Practical implementation guide and workbook for IFRS 3rd willey

Table of Contents   Title Page Copyright Page Foreword FOREWORD Preface Acknowledgments ABOUT THE AUTHORS   Chapter - INTRODUCTION TO INTERNATIONAL FINANCIAL REPORTING STANDARDS   INTRODUCTION WORLDWIDE ADOPTION OF IFRS REMAINING EXCEPTIONS THE INTERNATIONAL ACCOUNTING STANDARDS COMMITTEE THE INTERNATIONAL ACCOUNTING STANDARDS BOARD STRUCTURE AND GOVERNANCE THE WAY FORWARD   Chapter - IASB FRAMEWORK   INTRODUCTION OBJECTIVE OF FINANCIAL STATEMENTS UNDERLYING ASSUMPTIONS QUALITATIVE CHARACTERISTICS OF FINANCIAL STATEMENTS ELEMENTS OF FINANCIAL STATEMENTS CONCEPTS OF CAPITAL AND CAPITAL MAINTENANCE FUTURE DEVELOPMENTS MULTIPLE-CHOICE QUESTIONS   Chapter - PRESENTATION OF FINANCIAL STATEMENTS (IAS 1)   INTRODUCTION SCOPE PURPOSE OF FINANCIAL STATEMENTS OVERALL CONSIDERATIONS STRUCTURE AND CONTENT EXTRACTS FROM PUBLISHED FINANCIAL STATEMENTS EXTRACTS FROM PUBLISHED FINANCIAL STATEMENTS OTHER AMENDMENTS TO IAS MULTIPLE-CHOICE QUESTIONS   Chapter - INVENTORIES (IAS 2)   BACKGROUND AND INTRODUCTION SCOPE MEASUREMENT OF INVENTORIES COST OF INVENTORIES TECHNIQUES FOR MEASUREMENT OF COSTS COST FORMULAS NET REALIZABLE VALUE RECOGNITION OF EXPENSE DISCLOSURE EXTRACTS FROM PUBLISHED FINANCIAL STATEMENTS MULTIPLE-CHOICE QUESTIONS   Chapter - STATEMENT OF CASH FLOWS (IAS 7)   BACKGROUND AND INTRODUCTION SCOPE BENEFITS OF PRESENTING A STATEMENT OF CASH FLOWS CASH AND CASH EQUIVALENTS PRESENTATION OF THE STATEMENT OF CASH FLOWS OPERATING ACTIVITIES INVESTING ACTIVITIES FINANCING ACTIVITIES NONCASH TRANSACTIONS DIRECT VERSUS INDIRECT METHOD REPORTING CASH FLOWS ON A GROSS BASIS VERSUS A NET BASIS FOREIGN CURRENCY CASH FLOWS REPORTING FUTURES, FORWARD CONTRACTS, OPTIONS, AND SWAPS RECONCILIATION OF CASH AND CASH EQUIVALENTS ACQUISITIONS AND DISPOSALS OF SUBSIDIARIES AND OTHER BUSINESS UNITS OTHER DISCLOSURES REQUIRED AND RECOMMENDED BY IAS EXTRACTS FROM PUBLISHED FINANCIAL STATEMENTS MULTIPLE-CHOICE QUESTIONS   Chapter - ACCOUNTING POLICIES, CHANGES IN ACCOUNTING ESTIMATES AND ERRORS   BACKGROUND AND INTRODUCTION ACCOUNTING POLICIES SELECTION AND APPLICATION OF ACCOUNTING POLICIES CONSISTENCY OF ACCOUNTING POLICIES FACTORS GOVERNING CHANGES IN ACCOUNTING POLICIES APPLYING CHANGES IN ACCOUNTING POLICIES LIMITATIONS OF RETROSPECTIVE APPLICATION DISCLOSURES WITH RESPECT TO CHANGES IN ACCOUNTING POLICIES CHANGES IN ACCOUNTING ESTIMATES CORRECTION OF PRIOR PERIOD ERRORS EXTRACTS FROM PUBLISHED FINANCIAL STATEMENTS MULTIPLE-CHOICE QUESTIONS   Chapter - EVENTS AFTER THE REPORTING PERIOD (IAS 10)   BACKGROUND AND INTRODUCTION SCOPE AUTHORIZATION DATE ADJUSTING AND NONADJUSTING EVENTS (AFTER THE REPORTING PERIOD) DIVIDENDS PROPOSED OR DECLARED AFTER THE BALANCE SHEET DATE GOING CONCERN CONSIDERATIONS DISCLOSURE REQUIREMENTS EXTRACTS FROM PUBLISHED FINANCIAL STATEMENTS BARLOWORLD MULTIPLE-CHOICE QUESTIONS   Chapter - CONSTRUCTION CONTRACTS (IAS 11)   BACKGROUND AND INTRODUCTION COMBINING AND SEGMENTING CONSTRUCTION CONTRACTS CONTRACT REVENUE CONTRACT COSTS RECOGNITION OF CONTRACT REVENUE AND EXPENSES FIXED-PRICE CONTRACT COST-PLUS CONTRACT PERCENTAGE-OF-COMPLETION METHOD IFRIC 12 IFRIC 15 DISCLOSURES EXTRACTS FROM PUBLISHED FINANCIAL STATEMENTS MULTIPLE-CHOICE QUESTIONS   Chapter - INCOME TAXES (IAS 12)   BACKGROUND AND INTRODUCTION CURRENT TAX LIABILITIES AND ASSETS ACCOUNTING FOR DEFERRED TAX CONSOLIDATED FINANCIAL STATEMENTS TEMPORARY DIFFERENCES NOT RECOGNIZED FOR DEFERRED TAX DEFERRED TAX ASSETS TAX RATES DISCOUNTING CURRENT AND DEFERRED TAX RECOGNITION DIVIDENDS DISCLOSURE: KEY ELEMENTS REVISION OF IAS 12 SICs EXTRACTS FROM PUBLISHED FINANCIAL STATEMENTS MULTIPLE-CHOICE QUESTIONS   Chapter 10 - PROPERTY, PLANT, AND EQUIPMENT (IAS 16)   BACKGROUND AND INTRODUCTION SCOPE RECOGNITION OF AN ASSET DEPRECIATION DERECOGNITION IFRIC INTERPRETATION DISCLOSURE EXTRACTS FROM PUBLISHED FINANCIAL STATEMENTS MULTIPLE-CHOICE QUESTIONS   Chapter 11 - LEASES (IAS 17)   BACKGROUND AND INTRODUCTION SCOPE CLASSIFICATION OF LEASES LEASES IN THE FINANCIAL STATEMENTS OF LESSEES LEASES IN THE FINANCIAL STATEMENTS OF LESSORS SALE AND LEASEBACK TRANSACTIONS AND OTHER