IFRS Illustrative Financial Statements March 2010

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<ul><li><p>8/6/2019 IFRS Illustrative Financial Statements March 2010</p><p> 1/126</p><p>Illustrative financial statements:investment funds</p><p>International Financial Reporting StandardsMarch 2010</p></li><li><p>8/6/2019 IFRS Illustrative Financial Statements March 2010</p><p> 2/126</p><p> 2010 KPMG IFRG Limited, a UK company, limited by guarantee. All rights reserved.</p><p>About this publication</p><p>These illustrative nancial statements have been produced by the KPMG International Standards Group (part of</p><p>KPMG IFRG Limited), and the views expressed herein are those of the KPMG International Standards Group.</p><p>ContentThe purpose of this publication is to assist you in preparing the nancial statements of an investment fund inaccordance with International Financial Reporting Standards (IFRSs). It illustrates one possible format of nancialstatements for fund-speci c entities, based on a ctitious tax-exempt open-ended single-fund investmentcompany which does not form part of a consolidated entity nor holds investments in any subsidiaries, associatesor joint venture entities and whose redeemable shares are classi ed as nancial liabilities; the company isoutside the scope of IFRS 8 Operating Segments and is not a rst-time adopter of IFRSs (see Technical guide ).Appendix I provides an example of disclosures for a fund within the scope of IFRS 8 with multiple reportablesegments. Appendix II provides an example of disclosures for a fund whose puttable instruments are classi edas equity.</p><p>This publication re ects IFRSs in issue at 31 December 2009 that are required to be applied by an entity with anannual period beginning on 1 January 2009 (currently effective requirements). Other IFRSs or amendmentsthereto that are effective for annual periods beginning a ter 1 January 2009 (forthcoming requirements) havenot been adopted early in preparing these illustrative nancial statements. This publication focuses on disclosurerequirements which are speci c to funds activities. For other disclosures that might be relevant to an entity,please refer to our publications Illustrative fnancial statements and Illustrative fnancial statements: banks .</p><p>This publication illustrates only the nancial statements component of a nancial report and the requirementsof IFRSs as issued by the International Accounting Standards Board (IASB or the Board). However, typically a</p><p>nancial report will include at least some additional commentary by management, either in accordance with</p><p>local laws and regulations or at the election of the entity (see Technical guide ).</p><p>When preparing nancial statements in accordance with IFRSs, an entity should have regard to its local legaland regulatory requirements. This publication does not consider any requirements of a particular jurisdiction.</p><p>The IASB established an Expert Advisory Panel (the Panel) to assist the IASB in reviewing best practices inthe area of valuation techniques and formulating any necessary additional guidance on valuation methods for</p><p>nancial instruments and related disclosures when markets are no longer active. The panel issued its nalreport Measuring and disclosing the air value o fnancial instruments in markets that are no longer active on31 October 2008. Part 2 of the report contains guidance on disclosures. This publication does not illustratethese disclosures, unless they are also required by IFRS 7 Financial Instruments: Disclosures. For illustrativeexample of disclosures in the Panels report and explanatory notes see our publication Illustrative fnancial statements: banks. </p><p>IFRSs and their interpretation change over time. Accordingly, these illustrative nancial statements should notbe used as a substitute for referring to the standards and interpretations themselves.</p><p>AcknowledgementsThis publication has been produced jointly by the KPMG International Standards Group (part of KPMG IFRGLimited) and the Financial Services Audit Practice of KPMG in Ireland.</p><p>We would like to acknowledge the principal contributors to this publication. Those contributors include EwaBialkowska and Sze Yen Tan of the KPMG International Standards Group, and Barry Winters, Frank Gannon and</p><p>Karen Chay of the Financial Services Audit Practice of KPMG in Ireland.</p></li><li><p>8/6/2019 IFRS Illustrative Financial Statements March 2010</p><p> 3/126</p><p> 2010 KPMG IFRG Limited, a UK company, limited by guarantee. All rights reserved.</p><p>ReferencesThe illustrative nancial statements are contained on the odd-numbered pages of this publication. The even-numbered pages contain explanatory comments and notes on the disclosure requirements of IFRSs. Theillustrative examples, together with the explanatory notes, however, are not intended to be seen as a completeand exhaustive summary of all disclosure requirements that are applicable under IFRSs. For an overview of alldisclosure requirements that are applicable under IFRSs, see our publication IFRS Disclosure Checklist .