F *or an
average e5change rate+ in line with the income statement *see I)S '#+
?nrealiEed e8c"ange gains and losses ' not -F but gains and losses on cash and cash
equivalents in a foreign currency are reported in -F statement in order to reconcile
balance of cash and cash equivalents at the start and end of period >? !o be
presented separately from each category of -F
Additional disclosures
-ash and cash equivalents restricted in use
Ipen lines of borrowing facilities
Segment information cash flow statement for each reported segment
.onsolidated F%S and Business .ombinations
.lassification
2>
IAS -< .onsolidated and Separate Financial Statements
Scope
4reparation and presentation of consolidated financial statements
)ccounting for investments in subsidiaries, Hointly controlled entities and associates in separate
financial statements
Related Standards
I)S '@ , Investments in )ssociates
I)S &# , Interests in 1oint Bentures
IFRS & , 9usiness -ombinations
Scope of consolidated F%S
)ll subsidiaries, e5cept if a subsidiary meets the criteria to be classified as held for sale on
acquisition >? accounted for under IFRS 3
Subsidiary not e5cluded simply because its business activities are dissimilar from those of the
Lroup
Presentation of consolidated F%S
) parent should present consolidated financial statements, unless all the following conditions are
met6
Mholly owned or partially8owned subsidiary that received permission from owners other than the
parent"
4arentKs debt or equity instruments are not publicly traded"
4arent is not in the process of a public filing" and
2ltimate or intermediate parent produces IFRS consolidated financial statements
.ontrol ' 4ower to govern the financial and operating policies of an entity so as to obtain benefits
from its activities
4resumed when the parent owns more than 3(X of the voting power, unless it can be clearly
demonstrated that such ownership does not constitute control
If \> 3(X, control also e5ists when6
4ower over more than 3(X by virtue of an agreement
4ower to govern the financial and operating policies of the enterprise under a statute or an
agreement
4ower to appoint or remove the maHority of the members of the board of directors *or equivalent
governing body+
4ower to cast the maHority of votes at meetings of the board of directors or equivalent governing
body
.onsolidated financial statements ' the financial statements of a group presented as those of a
single economic entity
2A
@inorit) interest ' that part of the profit or loss and net asset of a subsidiary attributable to equity
interests that are not owned, directly or indirectly through subsidiaries, by the parent
A group ' a parent and all its subsidiaries
A parent ' an entity that has one or more subsidiaries
A subsidiar) ' an entity, including an unincorporated entity such as a partnership, that is
controlled by another entity *known as the parent+
.onsolidation procedures
Eine8by8line basis
.limination
parent]s investment and portion of equity
intragroup balances, transactions N resulting unrealiDed profits should be eliminated in full
2se of uniform accounting policies ?? adHust if policies are not uniform *no e5emption+
;inority interests
4resented within equity separately from the parent shareholdersK equity
4resented separately the profit or loss of the group
-ase study
)ssumptions6
9 has been founded by )
) owns %3X of the voting rights of 9
) has sold goods to 9 for 3(
!he invoice remains unpaid at year8end and therefore ) has a receivable of 3( against 9 which
in turn has a payable of 3( against )
5=
IAS 2! Interests in Koint Hentures
Scope
)ccounting for interest in Hoint ventures and the reporting of 1B assets, liabilities, income and
e5penses
.5clusions
BenturersK interest in Hointly controlled entities held by6
venture capital organisations
mutual funds, unit trusts and similar entities including investment8linked insurance funds and
classified as held for trading under I)S &$
Interest is classified as held for sale under IFRS 3 >? accounted for under that standard
!he venturer need not present consolidated financial statements under I)S '%
Koint Henture $KH& ' ) contractual arrangement whereby two or more parties undertake an
economic activity that is subHect to Hoint control
Henturer ' ) party to a 1B and has Hoint control over that 1B
Investor in a KH ' ) party to a 1B and does not have Hoint control over that 1B
Koint control ' !he contractually agreed sharing of control over an economic activity, and e5ists
only when the strategic financial and operating decisions relating to the activity require the
unanimous consent of the parties sharing control *the venturers+
.ontractual arrangement
Includes matters such as
activity, duration N reporting obligations of 1B
appointment of the board of directors of the 1B and the voting rights of the venturers
capital contributions by the venturers
the sharing by the venturers of the output, income, e5penses or results of the 1B
.nsure that no single venturer is in a position to control the activity unilaterally
;ay identify one venturer as the operator or manager of the 1B
E*uit) met"od
4rinciples used are similar to those of I)S '@
fair value adHustments N goodwill
adHustments to uniform accounting policy
proportionate eliminations
Proportionate consolidation
Include share *pro rata X investment held+ of assets, liabilities, income N e5penses
5!