TRANSACTIONS INVOLVING THE LEGAL FORM THE FUTURE OF LEASE ACCOUNTING EXTRACTS FROM PUBLISHED FINANCIAL STATEMENTS MULTIPLE-CHOICE QUESTIONS   Chapter 12 - REVENUE (IAS 18)   BACKGROUND AND INTRODUCTION SCOPE MEASUREMENT OF REVENUE IDENTIFICATION OF A TRANSACTION SALE OF GOODS RENDERING OF SERVICES INTEREST, ROYALTIES, AND DIVIDENDS DISCLOSURES IFRIC 12, SERVICE CONCESSION ARRANGEMENTS IFRIC 13, CUSTOMER LOYALTY PROGRAMS AMENDMENT TO IAS 18 ANNUAL IMPROVEMENTS 2009 IFRIC 15, AGREEMENTS FOR THE CONSTRUCTION OF REAL ESTATE DISCLOSURES IFRIC 18, TRANSFERS OF ASSETS FROM CUSTOMERS EXTRACTS FROM PUBLISHED FINANCIAL STATEMENTS MULTIPLE-CHOICE QUESTIONS   Chapter 13 - EMPLOYEE BENEFITS (IAS 19)   SCOPE DEFINED CONTRIBUTION PLANS AND DEFINED BENEFIT PLANS—CLASSIFICATION DEFINED BENEFIT PLANS DEFINED CONTRIBUTION PLANS CONTRASTING DEFINED BENEFIT AND DEFINED CONTRIBUTION ACCOUNTING FOR DEFINED CONTRIBUTION SCHEMES ACCOUNTING FOR DEFINED BENEFIT PLANS KEY INFORMATION: DEFINED BENEFIT PLANS STATEMENT OF FINANCIAL POSITION STATEMENT OF COMPREHENSIVE INCOME MEASURING THE DEFINED BENEFIT OBLIGATION PLAN ASSETS PENSION ASSETS AND LIABILITIES CURTAILMENTS AND SETTLEMENTS ACTUARIAL GAINS AND LOSSES—DEFINED BENEFIT PLANS IFRIC 14, IAS 19—THE LIMIT ON A DEFINED BENEFIT ASSET, MINIMUM FUNDING DISCLOSURE EXTRACTS FROM PUBLISHED FINANCIAL STATEMENTS MULTIPLE-CHOICE QUESTIONS   Chapter 14 - ACCOUNTING FOR GOVERNMENT GRANTS AND DISCLOSURE OF GOVERNMENT   INTRODUCTION SCOPE GOVERNMENT GRANTS RECOGNITION OF GOVERNMENT GRANTS NONMONETARY GRANTS PRESENTATION OF GRANTS RELATED TO ASSETS REPAYMENT OF GOVERNMENT GRANTS GOVERNMENT ASSISTANCE DISCLOSURES MULTIPLE-CHOICE QUESTIONS   Chapter 15 - THE EFFECTS OF CHANGES IN FOREIGN EXCHANGE RATES (IAS 21 )   OBJECTIVES FUNCTIONAL CURRENCY RECORDING FOREIGN CURRENCY TRANSACTIONS USING THE FUNCTIONAL CURRENCY RECOGNITION OF EXCHANGE DIFFERENCES TRANSLATION TO THE PRESENTATION CURRENCY FROM THE FUNCTIONAL CURRENCY TRANSLATION OF A FOREIGN OPERATION DISPOSAL OF A FOREIGN ENTITY DISCLOSURE EXTRACTS FROM PUBLISHED FINANCIAL STATEMENTS MULTIPLE-CHOICE QUESTIONS   Chapter 16 - BORROWING COSTS (IAS 23)   BACKGROUND SCOPE BORROWING COSTS QUALIFYING ASSETS RECOGNITION BORROWINGS ELIGIBLE FOR CAPITALIZATION EXCESS OF CARRYING AMOUNT OF THE QUALIFYING ASSET OVER THE RECOVERABLE AMOUNT agricultural in business combinations combined or contained with tangible assets first-time adopters of IFRS impairment mineral resources, exploration for and evaluation of share-based payments for small and medium-sized entities (SMEs) Interest and financial instruments revenue Interest cost borrowing costs See IAS 23, Borrowing Costs employee benefit plans Interim reporting See also IAS 34, Interim Financial Reporting first-time adopters of IFRS operating segments Internally generated intangible assets International Accounting Standards (IAS) See IAS (International Accounting Standards) International Accounting Standards Board (IASB) background “Conceptual Framework for Financial Reporting—The Reporting Entity,” Exposure Draft Framework for the Preparation and Presentation of Financial Statements IASC compared IFRS and US GAAP convergence project International Financial Reporting Interpretations Committee (IFRIC) See IFRIC (IFRS Interpretations Committee ) joint project with FASB on financial statement framework joint project with FASB on leases joint project with FASB on revenue Monitoring Committee responsibilities of standards, process for setting structure and governance International Accounting Standards Committee (IASC) accounting profession, relationship with Board Core Standards Work Program Framework for the Preparation and Presentation of Financial Statements improvements and comparability project initial standards International Accounting Standards (IAS) See IAS (International Accounting Standards) objectives of Standing Interpretations Committee (SIC) See SIC (Standing Interpretations Committee) International Accounting Standards Committee Foundation International Federation of Accountants (IFAC) International Financial Reporting Interpretations Committee (IFRIC) See IFRIC (IFRS Interpretations