IFRS model financial statements

A S S U R A N C E A N D A DV I S O RY B U S I N E S S S E RV I C E S !@# Good Group (International) Limited International GAAP® Illustrative Financial Statements Based on International Financial Reporting Standards in issue at 31 May 2005 © Copyright EYGM Limited 2005 All rights reserved Ernst & Young is a registered trademark ® International GAAP is a registered trademark of Ernst & Young LLP Global IFRS Services Ernst & Young Global Limited Becket House Lambeth Palace Road London SE1 7EU United Kingdom E-mail: ifrs@uk.ey.com First Edition published in 2002 Second Edition published in 2004 Third Edition published in 2005 by: Ernst & Young Global Limited http://www.ey.com http://www.ey.com/ifrs This publication has been carefully prepared, but it necessarily contains information in summary form and is therefore intended for general guidance only, and is not intended to be a substitute for detailed research or the exercise of professional judgement Ernst & Young can accept no responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication On any specific matter, reference should be made to the appropriate adviser Contents Page Abbreviations and Key Introduction General Information Financial Review by Management 10 Independent Auditors' Report 16 Consolidated Income Statement 17 Consolidated Balance Sheet 18 Consolidated Statement of Changes in Equity .19 Consolidated Cash Flow Statement .21 Corporate information 22 2.1 Basis of preparation 22 2.2 Changes in accounting policies 22 2.3 Significant accounting judgements and estimates 24 2.4 Summary of significant accounting policies .25 2.5 Adoption of IFRSs during the year 37 Business combination 39 Interest in a joint venture 40 Segment information 40 Other revenues and expenses .44 Income tax 46 Discontinued operation 48 Earnings per share 49 10 Dividends paid and proposed 49 11 Property, plant and equipment 50 12 Investment properties 52 13 Intangible assets 52 14 Investment in an associate 54 15 Impairment testing of goodwill and intangibles with indefinite lives 54 16 Available-for-sale investments 55 17 Other financial assets (non-current) 55 18 Share-based payment plans 55 19 Pensions and other post-employment benefit plans .57 20 Inventories 60 21 Trade and other receivables (current) .60 22 Cash and short-term deposits 60 23 Issued capital and reserves 61 24 Interest-bearing loans and borrowings .62 25 Provisions .63 26 Government grants .64 27 Trade and other payables (current) 64 28 Commitments and contingencies 65 29 Related party disclosures 66 30 Financial risk management objectives and policies .68 31 Financial instruments 70 32 Events after the balance sheet date 73 General comments on the financial statements 74 Comments on Financial Review by Management 78 Comments on the Independent Auditors' Report .79 Contents Comments on Consolidated Income Statement 81 Comments on Consolidated Balance Sheet 84 Comments on Consolidated Statement of Changes in Equity 87 Comments on Consolidated Cash Flow Statement 89 Comments on notes to the consolidated financial statements 89 Appendix - Illustrative disclosures for a first-time adopter of IFRS 152 Index 157 Abbreviations and Key Abbreviations The following styles of abbreviation are used in the International GAAP Illustrative Financial Statements: IAS 33.41 International Accounting Standard No 33, paragraph 41 IAS BC 13 International Accounting Standard No 1, Basis for Conclusions, paragraph 13 IFRS 2.44 International Financial Reporting Standard No 2, paragraph 44 SIC-29.6 Standing Interpretations Committee Interpretation No 29, paragraph IFRIC 4.6 International Financial Reporting Interpretations Committee Interpretation No 4, paragraph IAS 39.IG.G.2 IAS 39 ‘Financial Instruments: Recognition and Measurement’ – Guidance on Implementing IAS 39 Section G: Other, paragraph G.2 IAS 39 AG71 IAS 39 ‘Financial Instruments: Recognition and Measurement’ – Appendix A – Application Guidance, Paragraph AG71 ISA 700.25 International Standard on Auditing No 700, paragraph 25 Author’s Note Author’s notes explain how the requirements of IFRS have been interpreted in arriving at the illustrative disclosure GAAP Generally Accepted Accounting Principles IASB International Accounting Standards Board Key When the commentary accompanying the financial statements is italicised, it indicates that the requirement discussed is not illustrated or it refers to an alternative in a particular standard which has not been chosen Such narrative has not been given for every conceivable disclosure requirement, for which reference should be made to the International GAAP® Disclosure Checklist 2005 When the narrative is preceded by an asterisk*, it indicates that the disclosure is recommended by an IFRS, SIC Interpretation or IFRIC Interpretation but the disclosure is not mandatory Introduction This volume contains the annual report and consolidated financial statements of a fictitious company, Good Group (International) Limited, a manufacturing company with subsidiaries (‘the Group’), incorporated and listed in Euroland, with a reporting date of 31 December Euroland is a fictitious country within Europe, whose currency is euros (€) The Group’s functional and presentation currency is euros Each section of the financial statements of the Group is cross-referenced to a commentary section included after the complete set of financial statements The purpose of this commentary section is to illustrate the significant IFRS requirements related to the particular section This commentary includes both IFRS requirements that are disclosed or followed in the financial statements and those that are not (shown in italics) In addition to this commentary, IFRS references are shown on the right hand side of each page of the financial statements indicating the specific IFRS paragraph that outlines the actual accounting treatment or disclosure adopted for that particular line item or block of narrative These illustrative financial statements are not intended to satisfy country or stock market regulations in any given jurisdiction and may have to be significantly altered to meet such requirements These financial statements are illustrative only, and not attempt to show all possible accounting and disclosure requirements In case of doubt as to the requirements, it is essential to refer to the relevant source and, where necessary, to seek appropriate professional advice Please note that although the illustrative financial statements endeavour to illustrate the most usual disclosures expected to be found in the financial statements of a large manufacturing company, they should not be regarded as including every possible disclosure International Financial Reporting Standards (IFRSs) The abbreviation IFRSs is defined in paragraph of the new Preface to International Financial Reporting Standards to include “standards and interpretations approved by the IASB, and