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    International Financial Reporting Standards

    Pocket guide 2010

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    This pocket guide provides a summary o the recognition and measurement

    requirements o International Financial Reporting Standards (IFRS) issued

    up to August 2010. It does not address in detail the disclosure requirements;

    these can be ound in the PwC publication IFRS disclosure checklist.

    The inormation in this guide is arranged in six sections:

    Accountingrulesandprinciples

    Incomestatementandrelatednotes

    Balancesheetandrelatednotes

    Consolidatedandseparatenancialstatements

    Othersubjects

    Industry-specictopics

    More detailed guidance and inormation on these topics can be ound in the

    IFRS Manual o Accounting 2010 and other PwC publications. A list o PwCs

    IFRS publications is provided on the inside ront and back covers.

    International Financial Reporting Standards

    Pocket guide 2010

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    PricewaterhouseCoopers IFRS pocket guide 2010 ii

    Contents

    Consolidated and separate nancial statements 51

    24. Consolidatedandseparatenancialstatements 51

    25. Businesscombinations 53

    26. Disposalsofsubsidiaries,businessandnon-currentassets 56

    27. Associates 58

    28. Jointventures 59

    Other subjects 60

    29. Related-partydisclosures 60

    30. Cash fow statements 62

    31. Interim reports 63

    32. Serviceconcessionarrangements 65

    Industry-specic topics 66

    33. Agriculture 66

    34. Retirementbenetplans 67

    35. Extractiveindustries 68

    Index by standards and interpretation 70

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    IFRSpocketguide2009

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    Accounting rules and principles

    1PricewaterhouseCoopers IFRS pocket guide 2010

    Accounting rules and principles

    1 Introduction

    Therehavebeenmajorchangesinnancialreportinginrecentyears.Most

    obvious is the continuing adoption o IFRS worldwide. Many territories have

    beenusingIFRSforsomeyears,andmoreareplanningtocomeonstream

    from2011.ThenextwaveoftransitioningcountriesincludesKorea,India,

    Japan,muchofSouthandCentralAmericaandCanada.Thekeycountryin

    this regard is the US. The decision about adoption o IFRS in the US is still

    tobetaken.Despitethis,alikelyadoptiondateisnowmoreoftenquotedas

    2016 rather than 2014. Convergence between IFRS and US GAAP continues

    in the meantime.

    An important recent development is the extent to which IFRS is aected

    bypolitics.Thecreditcrunch,theproblemsinthebankingsectorandthe

    attempts o politicians to resolve these questions have resulted in pressure

    onstandardsetterstoamendtheirstandards,primarilythoseonnancial

    instruments.Thispressureisunlikelytodisappear,atleastintheshort

    term.TheIASBisworkinghardtorespondtothis;wecanthereforeexpect

    a continuous stream o changes to the standards in the next ew monthsand years.

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    2 IFRS pocket guide 2010 PricewaterhouseCoopers

    Accounting rules and principles

    2 Accounting principles and applicability o IFRS

    TheIASBhastheauthoritytosetIFRSandtoapproveinterpretationsof

    those standards.

    IFRSsareintendedtobeappliedbyprot-orientatedentities.Theseentities

    nancialstatementsgiveinformationaboutperformance,positionandcash

    owthatisusefultoarangeofusersinmakingnancialdecisions.These

    usersincludeshareholders,creditors,employeesandthegeneralpublic.A

    completesetofnancialstatementsincludesa:

    Balancesheet.

    Statementofcomprehensiveincome.

    Cashowstatement.

    Statementofchangesinequity.

    Adescriptionofaccountingpolicies.

    Notestothenancialstatements.

    The concepts underlying accounting practices under IFRS are set out

    intheIASBsFrameworkforthepreparationandpresentationof

    nancialstatements.

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    3PricewaterhouseCoopers IFRS pocket guide 2010

    Accounting rules and principles

    3 First-time adoption o IFRS IFRS 1

    An entity moving rom national GAAP to IFRS should apply the requirements

    ofIFRS1.ItappliestoanentitysrstIFRSnancialstatementsandinterim

    reportspresentedunderIAS34,Interimnancialreporting,thatarepart

    o that period. The basic requirement is or ull retrospective application

    ofallIFRSseffectiveatthereportingdate.However,thereareanumber

    o optional exemptions and mandatory exceptions to the requirement or

    retrospective application.

    TheexemptionscoverstandardsforwhichtheIASBconsidersthat

    retrospectiveapplicationcouldprovetobetoodifcultorcouldresultinacostlikelytoexceedanybenetstousers.Theexemptionsareoptional.Any,

    all or none o the exemptions may be applied.

    The optional exemptions relate to:

    Businesscombinations.

    Deemedcost.

    Employeebenets.

    Cumulativetranslationdifferences. Compoundnancialinstruments.

    Assetsandliabilitiesofsubsidiaries,associatesandjointventures.

    Designationofpreviouslyrecognisednancialinstruments.

    Share-basedpaymenttransactions.

    Insurancecontracts.

    Decommissioningliabilitiesincludedinthecostofproperty,

    plant and equipment.

    Leases.

    Serviceconcessionarrangements. Borrowingcosts.

    Investmentsinsubsidiaries,jointlycontrolledentitiesandassociates.

    Transfersofassetsfromcustomers.

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    4 IFRS pocket guide 2010 PricewaterhouseCoopers

    Accounting rules and principles

    The exceptions cover areas in which retrospective application o the IFRS

    requirements is considered inappropriate. The ollowing exceptions are

    mandatory,notoptional:

    Hedgeaccounting.

    Estimates.

    Non-controllinginterests.

    Comparative inormation is prepared and presented on the basis o IFRS.

    Almostalladjustmentsarisingfromtherst-timeapplicationofIFRSare

    againstopeningretainedearningsoftherstperiodthatispresentedonan

    IFRS basis.

    Certain reconciliations rom previous GAAP to IFRS are also required.

