3 IFRS PWC IFRS Illustrative Financial Statements 2013

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<ul><li><p>8/13/2019 3 IFRS PWC IFRS Illustrative Financial Statements 2013</p><p> 1/187</p><p>Illustrative IFRSconsolidated financial</p><p>statementsfor 2013 year ends</p><p>inform.pwc.com</p></li><li><p>8/13/2019 3 IFRS PWC IFRS Illustrative Financial Statements 2013</p><p> 2/187</p></li><li><p>8/13/2019 3 IFRS PWC IFRS Illustrative Financial Statements 2013</p><p> 3/187</p><p>Bloomsbury Professional, an imprint of Bloomsbury Publishing Plc, Maxwelton House,</p><p>4143 Boltro Road, Haywards Heath, West Sussex, RH16 1BJ</p><p>This book has been prepared for general guidance on matters of interest only, and does notconstitute professional advice. You should not act upon the information contained in this bookwithout obtaining specific professional advice. Accordingly, to the extent permitted by law,PricewaterhouseCoopers LLP (and its members, employees and agents) and publisher accept noliability, and disclaim all responsibility, for the consequences of you or anyone else acting, orrefraining from acting, in reliance on the information contained in this document or for any decisionbased on it, or for any consequential, special or similar damages even if advised of the possibilityof such damages.</p><p>All rights reserved. No part of this publication may be reproduced in any material form (including</p><p>photocopying or storing it in any medium by electronic means and whether or not transiently orincidentally to some other use of this publication) without the written permission ofPricewaterhouseCoopers LLP except in accordance with the provisions of the Copyright, Designsand Patents Act 1988 or under the terms of a licence issued by the Copyright Licensing AgencyLtd, Saffron House, 610 Kirby Street, London EC1 N 8TS. Applications for the copyright ownerswritten permission to reproduce any part of this publication should be addressed to the publisher.</p><p>Warning: The doing of an unauthorised act in relation to a copyright work may result in both a civilclaim for damages and criminal prosecution.</p><p>ISBN 9781780432588</p><p>British Library Cataloguing-in-Publication Data.A catalogue record for this book is available from the British Library.</p><p># 2013 PricewaterhouseCoopers</p><p>Printed in Great Britain </p></li><li><p>8/13/2019 3 IFRS PWC IFRS Illustrative Financial Statements 2013</p><p> 4/187</p><p>IFRS GAAP plc year ended 31 December 2013</p><p>PwC Illustrative IFRS consolidated financial statements for 2013 year ends iii</p></li><li><p>8/13/2019 3 IFRS PWC IFRS Illustrative Financial Statements 2013</p><p> 5/187</p></li><li><p>8/13/2019 3 IFRS PWC IFRS Illustrative Financial Statements 2013</p><p> 6/187</p><p>Introduction</p><p>This publication provides an illustrative set of consolidated financial statements,</p><p>prepared in accordance with International Financial Reporting Standards (IFRS), for a</p><p>fictional manufacturing, wholesale and retail group (IFRS GAAP plc).</p><p>IFRS GAAP plc is an existing preparer of IFRS consolidated financial statements;</p><p>IFRS 1, First-time adoption of International Financial Reporting Standards, is not</p><p>applicable. Guidance on financial statements for first-time adopters of IFRS is available</p><p>at www.pwc.com/ifrs</p><p>This publication is based on the requirements of IFRS standards and interpretations for</p><p>financial years beginning on or after 1 January 2013.</p><p>PwC commentary has been provided, in grey boxes, to explain the detail behind the</p><p>presentation of a number of challenging areas. We draw your attention in particular to</p><p>our commentary on the income statement, statement of comprehensive income,</p><p>balance sheet, statement of changes in equity, statement of cash flows, statement of</p><p>significant accounting policies and financial risk management.</p><p>Areas in which we have made significant changes to presentation since 2012 have</p><p>been highlighted in pink. For 2013 the significant changes include the application of</p><p>IFRSs 10, 11, 12 and 13 together with IAS 19 and the IAS 1 presentation changes to</p><p>Other Comprehensive Income.</p><p>We have attempted to create a realistic set of financial statements for a corporate entity.</p><p>However, by necessity we illustrate disclosures that for many entities may be</p><p>immaterial. Determining the level of disclosure is a matter of judgement, and naturally</p><p>disclosure of immaterial items is not required. Certain types of transaction have beenexcluded, as they are not relevant to the groups operations. The example disclosures,</p><p>if material, for some of these additional items have been included in appendix III. The</p><p>forthcoming IFRS requirements are outlined in a table in appendix IV.</p><p>The example disclosures should not be considered the only acceptable form of</p><p>presentation. The form and content of each reporting entitys financial statements are</p><p>the responsibility of the entitys management. Alternative presentations to those</p><p>proposed in this publication may be equally acceptable if they comply with the specific</p><p>disclosure requirements prescribed in IFRS.</p><p>These illustrative financial statements are not a substitute for reading the standards and</p><p>interpretations themselves or for professional judgement as to fairness of presentation.