International Accounting Standards (IASs) and SIC interpretations issued under previous Constitutions.” Thus, when financial statements are described as complying with IFRSs, this means that they comply with the entire hierarchy of pronouncements sanctioned by the IASB including International Accounting Standards, International Financial Reporting Standards and Interpretations originated by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee The International Financial Reporting Interpretations Committee (IFRIC) The International Financial Reporting Interpretations Committee (IFRIC) is a committee appointed by the IASC Foundation Trustees that assists the IASB in establishing and improving standards of financial accounting and reporting for the benefit of users, preparers and auditors of financial statements The IFRIC addresses issues of reasonably widespread importance, and not issues of concern to only a small set of entities The interpretations cover both: • newly identified financial reporting issues not specifically addressed in IFRSs; or • issues where unsatisfactory or conflicting interpretations have developed, or seem likely to develop in the absence of authoritative guidance, with a view to reaching a consensus on the appropriate treatment At the time of writing, IFRIC had issued six interpretations IFRIC “Emission Rights” has been withdrawn by the IASB IFRSs as at 31 May 2005 The standards applied in the financial statements are those that were in issue as at 31 May 2005 It is important to note that these financial statements will require continual update, as standards are issued and/or revised by the IASB Standards applied in the Illustrative Financial Statements are: International Financial Reporting Standards (IFRSs) IFRS IFRS IFRS Share-based Payment (adopted by the Group for the first time in 2005) Business Combinations (adopted by the Group for the first time in 2005) Non-current Assets Held for Sale and Discontinued Operations (adopted by the Group for the first time in 2005) Introduction International Accounting Standards (IASs) IAS IAS IAS IAS IAS 10 IAS 12 IAS 14 IAS 16 IAS 17 IAS 18 IAS 19 IAS 20 IAS 21 IAS 23 IAS 24 IAS 27 IAS 28 IAS 31 IAS 32 IAS 33 IAS 36 IAS 37 IAS 38 IAS 39 IAS 40 Presentation of Financial Statements Inventories Cash Flow Statements Accounting Policies, Changes in Accounting Estimates and Errors Events after the Balance Sheet Date Income Taxes Segment Reporting Property, Plant and Equipment (the revised standard adopted by the Group for the first time in 2005) Leases Revenue Employee Benefits (including the amendments made in December 2004 applicable for annual periods beginning on or after January 2006) Accounting for Government Grants and Disclosure of Government Assistance The Effects of Changes in Foreign Exchange Rates (the revised standard adopted by the Group for the first time in 2005) Borrowing Costs Related Party Disclosures Consolidated and Separate Financial Statements Investments in Associates Interests in Joint Ventures Financial Instruments: Disclosures and Presentation Earnings Per Share Impairment of Assets Provisions, Contingent Liabilities and Contingent Assets Intangible Assets Financial Instruments: Recognition and Measurement (as at 28 February 2005) Investment Property The following Standards have not been dealt with in these financial statements: IFRS IFRS IFRS IFRS IAS 11 IAS 26 IAS 29 IAS 30 IAS 34 IAS 41 First-time Adoption of International Financial Reporting Standards Insurance Contracts Exploration for and Evaluation of Mineral Resources Financial Instruments: Disclosures Construction Contracts Accounting and Reporting by Retirement Benefit Plans Financial Reporting in Hyperinflationary Economies Disclosures in the Financial Statements of Banks and Similar Financial Institutions Interim Financial Reporting Agriculture Therefore, users of this publication are cautioned to verify that there has been no change in the requirements of IFRSs between 31 May 2005 and their reporting date The Group is an existing IFRS preparer Thus, these financial statements not reflect the additional requirements for first-time adopters under IFRS ‘First-time Adoption of International Financial Reporting Standards’ (IFRS 1) and as such the disclosures of this Standard have not been incorporated IFRS provides the basis on which first-time adopters convert their financial statements from local GAAP to IFRSs We have provided examples of possible disclosures for a first-time adopter in the Appendix on pages 152 - 156 This example is based on Example 11 included in the Implementation Guidance of IFRS However, users are cautioned to refer directly to IFRS and obtain professional assistance in their own conversion process as the Appendix does not illustrate all possible disclosures and in deriving examples for the reconciling items, we have not attempted to use any country specific GAAP The financial statements not attempt to comply with local statutory or listing authority requirements or disclosures in any particular jurisdiction Introduction Benchmark and allowed alternative treatments In some cases, IFRSs permit two accounting treatments for like transactions and events, with one treatment described as a benchmark treatment and the other as an allowed alternative treatment Preparers of financial statements may choose which treatment to adopt IAS requires an entity to select and apply its accounting policies consistently for similar transactions, other events and conditions, unless an IFRS specifically requires or permits categorisation of items for which different policies may be appropriate Where an IFRS requires or permits such categorisation, an appropriate accounting policy shall be selected and applied consistently to each category Therefore, once a choice of benchmark or allowed alternative treatment has been made, it becomes a matter of accounting policy and must be applied consistently Changes in accounting policy should only be made in accordance with IAS 8.14 In this publication, where a choice is permitted by an International Financial Reporting Standard, the Group has adopted either the benchmark or allowed alternative treatment as appropriate to the circumstances of the Group On the commentary pages, both treatments are described, with the treatment adopted shown in normal font, and the other treatment shown in italics Good Group (International) Limited Annual Report and Consolidated Financial Statements 31 December 2005 CONTENTS OF THE FINANCIAL STATEMENTS Page General Information Financial Review by Management 10 Independent Auditors' Report 16 Consolidated Income Statement 17 Consolidated Balance Sheet 18 Consolidated Statement of Changes in Equity 19 Consolidated Cash Flow Statement 21 Corporate information 22 2.1 Basis of preparation 22 2.2 Changes in accounting policies 22 2.3 Significant accounting judgements and estimates 24 2.4 Summary of significant accounting policies 25 