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    6 IFRS pocket guide 2010 PricewaterhouseCoopers

    Accounting rules and principles

    Thefollowingitems,asaminimum,arepresentedonthefaceofthe

    balance sheet:

    Assetsproperty,plantandequipment;investmentproperty;intangible assets;nancialassets;investmentsaccountedforusingtheequity

    method; biological assets; deerred tax assets; current tax assets;

    inventories; trade and other receivables; and cash and cash equivalents.

    Equityissuedcapitalandreservesattributabletotheparentsowners;

    andnon-controllinginterest.

    Liabilitiesdeferredtaxliabilities;currenttaxliabilities;nancial

    liabilities; provisions; and trade and other payables.

    Assetsandliabilitiesheldforsalethetotalofassetsclassiedas

    heldforsaleandassetsincludedindisposalgroupsclassiedas

    heldforsale;andliabilitiesincludedindisposalgroupsclassiedasheld

    forsaleinaccordancewithIFRS5,Non-currentassetsheldforsaleand

    discontinued operations.

    Currentandnon-currentassetsandcurrentandnon-currentliabilitiesare

    presentedasseparateclassicationsinthestatementunlesspresentation

    based on liquidity provides inormation that is reliable and more relevant.

    Statement o comprehensive income

    The statement o comprehensive income presents an entitys perormance

    overaspecicperiod.Entitieshaveachoiceofpresentingthisinasingle

    statement or as two statements. The statement o comprehensive income

    underthesingle-statementapproachincludesallitemsofincomeand

    expense and includes each component o other comprehensive income

    classiedbynature.Underthetwo-statementapproach,allcomponents

    ofprotorlossarepresentedinanincomestatement,followedimmediately by a statement o comprehensive income. This begins with

    thetotalprotorlossfortheperiodanddisplaysallcomponentsofother

    comprehensive income and ends with total comprehensive income or

    the period.

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    7PricewaterhouseCoopers IFRS pocket guide 2010

    Accounting rules and principles

    Items to be presented in statement o comprehensive income

    Thefollowingitems,asaminimum,arepresentedinthestatementof

    comprehensive income:

    Revenue.

    Financecosts.

    Shareoftheprotorlossofassociatesandjointventuresaccountedfor

    using the equity method.

    Taxexpense.

    Post-taxprotorlossofdiscontinuedoperationsaggregatedwithany

    post-taxgainorlossrecognisedonthemeasurementtofair

    value less costs to sell (or on the disposal) o the assets or disposal

    group(s) constituting the discontinued operation.

    Protorlossfortheperiod.

    Eachcomponentofothercomprehensiveincomeclassiedbynature.

    Shareoftheothercomprehensiveincomeofassociatesandjoint

    ventures accounted or using the equity method.

    Totalcomprehensiveincome.

    Protorlossfortheperiodandtotalcomprehensiveincomeareallocatedinthestatementofcomprehensiveincometotheamountsattributabletonon-

    controlling interest and to the parents owners.

    Additionallineitemsandsub-headingsarepresentedinthisstatement

    when such presentation is relevant to an understanding o the entitys

    nancialperformance.

    Material items

    The nature and amount o items o income and expense are disclosed

    separately,wheretheyarematerial.Disclosuremaybeinthestatementorin

    the notes. Such income/expenses may include items such as restructuring

    costs;write-downsofinventoriesorproperty,plantandequipment;litigation

    settlements;andgainsorlossesondisposalsofnon-currentassets.

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    9PricewaterhouseCoopers IFRS pocket guide 2010

    Accounting rules and principles

    5 Accounting policies, accounting estimates and

    errors IAS 8

    An entity ollows the accounting policies required by IFRS that are relevant

    totheparticularcircumstancesoftheentity.However,forsomesituations,

    standards oer choice; there are other situations where there is no

    guidance.Inthesesituations,managementshouldselectappropriate

    accounting policies.

    Managementusesitsjudgementindevelopingandapplyinganaccounting

    policy that results in inormation that meets the qualitative characteristics

    ofrelevanceandreliability,includingfaithfulrepresentation,substanceoverform,neutrality,prudenceandcompleteness.IfthereisnoIFRSstandardor

    interpretationthatisspecicallyapplicable,managementshouldconsider

    theapplicabilityoftherequirementsinIFRSonsimilarandrelatedissues,

    andthenthedenitions,recognitioncriteriaandmeasurementconceptsfor

    assets,liabilities,incomeandexpensesintheFramework.Managementmay

    alsoconsiderthemostrecentpronouncementsofotherstandard-setting

    bodies,otheraccountingliteratureandacceptedindustrypractices,where

    these do not confict with IFRS.

    Accounting policies should be applied consistently to similar transactions

    and events.

    Changes in accounting policies

    Changes in accounting policies made on adoption o a new standard are

    accounted or in accordance with the transition provisions (i any) within that

    standard.Ifspecictransitionprovisionsdonotexist,achangeinpolicy

    (whetherrequiredorvoluntary)isaccountedforretrospectively(thatis,by

    restatingallcomparativegurespresented)unlessthisisimpracticable.

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    10 IFRS pocket guide 2010 PricewaterhouseCoopers

    Accounting rules and principles

    Issue o new/revised standards not yet eective

    Standards are normally published in advance o the required implementation

    date.Intheinterveningperiod,whereanew/revisedstandardthatisrelevanttoanentityhasbeenissuedbutisnotyeteffective,theentitydisclosesthis

    act. It also provides the known or reasonably estimable inormation relevant

    to assessing the impact that the application o the standard might have on

    theentitysnancialstatementsintheperiodofinitialrecognition.

    Changes in accounting estimates

    An entity recognises prospectively changes in accounting estimates by

    includingtheeffectsinprotorlossintheperiodthatisaffected(theperiod

    ofthechangeandfutureperiods),exceptifthechangeinestimategives

    risetochangesinassets,liabilitiesorequity.Inthiscase,itisrecognisedby

    adjustingthecarryingamountoftherelatedasset,liabilityorequityinthe

    period o the change.