4rinciples used similar to those of I)S '%
line8by8line basis
adHustments to uniform accounting policy
proportionate eliminations
JJJ 7o minority interest
Draft standard issued on 1oint )rrangements will supersede I)S &# *final standard e5pected in
'((@+ and removes the option to use proportionate consolidation
- ase
)ssumptions
9 has been founded by )
) owns %3X of the voting rights
-ontrol is e5ercised Hointly with a partner
4isclosure
!he aggregate amount of
contingencies and commitments
current assets, long8term assets, current liabilities, long8term liabilities
income and e5penses
5-
) listing and description of interests in significant Hoint ventures including proportion of ownership
interest held
IAS -> Investments in Associates
Scope
)ccounting for investments in associates, e5cept when it is
held by6
venture capital organisations
mutual Funds, unit trusts and similar entities including investment8linked insurance funds and
classified as held for trading under I)S &$
Related Standards
I)S '% , -onsolidated and Separate Financial Statements
I)S &# , Interests in 1oint Bentures
IFRS & , 9usiness -ombinations
Significant influence ' 4ower to participate in the financial N operating policy decisions of the
investee but is not control *or Hoint control+ over those policies
JJJ 4resumption6 direct or indirect ownership of '(X or more of the voting power of the investee
.5ception6 if clearly demonstrated that significant influence is not obtained !he e5istence of
significant influence is usually evidenced by one of the following ways6
Representation on the board of directors
4articipation in policy making processes *including decisions about dividends+
;aterial transactions between the investor and investee
Interchange of management personnel
4rovision of essential technical information
E*uit) met"od
?? balance sheet
initially recorded at cost and
adHusted thereafter for the post acquisition change in the investor]s share of net assets
?? income statement
investor]s share of the results of operations
-ase
)ssumptions6
) owns %3X of the voting rights but, due to contractual arrangements with the other shareholders,
only e5ercises a significant influence
Data from 9 are the same as in the consolidation e5ample6
Share capital '((
Retained earnings #((
4rofit for the year =(
52
4isclosure
)n appropriate listing and description of significant associates including
proportion of ownership interest
if different, proportion of voting power held
accounting methods used
Ither important disclosures
classification as long8term assets
disclosure as separate items *90S N I0S+
unrecognised share of losses
IFRS 2 Business .ombinations
Draft standard issued will supersede IFRS *final standard still e5pected in '((%+ and will be
applicable starting in '(($
Objective
!o specify the financial reporting by an entity when it undertakes a business combination6
9usiness should be accounted for by applying the purchase method
!he acquirer recognises the acquireeKs
ID.7!IFI)9E. )SS.!S
ID.7!IFI)9E. EI)9IEI!I.S
ID.7!IFI)9E. -I7!I7L.7! EI)9IEI!I.S
55
at their fair values at the acquisition date )7D recogniDes goodwill, which is subsequently
tested for impairment rather than amortiDed
)ll business combinations
!he bringing together of separate entities or businesses into one reporting entity
9usiness
Integrated set of activities and assets conducted and managed for the purposes of providing6
) return to investors or
Eower costs or other economic benefits directly and proportionately to policyholders and
participants
Lenerally consists of6
Inputs
processes applied to those inputs and
Resulting outputs that are, or will be, used to generate revenues
If goodwill is present in a transferred set of activities and assets, the transferred set shall be
presumed to be a business
Scope e5emptions
# 9usiness combinations in which separate entities or businesses are brought together to form a
Hoint venture
' 9usiness combinations involving entities or businesses under common control
& 9usiness combinations involving two or more mutual entities
= 9usiness combinations in which separate entities or businesses are brought together by
contract alone without the obtaining of an ownership interest
Purc"ase accounting Overvie
Identif) an Ac*uirer
