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39_ifrs

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05/30/2013

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Overview of IFRSsIFRSsGlobal GAAPs

Basic 
 

What is accounting? What is a standard? What is a accounting standard? What is GAAP? How Many types of International accounting standards are there ? How many types of GAAPs are there?
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IFRSIFRS- Meaning 
 

both a narrow and a broad meaning. Narrowly, IFRSs refers to the new numbered series of pronouncements that the IASB is issuing, as distinct from the International Accounting Standards (IASs) series issued by its predecessor. More broadly, IFRSs refers to the entire body of IASB pronouncements, including standards and interpretations approved by the IASB and IASs and SIC interpretations approved by the predecessor International Accounting Standards Committee.
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Bodies Associated with IFRS 

International Accounting Standard Board 
   

Based in London. Formed in 2001. Funded by IASC Foundation Consist of 14 members overseen by the 22 Trustees of the International Accounting Standards Committee (IASC) Foundation. Advises IASB Comprises 40 members Established in March 2002 Replaced Standing Interpretation Committee Assists IASB Fourteen Voting Members
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Standards Advisory Council 
 

International Financial Reporting Interpretation Committee 
  

Contents of IFRS Literature 
 



Preface to IFRS Framework for the Preparation and Presentation of Financial Statements 37 : Main Standards i.e. 8 IFRS + 29 IAS 26 Interpretations i.e. 15 IFRIC + 11 SIC [IFRIC 3 withdrawn in June 2005]

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 Enhance comparability between financial statements of various companies across the globe  Reduce time and resources required to prepare different set of accounts for companies listed in various exchanges of the world and for companies having global group companies. csnanda@gmail.Need for IFRS A single set of accounting standards would enable internationally  to standardize training and assure better quality of accounting profession  it would also permit international capital to flow more freely  enabling companies to develop consistent global practices on accounting problems.  It would be beneficial to regulators as a complexity associated with needing to understand various reporting regimes would be reduced.com 6 .

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 world's capital markets and other users make economic decisions. to bring about convergence of national accounting standards and International Accounting standards and IFRS to high quality solutions.com 7 . in the public interest.Objective of IFRS     to develop. csnanda@gmail. to take account of the special needs of small and medium-sized entities and emerging economies. to promote the use and rigorous application of those standards. a single set of high quality.

measurement. IASB Standards are known as International Financial Reporting Standards (IFRSs). All International Accounting Standards (IASs) and Interpretations issued by the former IASC (International Accounting Standard Committee) and SIC (Standard Interpretation Committee) continue to be applicable unless and until they are amended or withdrawn. IFRSs apply to the general purpose financial statements and other financial reporting by profit-oriented entities -. presentation and disclosure requirements of transaction and events in general purpose financial statements. csnanda@gmail. regardless of their legal form. financial. Entities other than profit-oriented business entities may also find IFRSs profitappropriate. IFRS set out recognition.those engaged in commercial. 4. and similar activities. profitindustrial. 3.com 8 .Scope of IFRS 1. 2.

a statement showing either all changes in equity or changes in equity other than those arising from investments by and distributions to owners. and explanatory notes. A complete set of financial statements includes a balance sheet. employees. csnanda@gmail. performance.com 9 . an income statement. 6. General purpose financial statements are intended to meet the common needs of shareholders. IFRS apply to individual company and consolidated financial statements. creditors. and cash flows. 7. a cash flow statement. a summary of accounting policies. Other financial reporting includes information provided outside financial statements that assists in the interpretation of a complete set of financial statements or improves users' ability to make efficient economic decisions. 8. 5.Scope ««. and the public at large for information about an entity's financial position.

Paragraphs of both types have equal authority. IFRS will present fundamental principles in bold face type and other guidance in non-bold type (the 'black-letter'/'grey-letter' distinction). 10. Further. the conformity with IAS requires compliance with every applicable IAS and Interpretation requires compliance with all IFRSs as well. csnanda@gmail. In developing Standards. IAS 1 provides that. 9.Scope ««««. 11. IASB intends to reconsider the choices in existing IASs with a view to reducing the number of those choices. 12.com 10 . If an IFRS allows both a 'benchmark' and an 'allowed alternative' treatment. IASB intends not to permit choices in accounting treatment.. financial statements may be described as conforming to IFRS whichever treatment is followed.