    Errors

    Errors may arise rom mistakes and oversights or misinterpretation oinormation.

    Errorsthatarediscoveredinasubsequentperiodareprior-perioderrors.

    Materialprior-perioderrorsareadjustedretrospectively(thatis,byrestating

    comparativegures)unlessthisisimpracticable.

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    13PricewaterhouseCoopers IFRS pocket guide 2010

    Accounting rules and principles

    Nature and characteristics o nancial instruments

    Financialinstrumentsincludeawiderangeofassetsandliabilities,such

    astradedebtors,tradecreditors,loans,nanceleasereceivablesandderivatives.TheyarerecognisedandmeasuredaccordingtoIAS39s

    requirements and are disclosed in accordance with IFRS 7.

    Financial instruments represent contractual rights or obligations to receive or

    paycashorothernancialassets.Non-nancialitemshaveamoreindirect,

    non-contractualrelationshiptofuturecashows.

    Anancialassetiscash;acontractualrighttoreceivecashoranother

    nancialasset;acontractualrighttoexchangenancialassetsorliabilities

    with another entity under conditions that are potentially avourable; or an

    equity instrument o another entity.

    Anancialliabilityisacontractualobligationtodelivercashoranother

    nancialasset;ortoexchangenancialinstrumentswithanotherentity

    under conditions that are potentially unavourable.

    An equity instrument is any contract that evidences a residual interest in theentitys assets ater deducting all o its liabilities.

    Aderivativeisanancialinstrumentthatderivesitsvaluefromanunderlying

    price or index; requires little or no initial net investment; and is settled at a

    uture date.

    Embedded derivatives in host contracts

    Somenancialinstrumentsandothercontractscombineaderivativeandanon-derivativeinasinglecontract.Thederivativepartofthecontract

    isreferredtoasanembeddedderivative.Itseffectisthatsomeofthe

    contractscashowsvaryinasimilarwaytoastand-alonederivative.For

    example,theprincipalamountofabondmayvarywithchangesinastock

    marketindex.Inthiscase,theembeddedderivativeisanequityderivativeon

    the relevant stock market index.

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    14 IFRS pocket guide 2010 PricewaterhouseCoopers

    Accounting rules and principles

    Embeddedderivativesthatarenotcloselyrelatedtotherestofthe

    contractareseparatedandaccountedforasstand-alonederivatives(that

    is,measuredatfairvalue,generallywithchangesinfairvaluerecognisedin

    protorloss).Anembeddedderivativeisnotcloselyrelatedifitseconomiccharacteristics and risks are dierent rom those o the rest o the contract.

    IAS39setsoutmanyexamplestohelpdeterminewhenthistestis(andis

    not) met.

    Analysing contracts or potential embedded derivatives is one o the more

    challengingaspectsofIAS39.

    Classication o nancial instruments

    ThewaythatnancialinstrumentsareclassiedunderIAS39driveshow

    they are subsequently measured and where changes in measurement are

    accounted or.

    Undernancialinstrumentsaccounting,priortotheimpactofIFRS9,there

    arefourclassesofnancialasset(underIAS39):fairvaluethroughprot

    orloss,heldtomaturity,loansandreceivablesandavailableforsale.The

    factorstotakeintoaccountwhenclassifyingnancialassetsinclude:

    Arethecashowsarisingfromtheinstrumentxedordeterminable?

    Doestheinstrumenthaveamaturitydate?

    Aretheassetsheldfortrading?Doesmanagementintendtoholdthe

    instrumentstomaturity?

    Istheinstrumentaderivative,ordoesitcontainan

    embeddedderivative?

    Istheinstrumentquotedonanactivemarket?

    Hasmanagementdesignatedtheinstrumentintoaparticular classicationatinception?

    Financialliabilitiesareatfairvaluethroughprotorlossiftheyare

    designatedassuch(subjecttovariousconditions),iftheyareheldfortrading

    oriftheyarederivatives(exceptforaderivativethatisanancialguarantee

    contract or a designated and eective hedging instrument). They are

    otherwiseclassiedasotherliabilities.

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    17PricewaterhouseCoopers IFRS pocket guide 2010

    Accounting rules and principles

    entityceasestorecognisetheassets)orwhethernancehasbeensecured

    on the assets (and the entity recognises a liability or any proceeds received).

    Thisevaluationmightbestraightforward.Forexample,itisclearwithlittleor

    noanalysisthatanancialassetisderecognisedinanunconditionaltransferofittoanunconsolidatedthirdparty,withnorisksandrewardsoftheasset

    beingretained.Conversely,derecognitionisnotallowedwhereanassethas

    been transerred but substantially all the risks and rewards o the asset have

    beenretainedthroughthetermsoftheagreement.However,theanalysis

    may be more complex in other cases. Securitisation and debt actoring

    are examples o more complex transactions where derecognition will need

    careul consideration.

    Derecognition o liabilities

    Anentitymayonlyceasetorecognise(derecognise)anancialliabilitywhen

    itisextinguishedthatis,whentheobligationisdischarged,cancelledor

    expired,orwhenthedebtorislegallyreleasedfromtheliabilitybylaworby

    the creditor agreeing to such a release.

    Measurement o nancial assets and liabilities

    Allnancialassetsandnancialliabilitiesaremeasuredinitiallyatfair

    valueunderIAS39.Thefairvalueofanancialinstrumentisnormallythe

    transactionpricethatis,theamountoftheconsiderationgivenor

    received.However,insomecircumstances,thetransactionpricemaynot

    beindicativeoffairvalue.Insuchasituation,anappropriatefairvalueis

    determined using data rom current observable transactions in the same

    instrument or based on a valuation technique whose variables include only

    data rom observable markets.