2.5 Adoption of IFRSs during the year 37 Business combination 39 Interest in a joint venture 40 Segment information 40 Other revenues and expenses 44 Income tax 46 Discontinued operation 48 Earnings per share 49 10 Dividends paid and proposed 49 11 Property, plant and equipment 50 12 Investment properties 52 13 Intangible assets 52 14 Investment in an associate 54 15 Impairment testing of goodwill and intangibles with indefinite lives 54 16 Available-for-sale investments 55 17 Other financial assets (non-current) 55 18 Share-based payment plans 55 19 Pensions and other post-employment benefit plans 57 20 Inventories 60 21 Trade and other receivables (current) 60 22 Cash and short-term deposits 60 23 Issued capital and reserves 61 24 Interest-bearing loans and borrowings 62 25 Provisions 63 26 Government grants 64 27 Trade and other payables (current) 64 28 Commitments and contingencies 65 29 Related party disclosures 66 30 Financial risk management objectives and policies 68 31 Financial instruments 70 32 Events after the balance sheet date 73 Illustrative financial statements COMMENTS ON NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS IAS 32.8 IAS 32 shall be applied to those contracts to buy or sell a non-financial item that can be settled net in cash or another financial instrument, or by exchanging financial instruments, as if the contracts were financial instruments, with the exception of contracts that were entered into and continue to be held for the purpose of the receipt or delivery of a non-financial item in accordance with the entity’s expected purchase, sale or usage requirements IAS 39.3 Financial guarantee contracts are subject to IAS 39 if they provide for payments to be made in response to changes in a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract IAS 39.4 Loan commitments that the entity designates as financial liabilities at fair value through profit or loss are within the scope of this Standard An entity that has a past practice of selling the assets resulting from its loan commitments shortly after origination shall apply this Standard to all its loan commitments in the same class IAS 39.5 IAS 39 shall be applied to those contracts to buy or sell a non-financial item that can be settled net in cash or another financial instrument, or by exchanging financial instruments, as if the contracts were financial instruments, with the exception of contracts that were entered into and continue to be held for the purpose of the receipt or delivery of a non-financial item in accordance with the entity’s expected purchase, sale or usage requirements General IAS 32.52 Transactions in financial instruments may result in an entity assuming or transferring to another party one or more of the financial risks described below The required disclosures provide information to assist users of financial statements in assessing the extent of risk related to financial instruments • Market risk includes three types of risk: • currency risk—the risk that the value of a financial instrument will fluctuate because of changes in foreign exchange rates • fair value interest rate risk—the risk that the value of a financial instrument will fluctuate because of changes in market interest rates • price risk—the risk that the value of a financial instrument will fluctuate as a result of changes in market prices, whether those changes are caused by factors specific to the individual instrument or its issuer or factors affecting all instruments traded in the market Market risk embodies not only the potential for loss but also the potential for gain • Credit risk—the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss • Liquidity risk (also referred to as funding risk)—the risk that an entity will encounter difficulty in raising funds to meet commitments associated with financial instruments Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value • Cash flow interest rate risk—the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates In the case of a floating rate debt instrument, for example, such fluctuations result in a change in the effective interest rate of the financial instrument, usually without a corresponding change in its fair value IAS 32.55 The management of an entity groups financial instruments into classes that are appropriate to the nature of the information disclosed, taking into account matters such as the characteristics of the instruments and the measurement basis that has been applied In general, classes distinguish items measured at cost or amortised cost from items measured at fair value Sufficient information is provided to permit a reconciliation to relevant line items on the balance sheet When an entity is a party to financial instruments not within the scope of this Standard, those instruments constitute a class or classes of financial assets or financial liabilities separate from those within the scope of this Standard Disclosures about those financial instruments are dealt with by other IFRSs 146 Consolidated Good Group (International) Limited COMMENTS ON NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS IAS 32.63 When financial instruments held or issued by an entity, either individually or as a class, create a potentially significant exposure to the risks described in paragraph 52, terms and conditions that warrant disclosure include: • the principal, stated, face or other similar amount which, for some derivative instruments, such as interest rate swaps, might be the amount (referred to as the notional amount) on which future payments are based; • the date of maturity, expiry or execution; • early settlement options held by either party to the instrument, including the period in which, or date at which, the options can be exercised and the exercise price or range of prices; • options held by either party to the instrument to convert the instrument into, or exchange it for, another financial instrument or some other asset or liability, including the period in which, or date at which, the options can be exercised and the conversion or exchange ratio(s); • the amount and timing of scheduled future cash receipts or payments of the principal amount of the instrument, including instalment repayments and any sinking fund or similar requirements; • stated rate or amount of interest, dividend or other periodic return on principal and the timing of payments; • collateral held, in the case of a financial asset, or pledged, in the case of a financial liability; • in the case of an instrument for which cash flows are denominated in a currency other than the entity’s functional currency, the currency in which receipts or payments are required; • in the case of an instrument that provides for an exchange, information described above for the instrument to be acquired in the exchange; and • any condition of the instrument or an associated covenant that, if contravened, would significantly alter any of the other