</p><p>To the left of each item disclosed, a reference to the relevant currently effective standard is provided; generallythe references relate only to disclosure requirements. The illustrative nancial statements also containreferences to our publication Insights into IFRS (6 th Edition 2009/10 ).</p><p>Other ways KPMG member rm professionals can helpWe have a range of publications that can assist you further, including Insights into IFRS , IFRS: An overview , IFRS Handbook: First-time adoption o IFRS, Disclosure checklist , Illustrative fnancial statements , and Illustrative condensed interim fnancial statements . Technical information is available at www.kpmgifrg.com.</p><p>KPMGs Brie ng Sheet Issue 165 provides an overview of newly effective standards that may affect nancialstatements for annual periods ended 31 December 2009. It may serve as a useful reminder for entities withlater reporting periods. It also provides an overview of standards issued but not yet effective for annual periodsended 31 December 2009 that may affect later periods.</p><p>For access to an extensive range of accounting, auditing and nancial reporting guidance and literature, visitKPMGs Accounting Research Online. This web-based subscription service can be a valuable tool for anyone whowants to stay informed in todays dynamic environment. For a free 15-day trial, go to www.aro.kpmg.com andregister today.</p></li><li><p>8/6/2019 IFRS Illustrative Financial Statements March 2010</p><p> 4/126</p><p> 2010 KPMG IFRG Limited, a UK company, limited by guarantee. All rights reserved.</p><p>Technical guide</p><p>Form and content of nancial statements</p><p>IAS 1 Presentation o Financial Statements sets out the overall requirements for the presentation of nancialstatements, including their content and structure. Other standards and interpretations deal with the recognition,measurement and disclosure requirements related to speci c transactions and events. IFRSs are not limited toa particular legal framework. Therefore nancial statements prepared under IFRSs often contain supplementaryinformation required by local statute or listing requirements, such as a directors report (see below) and, morespeci cally for funds, an investment managers report and trustee report.</p><p>Choice of accounting policiesThe accounting policies disclosed in these illustrative nancial statements re ect the facts and circumstances ofthe ctitious open-ended single-fund investment company on which these nancial statements are based. Theyshould not be relied upon for a complete understanding of the requirements of IFRSs and should not be usedas a substitute for referring to the standards and interpretations themselves. The accounting policy disclosuresappropriate for an entity depend on the facts and circumstances of that entity and may differ from thedisclosures presented in these illustrative nancial statements. The recognition and measurement requirementsof IFRSs are discussed in our publication Insights into IFRS .</p><p>Reporting by directorsGenerally local laws and regulations determine the extent of reporting by directors (or similar) in addition to thepresentation of nancial statements. IAS 1 encourages, but does not require, entities to present, outside the</p><p>nancial statements, a nancial review by management. The review describes and explains the main featuresof the entitys nancial performance and nancial position, and the principal uncertainties it faces. Such a reportmay include a review of:</p><p> the main factors and in uences determining nancial performance, including changes in the environment inwhich the entity operates, the entitys response to those changes and their effect, and the entitys policy forinvestment to maintain and enhance nancial performance, including its dividend policy;</p><p> the entitys sources of funding; and the entitys resources not recognised in the statement of nancial position in accordance with IFRSs.</p><p>In June 2009 the IASB published Exposure Draft (ED) Management Commentary, which proposes a frameworkfor the preparation of management commentary that accompanies nancial statements prepared in accordancewith IFRSs. The proposals in the ED will not result in an IFRS, and therefore if nalised an entity would not berequired to comply with the framework for the preparation and presentation of management commentary inorder to assert compliance with IFRSs.</p><p>First-time adopters of IFRSsThese illustrative nancial statements assume that the entity is not a rst-time adopter of IFRSs. IFRS 1 First- time Adoption o International Financial Reporting Standards applies to an entitys rst nancial statementsprepared in accordance with IFRSs. IFRS 1 requires extensive disclosures explaining how the transition fromprevious GAAP to IFRSs affects the reported nancial position, nancial performance and cash ows of anentity. These disclosures include reconciliations of equity and reported total comprehensive income (or pro tor loss if the entity did not previously report total comprehensive income) at the date of transition to IFRSsand at the end of the comparative period presented in the entitys rst IFRS nancial statements, explainingmaterial adjustments to the statements of nancial position, changes in equity and comprehensive income,and identifying separately the correction of any errors made under previous GAAP. An entity that presenteda statement of cash ows under previous GAAP also explains any material adjustments to its statement of</p><p>cash ows.