    Themeasurementofnancialinstrumentsafterinitialrecognition

    dependsontheirinitialclassication.Allnancialassetsaremeasuredat

    fairvalueexceptforloansandreceivables,held-to-maturityassetsand,

    inrarecircumstances,unquotedequityinstrumentswhosefairvalues

    cannotbemeasuredreliably,orderivativeslinkedtoandthatmustbe

    settled by the delivery o such unquoted equity instruments that cannot be

    measured reliably.

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    18 IFRS pocket guide 2010 PricewaterhouseCoopers

    Accounting rules and principles

    Loansandreceivablesandheld-to-maturityinvestmentsaremeasuredat

    amortisedcost.Theamortisedcostofanancialassetornancialliabilityis

    measuredusingtheeffectiveinterestmethod.

    Available-for-salenancialassetsaremeasuredatfairvalue,withchangesin

    fairvaluerecognisedinothercomprehensiveincome.Foravailable-for-sale

    debtsecurities,interestisrecognisedinincomeusingtheeffectiveinterest

    method.Dividendsonavailable-for-saleequitysecuritiesarerecognisedin

    protorlossastheholderbecomesentitledtothem.Derivatives(including

    separated embedded derivatives) are measured at air value. All air value

    gainsandlossesarerecognisedinprotorlossexceptwheretheyqualifyas

    hedging instruments in cash fow hedges.

    Financial liabilities are measured at amortised cost using the eective

    interestmethodunlesstheyareclassiedatfairvaluethroughprotorloss.

    Financialassetsandnancialliabilitiesthataredesignatedashedgeditems

    mayrequirefurtheradjustmentsunderthehedgeaccountingrequirements.

    Allnancialassetsaresubjecttoreviewforimpairment,exceptthose

    measuredatfairvaluethroughprotorloss.Wherethereisobjective

    evidencethatsuchanancialassetmaybeimpaired,theimpairmentlossiscalculatedandrecognisedinprotorloss.

    Hedge accounting

    Hedgingistheprocessofusinganancialinstrument(usuallyaderivative)

    tomitigateallorsomeoftheriskofahedgeditem.Hedgeaccounting

    changes the timing o recognition o gains and losses on either the hedged

    itemorthehedginginstrumentsothatbotharerecognisedinprotorloss

    in the same accounting period in order to record the economic substance othe combination o the hedged item and instrument.

    Toqualifyforhedgeaccounting,anentitymust(a)formallydesignateand

    document a hedge relationship between a qualiying hedging instrument

    and a qualiying hedged item at the inception o the hedge; and (b) both

    atinceptionandonanongoingbasis,demonstratethatthehedgeis

    highly eective.

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    19PricewaterhouseCoopers IFRS pocket guide 2010

    Accounting rules and principles

    There are three types o hedge relationship:

    Fairvaluehedgeahedgeoftheexposuretochangesinthefairvalue

    ofarecognisedassetorliability,orarmcommitment. Cashowhedgeahedgeoftheexposuretovariabilityincashows

    ofarecognisedassetorliability,armcommitmentorahighlyprobable

    orecast transaction.

    Netinvestmenthedgeahedgeoftheforeigncurrencyriskonanet

    investment in a oreign operation.

    Forafairvaluehedge,thehedgeditemisadjustedforthegainorloss

    attributable to the hedged risk. That element is included in the income

    statement where it will oset the gain or loss on the hedging instrument.

    Foraneffectivecashowhedge,gainsandlossesonthehedging

    instrument are initially included in other comprehensive income. The amount

    included in other comprehensive income is the lesser o the air value o the

    hedginginstrumentandhedgeitem.Wherethehedginginstrumenthasafair

    valuegreaterthanthehedgeditem,theexcessisrecordedwithintheprot

    or loss as ineectiveness. Gains or losses deerred in other comprehensive

    incomearereclassiedtoprotorlosswhenthehedgeditemaffectstheincomestatement.Ifthehedgeditemistheforecastacquisitionofanon-

    nancialassetorliability,theentitymaychooseanaccountingpolicyof

    adjustingthecarryingamountofthenon-nancialassetorliabilityforthe

    hedginggainorlossatacquisition,orleavingthehedginggainsorlosses

    deferredinequityandreclassifyingthemtoprotandlosswhenthehedged

    itemaffectsprotorloss.

    Hedges o a net investment in a oreign operation are accounted or similarly

    to cash fow hedges.

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    29PricewaterhouseCoopers IFRS pocket guide 2010

    Income statement and related notes

    Tocalculatethedenedbenetobligation,estimates(actuarialassumptions)

    about demographic variables (such as employee turnover and mortality) and

    nancialvariables(suchasfutureincreasesinsalariesandmedicalcosts)are

    inputintoavaluationmodel.Thebenetisthendiscountedtopresentvalue.This normally requires the expertise o an actuary.

    Wheredenedbenetplansarefunded,theplanassetsaremeasuredatfair

    value using discounted cash fow estimates i market prices are not available.

    Planassetsaretightlydened,andonlyassetsthatmeetthedenitionof

    planassetsmaybeoffsetagainsttheplansdenedbenetobligations

    thatis,thenetsurplusordecitisshownonthebalancesheet.

    There-measurementateachbalancesheetdateoftheplanassetsand

    thedenedbenetobligationgivesrisetoactuarialgainsandlosses.There

    arethreepermissiblemethodsunderIAS19forrecognisingactuarialgains

    and losses:

    UndertheOCIapproach,actuarialgainsandlossesarerecognised

    immediately in other comprehensive income.

    Underthecorridorapproach,anyactuarialgainsandlossesthatfall

    outsidethehigherof10percentofthepresentvalueofthedened benetobligationor10percentofthefairvalueoftheplanassets

    (i any) are amortised over no more than the remaining working lie o

    the employees.

    Undertheincomestatementapproach,actuarialgainsandlossesare

    recognisedimmediatelyinprotorloss.