terms (for example, a maximum debt-to-equity ratio in a bond covenant that, if contravened, would make the full principal amount of the bond due and payable immediately) IAS 32.65 The usefulness of information about the extent and nature of financial instruments is enhanced when it highlights any relationship between individual instruments that can significantly affect the amount, timing or certainty of the future cash flows of an entity For example, it may be important to disclose hedging relationships such as one that might exist when an entity holds an investment in shares for which it has purchased a put option The extent to which a risk exposure is altered by the relationship among the assets and liabilities may be apparent to financial statement users from information of the type described in paragraph 63, but in some circumstances further disclosure is necessary IAS 32.94 Derecognition An entity may have either transferred a financial asset (see paragraph 18 of IAS 39) or entered into the type of arrangement described in paragraph 19 of IAS 39 in such a way that the arrangement does not qualify as a transfer of a financial asset If the entity either continues to recognise all of the asset or continues to recognise the asset to the extent of the entity’s continuing involvement (see IAS 39, paragraphs 29 and 30) it shall disclose for each class of financial asset: • the nature of the assets; • the nature of the risks and rewards of ownership to which the entity remains exposed; • when the entity continues to recognise all of the asset, the carrying amounts of the asset and of the associated liability; and • when the entity continues to recognise the asset to the extent of its continuing involvement, the total amount of the asset, the amount of the asset that the entity continues to recognise and the carrying amount of the associated liability Collateral • An entity shall disclose the carrying amount of financial assets pledged as collateral for liabilities, the carrying amount of financial assets pledged as collateral for contingent liabilities, and any material terms and conditions relating to assets pledged as collateral • When an entity has accepted collateral that it is permitted to sell or repledge in the absence of default 147 Illustrative financial statements COMMENTS ON NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS by the owner of the collateral, it shall disclose: the fair value of the collateral accepted (financial and non-financial assets); the fair value of any such collateral sold or repledged and whether the entity has an obligation to return it; and • any material terms and conditions associated with its use of this collateral Compound financial instruments with multiple embedded derivatives If an entity has issued an instrument that contains both a liability and an equity component and the instrument has multiple embedded derivative features whose values are interdependent (such as a callable convertible debt instrument), it shall disclose the existence of those features and the effective interest rate on the liability component (excluding any embedded derivatives that are accounted for separately) Financial assets and financial liabilities at fair value through profit or loss • An entity shall disclose the carrying amounts of financial assets and financial liabilities that: • are classified as held for trading; and • were, upon initial recognition, designated by the entity as financial assets and financial liabilities at fair value through profit or loss (ie those that are not financial instruments classified as held for trading) • If the entity has designated a financial liability as at fair value through profit or loss, it shall disclose: • the amount of change in its fair value that is not attributable to changes in a benchmark interest rate (eg LIBOR); and • the difference between its carrying amount and the amount the entity would be contractually required to pay at maturity to the holder of the obligation Reclassification If the entity has reclassified a financial asset as one measured at cost or amortised cost rather than at fair value, it shall disclose the reason for that reclassification Income statement and equity • An entity shall disclose material items of income, expense and gains and losses resulting from financial assets and financial liabilities, whether included in profit or loss or as a separate component of equity For this purpose, the disclosure shall include at least the following items: • total interest income and total interest expense (calculated using the effective interest method) for financial assets and financial liabilities that are not at fair value through profit or loss; • for available-for-sale financial assets, the amount of any gain or loss recognised directly in equity during the period and the amount that was removed from equity and recognised in profit or loss for the period; and • the amount of interest income accrued on impaired financial assets Impairment An entity shall disclose the nature and amount of any impairment loss recognised in profit or loss for a financial asset, separately for each significant class of financial asset Defaults and breaches With respect to any defaults of principal, interest, sinking fund or redemption provisions during the period on loans payable recognised as at the balance sheet date, and any other breaches during the period of loan agreements when those breaches can permit the lender to demand repayment (except for breaches that are remedied, or in response to which the terms of the loan are renegotiated, on or before the balance sheet date), an entity shall disclose: • details of those breaches; • the amount recognised as at the balance sheet date in respect of the loans payable on which the breaches occurred; and • with respect to amounts disclosed under (ii), whether the default has been remedied or the terms of the loans payable renegotiated before the date the financial statements were authorised for issue • • 148 Consolidated Good Group (International) Limited COMMENTS ON NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Fair values IAS 32.86 Except as set out in paragraphs 90 and 91A, for each class of financial assets and financial liabilities, an entity shall disclose the fair value of that class of assets and liabilities in a way that permits it to be compared with the corresponding carrying amount in the balance sheet IAS 32.87 Fair value information is widely used for business purposes in determining an entity’s overall financial position and in making decisions about individual financial instruments It is also relevant to many decisions made by users of financial statements because, in many circumstances, it reflects the judgement of the financial markets about the present value of expected future cash flows relating to an instrument Fair value information permits comparisons of financial instruments having substantially