VAS vs IFRS COMPARISON

1 VAS vs IFRS COMPARISON 2 IFRS – VAS: Significant differences IFRS: There are 38 Standards VAS: There are 26 Standards 3 List of IFRS – VAS Comparison 1 Inventories – VAS 02 vs. IAS 02 2 Tangible fixed assets – VAS 03 vs. IAS 16 3 Intangible fixed assets – VAS 04 vs. IAS 38 4 Revenue and Other Income – VAS 14 vs. IAS 18 5 Framework – VAS 01 vs. IFRS Framework 6 Leases – VAS 06 vs. IAS 17 7 The effects of changes in Foreign Exchange rates – VAS 10 vs. IAS 21 8 Construction contract – VAS 15 vs. IAS 11 9 Borrowing costs – VAS 16 vs. IAS 23 10 Cash flow statements – VAS 24 vs. IAS 07 4 List of IFRS – VAS Comparison (cont’) 11 Investment Property – VAS 05 vs. IAS 40 12 Accounting for Investments in associates – VAS 07 vs. IAS 28 13 Financial Reporting for Interests in joint ventures –VAS 08 vs. IAS 31 14 Presentation of Financial Statements – VAS 21 vs. IAS 01 15 Consolidated Financial Statements & Accounting for Investments in subsidiaries – VAS 25 vs. IAS 27 16 Related parties disclosures – VAS 26 vs. IAS 24 17 Income Tax – VAS 17 vs. IAS 12 18 Disclosures in the Financial Statements of Banks and similar Financial Institutions – VAS 22 vs. IAS 30 19 Events after the Balance Sheet date – VAS 23 vs. IAS 10 5 List of IFRS – VAS Comparison (cont’) 20 Interim Financial Reporting – VAS 27 vs. IAS 34 21 Segment Reporting – VAS 28 vs. IAS 14 22 Changes in Accounting policies, accounting estimates and errors – VAS 29 vs. IAS 8 23 Business combinations – VAS 11 vs. IFRS 3 24 Provisions, Contingent Liabilities and Contingent Assets – VAS 18 vs. IAS 37 25 Insurance contracts – VAS 19 vs. IFRS 4 26 Earning per share – VAS 30 vs. IAS 33 6 Inventories – VAS 02 vs. IAS 02 (1/3) Area of differenc e VAS IAS Other costs Silent. (par.17) In limited circumstances, borrowing costs are included in the cost of inventories. These circumstances are identified in the allowed alternative treatment in IAS 23- Borrowing Costs. 7 Inventories – VAS 02 vs. IAS 02 (2/3) Area of differenc e VAS IAS Other costs Silent. (par.18) When inventories are purchased with deferred settlement terms, the difference between the purchase price for normal credit terms and the amount paid is recognised as interest expense over the period of financing. 8 Inventories – VAS 02 vs. IAS 02 (3/3) Area of difference VAS IAS Cost measuremen t techniques: (par. 13) VAS 2 introduces four methods of inventories costing with equal ranking • Specific identification •Weighted average • First-in, first-out • Last-in, first out (par. 23-25) In IAS 2, only 3 methods are mentioned Prohibition of LIFO as a cost formula 9 Tangible fixed assets – VAS 03 vs. IAS 16 (1/4) Area of difference VAS IAS Recognitio n of fixed assets: (par. 6) Additional criteria for recognition of a tangible fixed assets: • It meets the value criteria under the prevailing regulations (i.e greater than MVND 10). (par.7) IAS only mentioned two criteria for recognition of tangible fixed asset: • it is probable that future economic benefits associated with the item will flow to the entity; and • the cost of the item can be measured reliably 10 Tangible fixed assets – VAS 03 vs. IAS 16 (2/4) Area of difference VAS IAS Subsequent re- measurement: Paragraph 28: • The tangible fixed assets are only allowed to be re-valued in accordance with state regulations subsequently to its initial recognition. Paragraph 29: • Revalued amount is accepted as an allowed alternative treatment for measurement subsequent to initial recognition. Decision is made by the company’s management. [...]