-ombining entity that obtains control over the combining entities or businesses
In addition to the concept of control, consider6
Fair value of the combining entities
;ovement of cash or other assets
Selection of the management team of the combined entity
)cquirer for accounting may be different than legal acquirer *a Preverse acquisitionK+
Mhere a new entity is formed, one of the pre8e5isting entities must be identified as the acquirer
.ost of t"e business combination
5;
Included
Fair values, at the date of e5change, of6
)ssets given
Eiabilities incurred or assumed
.quity instruments issued by the acquirer
-osts directly attributable to the combination such as professional fees paid to accountants,
legal advisers, valuers and other consultants to effect the 9-
)dHustment contingent on future events to the e5tend that6
It is probable and
It can be measured reliably
.5cluded
Leneral administrative costs
-osts of arranging and issuing financial liabilities to effect a business combination >? treated
with the liability under I)S &$
-osts of issuing equity instruments to effect a business combination >? reduce the proceeds
from the equity issue under I)S &'
Allocate t"e .ost of t"e .ombination
)t the date of acquisition
Recognise on the consolidated balance sheet the fair values of the acquireeKs identifiable6
)ssets
Eiabilities and
contingent liabilities
if6
It is probable that future economic benefits will flow to *asset+ 0 from *liability+ the acquirer" and
!he fair value can be measured reliably
Special case6 an intangible asset has to be recognised separately if
It is identifiable >? separable IR arises from contractual 0 legal rights
Its fair value can be measured reliably
-ontingent liabilities
Defined in I)S &%
4ossible obligation confirmed by the *non+ occurrence of uncertain future events not
controlled by the entity" IR
4resent obligation but outflow of resources not probable IR obligation cannot be measured
with sufficient reliability
Separately recogniDed if reliable measurement ?? !he fair value is the amount that a third party
would charge to assume the liability >? reflect all e5pectations of possible cash flows
;easurement after initial recognition >? higher of6
!he amount that would be recognised under I)S &%" and
!he amount initially recognised *less cumulative amortisation if appropriate+
Ioodill computation
Recognise as an asset at acquisition date
Do not amortise
!est for impairment at least annually according to I)S &/
5+
L6egative goodillC computation
Reassess
the identification and the measurement of the acquireeKs identifiable assets, liabilities and
contingent liabilities
the measurement of the cost
)ny remaining e5cess *>negative goodwill+ is recogniDed in profit and loss immediately
-ase
-ost of the 9usiness -ombination paid in cash6 ` #(((
Fair value of )ssets acquired and liabilities assumed6
44N.6 '((
Inventory6 #((
-ash6 #3(
Debt6 8#((
)ccounts payable6 83(
7et asset acquired &((
Loodwill6 #((( , &(( > %((
)ccounting entry6
DR 44N. '((
DR Inventory #((
DR -ash #3(
DR Loodwill %((
-R Debt #((
-R )ccounts payable 3(
-R -ash #(((
Initial accounting determined provisionall)
If initial accounting for a business combination can only be determined on a provisional basis
!hat fact shall be disclosed together with the reasons
)ny subsequent adHustment should be recogniDed6
Mithin #' months of the acquisition date
From the acquisition date >? adHust carrying amounts *including goodwill+ and restate
comparative information
)dHustments after initial accounting is complete
Shall be recogniDed only to correct an error in accordance with I)S @, e5cept for6
!he adHustments to the cost contingent on future events
!he recognition of a deferred ta5 asset not recogniDed at initial accounting but subsequently
realiDed -arrying amount of goodwill to be reduced via 40E for the e5tend of the
recognition Such adHustment does not create :negative goodwill<
4isclosures
)cquirer shall disclose information that enables users to evaluate6
7ature N financial effects of 9- effected6
During the period
5<
)fter the balance sheet but before the FS are authoriDed for issue
Financial effects of gains, losses, error corrections and other adHustments recogniDed in the
current period
-hanges in the carrying amount of goodwill
Revenue & Inventor)
IAS !> Revenue
Scope