the same economic characteristics, regardless of why they are held and when and by whom they were issued or acquired Fair values provide a neutral basis for assessing management’s stewardship by indicating the effects of its decisions to buy, sell or hold financial assets and to incur, maintain or discharge financial liabilities When an entity does not measure a financial asset or financial liability in its balance sheet at fair value, it provides fair value information through supplementary disclosures IAS 32.88 For financial instruments such as short-term trade receivables and payables, no disclosure of fair value is required when the carrying amount is a reasonable approximation of fair value IAS 32.89 In disclosing fair values, an entity groups financial assets and financial liabilities into classes and offsets them only to the extent that their related carrying amounts are offset in the balance sheet IAS 32.90 If investments in unquoted equity instruments or derivatives linked to such equity instruments are measured at cost under IAS 39 because their fair value cannot be measured reliably, that fact shall be disclosed together with a description of the financial instruments, their carrying amount, an explanation of why fair value cannot be measured reliably and, if possible, the range of estimates within which fair value is highly likely to lie Furthermore, if financial assets whose fair value previously could not be reliably measured are sold, that fact, the carrying amount of such financial assets at the time of sale and the amount of gain or loss recognised shall be disclosed IAS 32.91 If investments in unquoted equity instruments or derivatives linked to such equity instruments are measured at cost under IAS 39 because their fair values cannot be measured reliably, the information about fair value set out in paragraphs 86 and 92 is not required to be disclosed Instead, information is provided to assist users of the financial statements in making their own judgements about the extent of possible differences between the carrying amount of such financial assets and financial liabilities and their fair value In addition to an explanation of the principal characteristics of the financial instruments that are pertinent to their value and the reason for not disclosing fair values, information is provided about the market for the instruments In some cases, the terms and conditions of the instruments disclosed in accordance with paragraph 60 may provide sufficient information When it has a reasonable basis for doing so, management may indicate its opinion on the relationship between fair value and the carrying amount of financial assets and financial liabilities for which it is unable to determine fair value reliably IAS 32.91A Some financial assets and financial liabilities contain a discretionary participation feature as described in IFRS If an entity cannot measure reliably the fair value of that feature, the entity shall disclose that fact together with a description of the contract, its carrying amount, an explanation of why fair value cannot be measured reliably and, if possible, the range of estimates within which fair value is highly likely to lie 149 Illustrative financial statements COMMENTS ON NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS IAS 32.92 An entity shall disclose: • the methods and significant assumptions applied in determining fair values of financial assets and financial liabilities separately for significant classes of financial assets and financial liabilities • whether fair values of financial assets and financial liabilities are determined directly, in full or in part, by reference to published price quotations in an active market or are estimated using a valuation technique • whether its financial statements include financial instruments measured at fair values that are determined in full or in part using a valuation technique based on assumptions that are not supported by observable market prices or rates If changing any such assumption to a reasonably possible alternative would result in a significantly different fair value, the entity shall state this fact and disclose the effect on the fair value of a range of reasonably possible alternative assumptions For this purpose, significance shall be judged with respect to profit or loss and total assets or total liabilities • the total amount of the change in fair value estimated using a valuation technique that was recognised in profit or loss during the period Hedging activities IAS 32.56 IAS 32.58 IAS 32.59 IAS 39.98 An entity shall describe its financial risk management objectives and policies, including its policy for hedging each main type of forecast transaction for which hedge accounting is used An entity shall disclose the following separately for designated fair value hedges, cash flow hedges and hedges of a net investment in a foreign operation (as defined in IAS 39): • a description of the hedge; • a description of the financial instruments designated as hedging instruments and their fair values at the balance sheet date; • the nature of the risks being hedged; and • for cash flow hedges, the periods in which the cash flows are expected to occur, when they are expected to enter into the determination of profit or loss, and a description of any forecast transaction for which hedge accounting had previously been used but which is no longer expected to occur When a gain or loss on a hedging instrument in a cash flow hedge has been recognised directly in equity, through the statement of changes in equity, an entity shall disclose: • the amount that was so recognised in equity during the period; • the amount that was removed from equity and included in profit or loss for the period; and • the amount that was removed from equity during the period and included in the initial measurement of the acquisition cost or other carrying amount of a non-financial asset or non-financial liability in a hedged highly probable forecast transaction If a hedge of a forecast transaction subsequently results in the recognition of a non-financial asset or a non-financial liability, or a forecast transaction for a non-financial asset or nonfinancial liability becomes a firm commitment for which fair value hedge accounting is applied, then the entity shall adopt either of the following: • It reclassifies the associated gains and losses that were recognised directly in equity in accordance with paragraph 95 into profit or loss in the same period or periods during which the asset acquired or liability assumed affects profit or loss (such as in the periods that depreciation expense or cost of sales is recognised) However, if an entity expects that all or a portion of a loss recognised directly in equity will not be recovered in one or more future periods, it shall reclassify into profit or loss the amount that is not expected to be recovered • It removes the associated gains and