IASB Framework Objectives of financial statements Capital and capital maintenance Qualitative characteristics of IAS financial statements Elements of the financial statements -Definition -Recognition -Measurement csnanda@gmail.com 11 .

2001.Framework   The IASB Framework was approved by IASC Board in April. 1989 for publication in July 1989. and Defines the basic elements of financial statements and the concepts for recognising and measuring them in financial statements csnanda@gmail. The framework :    Defines the objective of financial statements. Identifies the qualitative characteristics that make information in financial statements useful. and adopted by the IASB in April.com 12 .

5.com 13 . 6. 8.LIST OF IFRS 1. IFRS 1 First-time Adoption of International Financial Reporting FirstStandards IFRS 2 Share-based Payment ShareIFRS 3 Business Combinations IFRS 4 Insurance Contracts IFRS 5 Non-current Assets Held for Sale and Discontinued NonOperations IFRS 6 Exploration for and evaluation of Mineral Resources IFRS 7 Financial Instruments: Disclosures IFRS 8 Operating Segments csnanda@gmail. 3. 4. 7. 2.

Property and Equipment Leases Revenue Employee Benefits csnanda@gmail. 3. Changes in Accounting Estimates and Errors Events after Reporting Period Construction Contracts Income Tax Plant. 10. 9. 7. 11. IAS 1 IAS 2 IAS 7 IAS 8 IAS 10 IAS 11 IAS 12 IAS 16 IAS 17 IAS 18 IAS 19 Presentation of Financial Statement Inventories Statement of Cash Flow Accounting policies. 4.International Accounting standards [IAS] 1. 5.com 14 . 8. 2. 6.

com 15 . 16. 15. 13. 20. 14.Index«««««. 19. IAS 20 Accounting for Government Grants and Disclosure of Government Assistance IAS 21 The Effect of Change in Foreign Exchange Rates IAS 23 Borrowing Costs IAS 24 Related Party Disclosures IAS 26 Accounting and Reporting by Retirement Benefit Plans IAS 27 Consolidated and Complete Financial Statements IAS 28 Investment in Associates IAS 29 Financial Reporting in Hyper Inflationary Economies IAS 31 Interest in Joint Venture csnanda@gmail. 18. 12. 17.

28.21. IAS 32 IAS 33 IAS 34 IAS 36 IAS 37 Assets IAS 38 IAS 39 IAS 40 IAS 41 Financial Instrument: Presentation Earning per Share Interim Financial Reporting Impairment of Assets Provisions. 22.com 16 . Contingent Liability and Contingent Intangible Assets Financial Instrument: Recognition and Measurement\ Measurement\ Investment Property Agriculture csnanda@gmail. 27. 29. 24. 26. 25. 23.

Restoration and Similar Liabilities Members· Share in Co-operative Entities and Similar Instruments CoDetermining whether an Arrangement contains Lease Rights to Interests arising from Decommissioning.com 17 . Restoration and Environmental Rehabilitation Funds Liabilities arising from Participation in a Specific Market.Waste Electrical and Electronic MarketEquipment Applying restatement approach under IAS 29 Scope of IFRS 2 Reassessment of Embedded Derivative Interim Financial Reporting and Impairment IFRS 2.Group and Treasury Share Transaction 2- IFRIC 12 IFRIC 13 Service Concession Arrangements Customer Loyalty Programmes csnanda@gmail.Index of Interpretations IFRIC 1 IFRIC 2 IFRIC 4 IFRIC 5 IFRIC 6 IFRIC 7 IFRIC 8 IFRIC 9 IFRIC 10 IFRIC 11 Changes in Existing Decommissioning.

com 18 .The Limit on a Defined Benefit Asset.. IFRIC 14 IFRIC 15 IFRIC 16 IAS 19. Minimum 19Funding Requirement and their Interaction Agreements for the Construction of Real Estate Hedges of a Net Investment in a Foreign Operation csnanda@gmail.Index of Interpretations««.

Recovery of Revalued Non Depreciable Assets TaxesIncome Taxes.Web Site Costs Assetscsnanda@gmail.com 19 .Change in Tax Status of an Entity or its Shareholders TaxesEvaluating the Substance of Transaction Involving the Legal Form of a Lease Service Concession Arrangements: Disclosures Revenue: Barter Transaction Involving Advertising Services Intangible Assets.Incentives LeaseIncome Taxes.No Specific Relation to Operating Activities AssistanceConsolidationConsolidation.Non Monetary Contribution by Venturers EntitiesOperating Lease.Special Purpose Entities Jointly Controlled Entities.. SIC 7 SIC 10 SIC 12 SIC 13 SIC 15 SIC 21 SIC 25 SIC 27 SIC 29 SIC 31 SIC 32 Introduction of the EURO Government Assistance.Index of Interpretations««.