Recognition of revenue from sale of goods, rendering of services and use by others of enterprise
assets *> interest, royalties and dividends+
.5cluded from scope
-onstruction contracts, leases, insurance, agriculture N other industry specific
Revenue ' Lross inflow of economic benefits, arising in the ordinary course of activities, resulting
in increases in equity, but not contributions from shareholders
@easurement at fair value
Revenue should be measured at the fair value of consideration received
;ost cases6 nominal value of cash received or receivable *net of rebates+
For deferred consideration >? discounting may be necessary
Identification of t"e transaction
Due to the economic substance, some transactions should be
split into component parts >? .5ample6 service element in product sale price
combined into one transaction >? .5ample6 sale and repurchase transaction
Sale of goods
Recognition
Significant risks and rewards of ownership transferred
;anagerial involvement and control ceased
Revenue can be measured reliably
It is probable that economic benefits will flow to the enterprise
-osts can be measured reliably
!ransfer of Risks and Rewards
In most cases, the transfer of risks and rewards of ownership coincides with the transfer of the
legal title or the passing of possession to the buyer
In other cases, the transfer of risks and rewards of ownership occurs at a different time
.5ample6
when the goods are shipped subHect to installation and the installation is a significant part of the
contract which has not yet been completed by the enterprise" and
when the buyer has the right to rescind the purchase for a reason specified in the sales contract
and the enterprise is uncertain about the probability of return
5>
If insignificant risks retained >? revenue recogniDed For e5ample6
a seller may retain the legal title to the goods solely to protect the collectability of the amount
due
retail sale when a refund is offered if the customer is not satisfied *liability for returns is
recogniDed based on previous e5perience and other relevant factors+
Rendering of services
If the outcome can be estimated reliably, ie
revenue can be measured reliably
probable economic benefits
stage of completion N costs incurred and costs to complete can be measured reliably
>? revenue recogniDed based on stage of completion
2nder this method, revenue is recogniDed in the accounting periods in which the services are
rendered
!he stage of completion of a transaction may be determined by a variety of methods6
surveys of work performed"
services performed to date as a percentage of total services to be performed" or
the proportion that costs incurred to date bear to the estimated total costs of the transaction
4rogress payments and advances received from customers often do not reflect the services
performed
.5ample, stage of completion
Interest3 Ro)alties and 4ividends
Similar criteria re probability and reliable measurement
9asis for recognition
Interest ?? effective yield method *Interest revenue includes the amount of amortiDation of any
discount, premium or other difference between the initial carrying amount of a debt
security and its amount at maturity+
Royalties ?? appropriate accrual basis
Dividends ?? when right established
4isclosure
)ccounting policies for the recognition of revenue
)mounts of revenue for each category
the sale of goods
the rendering of services
5A
interest
royalties
dividends
Revenue from e5changes of assets
E8amples
O P9ill and holdK sales, in which delivery is delayed at the buyerKs request but the buyer takes title
and accepts billing
Revenue is recogniDed when the buyer takes title, provided6
it is probable that delivery will be made"
the item is on hand, identified and ready for delivery to the buyer at the time the sale is
recogniDed"
the buyer specifically acknowledges the deferred delivery instructions" and
the usual payment terms apply
Revenue is not recogniDed when there is simply an intention to acquire or manufacture the goods
in time for delivery
O Loods shipped subHect to installation and inspection
Revenue is normally recogniDed when the buyer accepts delivery, and installation and inspection
are complete
Rowever, revenue is recogniDed immediately upon the buyerKs acceptance of delivery when6