</p><p>They do not cover all possible disclosures that IFRS requires. Further specific</p><p>information may be required in order to ensure fair presentation under IFRS. We</p><p>recommend that readers refer to our publication IFRS disclosure checklist 2013.</p><p>PwC Illustrative IFRS consolidated financial statements for 2013 year ends v</p></li><li><p>8/13/2019 3 IFRS PWC IFRS Illustrative Financial Statements 2013</p><p> 7/187</p><p>Abbreviations</p><p>IFRS1p37 = International Financial Reporting Standard [number], paragraph</p><p>number.</p><p>7p22 = International Accounting Standard [number], paragraph number.</p><p>SIC-15p5 = Standing Interpretations Committee [number], paragraph number.</p><p>DV = Disclosure Voluntary. Disclosure is encouraged but not required and</p><p>therefore represents best practice.</p><p>vi PwC Illustrative IFRS consolidated financial statements for 2013 year ends</p></li><li><p>8/13/2019 3 IFRS PWC IFRS Illustrative Financial Statements 2013</p><p> 8/187</p><p>Contents</p><p>Page</p><p>Financial statements</p><p>Consolidated income statement ................................................................................. 1</p><p>Consolidated statement of comprehensive income .................................................... 2</p><p>Consolidated balance sheet ...................................................................................... 10</p><p>Consolidated statement of changes in equity ........................................................... 15</p><p>Consolidated statement of cash flows ...................................................................... 18</p><p>Notes to the consolidated financial statements:</p><p>1 General information ........................................................................................ 22</p><p>2 Summary of significant accounting policies: ................................................... 22</p><p>2.1 Basis of preparation ............................................................................. 22</p><p>2.1.1 Changes in accounting policies and disclosures .......................... 23</p><p>2.2 Consolidation ....................................................................................... 24</p><p>2.3 Segment reporting ............................................................................... 27</p><p>2.4 Foreign currency translation ................................................................. 27</p><p>2.5 Property, plant and equipment ............................................................. 28</p><p>2.6 Intangible assets .................................................................................. 292.7 Impairment of non-financial assets ...................................................... 30</p><p>2.8 Non-current assets (or disposal groups) held for sale ......................... 30</p><p>2.9 Financial assets ................................................................................... 31</p><p>2.9.1 Classification ................................................................................ 31</p><p>2.9.2 Recognition and measurement .................................................... 31</p><p>2.10 Offsetting financial instruments ............................................................ 32</p><p>2.11 Impairment of financial assets ............................................................. 32</p><p>2.12 Derivative financial instruments and hedging activities ........................ 33</p><p>2.13 Inventories ........................................................................................... 34</p><p>2.14 Trade receivables ................................................................................ 35</p><p>2.15 Cash and cash equivalents .................................................................. 35</p><p>2.16 Share capital ........................................................................................ 35</p><p>2.17 Trade payables .................................................................................... 35</p><p>2.18 Borrowings ........................................................................................... 36</p><p>2.19 Borrowing costs ................................................................................... 36</p><p>2.20 Compound financial instruments .......................................................... 36</p><p>2.21 Current and deferred income tax ......................................................... 37</p><p>2.22 Employee benefits ............................................................................... 38</p><p>2.23 Share-based payments ........................................................................ 392.24 Provisions ............................................................................................ 40</p><p>2.25 Revenue recognition ............................................................................ 40</p><p>2.26 Interest income .................................................................................... 41</p><p>2.27 Dividend income .................................................................................. 42</p><p>2.28 Leases ................................................................................................. 42</p><p>2.29 Dividend distribution ............................................................................. 