Committee) International Financial Reporting Standards (IFRS) See also under individual IFRS about adoption of exceptions to global recognition of first-time adopters of See IFRS 1, First-Time Adoption of International Financial Reporting Standards global acceptance of IFRS issued by IASB to December 31, 2009, list of need for common standards and US Financial Accounting Standards Board (FASB) and US GAAP International Organization of Securities Commissions (IOSCO) Inventories See also IAS 2, Inventories share-based payments for small and medium-sized entities (SMEs) Investing activities, statement of cash flows Investment property See also IAS 40, Investment Property small and medium-sized entities (SMEs) Investments held for sale Investors, joint ventures IOSCO See International Organization of Securities Commissions (IOSCO) J Joint control, related parties Joint ventures and first-time adopters of IFRS related-party transactions and small and medium-sized entities (SMEs) Jointly controlled entities and first-time adopters of IFRS IAS 31, Interests in Joint Ventures K Key management personnel, related-party disclosures See also IAS 24, Related-Party Disclosures L Leases See also IAS 17, Leases and first-time adopters of IFRS land leases small and medium-sized entities (SMEs) Lessees, financial statements of See also IAS 40, Investment Property Lessors, financial statements of See also IAS 40, Investment Property Liabilities classification of in business combinations contingent liabilities contingent liabilities assumed in business combinations current liabilities as element of financial statements noncurrent offsetting recognition of identifiable assets in business combinations small and medium-sized entities (SMEs) statement of financial position Liability method, income taxes Liquidation, obligations arising on Liquidity risk Loans, forgiveable (government grants) Loans and receivables (L&R) Losses actuarial gains and losses agricultural financial instruments future operating losses impairment See Impairment losses profit or loss M Market risk Materiality Measurement fair value, agricultural produce and biological assets financial instruments and interim reporting investment property mineral resources, exploration for and evaluation of noncurrent assets of revenue Measurement bases Measurement period, business combinations Medical benefits Memorandum of Understanding, IFRS and US GAAP convergence project Mineral resources See IFRS 6, Exploration for and Evaluation of Mineral Resources Minimum lease payments Monitoring Board Multiemployer plans N Net assets acquired, business combinations New Zealand Nonadjusting events Noncash transactions, statement of cash flows Noncontrolling interest (NCI) See also IAS 27, Consolidated and Separate Financial Statements business combinations consolidated financial statements Noncurrent assets Noncurrent liabilities Nonfinancial items, contracts to buy or sell at future date Nonmonetary items financial reporting in hyperinflationary economies joint ventures, contributions to Nonrecourse loans Notes to financial statements See also Disclosures financial statement presentation small and medium-sized entities (SMEs) O Offsetting assets and liabilities financial assets and liabilities financial statements insurance contracts Oil and gas assets See also IFRS 6, Exploration for and Evaluation of Mineral Resources and first-time adopters of IFRS Onerous contracts Opening statement of financial position Operating activities, statement of cash flows Operating leases Operating segments See also IFRS 8, Operating Segments Option contracts Other comprehensive income associates, investments in financial statement presentation small and medium-sized entities (SMEs) Owner-occupied property Ownership interests, changes in P Parent, consolidated financial statements See also IAS 27, Consolidated and Separate Financial Statements Pass-through arrangements Past service cost, employee benefit plans Percentage-of-completion method, construction contracts Permanent differences Philippines Point-of-sale costs, biological assets and agricultural produce Pooling method