... point (d) like VAS 21 Framework – VAS 01 vs IFRS Framework (1/2) Area of difference VAS IAS Elements of Financial Statement : Not mentioned Substance over form is a qualitative characteristic of financial statements Equity: List many items Suggest including shareholders capital, retained earnings and reserves 22 Framework – VAS 01 vs IFRS Framework (2/2) Area of difference Historical cost VAS IAS (par.5)... recognition (VAS) Measurement after Recognition – Cost Model (IFRS) VAS (par.53) Did not mention the accumulated impairment losses IAS (par.74,75) After initial recognition, an intangible asset shall be carried at its cost less any accumulated amortisation and any accumulated impairment losses 16 Intangible fixed assets – VAS 04 vs IAS 38 (5/5) Area of difference Amortized period (VAS) Useful life (IFRS) VAS. .. assets) 11 Tangible fixed assets – VAS 03 vs IAS 16 (4/4) Area of difference VAS Impairmen Not specified t (cont.): IAS • Write back when the circumstances that led to the write-down cease to exist and the new circumstances are expected to persist 12 Intangible fixed assets – VAS 04 vs IAS 38 (1/5) Area of difference VAS IAS Recognition and measuremen t (par.16) VAS requires two additional recognition... and Other Income – VAS 14 vs IAS 18 (1/4) Area of difference Measuremen Silent t of revenue: VAS IAS When the fair value of consideration in cash or cash equivalent received/receivable is less than the nominal amount of the cash received or receivable, the difference is recognized as interest revenue 18 Revenue and Other Income – VAS 14 vs IAS 18 (2/4) Area of difference Other Income: VAS IAS Other incomes... compensation received; 19 Revenue and Other Income – VAS 14 vs IAS 18 (3/4) Area of difference Other Income (cont.): VAS IAS • Previously written-off Silent accounts which has been collected; • Accounts payable whose payee no longer exist; • Tax reimbursement and reduction; • Others 20 Revenue and Other Income – VAS 14 vs IAS 18 (4/4) Area of difference VAS Disclosure: (par.34) The financial statements... fixed assets – VAS 04 vs IAS 38 (3/5) Area of difference VAS IAS Development (par.40) In addition to 6 (par.57) 6 criteria for phase of an criteria which is similar to recognition IAS, VAS 04 has one intangible asset arising from development more requirement: compliance with current phase regulation of value and useful life for intangible fixed asset 15 Intangible fixed assets – VAS 04 vs IAS 38 (4/5)... Exchange Rates – VAS 10 vs IAS 21 (1/6) Area of VAS IAS difference Initial recognitio n (par.07) A foreign currency (par.20) transactions include transactions arising when an entity: … Silent (c) becomes a party to an unperformed foreign exchange contract Silent … (e) otherwise uses one currency to buy 26 The Effects of Changes in Foreign Exchange Rates – VAS 10 vs IAS 21 (2/6) Area of VAS IAS difference... VAS 10 28 The Effects of Changes in Foreign Exchange Rates – VAS 10 vs IAS 21 (4/6) Area of difference Recognition of exchange difference: VAS • For enterprise that use financial • instruments for hedging against foreign exchange risk, no retranslation of value for hedged items are allowed IAS Not mentioned since being treated in IAS 39 29 The Effects of Changes in Foreign Exchange Rates – VAS 10 vs. .. Leases – VAS 06 vs IAS 17 (1/2) Area of difference VAS The (par.4) the earlier inception of of the date the right to use the asset is the lease transferred or the date the lease begins to be charged in accordance with the lease agreement IAS (par.4) the earlier of the date of the lease agreement or of a commitment by the parties to the principal provisions of the lease 24 Leases – VAS 06 vs IAS 17...Tangible fixed assets – VAS 03 vs IAS 16 (3/4) IAS Area of VAS difference Impairment • Not : specified • When the recoverable amount has declined below the carrying amount, the carrying amount should be reduced to the recoverable amount • The . 1 VAS vs IFRS COMPARISON 2 IFRS – VAS: Significant differences IFRS: There are 38 Standards VAS: There are 26 Standards 3 List of IFRS – VAS Comparison. Construction contract – VAS 15 vs. IAS 11 9 Borrowing costs – VAS 16 vs. IAS 23 10 Cash flow statements – VAS 24 vs. IAS 07 4 List of IFRS – VAS Comparison (cont’)