losses that were recognised directly in equity in accordance with paragraph 95, and includes them in the initial cost or other carrying amount of the asset or liability Events after the balance sheet date IAS 10.10 150 (Accounts page 73) An entity shall not adjust the amounts recognised in its financial statements to reflect nonadjusting events after the balance sheet date Consolidated Good Group (International) Limited COMMENTS ON NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS IAS 10.19 If an entity receives information after the balance sheet date about conditions that existed at the balance sheet date, it shall update disclosures that relate to those conditions, in the light of the new information IAS 10.21 If non-adjusting events after the balance sheet date are material, non-disclosure could influence the economic decisions of users taken on the basis of the financial statements Accordingly, an entity shall disclose the following for each material category of nonadjusting event after the balance sheet date: • the nature of the event; and • an estimate of its financial effect, or a statement that such an estimate cannot be made 151 APPENDIX – ILLUSTRATIVE DISCLOSURES FOR A FIRSTTIME ADOPTER OF IFRS Appendix illustrates possible disclosures for a first-time adopter Nevertheless, users should be cautioned as Appendix does not cover all possible accounting reconciliations and we have not attempted to use any country specific GAAP Therefore as it is a purely hypothetical illustration which has been based upon Example 11 included in the Implementation Guidance of IFRS ‘First-time Adoption of International Financial Reporting Standards’, we strongly encourage entities to obtain professional assistance where required Should you wish to refer to the disclosure requirements of IFRS 1, they are detailed in our 2005 International GAAP® disclosure checklist IFRS does not provide exemptions from the presentation and disclosure requirements in other IFRS A first-time adopter should provide all disclosures required by each IFRS in addition to the information required by IFRS described below IFRS requires an entity to explain how the transition from previous GAAP to IFRS affected its reported financial position, financial performance and cash flows Reconciliations IFRS states that an entity’s first IFRS financial statements shall include: (a) reconciliations of its equity reported under previous GAAP to its equity under IFRS for both of the following dates: • the date of transition to IFRS; and • the end of the latest period presented in the entity’s most recent annual financial statements under previous GAAP; (b) a reconciliation of the profit or loss reported under previous GAAP for the latest period in the entity’s most recent annual financial statements to its profit or loss under IFRS for the same period; (c) if the entity recognised or reversed any impairment losses in preparing its opening IFRS balance sheet, the disclosures that IAS 36 Impairment of Assets would have required if the entity had recognised those impairment losses or reversals in the period beginning with the date of transition to IFRS; and (d) a reconciliation of the aggregate adjustment to the carrying amount reported under previous GAAP where the entity uses fair value in its balance sheet as deemed cost for either an item of property, plant and equipment, investment property or an intangible asset IFRS provides that the reconciliations required should give sufficient detail to enable users to understand the material adjustments to the balance sheet and income statement If an entity presented a cash flow statement under its previous GAAP, it shall also explain the material adjustments to the cash flow statement Comparatives IFRS requires the entity to present at least one year of comparative information complying with IFRS However, where the entity adopts IFRS prior to January 2006 and its comparative information does not comply with IAS 32 ‘Financial Instruments: Disclosure and Presentation’, IAS 39 ‘Financial Instruments: Recognition and Measurement’ and IFRS ‘Insurance Contracts’ it should apply its previous GAAP to any financial instruments within the scope of IAS 32 and IAS 39 and any insurance contracts within the scope of IFRS The entity is required to disclose the fact that for these items previous GAAP has been complied with and the basis used to prepare the information in addition to the nature and main adjustments making the information compliant with IAS 32, IAS 39 and IFRS 152 APPENDIX - ILLUSTRATIVE DISCLOSURES FOR A FIRSTTIME ADOPTER OF IFRS Correction of errors If an entity becomes aware of errors made under previous GAAP, the reconciliations required by IFRS should distinguish the correction of those errors from changes in accounting policies IAS ‘Accounting Policies, Changes in Accounting Estimates and Errors’ does not deal with changes in accounting policies that occur when an entity first adopts IFRS Therefore, IFRS states that IAS 8’s requirements for disclosures about changes in accounting policies not apply in an entity’s first IFRS financial statements IFRS also requires an entity that did not present financial statements for previous periods, to disclose that fact in its first IFRS financial statements The example below is an excerpt from the implementation guidance in IFRS It provides useful indications on the quality of information and level of detail that are expected from a first-time adopter in the explanation of the transition 153 APPENDIX – ILLUSTRATIVE DISCLOSURES FOR A FIRSTTIME ADOPTER OF IFRS Example: Reconciliation of equity and profit or loss Application of requirements This example includes a reconciliation of equity as at the date of transition to IFRS (1 January 2004) of a fictitious entity – Endeavour Limited IFRS also requires a reconciliation at the end of the last period presented under previous GAAP which has not been included in this example, being 31 December 2004 To assist readers in the interpretation of the information, it may be useful to include cross-references to accounting policies and supporting analyses giving further explanation of the adjustments shown in the reconciliations presented below IFRS 1.41 requires that where a first-time adopter becomes aware of errors made under previous GAAP, the reconciliations should distinguish between the correction of those errors and changes in accounting policies Note: The correction of an error has not been included in this example Background to example illustrated Endeavour Limited first adopted IFRS in 2005, with a date of transition to IFRS of January 2004 (i.e it has a 31 December year end) Its last financial statements under previous GAAP were for the year ended 31 December 2004 Endeavour’s first IFRS financial statements include the following reconciliations and related notes which are illustrated below Reconciliation of equity at January 2004 (date of transition to