Postemployment benefits See also IAS 19, Employee Benefits Prada, Michel Preexisting relationships in business combinations Present value of defined benefit obligation Presentation discontinued operations earnings per share financial instruments See IAS 32, Financial Instruments: Presentation; IFRS 9, Financial Instruments financial statements See IAS 1, Presentation of Financial Statements noncurrent assets held for sale and discontinued operations small and medium-sized enterprises (SMEs) Presentation currency Principles-based standards Profit or loss Profit sharing, short-term employee benefits Projected unit credit method Property, plant, and equipment See also IAS 16, Property, Plant, and Equipment impairment See IAS 36, Impairment of Assets mineral resources, exploration for and evaluation of share-based payments for small and medium-sized entities (SMEs) transfers of assets from customers Proportionate consolidation, joint ventures Proposed standards, procedure for developing Provisions Public-to-private service concession arrangements Puttable financial instruments Q Qualitative risk Quantitative risk R Receivables and payables, short-term Reclassification, financial instruments Recognition actuarial gains and losses agricultural produce and biological assets assets borrowing costs construction contracts corridor approach, actuarial gains and losses current and deferred tax derecognition of financial assets derecognition of financial liabilities derecognition of property, plant, and equipment financial instruments See IAS 39, Financial Instruments: Recognition and Measurement full recognition approach, actuarial gains and losses government grants impairment losses income taxes, current and deferred intangible assets inventories investment property mineral resources, exploration for and evaluation of property, plant, and equipment revenue share-based payments Reconciliation of cash and cash equivalents, statement of cash flows Recoverable amount, impairment losses Rehabilitate-operate-transfer arrangements Reinsurance Related-party disclosures, small and medium-sized entities (SMEs) Related-party transactions See IAS 24, Related-Party Disclosures Reportable segments See also IFRS 8, Operating Segments Reporting entities, “Conceptual Framework for Financial Reporting— The Reporting Entity,” Exposure Draft Reporting period and construction contracts events after See IAS 10, Events after the Reporting Period and first-time adoption of IFRS Research, intangible assets Research and development costs, small and medium-sized entities (SMEs) Residual value and impairment losses intangible assets property, plant, and equipment Restatement of financial statements in hyperinflationary economies Restructuring Restructuring costs in business combinations Retirement plans accounting and reporting to plan participants See IAS 26, Accounting and Reporting by Retirement Benefit Plans employee benefits See IAS 19, Employee Benefits Retrospective application of other IFRS for first-time adopters Revaluation and first-time adopters of IFRS property, plant, and equipment Revaluation model for measurement of intangible assets Revenue See also IAS 18, Revenue contract revenue, construction contracts small and medium-sized entities (SMEs) Reverse acquisitions Right-of-use model Rights, options, and warrants Risk, financial instrument disclosures Royalties Rules-based standards S Sale of goods, revenue from Sale/leaseback transactions Securities and Exchange Commission (SEC) and acceptance of IFRS IFRS and US GAAP convergence project Securitized debt Selected explanatory notes Separate financial statements See also IAS 27, Consolidated and Separate Financial Statements associates joint ventures small and medium-sized entities (SMEs) Service concession arrangements Services rendered, revenue from Shadow accounting Share-based payments and first-time adopters of IFRS income taxes key management personnel compensation, disclosure of small and medium-sized entities (SMEs) Short-term receivables and payables SIC (Standing Interpretations Committee) interpretations still in force for 2009 financial statements SIC 