the installation process is simple in nature, for e5ample the installation of a factory tested
television receiver which only requires unpacking and connection of power and antennae" or
the inspection is performed only for purposes of final determination of contract prices, for
e5ample, shipments of sugar or soya beans
O Loods shipped subHect to approval when the buyer has negotiated a limited right of return
If there is uncertainty about the possibility of return, revenue is recogniDed when the shipment has
been formally accepted by the buyer or the goods have been delivered and the time period for
reHection has elapsed
O -onsignment sales under which the recipient *buyer+ undertakes to sell the goods on behalf of
the shipper *seller+
Revenue is recogniDed by the shipper when the goods are sold by the recipient to a third party
O Sales under which the goods are delivered only when the buyer makes the final payment in a
series of installments
Revenue from such sales is recogniDed when the goods are delivered
OSale and repurchase agreements *other than swap transactions+ under which the seller
concurrently agrees to repurchase the same goods at a later date
For a sale and repurchase agreement on an asset other than a financial asset, the terms of the
agreement need to be analyDed to ascertain whether, in substance, the seller has transferred the
risks and rewards of ownership to the buyer and hence revenue is recogniDed
Mhen the seller has retained the risks and rewards of ownership, even though legal title has been
transferred, the transaction is a financing arrangement and does not give rise to revenue
;=
O Subscriptions to publications and similar items
Mhen the items involved are of similar value in each time period, revenue is recogniDed on a
straight8line basis over the period in which the items are dispatched
O Installment sales, under which the consideration is receivable in installments
Revenue attributable to the sales price, e5clusive of interest, is recogniDed at the date of sale !he
sale price is the present value of the consideration, determined by discounting the installments
receivable at the imputed rate of interest !he interest element is recogniDed as revenue as it is
earned, using the effective interest method
O Installation fees
Installation fees are recogniDed as revenue by reference to the stage of completion of the
installation, unless they are incidental to the sale of a product, in which case they are recogniDed
when the goods are sold
OO Servicing fees included in the price of the product
Mhen the selling price of a product includes an identifiable amount for subsequent servicing *for
e5ample, after sales support and product enhancement on the sale of software+, that amount is
deferred and recogniDed as revenue over the period during which the service is performed !he
amount deferred is that which will cover the e5pected costs of the services under the agreement,
together with a reasonable profit on those services
OO )dvertising commissions
;edia commissions are recogniDed when the related advertisement or commercial appears
before the public 4roduction commissions are recogniDed by reference to the stage of completion
of the proHect
OO )dmission fees
Revenue from artistic performances, banquets and other special events is recogniDed when the
event takes place Mhen a subscription to a number of events is sold, the fee is allocated to each
event on a basis, which reflects the e5tent to which services are performed at each event
OO ;embership fees
Revenue recognition depends on the nature of the services provided If the fee permits only
membership, and all other services or products are paid for separately, or if there is a separate
annual subscription, the fee is recogniDed as revenue when no significant uncertainty as to its
collectability e5ists
If the fee entitles the member to services or publications to be provided during the membership
period, or to purchase goods or services at prices lower than those charged to non8members, it is
recogniDed on a basis that reflects the timing, nature and value of the benefits provided
IAS - Inventories
Objective
-osts to be recogniDed as an asset
costs of purchase, costs of conversion
other costs incurred in bringing the inventories to their present location and condition
;!