KEY DATA       Totals for Listed Companies. for 162 jurisdictions: IFRSs not permitted ³ IFRSs permitted ³ 34 24 IFRSs required for some ³ 4 IFRSs required for all ³ 85 * No stock exchange ³ 15 *Includes 30 EU/EEA member states and 4 jurisdictions that have adopted full IFRS equivalents csnanda@gmail.com 20 .

com 21 .KEY DATA« Of the 113 jurisdictions (24 + 4 + 85) that permit or require IFRSs  In 80 jurisdictions the audit report refers to conformity with IFRSs  In 30 jurisdictions the audit report refers to conformity with IFRSs as adopted by the EU  In 1 jurisdiction (NZ) the audit report refers to local GAAP or to IFRSs as adopted in the jurisdiction  In 1 jurisdiction (HK) the audit report for some companies refers to local GAAP and for other companies it refers to IFRSs  For 1 jurisdiction (Brazil) we do not have this information csnanda@gmail.

com 22 .100 Chinese companies have recently switched over to new accounting standards bringing their books in line with international norms csnanda@gmail. This could make large companies look at other capital markets. Consequently. More than 1. Singapore. and in many of those capital markets IFRS are accepted. New Zealand. many believe that the predominance of US GAAP as a standard may be coming to an end. Japan. China.000 EU-listed companies adopted EUIFRS in one go. The eminent status to IFRS came about after the EU made it mandatory for all its listed companies starting 2005. US capital markets are losing their attractiveness as a result of what many view as excessive regulation. Africa and the European Union have either adopted or are converging to IFRS.     Australia. Middle East. more than 8. As a consequence.

com 23 .Classification of IFRSs          Financial Statements Assets Liabilities Revenue Expenditure Recognition & Measurement Disclosure & Presentation Industry Specific IFRSs Others csnanda@gmail.

com 24 .Financial Statements IAS 1 Presentation of Financial Statements  IAS 7 Cash flow statements  csnanda@gmail.

com 25 .Business Combinations & Group Reporting IAS 27 Consolidated financial statements and accounting for investments in subsidiaries  IFRS 3 Business Combinations  IAS 28 Investments in associate  IAS 31 Financial reporting of interest in joint venture  csnanda@gmail.

disclosures  csnanda@gmail.com 26 .Financial Instruments IAS 32 Financial instruments ² presentation  IAS 39 Financial instruments ² recognition and measurement  IFRS 7 Financial instruments .

Assets  IAS 38 Intangible assets  IAS 16 Property. plant and equipment  IAS 40 Investment property  IAS 23 Borrowing costs  IFRS 5 Non ² current assets held for sale and discontinued operations  IAS 2 Inventories    IAS 41 Agriculture IAS 20 Accounting for grants and disclosure of government assistance IAS 17 Leases csnanda@gmail.com 27 .

Liabilities IAS 12 Income taxes  IAS 37 Provisions.Contingent Liabilities and Contingent Assets  csnanda@gmail.com 28 .

Recognition & Measurement   IAS 21 The Effect of Changes in Foreign Exchange Rates IAS 36 Imapirement of Assets  IAS 10 Events after the balance sheet date csnanda@gmail.com 29 .

Disclosure & Presentation    IFRS 8 Operating Segments IAS 33 Earnings Per Share IAS 24 Related Party Disclosures csnanda@gmail.com 30 .

com 31 .Revenue   IAS 9 Revenue IAS 11 Construction Contracts csnanda@gmail.

com 32 .Expenses   IAS 19 Employee Benefits IAS 2 Share Based Payments csnanda@gmail.

com 33 .Others    IFRS 1 First ²time Adoption of International Financial Reporting Standards IAS 29 Financial Reporting In Hyperinflationery Economies IAS 34 Interim Financial Reporting csnanda@gmail.

com 34 .Industry Specific IFRSs    IFRS 4 Insurance Contracts IFRS 6 Exploration for and Evaluation of Mineral Resources IFRIC 12 & SIC 29 Service Concession Arrangements csnanda@gmail.

com 35 .Framework of Financial Statements  Fundamental Assumptions  Qualitative Characteristics of Financial Statements  Components of Complete set of Financial Statements  Elements of Financial Statements csnanda@gmail.

com 36 .Presentation of FS  Statement  Current of Financial Position / Non-Current Non Liquidity  Statement  Function of Comprehensive Income of Expense  Nature of Expense  Retrospective application for Change in Accounting Policy and Prior Period Errors  Proposed Dividends csnanda@gmail.