    IAS19analysesthechangesintheplanassetsandliabilitiesintovarious

    components,thenettotalofwhichisrecognisedasanexpenseorincomein

    the income statement. These components include:

    currentservicecost(thepresentvalueofthebenetsearnedbyactive

    employees in the current period);

    interestcost(theunwindingofthediscountonthedenedbenet

    obligation);

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    Income statement and related notes

    12 Share-based payment IFRS 2

    Share-basedpaymenttransactionsaretransactionsinwhichentitiesreceive

    goods or services as consideration or either:

    equityinstrumentsoftheentity(ortheentitysparentoranotherentity

    withinthesamegroup)equity-settledshare-basedpayment;or

    cashorotherassets,wheretheamountisbasedonthepriceorvalueof

    theentityssharescash-settledshare-basedpayment.

    Themostcommonapplicationistoemployeeshareschemes,suchasshare

    optionschemes.However,entitiessometimesalsopayforotherexpenses such as proessional ees and or the purchase o assets by means o

    share-basedpayment.

    The accounting treatment under IFRS 2 is based on the air value o the

    instruments.Boththevaluationofandtheaccountingforawardscanbe

    difcult,duetothecomplexmodelsthatneedtobeusedtocalculatethe

    fairvalueofoptions,andalsoduetothevarietyandcomplexityofschemes.

    Inaddition,thestandardrequiresextensivedisclosures.Theresultgenerally

    istoreducereportedprots,especiallyinentitiesthatuseshare-basedpayment extensively as part o their remuneration strategy.

    Alltransactionsinvolvingshare-basedpaymentarerecognisedasexpenses

    or assets over any vesting period.

    Equity-settledshare-basedpaymenttransactionsaremeasuredatthegrant

    datefairvalueforemployeeservices;and,fornon-employeetransactions,

    at the air value o the goods or services received at the date on which

    the entity recognises the goods or services. I the air value o the goodsor services cannot be estimated reliably such as employee services

    andcircumstancesinwhichthegoodsorservicescannotbespecically

    identiedtheentityusesthefairvalueoftheequityinstrumentsgranted.

    Additionally,managementneedstoconsiderifthereareanyunidentiable

    goodsorservicesreceivedortobereceivedbytheentity,asthesealsohave

    to be recognised and measured in accordance with IFRS 2.

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    33PricewaterhouseCoopers IFRS pocket guide 2010

    Income statement and related notes

    13 Taxation IAS 12

    IAS12onlydealswithtaxesonincome,comprisingcurrenttaxand

    deerred tax.

    Current tax expense or a period is based on the taxable and deductible

    amounts that will be shown on the tax return or the current year. An entity

    recognises a liability in the balance sheet in respect o current tax expense

    or the current and prior periods to the extent unpaid. It recognises an asset

    i current tax has been overpaid.

    Current tax assets and liabilities or the current and prior periods are

    measured at the amount expected to be paid to (recovered rom) the

    taxationauthorities,usingthetaxratesandtaxlawsthathavebeen

    enacted or substantively enacted by the balance sheet date.

    Taxpayablebasedontaxableprotseldommatchesthetaxexpensethat

    mightbeexpectedbasedonpre-taxaccountingprot.Themismatchcan

    occur because IFRS recognition criteria or items o income and expense

    are dierent rom the treatment o items under tax law.

    Deerred tax accounting seeks to deal with this mismatch. It is based on

    the temporary dierences between the tax base o an asset or liability and

    itscarryingamountinthenancialstatements.Forexample,aproperty

    isrevaluedupwardsbutnotsold,therevaluationcreatesatemporary

    difference(thecarryingamountoftheassetinthenancialstatements

    isgreaterthanthetaxbaseoftheasset),andthetaxconsequenceisa

    deerred tax liability.

    Deerred tax is provided in ull or all temporary dierences arising betweenthe tax bases o assets and liabilities and their carrying amounts in the

    nancialstatements,exceptwhenthetemporarydifferencearisesfrom:

    initialrecognitionofgoodwill(fordeferredtaxliabilitiesonly);

    initialrecognitionofanassetorliabilityinatransactionthatisnota

    businesscombinationandthataffectsneitheraccountingprotnor

    taxableprot;and

    investmentsinsubsidiaries,branches,associatesandjointventures,

    but only where certain criteria apply.

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    Income statement and related notes

    Deerred tax assets and liabilities are measured at the tax rates that are

    expected to apply to the period when the asset is realised or the liability

    issettled,basedontaxrates(andtaxlaws)thathavebeenenactedor

    substantively enacted by the balance sheet date. The discounting o deerredtax assets and liabilities is not permitted.

    The measurement o deerred tax liabilities and deerred tax assets refects

    the tax consequences that would ollow rom the manner in which the

    entityexpects,atthebalancesheetdate,torecoverorsettlethecarrying

    amount o its assets and liabilities. The expected manner o recovery or

    landwithanunlimitedlifeisalwaysthroughsale.Forotherassets,the

    mannerinwhichmanagementexpectstorecovertheasset(thatis,through

    use or through sale or through a combination o both) is considered at each

    balance sheet date.

    Management only recognises a deerred tax asset or deductible temporary

    differencestotheextentthatitisprobablethattaxableprotwillbeavailable

    against which the deductible temporary dierence can be utilised. This also

    applies to deerred tax assets or unused tax losses carried orward.

    Currentanddeferredtaxisrecognisedinprotorlossfortheperiod,unlessthe tax arises rom a business combination or a transaction or event that is

    recognisedoutsideprotorloss,eitherinothercomprehensiveincomeor

    directly in equity in the same or dierent period. The tax consequences that

    accompany,forexample,achangeintaxratesortaxlaws,areassessment

    o the recoverability o deerred tax assets or a change in the expected

    mannerofrecoveryofanassetarerecognisedinprotorloss,excepttothe

    extentthattheyrelatetoitemspreviouslychargedorcreditedoutsideprot

    or loss.