Determination of cost ?? lower of cost and net realiDable value
Scope
!he Standard applies to all inventories other than
work in progress arising under construction contracts *I)S ##+
financial instruments *I)S &'+
livestock, agricultural products, mineral ores *I)S =#+
Inventories ' assets held for sale in the ordinary course of business, in the process of production
or raw materials or supplies to be consumed in the production process or in the rendering of
services
Recognition
;atching of revenue and cost
Recognition according to I)S #@
risks and rewards of ownership have transferred
effective control over goods
cost can be measured reliably
economic benefits flow to enterprise
.ost of inventories
-ost of purchase
purchase price
import duties
non8recoverable ta5es
transport
other costs directly attributable to acquisition
-ost of conversion
costs directly related to units of production
direct materials
direct labour
systematic allocation of
fi5ed production overheads
variable production overheads
@easurement of cost
Ristorical cost method ?? cost formulas
!echniques of measurement
?? standard cost method
?? retail cost method
-ost formulas
?? FIFI *first8in, first8out+
?? Meighted average
-onsistency ?? use same cost formula for inventories of similar nature and use
@easurement
Eower of cost or net realiDable value
;-
6et realiEable value
4isclosures
accounting policy including cost formula
inventories, classification0carrying amount
carrying amount of items at 7RB
disclosure of recogniDed e5penses
cost of inventories" or
operating costs, applicable to revenues, classified by their nature
@IHB
;2
De kans dat het openbaar vervoer in het 9russels gewest op dinsdag #( april nog op gang wordt getrokken,
is quasi nihil geworden De socialistische vakbond geeft toe dat de regeringsvoorstellen voor biHkomende
maatregelen aniet Do slecht DiHn, maar toch nog moeten worden biHgeschaafda
Ret gemeenschappeliHk vakbondsfront komt later nog samen om een standpunt in te nemen in overleg met
de algemene directie van de ;IB9 Dat meldt Dario -oppens van het )-ID Iok de christeliHke vakbond
)-B denkt niet dat het werk dinsdag nog hervat Dal worden
a)ls we het werk hervatten, Dal dat in samenspraak met de andere vakbonden gebeuren Ret wantrouwen biH
de achterban is groot Dat wantrouwen willen we wegnemen met een stakingsaanDegging op het moment
dat het werk wordt hervat )ls de politiek haar beloftes niet houdt, leggen we dan opnieuw het werk neera,
aldus Euc Smekens van het )-B
VVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVV
Sta,erspi,et Garen
aDaarnaast waren er stakersposten opgetrokken voor de stelplaatsen van Raren, Schaarbeek en ;olenbeek
maar rond /#( uur werden die twee laatste opgehevena, voegt Sablon nog toe Ret stakerspiket aan de
stelplaats van Raren waar bussen en trams gestationeerd staan, is nog steeds bemand
9innen de socialistische vakbond )-ID DiHn er onderhandelingen opgestart over het opdoeken het
stakerspiket aan de ingang van de stelplaats in Raren !rams of bussen kunnen er niet uitriHden Ret piket
wordt bevolkt door socialistische en liberale vakbondsleden
De onderhandelingen in Raren verlopen via de dblbgubs op het terrein en de vice8voorDitter van het )-ID
die ter plaatse is gekomen aIf het piket biH de middagwissel om #= uur wordt opgedoekt, bliHft onduideliHka,
Degt -oppens
A.H roept liberale en socialistisc"e va,bonden op blo,,ade te stoppen
De christeliHke vakbond )-B roept de leden van de socialistische en liberale vakbonden op te stoppen met
de blokkade aDat was niet de afspraaka, Degt Euc Smekens van het )-B die Delf afDakte naar Raren
aMe hebben vastgesteld dat de werkwilligen onder druk DiHn geDet om niet uit te riHden Dat vinden we niet
kunnen en daarom vragen we om de blokkade van de stelplaats in Raren Do snel mogeliHk op te heffena,
benadrukt Smekens
Iok in de andere stelplaatsen wordt het uitriHden van de bussen nog steeds bemoeiliHkt
A.H eer aan de slag
De christeliHke bond )-B besliste om weer aan de slag te gaan na het dodeliHk incident van afgelopen
Daterdag De socialistische en liberale bonden hebben aangekondigd om verder actie te voeren
een persbericht vraagt de ;IB98directie de stakende werknemers nogmaals om het werk onmiddelliHk te
hervatten aRet is nu tiHd om alle emoties opDiH te Detten en te doen waarvoor wiH de voorbiHe dagen DiHn
opgekomen6 een kwalitatief en veilig openbaar vervoer ten dienste van onDe stad en met respect voor
iedereen De geloofwaardigheid van de ;IB9 hangt hiervan afa
Cris Eauwers, directeur8generaal ad interim van de vervoersmaatschappiH, voegt eraan toe dat hiH, aals
;IB9]er en 9russelaar niet wil dat wiH geDien worden als weinig constructieve mensen die een uitgestoken
hand niet weten te apprecicrena
;5