IAS 39.Recognition and Measurement of Assets      Types of Assets other than for specialised industries  IAS 2. IAS 41. IFRS 5. IAS 40. IAS 17. IAS 41. IAS 16. IAS 17. IFRS 5 Subsequent Measurement  IAS 2. IAS 20 Effect of Change in Method of Depreciation / Amortisation Derecognition csnanda@gmail. IAS 16. IAS 38.com 37 . IAS 40. IAS 39. IAS 38. IAS 16. IAS 40. IAS 36. IAS 23. IAS 17. IAS 38. IAS 39. IAS 41. IFRS 5 Initial Measurement  IAS 2.

com 38 .Recognition & Measurement of Liabilities  Income Taxes IAS 12  Employee Benefits IAS 19  Provisions IAS 37  Share Based Payment IFRS 2 csnanda@gmail.

com 39 .Revenue Recognition Principles  Measurement at Fair Value of the Consideration Received  Cost should be clear  No continuing managerial involvement  Interest on the basis of effective interest method csnanda@gmail.

com 40 .Recognition & Measurement of Financial Instruments  Definitions  Financial Instrument  Financial Asset  Financial Liability  Categories of Financial Asset  Categories of Financial Liabilities  Compound Financial Instruments  Hedge Accounting csnanda@gmail.

com 41 . Certain derivatives are carried at fair value. cash flow statements. except three years required for SEC registrants (public companies) for all statements except balance sheet. Components of financial statements Similar to IFRS. and accounting policies and notes. changes in equity and accounting policies and notes. cash flow statements. No revaluations except for certain types of financial instruments. csnanda@gmail. income statements. biological assets and certain securities are revalued to fair value.SUBJECT IFRS US GAAP Indian GAAP Accounting framework Historical cost Generally uses historical cost. No comprehensive guidance on derivatives and biological assets. plant and equipment may be revalued to fair value. In limited circumstances or on a voluntary basis. Derivatives. but intangible assets. Public listed company: Additionally are required to prepare consolidated financial statements along with the standalone financial statements. Single-entity parent company (standalone) two years¶ balance sheets. but property. property plant and equipment (PPE) and investment property may be revalued to fair value. Two years¶ consolidated balance sheets. an entity may present singleentity parent company (standalone) financial statements along with its consolidated financial statements. Specific accommodations in certain circumstances for foreign private issuers that may offer relief from the three-year requirement. Uses historical cost. income statements.

Does not prescribe a standard format. A liquidity presentation of assets and liabilities is used. US public companies should follow SEC regulations. Income statement Present as either a singlestep or multiple-step format. Certain minimum items are presented on the face of the balance sheet. Expenditures are presented by function. statement except when a SoRIE is presented. but certain income and expenditure items are disclosed in accordance with accounting standards and the Companies Act. In this case. Industry-specific formats are prescribed by industry regulations. only when a liquidity presentation provides more relevant and reliable information. The statement is the notes and not in the presented as a primary primary statement. certain items must be presented on the face of the balance sheet. the the statement is presented movement in accumulated as a primary statement. Changes in shareholders¶ equity are disclosed in separate schedules of µShare capital¶ and µReserves and surplus¶. only disclosure in the notes applies. csnanda@gmail. etc. No separate statement is required.Balance sheet Does not prescribe a particular format.com 42 . instead of a current/non-current presentation. Certain minimum items are presented on the face of the income statement. US public companies should follow SEC regulations. Items on the face of the balance sheet are generally presented in decreasing order of liquidity. Entities may present either a classified or non-classified balance sheet. although expenditure is presented in one of two formats (function or nature). Statement of changes in share (stock) holders¶ equity Statement shows capital Similar to IFRS except that transactions with owners. SEC profit and a reconciliation of rules allow certain all other components of information to be included in equity. Formats are prescribed by the Companies Act and other industry regulations like banking. insurance. Does not prescribe a standard format. Accounting standards do not prescribe a particular format.