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    Income statement and related notes

    14 Earnings per share IAS 33

    Earningspershare(EPS)isaratiothatiswidelyusedbynancialanalysts,

    investorsandotherstogaugeanentitysprotabilityandtovalueitsshares.EPS is normally calculated in the context o ordinary shares o the entity.

    Earnings attributable to ordinary shareholders are thereore determined by

    deducting rom net income the earnings attributable to holders o more

    senior equity instruments.

    An entity whose ordinary shares are listed on a recognised stock exchange

    or are otherwise publicly traded is required to disclose both basic and diluted

    EPSwithequalprominenceinitsseparateorindividualnancialstatements,

    orinitsconsolidatednancialstatementsifitisaparent.Furthermore,

    entitiesthatleorareintheprocessoflingnancialstatementswitha

    securities commission or other regulatory body or the purposes o issuing

    ordinaryshares(thatis,notaprivateplacement)arealsorequiredtocomply

    with the standard.

    BasicEPSiscalculatedbydividingtheprotorlossfortheperiod

    attributable to the equity holders o the parent by the weighted average

    numberofordinarysharesoutstanding(includingadjustmentsforbonusandrights issues).

    DilutedEPSiscalculatedbyadjustingtheprotorlossandtheweighted

    average number o ordinary shares by taking into account the conversion

    o any dilutive potential ordinary shares. Potential ordinary shares are those

    nancialinstrumentsandcontractsthatmayresultinissuingordinaryshares

    such as convertible bonds and options (including employee share options).

    BasicanddilutedEPSforbothcontinuingandtotaloperationsarepresentedwith equal prominence in the statement o comprehensive income or in

    the separate income statement where one is presented or each class

    ofordinaryshares.SeparateEPSguresfordiscontinuedoperationsare

    disclosed in the same statements or in the notes.

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    Balancesheetandrelatednotes

    18 Impairment o assets IAS 36

    Nearlyallassetscurrentandnon-currentaresubjecttoanimpairment

    test to ensure that they are not overstated on balance sheets.

    The basic principle o impairment is that an asset may not be carried on the

    balancesheetaboveitsrecoverableamount.Recoverableamountisdened

    as the higher o the assets air value less costs to sell and its value in use.

    Fair value less costs to sell is the amount obtainable rom a sale o an asset

    inanarmslengthtransactionbetweenknowledgeable,willingparties,less

    costs o disposal. Value in use requires management to estimate the uture

    cashowstobederivedfromtheassetanddiscountthemusingapre-tax

    market rate that refects current assessments o the time value o money and

    therisksspecictotheasset.

    Allassetssubjecttotheimpairmentguidancearetestedforimpairment

    where there is an indication that the asset may be impaired. Certain assets

    (goodwill,indenitelivedintangibleassetsandintangibleassetsthatarenot

    yet available or use) are also tested or impairment annually even i there is

    no impairment indicator.

    Assessment o whether an asset is impaired involves consideration o

    bothexternalindicators(forexample,signicantadversechangesinthe

    technological,market,economicorlegalenvironmentorincreasesinmarket

    interestrates)andinternalindicators(forexample,evidenceofobsolescence

    or physical damage o an asset or evidence rom internal reporting that the

    economicperformanceofanassetis,orwillbe,worsethanexpected).

    Recoverableamountiscalculatedattheindividualassetlevel.However,an

    assetseldomgeneratescashowsindependentlyofotherassets,andmostassetsaretestedforimpairmentingroupsofassetsdescribedascash-

    generatingunits(CGUs).ACGUisthesmallestidentiablegroupofassets

    that generates infows that are largely independent rom the cash fows rom

    other CGUs.

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    Balancesheetandrelatednotes

    19 Leases IAS 17

    A lease gives one party (the lessee) the right to use an asset over an agreed

    periodoftimeinreturnforpaymenttothelessor.Leasingisanimportantsourceofmedium-andlong-termnancing;accountingforleasescanhave

    asignicantimpactonlesseesandlessorsnancialstatements.

    Leasesareclassiedasnanceoroperatingleasesatinception,depending

    on whether substantially all the risks and rewards o ownership transer to

    thelessee.Underanancelease,thelesseehassubstantiallyalloftherisks

    andrewardofownership.Allotherleasesareoperatingleases.Leasesof

    land and buildings are considered separately under IFRS.

    Underanancelease,thelesseerecognisesanassetheldunderanance

    lease and a corresponding obligation to pay rentals. The lessee depreciates

    the asset.

    The lessor recognises the leased asset as a receivable. The receivable is

    measuredatthenetinvestmentintheleasetheminimumleasepayments

    receivable,discountedattheinternalrateofreturnofthelease,plusthe

    unguaranteed residual which accrues to the lessor.

    Underanoperatinglease,thelesseedoesnotrecogniseanassetand

    lease obligation. The lessor continues to recognise the leased asset

    and depreciates it. The rentals paid are normally charged to the income

    statement o the lessee and credited to that o the lessor on a

    straight-linebasis.

    Linkedtransactionswiththelegalformofaleaseareaccountedforonthe

    basisoftheirsubstanceforexample,asaleandleasebackwheretheselleris committed to repurchase the asset may not be a lease in substance i the

    sellerretainstherisksandrewardsofownershipandsubstantiallythesame

    rights o use as beore the transaction.

    Equally,sometransactionsthatdonothavethelegalformofaleaseare

    in substance leases i they are dependent on a particular asset that the

    purchaser can control physically or economically.

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    Balancesheetandrelatednotes

    20 Inventories IAS 2

    Inventories are initially recognised at cost. Cost o inventories includes

    importduties,non-refundabletaxes,transportandhandlingcosts,andanyotherdirectlyattributablecostslesstradediscounts,rebatesand

    similar items.

    Inventoriesarevaluedatthelowerofcostandnetrealisablevalue(NRV).

    NRVistheestimatedsellingpriceintheordinarycourseofbusiness,lessthe

    estimated costs o completion and estimated selling expenses.