IFRS) Notes ASSETS Non-current assets Start-up expenses Property, plant and equipment Goodwill Intangible assets Available-for-sale financial assets Current Assets Trade and other receivables Inventories Other financial assets Cash and cash equivalents 3 Interest bearing loans Trade and other payables Employee benefits Restructuring provision Deferred tax liability TOTAL LIABILITIES TOTAL EQUITY AND LIABILITIES 154 IFRS 300 7,154 1,671 216 2,161 11,502 (300) 100 150 (150) 420 220 – 7,254 1,821 66 2,581 11,722 4,161 4,107 325 2,058 10,651 22,153 – 490 431 – 921 1,141 4,161 4,597 756 2,058 11,572 23,294 2,500 – – 6,149 8,649 – 294 302 332 928 2,500 294 302 6,481 9,577 10 9,461 3,176 – 250 617 13,504 – – 66 (250) 397 213 9,461 3,176 66 – 1,014 13,717 22,153 1,141 23,294 TOTAL ASSETS EQUITY AND LIABILITIES Issued capital Revaluation reserve Hedging reserve Retained earnings TOTAL EQUITY Effect of Previous transition to IFRS GAAP APPENDIX - ILLUSTRATIVE DISCLOSURES FOR A FIRSTTIME ADOPTER OF IFRS Notes to the reconciliation of equity at January 2004: The book value of start-up expenses of 300, which were activated under previous GAAP, does not qualify for recognition as assets under IFRS Under previous GAAP, depreciation was influenced by the particular tax requirements however, under IFRS it reflects the useful life of the assets The cumulative adjustment increased the carrying amount of property, plant and equipment by 100 Intangible assets under previous GAAP included 150 for items that have been reclassified to goodwill because they not qualify for recognition as intangible assets under IFRS Under previous GAAP, available-for-sale financial assets were carried at a cost of 2,161 The fair value of these assets under IFRS is 2,581 The resulting gains of 294 (420 less related deferred tax of 126) are included in the revaluation reserve Previous GAAP excluded both fixed and variable production overhead of 490 for inventories, however under IFRS 490 may be recognised The fair value of a forward foreign exchange contract of 431 is recognised under IFRS, but was not recognised under previous GAAP The contract has been designated as at the date of transition to IFRS as a hedging instrument in a cash flow hedge of a highly probable forecast sale The hedge meets the criteria in IAS 39 for cash flow hedge accounting Therefore, an amount of 302 (431 less related deferred tax of 129) is recognised in the hedging reserve The following illustrates the adjustments to retained earnings: Start-up expenses (note 1) Depreciation (note 2) Production overhead (note 5) Pension liability (note 8) Restructuring provision (note 9) Tax effect of the above Total (300) 100 490 (66) 250 (142) 332 Previous GAAP used a cash basis for measuring its pension liability However, under IFRS a pension liability of 66 is recognised The restructuring liability of 250 relating to head office activities was recognised under previous GAAP, this amount does not qualify for recognition as a liability under IFRS 10 The above increased the deferred tax liability as follows: Revaluation reserve (note 4) Hedging reserve (note 6) Retained earnings (note 7) Total 126 129 142 397 Because the tax base at January 2004 of the items reclassified from intangible assets to goodwill (note 3) equalled their carrying amount at that date, the reclassification did not affect deferred tax liabilities 155 APPENDIX – ILLUSTRATIVE DISCLOSURES FOR A FIRSTTIME ADOPTER OF IFRS Reconciliation of profit or loss for the year 2004 Notes Revenue Cost of sales Gross profit Distribution costs Administration expenses Finance revenue Finance costs Profit before tax Tax expense Net profit/(loss) 1,2,3 1,4 Effect of Previous transition to IFRS GAAP 24,130 (18,503) 5,627 (2,167) (2,582) 1,946 (2,402) 422 (158) 264 – (97) (97) (30) (300) – – (427) 128 (299) IFRS 24,130 (18,600) 5,530 (2,197) (2,882) 1,946 (2,402) (5) (30) (35) Notes to the reconciliation of profit or loss for the year 2004: Previous GAAP did not recognise a pension liability however it can be recognised under IFRS The pension liability increased by 130 during 2004, which caused increases in cost of sales (50), distribution costs (30) and administrative expenses (50) Cost of sales is higher by 47 under IFRS because inventories include fixed and variable production overheads under IFRS but not under previous GAAP Depreciation was influenced by tax requirements under previous GAAP, but reflects the useful life of the assets under IFRS The effect on the profit for 31 December 2004 was immaterial A restructuring provision of 250 was recognised under previous GAAP at January 2004, but did not qualify for recognition under IFRS until the year ended 31 December 2004 This increases administrative expenses for the 31 December 2004 year end under IFRS Adjustments 1-4 above lead to a reduction of 128 in deferred tax expense Explanation of material adjustments to the cash flow statement for 31 December 2004: Income taxes of 133 paid during 2004 are classified as operating cash flows under IFRS, but were included in a separate category of tax cash flows under previous GAAP There are no other material differences between the cash flow statement prepared under IFRS and the cash flow statement presented under previous GAAP 156 Consolidated Good Group (International) Limited INDEX IFRS Share-based Payment IFRS 2.10 .105 IFRS 2.30 .105 IFRS 2.44 .128 IFRS 2.45 .129 IFRS 2.46 .129 IFRS 2.47 .129 IFRS 2.48 .130 IFRS 2.50 .130 IFRS 2.51 .130 IFRS 2.52 .130 IFRS 2.53 94 IFRS 2.54 94 IFRS 2.55 94 IFRS 2.56 94 IFRS 2.57 94 IFRS 2.58 94 IFRS 2.59 94 IFRS 2.60 94 IFRS Business Combinations IFRS 3.45 .101 IFRS 3.51 .101 IFRS 3.54 .101 IFRS 3.55 .101 IFRS 3.56 .125 IFRS 3.66 .108 IFRS 3.67 .108 IFRS 3.68 .108 IFRS 3.69 .108 IFRS 3.70 .108 IFRS 3.72 .109 IFRS 3.74 .124 IFRS 3.75 .124 IFRS 3.78 95 IFRS 3.79 95 IFRS 3.80 95 IFRS 3.81 95 IFRS 3.82 95 IFRS 3.83 95 IFRS 3.84 96 IFRS 3.85 96 IFRS Non-current Assets Held for Sale and Discontinued Operations IFRS 5.30 .117 IFRS 5.33 83, 117 IFRS 5.34 83, 117 IFRS 5.35 .118 IFRS 5.36 .118 IFRS 5.38 85, 88, 118 IFRS 5.39 .118 IFRS 5.40 85 IFRS 5.41 .118 IFRS 5.42 .118 IFRS 5.43 97 IFRS 5.44 97 IAS Presentation of Financial Statements IAS 1.8 74 IAS 1.9 78 IAS 1.10 78 IAS 1.13 74 IAS 1.14 91 IAS 1.16 74 IAS 1.17 74 IAS 1.18 75 IAS 1.19 75 IAS 1.21 75 IAS 1.23 76 IAS 1.27 75 IAS 1.29 74 IAS 1.32 .81, 84 IAS 1.34 81 IAS 1.35 81 IAS 1.36 75 IAS 1.38 .75, 93 IAS 1.39 75 IAS 1.42 75 IAS 1.44 74 IAS 1.46 .74, 91 IAS 1.49 76 IAS 1.51 84 IAS 1.52 84 IAS 1.57 84 IAS 1.60 84 IAS 1.63 84 IAS 1.68 85 IAS 1.68A 85 IAS 1.69 85 IAS 1.70 86 IAS 1.74 85 IAS 1.75 134 IAS 1.76 135 IAS 1.81 81 IAS 1.82 81 IAS 1.83 81 IAS 1.85 82 IAS 1.86 113 IAS 1.87 113 IAS 1.88 81 IAS 1.89 81 IAS 1.93 114 IAS 1.94 114 IAS 1.95 119 IAS 1.96 87 IAS 1.97 87 IAS 1.101 87 IAS 1.103 91 IAS 1.104 91 IAS 1.108 98 IAS 1.110 98 IAS 1.112 98 IAS 1.113 99 IAS 1.116 98 IAS 1.125 .120 IAS 1.126 91 