csnanda@gmail. Control exists when (a) parent owns. The existence of currently exercisable potential voting rights is also taken into consideration. the opening balances of assets. more than one half of an entity's voting power. which distinguishes between a variable interest model and a voting interest model.com 43 . Consolidation model Based on voting control or power to govern.Correction of errors Comparatives are restated and. liabilities and equity for the earliest prior period presented are restated. directly or indirectly through subsidiaries. Control can be direct or indirect and may exist with a lesser percentage of ownership (voting interest model). which is a similar notion to de facto control under IFRS. or de facto control (rare circumstances). Based on voting control or control over the composition of the board of directors or the governing body. directly or indirectly through subsidiaries. The effect of correction is included in current-year income statement with separate disclosure. Control also exists when the parent owns half or less of the voting power but has legal or contractual rights to control. ¶Effective control¶. Control is presumed to exist when parent owns. Restatement is not required. if the error occurred before the earliest prior period presented. more than one half of an entity's voting power or (b) it controls composition of an entity¶s board of directors so as to obtain economic benefits from its activities. A bipolar consolidation model is used. is very rare if ever employed in practice. Similar to IFRS. The existence of currently exercisable potential voting rights is not taken into consideration. Special purpose entities (SPEs) controlled by an entity are also consolidated.

Accounting would defer for following: y An entity acquired and held as a subsidiary y An acquisition by way of amalgamation of entity y A business acquisition (assets & liabilities only) csnanda@gmail.com 44 . All business combinations are acquisition.Types All business combinations are acquisitions. except uniting of interests method is used in certain amalgamations when all the specified conditions are met. Similar to IFRS. No comprehensive accounting standard on business combinations.

USGAAP     Generally Accepted Accounting Principles (accounting rules) used in the United States to prepare financial statements for publicly traded companies and many privatelyprivately-held companies. The Financial Accounting Standards Board (FASB) sets the accounting principles for the profession. Securities and Exchange Commission (SEC) requires that it be followed in financial reporting by publiclypubliclytraded companies.S.com 45 . although the U. GAAP is not written in law. US GAAP provisions differ somewhat from International Financial Reporting Standards csnanda@gmail.

the most authoritative GAAP setting publications.FASB PRONOUNCEMENTS 1. They are part of the FASB's conceptual framework project and set forth fundamental objectives and concepts that the FASB use in developing future standards. However. 3. 2.first issued in 1978. Statements of Financial Accounting Standards . 7 Financial Accounting concepts issued till date csnanda@gmail. Statements of Financial Accounting Concepts .com 46 . they are not a part of GAAP.

Financial Accounting Standards       OUT OF 163 FAS ISSUED TILL DATE 46 STANDARDS WERE SUPERCEDED 11 STANDARDS WERE RESCINDED IN 29 FURTHER AMENDEDMENTS WERE MADE 164 And 36 were issued as amendments And in the balance 41 no changes were made csnanda@gmail.com 47 .

com 48 .1961 Government Accounting standards issued by Government Accounting Standards Advisory Board Accounting standards for Local bodies issued by ICAI csnanda@gmail.Accounting Standards in India      Accounting Standards issued by ICAI. 2006 notifying accounting standards 1-7 and 9-29.[ AS 1 to 32] ICAICompanies (Accounting Standards) Rules. effective for 19COMPANIES for accounting periods commencing on or after 7 December 2006 Accounting standards to be followed by any class of assessees or in respect of any class of income ² Sec 145(2) of Income Tax Act.

com 49 . ICAI has decided to fully converge with IFRS issued by the IASB on or after April 1.   Accounting Standards Board (ASB) of ICAI formed on 21st April. insurance companies. 1977. As on date 32 Accounting standards have been issued. csnanda@gmail. Recognising the need for convergence with IFRS in the country. 2011 for the listed entities and other public interest entities such as banks.

ifac.com/index.icai.org/ International Federation of AccountantsAccountantshttp://www.org/Home.iasplus.org/ Financial Accounting Standards BoardBoardhttp://www.org/ csnanda@gmail.Useful Websites      International Accounting Standard BoardBoardhttp://www.com 50 .htm Institute of Chartered Accountants of IndiaIndiahttp://www.fasb.iasb.htm Website launched by DeloitteDeloittehttp://www.

com csnanda@gmail.com 51 .Questions/ Suggestions/ Comments??? csnanda@gmail.

com 52 .csnanda@gmail.

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