8, First-Time Application of IAS as the Primary Basis of Accounting SIC 12, Consolidation—Special-Purpose Entities SIC 13, Jointly Controlled Entities—Nonmonetary Contributions by Venturers SIC 21, Income Taxes—Recovery of Revalued Nondepreciable Assets SIC 25, Income Taxes—Changes in the Tax Status of an Entity or Its Shareholders SIC 27, Evaluating the Substance of Transactions Involving the Legal Form of a Lease SIC 29, Service Concession Arrangements: Disclosures SIC 31, Revenue—Barter Transactions Involving Advertising Services SIC 32, Intangible Assets—Web Site Costs Sick pay Significant influence, associates Singapore Single lessor accounting model Small and medium-sized entities (SMEs) See IFRS for Small and Medium-Sized Entities (SMEs) Special-purpose entities (SPEs) Spot rate Standards Advisory Council (SAC) Standing Interpretations Committee (SIC) See SIC (Standing Interpretations Committee) Statement of cash flows See also IAS 7, Statement of Cash Flows cash components of discontinued operations financial statement presentation interim reporting restatement, hyperinflationary economies small and medium-sized entities (SMEs) Statement of changes in equity associates, investments in financial instrument disclosures financial statement presentation interim reporting small and medium-sized entities (SMEs) Statement of comprehensive income discontinued operations employee benefit plans financial instrument disclosures financial statement presentation interim reporting presentation currency, translation from functional currency restatement, hyperinflationary economies small and medium-sized entities (SMEs) Statement of financial position employee benefit plans financial instrument disclosures financial statement presentation interim reporting opening statement of financial position, adjustments required small and medium-sized entities (SMEs) Statement of other comprehensive income employee benefit plans Statements of Financial Accounting Standards (SFAS) SFAS 131, Disclosures about Segments of an Enterprise and Related Information SFAS 141 (R), Business Combinations Step acquisitions Subsidiaries acquisitions and disposals of subsidiaries or other business units consolidated financial statements See also IAS 27, Consolidated and Separate Financial Statements and first-time adopters of IFRS loss of control of foreign subsidiary Subsidies, agricultural Successful efforts method (oil and gas) Swap contracts, statement of cash flows T Tax base Tax rates Temporary tax differences Termination benefits Three-level hierarchy for fair value disclosures Total comprehensive income Tranches Transaction costs business combinations financial instruments Transfers of assets from customers and first-time adopters of IFRS IFRIC 18, Transfers of Assets from Customers Transitional provisions, first-time adopters of IFRS Transparency See also IAS 24, Related-Party Disclosures Treasury shares True and fair override Tweedie, David U US GAAP US Securities and Exchange Commission See Securities and Exchange Commission (SEC) Useful life and impairment losses intangible assets property, plant, and equipment V Value at risk (VAR) Value-in-use Variations, construction contracts Vesting, share-based payments Voting rights in associates W Wages and salaries Web site development costs Working capital NOTE: In July 2009 the IASB promulgated the much-awaited “IFRS for Small and MediumSized Enterprises (SMEs).” It provides standards applicable to private entities (that are not publicly accountable as defined in this standard) ... Howarth and Brandon Dust, for their able guidance and patience; Natasha Andrews-Noel and Pam Reh and their editorial staff, for their creative and valuable editorial comments and assistance; and. .. committed to developing high quality, understandable, and enforceable global accounting standards that meet the demands for comparable and transparent information in the world’s capital markets... FROM IFRS FOR SMEs KEY PRINCIPLES TYPES OF SIMPLIFICATIONS ACCOUNTING TREATMENTS DISALLOWED UNDER IFRS FOR SMEs SPECIFIC RECOGNITION AND MEASUREMENT SIMPLIFICATIONS SUMMARY OF THE IFRS FOR SMEs PRACTICAL