IAS Inventories IAS 2.36 103, 114, 134 IAS Cash Flow Statements IAS 7.6 89 IAS 7.8 135 IAS 7.10 89 IAS 7.18 89 IAS 7.19 89 IAS 7.21 89 IAS 7.22 89 IAS 7.24 89 IAS 7.28 90 IAS 7.31 89 IAS 7.35 89 IAS 7.36 90 IAS 7.39 90 IAS 7.40 109, 118 IAS 7.43 121 IAS 7.45 135 IAS 7.46 104 IAS 7.48 135 IAS 7.50 111, 135 IAS Accounting Policies, Changes in Accounting Estimates and Errors IAS 8.13 93 IAS 8.14 93 IAS 8.19 76 IAS 8.22 88 IAS 8.23 76 IAS 8.24 76 IAS 8.25 76 IAS 8.28 93 IAS 8.29 94 IAS 8.30 99 IAS 8.39 77 IAS 8.40 77 IAS 8.42 76 IAS 8.43 76 IAS 8.44 76 IAS 8.45 77 IAS 8.49 99 IAS 10 Events after the Balance Sheet Date IAS 10.10 .150 IAS 10.12 .120 IAS 10.13 .120 IAS 10.14 76 IAS 10.17 91 IAS 10.19 .151 IAS 10.21 .151 IAS 11 Construction Contracts IAS 11.39 82, 103 IAS 11.40 86 IAS 11.42 86 IAS 11.45 .140 157 Illustrative financial statements INDEX IAS 12 Income Taxes IAS 12.15 .106 IAS 12.24 .107 IAS 12.39 .106 IAS 12.44 .107 IAS 12.46 .106 IAS 12.52A 116 IAS 12.61 88 IAS 12.71 86 IAS 12.74 86 IAS 12.77 82 IAS 12.79 .115 IAS 12.80 .115 IAS 12.81 116, 118 IAS 12.82 .116 IAS 12.82A 116 IAS 12.87 .116 IAS 12.87A 117 IAS 12.87B 117 IAS 12.88 117, 140 IAS 14 Segment Reporting IAS 14.51 .110 IAS 14.52 .110 IAS 14.52A 110 IAS 14.53 .110 IAS 14.55 .110 IAS 14.56 .110 IAS 14.57 .110 IAS 14.58 .111 IAS 14.59 .111 IAS 14.61 .111 IAS 14.62 .111 IAS 14.63 .111 IAS 14.64 .111 IAS 14.66 .111 IAS 14.67 .111 IAS 14.69 .112 IAS 14.70 .112 IAS 14.71 .112 IAS 14.72 .112 IAS 14.74 .110 IAS 14.75 .110 IAS 14.76 .112 IAS 14.81 .110 IAS 16 Property, Plant and Equipment IAS 16.29 .100 IAS 16.67 .100 IAS 16.68 .100 IAS 16.71 .100 IAS 16.73 100, 120 IAS 16.74 120, 136, 139 IAS 16.77 .121 IAS 16.79 .120 IAS 17 Leases IAS 17.31 120, 139 IAS 17.35 115, 138 IAS 17.47 .139 158 IAS 17.49 .121 IAS 17.50 82 IAS 17.56 .138 IAS 17.65 .139 IAS 18 Revenue IAS 18.35 82, 105 IAS 19 Employee Benefits IAS 19.23 .133 IAS 19.29 .130 IAS 19.30 .130 IAS 19.46 .130 IAS 19.47 .141 IAS 19.116 .133 IAS 19.120A 105, 130 IAS 19.122 .132 IAS 19.124 133, 141 IAS 19.125 .133 IAS 19.126 .133 IAS 19.131 .133 IAS 19.141 .133 IAS 19.142 .133 IAS 19.143 .141 IAS 19.159 .97 IAS 19.159A 97 IAS 19.159B 97, 133 IAS 19.159C 97, 133 IAS 19.160 97, 134 IAS 20 Accounting for Government Grants and Disclosure of Government Assistance IAS 20.12 .113 IAS 20.24 86 IAS 20.39 105, 113 IAS 21 The Effects of Changes in Foreign Exchange Rates IAS 21.15 .100 IAS 21.39 77 IAS 21.47 98 IAS 21.51 77 IAS 21.52 88, 114 IAS 21.53 .100 IAS 21.54 .100 IAS 21.55 77, 100 IAS 21.57 77 IAS 21.58 98 IAS 21.59 98 IAS 21.60 98 IAS 23 Borrowing Costs IAS 23.9 100 IAS 23.29 .100 IAS 24 Related Party Disclosures IAS 24.4 140 IAS 24.12 .140 IAS 24.16 .140 IAS 24.17 .141 IAS 24.18 .141 IAS 24.19 .141 IAS 24.20 .141 IAS 24.21 .141 IAS 24.22 .141 IAS 27 Consolidated and Separate Financial Statements IAS 27.9 .91 IAS 27.10 92 IAS 27.24 92 IAS 27.25 92 IAS 27.26 92 IAS 27.27 92 IAS 27.28 92 IAS 27.33 82, 86 IAS 27.34 82 IAS 27.40 92 IAS 28 Investments in Associates IAS 28.13 .102 IAS 28.18 .103 IAS 28.19 .103 IAS 28.24 .102 IAS 28.25 .102 IAS 28.26 .102 IAS 28.27 .102 IAS 28.37 .125 IAS 28.38 82, 85 IAS 28.39 88 IAS 28.40 .140 IAS 31 Interests in Joint Ventures IAS 31.15 99 IAS 31.21 99 IAS 31.30 99 IAS 31.34 99 IAS 31.38 99 IAS 31.41 .100 IAS 31.42 .100 IAS 31.45 .100 IAS 31.54 109, 140 IAS 31.55 .109 IAS 31.56 .109 IAS 31.57 .100 IAS 32 Financial Instruments: Disclosure and Presentation IAS 32.5 145 IAS 32.8 146 IAS 32.15 .137 IAS 32.18 104, 137 IAS 32.20 .137 IAS 32.33 .135 IAS 32.34 86 IAS 32.35 87 IAS 32.39 87 IAS 32.40 .114 Consolidated Good Group (International) Limited INDEX IAS 32.51 .142 IAS 32.52 .146 IAS 32.55 .146 IAS 32.56 142, 150 IAS 32.57 .142 IAS 32.58 142, 150 IAS 32.59 88, 142, 150 IAS 32.60 104, 134, 135, 136 IAS 32.61 .104 IAS 32.63 134, 136, 147 IAS 32.64 .137 IAS 32.65 .147 IAS 32.66 .104 IAS 32.67 128, 135, 136, 142 IAS 32.70 .143 IAS 32.71 .142 IAS 32.72 136, 143 IAS 32.73 .143 IAS 32.74 .143 IAS 32.75 .144 IAS 32.76 .144 IAS 32.77 .144 IAS 32.79 .144 IAS 32.80 .144 IAS 32.81 .144 IAS 32.82 .144 IAS 32.83 .145 IAS 32.85 .145 IAS 32.86 .149 IAS 32.87 .149 IAS 32.88 .149 IAS 32.89 .149 IAS 32.90 .149 IAS 32.91 .149 IAS 32.91A 149 IAS 32.92 107, 150 IAS 32.93 .104 IAS 32.94 87, 114, 128, 147 IAS 33 Earnings per Share IAS 33.4 82 IAS 33.64 .119 IAS 33.65 .119 IAS 33.66 82 IAS 33.67 83 IAS 33.68 .118 IAS 33.69 83 IAS 33.70 .119 IAS 33.72 .119 IAS 33.73 .119 IAS 34 Interim Financial Reporting IAS 34.26 77 IAS 36 Impairment of Assets IAS 36.9 101 IAS 36.18 .103 IAS 36.126 .88, 115 IAS 36.129 .113 IAS 36.130 .126 IAS 36.131 .126 IAS 36.132 .126 IAS 36.133 .126 IAS 36.134 .127 IAS 36.135 .128 IAS 36.138 .96 IAS 36.139 .96 IAS 36.140 .96 IAS 37 Provisions, Contingent Liabilities and Contingent Assets IAS 37.14 .105 IAS 37.84 .137 IAS 37.85 .137 IAS 37.86 .139 IAS 37.88 .140 IAS 37.89 .140 IAS 37.91 .140 IAS 37.92 137, 140 IAS 38 Intangible Assets IAS 38.21 .101 IAS 38.24 .101 IAS 38.33 .101 IAS 38.48 .101 IAS 38.54 .102 IAS 38.57 .102 IAS 38.72 .101 IAS 38.118 101, 123 IAS 38.122 .124 IAS 38.124 .124 IAS 38.126 .114 IAS 38.128 .124 IAS 38.129 .96 IAS 38.130 .96 IAS 38.131 .97 IAS 38.132 .97 IAS 39 Financial Instruments: Recognition and Measurement IAS 39.3 146 IAS 39.4 146 IAS 39.5 146 IAS 39.38 .103 IAS 39.43 .104 IAS 39.45 .103 IAS 39.46 .104 IAS 39.47 .104 IAS 39.58 .104 IAS 39.89 .107 IAS 39.95 .107 IAS 39.98 .150 IAS 39.102 .88 IAS 39 AG71 103 IAS 39 AG74 103 IAS 39.IG.G.1 87, 114 IAS 39.IG.G.2 90 IAS 40 Investment Property IAS 40.20 .101 IAS 40.30 .101 IAS 40.34 .101 IAS 40.66 .101 IAS 40.69 .101 IAS 40.75 113, 121 IAS 40.76 .122 IAS 40.77 .122 IAS 40.78 .122 IAS 40.79 .123 SIC 12 Consolidation — Special Purpose Entities SIC-12.8 92 SIC-12.9 92 SIC-12.10 93 SIC 27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease SIC-27.10 .138 SIC-27.11 .138 SIC 29 Disclosure — Service Concession Arrangements SIC-29.6 106 SIC-29.7 106 ISA 700 The Auditor's Report on Financial Statements ISA 700.5 79 ISA 700.6 79 ISA 700.7 79 ISA 700.8 79 ISA 700.9 79 ISA 700.12 79 ISA 700.13 80 ISA 700.14 80 ISA 700.15 80 ISA 700.17 80 ISA 700.23 80 ISA 700.24 80 ISA 700.25 80 ISA 700.26 80 159 E R N S T & Y O U N G G L O BA L L I M I T E D © 2005 EYGM Limited All Rights Reserved Ernst & Young is a registered trademark www.ey.com/ifrs, ifrs @uk.ey.com ... revised by the IASB Standards applied in the Illustrative Financial Statements are: International Financial Reporting Standards (IFRSs) IFRS IFRS IFRS Share-based Payment (adopted by the Group for the... Assets Financial Instruments: Recognition and Measurement (as at 28 February 2005) Investment Property The following Standards have not been dealt with in these financial statements: IFRS IFRS IFRS. .. Illustrative financial statements NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS IAS 1.103 IAS 1.104 IAS 1.8(e) Corporate information (Comment page 91) The consolidated financial statements of