    IAS2,Inventories,requiresthecostforitemsthatarenotinterchangeable

    orthathavebeensegregatedforspeciccontractstobedeterminedonan

    individual-itembasis.Thecostofotheritemsofinventoryusedisassigned

    byusingeithertherst-in,rst-out(FIFO)orweightedaveragecostformula.

    Last-in,rst-out(LIFO)isnotpermitted.Anentityusesthesamecost

    ormula or all inventories that have a similar nature and use to the entity.

    Adifferentcostformulamaybejustiedwhereinventorieshaveadifferent

    nature or use. The cost ormula used is applied on a consistent basis rom

    period to period.

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    Balancesheetandrelatednotes

    I an entity has an onerous contract (the unavoidable costs o meeting the

    obligationsunderthecontractexceedtheeconomicbenetsexpectedto

    bereceivedunderit),thepresentobligationunderthecontractisrecognised

    as a provision. Impairments o any assets dedicated to the contract arerecognised beore making a provision.

    Restructuring provisions

    Therearespecicrequirementsforrestructuringprovisions.Aprovision

    is recognised when there is: (a) a detailed ormal plan identiying the main

    eatures o the restructuring; and (b) a valid expectation in those aected that

    the entity will carry out the restructuring by starting to implement the plan or

    by announcing its main eatures to those aected.

    A restructuring plan does not create a present obligation at the balance

    sheetdateifitisannouncedafterthatdate,evenifitisannouncedbefore

    thenancialstatementsareapproved.Noobligationarisesforthesaleofan

    operationuntiltheentityiscommittedtothesale(thatis,thereisabinding

    sale agreement).

    The provision includes only incremental costs necessarily resulting rom therestructuring and not those associated with the entitys ongoing activities.

    Any expected gains on the sale o assets are not considered in measuring a

    restructuring provision.

    Reimbursements

    An obligation and any anticipated recovery are presented separately as a

    liabilityandanassetrespectively;however,anassetcanonlybe

    recognised i it is virtually certain that settlement o the obligation will resultinareimbursement,andtheamountrecognisedforthereimbursement

    should not exceed the amount o the provision. The amount o any

    expectedreimbursementisdisclosed.Netpresentationispermittedonlyin

    the income statement.

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    Balancesheetandrelatednotes

    Subsequent measurement

    Management perorms an exercise at each balance sheet date to identiy the

    best estimate o the expenditure required to settle the present obligation atthebalancesheetdate,discountedatanappropriaterate.Theincreasein

    provision due to the passage o time is recognised as interest expense.

    Contingent liabilities

    Contingent liabilities are possible obligations whose existence will be

    conrmedonlyontheoccurrenceornon-occurrenceofuncertainfuture

    eventsoutsidetheentityscontrol,orpresentobligationsthatarenot

    recognised because: (a) it is not probable that an outfow o economic

    benetswillberequiredtosettletheobligation;or(b)theamountcannotbe

    measured reliably.

    Contingent liabilities are not recognised but are disclosed and described in

    thenotestothenancialstatements,includinganestimateoftheirpotential

    nancialeffectanduncertaintiesrelatingtotheamountortimingofany

    outow,unlessthepossibilityofsettlementisremote.

    Contingent assets

    Contingentassetsarepossibleassetswhoseexistencewillbeconrmed

    onlyontheoccurrenceornon-occurrenceofuncertainfutureevents

    outsidetheentityscontrol.Contingentassetsarenotrecognised.Whenthe

    realisationofincomeisvirtuallycertain,therelatedassetisnotacontingent

    asset; it is recognised as an asset.

    Contingentassetsaredisclosedanddescribedinthenotestothenancialstatements,includinganestimateoftheirpotentialnancialeffectifthe

    inowofeconomicbenetsisprobable.

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    Balancesheetandrelatednotes

    22 Events ater the reporting period and nancial

    commitments IAS 10

    Itisnotgenerallypracticableforpreparerstonalisenancialstatements

    without a period o time elapsing between the balance sheet date and

    thedateonwhichthenancialstatementsareauthorisedforissue.The

    question thereore arises as to the extent to which events occurring between

    thebalancesheetdateandthedateofapproval(thatis,eventsafterthe

    reportingperiod)shouldbereectedinthenancialstatements.

    Eventsafterthereportingperiodareeitheradjustingeventsornon-adjusting

    events.Adjustingeventsprovidefurtherevidenceofconditionsthatexistedatthebalancesheetdateforexample,determiningaftertheyearendthe

    considerationforassetssoldbeforetheyearend.Non-adjustingevents

    relatetoconditionsthataroseafterthebalancesheetdateforexample,

    announcing a plan to discontinue an operation ater the year end.

    The carrying amounts o assets and liabilities at the balance sheet date are

    adjustedonlyforadjustingeventsoreventsthatindicatethatthegoing-

    concern assumption in relation to the whole entity is not appropriate.

    Signicantnon-adjustingpost-balance-sheetevents,suchastheissueofsharesormajorbusinesscombinations,aredisclosed.

    Dividends proposed or declared ater the balance sheet date but beore

    thenancialstatementshavebeenauthorisedforissuearenotrecognised

    asaliabilityatthebalancesheetdate.Detailsofthesedividendsare,

    however,disclosed.

    Anentitydisclosesthedateonwhichthenancialstatementswere

    authorisedforissueandthepersonsauthorisingtheissueand,wherenecessary,thefactthattheownersorotherpersonshavetheabilityto

    amendthenancialstatementsafterissue.

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    Balancesheetandrelatednotes

    23 Equity (share capital and reserves)

    Equity,alongwithassetsandliabilities,isoneofthethreeelements

    usedtoportrayanentitysnancialposition.EquityisdenedintheIASBsFrameworkastheresidualinterestintheentitysassetsafter

    deductingallitsliabilities.Thetermequityisoftenusedtoencompassan

    entitys equity instruments and reserves. Equity is given various

    descriptionsinthenancialstatements.Corporateentitiesmayrefertoit

    asownersequity,shareholdersequity,capitalandreserves,shareholders

    unds and proprietorship. Equity includes various components with

    dierent characteristics.