</p></li><li><p>8/6/2019 IFRS Illustrative Financial Statements March 2010</p><p> 5/126</p><p>This page has been left blank intentionally.</p></li><li><p>8/6/2019 IFRS Illustrative Financial Statements March 2010</p><p> 6/126</p><p> 2010 KPMG IFRG Limited, a UK company, limited by guarantee. All rights reserved.</p><p>Note Re erence Explanatory note </p><p>1. IAS 1.10 In these illustrative nancial statements, the titles of the statements, with the exceptionof the statement of changes in net assets attributable to holders of redeemable shares(see explanatory note 3 below), are consistent with the titles used in IAS 1 Presentation o Financial Statements (2007). However, these terms are not mandatory and different titlesare permitted.</p><p> 2. IAS 1.10(b) A complete set of nancial statements comprises, as one of its statements, a statement of</p><p>comprehensive income for the period.</p><p> IAS 1.81 Total comprehensive income is the changes in equity during a period other than thosechanges resulting from transactions with owners in their capacity as owners, which ispresented either in:</p><p> one statement (i.e. a statement of comprehensive income); or two statements (i.e. a separate income statement and a statement beginning with pro t</p><p>or loss and displaying components of other comprehensive income).</p><p>3. IAS 1.106 A complete set of nancial statements comprises, as one of its statements, a statementof changes in equity. However, as there is no equity in the Fund, no statement of changesin equity is presented. Instead, a statement of changes in net assets attributable to holdersof redeemable shares is presented. Although IFRSs do not require presentation of thisstatement, in our view, it provides users of the nancial statements with relevant and usefulinformation with respect to the components underlying the movements in the net assets ofthe Fund attributable to the holders of redeemable shares during the year.</p><p>4. IAS 7.18, 19 In these illustrative nancial statements cash ows from operating activities are presentedusing the direct method, whereby major classes of cash receipts and payments related tooperating activities are disclosed. An entity also may present operating cash ows using theindirect method, whereby pro t or loss is adjusted for the effects of non-cash transactions,accruals and deferrals, and items of income or expense associated with investing or nancingcash ows. For an example statement of cash ows presenting operating cash ows usingthe indirect method see our publications Illustrative fnancial statements or Illustrative fnancial statements: banks .</p></li><li><p>8/6/2019 IFRS Illustrative Financial Statements March 2010</p><p> 7/126</p><p>Illustrative nancial statements: Investment funds 5 March 2010</p><p> 2010 KPMG IFRG Limited, a UK company, limited by guarantee. All rights reserved.</p><p>Contents</p><p>Re erence Page</p><p>IAS 1.10, 49 Financial statementsStatement of nancial position 1 7Statement of comprehensive income 1, 2 9Statement of changes in net assets attributable to holders of redeemable shares 3 11Statement of cash ows 1, 4 13Notes to the nancial statements 15</p><p>Independent auditors report 87 </p><p>AppendicesI Segment reporting multiple segment fund 89II Open-ended fund with puttable instruments re-classi ed as equity 99III Schedule of investments unaudited 113IV Currently effective requirements 116V Forthcoming requirements 122</p></li><li><p>8/6/2019 IFRS Illustrative Financial Statements March 2010</p><p> 8/126</p><p>6 Illustrative nancial statements: Investment funds March 2010</p><p> 2010 KPMG IFRG Limited, a UK company, limited by guarantee. All rights reserved.</p><p>Note Re erence Explanatory note </p><p>1. IAS 1.45 The presentation and classi cation of items in the nancial statements is retained from oneperiod to the next unless changes are required by a new standard or interpretation, or it isapparent, following a signi cant change to an entitys operations or a review of its nancial</p><p>statements, that another presentation or classi cation would be more appropriate. Theentity also considers the criteria for selection and application of accounting policies in IAS 8Accounting Policies, Changes in Accounting Estimates and Errors .</p><p> 2. IAS 1.55, 58 Additional line items, headings and subtotals are presented separately in the statement</p><p>of nancial position when such presentation is relevant to an understanding of the entitysnancial position. The judgement used is based on an assessment of the nature and liquidity</p><p>of the assets, the function of assets within the entity, as well as the amounts, nature andtiming of liabilities. Additional line items may include, for example, other assets for theinclusion of prepayments.</p><p> IAS 1.57 IAS 1 does not prescribe the order or format in which an entity presents items. Additional lineitems are included when the size, nature or function of an item or aggreg...</p></li></ul>

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