42</p><p>2.30 Exceptional items ................................................................................. 42</p><p>PwC Illustrative IFRS consolidated financial statements for 2013 year ends vii</p></li><li><p>8/13/2019 3 IFRS PWC IFRS Illustrative Financial Statements 2013</p><p> 9/187</p><p>3 Financial risk management ............................................................................ 45</p><p>3.1 Financial risk factors ................................................................................. 45</p><p>3.2 Capital management ................................................................................. 50</p><p>3.3 Fair value estimation ................................................................................. 50</p><p>3.4 Offsetting financial assets and liabilities .................................................... 544 Critical accounting estimates and judgements ............................................... 62</p><p>4.1 Critical accounting estimates and assumptions ........................................ 62</p><p>4.2 Critical judgements in applying the entitys accounting policies ................ 63</p><p>5 Segment information ...................................................................................... 65</p><p>6 Exceptional items ........................................................................................... 70</p><p>7 Other income .................................................................................................. 71</p><p>8 Other (losses)/gains net .............................................................................. 71</p><p>9 Expenses by nature ....................................................................................... 71</p><p>10 Employee benefit expense ............................................................................. 72</p><p>11 Finance income and costs ............................................................................. 7212 Investments accounted for using the equity method ...................................... 73</p><p>12(a) Investment in associates ...................................................................... 73</p><p>12(b) Investment in joint venture .................................................................... 76</p><p>12(c) Principal subsidiaries ............................................................................. 79</p><p>13 Income tax expense ....................................................................................... 82</p><p>14 Earnings per share ......................................................................................... 85</p><p>15 Net foreign exchange gains/(losses) .............................................................. 86</p><p>16 Property, plant and equipment ....................................................................... 86</p><p>17 Intangible assets ............................................................................................ 91</p><p>18 Financial instruments ....................................................................................... 95</p><p>18(a) Financial instruments by category ....................................................... 95</p><p>18(b) Credit quality of financial assets .......................................................... 97</p><p>19 Available-for-sale financial assets .................................................................. 98</p><p>20 Derivative financial instruments ...................................................................... 99</p><p>21 Trade and other receivables ........................................................................ 100</p><p>22 Inventories .................................................................................................... 102</p><p>23 Financial assets at fair value through profit or loss ..................................... 103</p><p>24 Cash and cash equivalents .......................................................................... 103</p><p>25 Non-current assets held for sale and discontinued operations .................... 10426 Share capital and premium ......................................................................... 105</p><p>27 Share-based payments ................................................................................ 106</p><p>28 Retained earnings ........................................................................................ 107</p><p>29 Other reserves ............................................................................................. 108</p><p>30 Trade and other payables ............................................................................ 111</p><p>31 Borrowings ................................................................................................... 111</p><p>32 Deferred income tax .................................................................................... 114</p><p>33 Post-employment benefits ............................................................................ 116</p><p>33(a) Defined benefit pension plans ............................................................. 116</p><p>33(b) Post-employment medical benefits ..................................................... 12033(c) Post-employment benefits...</p></li></ul>

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