    Determining what constitutes an equity instrument or the purpose o IFRS

    andhowitshouldbeaccountedforfallswithinthescopeofthenancial

    instrumentstandardIAS32,Financialinstruments:Presentation.

    Differentclassesofsharecapitalmaybetreatedaseitherdebtorequity,

    or a compound instrument with both debt and equity components. Equity

    instruments(forexample,issued,non-redeemableordinaryshares)are

    generally recorded at the proceeds o issue net o transaction costs. Equity

    instrumentsarenotre-measuredafterinitialrecognition.

    Reservesincluderetainedearnings,togetherwithfairvaluereserves,

    hedgingreserves,assetrevaluationreservesandforeigncurrencytranslation

    reserves and other statutory reserves.

    Treasury shares

    Treasurysharesaredeductedfromequity.Nogainorlossisrecognisedin

    protorlossonthepurchase,sale,issueorcancellationofanentitysownequity instruments.

    Non-controlling interests

    Non-controllinginterests(previouslytermedminorityinterests)in

    consolidatednancialstatementsarepresentedasacomponentofequity,

    separately rom the parent shareholders equity.

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    Balancesheetandrelatednotes

    Disclosures

    IAS1,Presentationofnancialstatements,requiresvariousdisclosures.

    Theseincludethetotalissuedsharecapitalandreserves,presentationofastatementofchangesinequity,capitalmanagementpoliciesand

    dividend inormation

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    Consolidated and separate inancial statements

    Consolidated and separate nancial statements

    24 Consolidated and separate nancial statements IAS 27

    IAS27,Consolidatedandseparatenancialstatements,requires

    consolidatednancialstatementstobepreparedinrespectofagroup,

    subjecttocertainexceptions.Allsubsidiariesshouldbeconsolidated.A

    subsidiary is an entity that is controlled by the parent. Control is the power

    togovernthenancialandoperatingpoliciesofanentitysoastoobtain

    benetsfromitsactivities.Itispresumedtoexistwhentheinvestordirectly

    orindirectlyholdsmorethan50percentoftheinvesteesvotingpower;

    this presumption may be rebutted i there is clear evidence to the contrary.Controlmayalsoexistwherelessthan50percentoftheinvesteesvoting

    power is held and the parent has the power to control through or example

    control o the board o directors.

    Consolidation o a subsidiary takes place rom the date o acquisition; this

    is the date on which control o the acquirees net assets and operations is

    effectivelytransferredtotheacquirer.Consolidatednancialstatementsare

    prepared to show the eect as i the parent and all the subsidiaries were one

    entity.Transactionswithinthegroup(forexample,salesfromonesubsidiaryto another) are eliminated.

    An entity with one or more subsidiaries (a parent) presents consolidated

    nancialstatements,unlessallthefollowingconditionsaremet:

    Itisitselfasubsidiary(subjecttonoobjectionfromanyshareholder).

    Itsdebtorequityarenotpubliclytraded.

    Itisnotintheprocessofissuingsecuritiestothepublic.

    TheultimateorintermediateparentoftheentitypublishesIFRS consolidatednancialstatements.

    There are no exemptions i the group is small or i certain subsidiaries are in

    a dierent line o business.

    Fromthedateofacquisition,theparent(theacquirer)incorporatesintothe

    consolidatedstatementofcomprehensiveincomethenancialperformance

    o the acquiree and recognises in the consolidated balance sheet the

    acquiredassetsandliabilities(atfairvalue),includinganygoodwillarisingon

    theacquisition(see,BusinesscombinationsIFRS3,p53).

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    Consolidated and separate inancial statements

    Theacquireesidentiableassets(includingintangibleassetsnotpreviously

    recognised),liabilitiesandcontingentliabilitiesaregenerallyrecognised

    at their air value. Fair value is determined by reerence to an arms length

    transaction; the intention o the acquirer is not relevant. I the acquisition isforlessthan100percentoftheacquiree,thereisanon-controllinginterest.

    Thenon-controllinginterestrepresentstheequityinasubsidiarythatis

    notattributable,directlyorindirectly,totheparent.Theparentcanelectto

    measurethenon-controllinginterestatitsfairvalueoratitsproportionate

    shareoftheidentiablenetassets.

    The consideration or the combination includes cash and cash equivalents

    andthefairvalueofanynon-cashconsiderationgiven.Anysharesissued

    as part o the consideration are air valued. I any o the consideration is

    deferred,itisdiscountedtoreectitspresentvalueattheacquisitiondate,

    i the eect o discounting is material. Consideration includes only those

    amounts paid to the seller in exchange or control o the entity. Consideration

    excludesamountspaidtosettlepre-existingrelationships,paymentsthatare

    contingentonfutureemployeeservicesandacquisition-relatedcosts.

    A portion o the consideration may be contingent on the outcome o uture

    eventsortheacquiredentitysperformance(contingentconsideration).Contingent consideration is also recognised at its air value at the date

    o acquisition. The accounting or contingent consideration ater the

    dateofacquisitiondependsonwhetheritisclassiedasaliability(tobe

    re-measuredtofairvalueeachreportingperiodthroughprotandloss)

    orequity(nore-measurement),usingtheguidanceinIAS32,Financial

    instruments: Presentation.

    Goodwillisrecognisedforthefutureeconomicbenetsarisingfromassets

    acquiredthatarenotindividuallyidentiedandseparatelyrecognised.Goodwillisthedifferencebetweentheconsiderationtransferred,theamount

    ofanynon-controllinginterestintheacquireeandtheacquisition-datefair

    value o any previous equity interest in the acquiree over the air value o the

    groupsshareoftheidentiablenetassetsacquired.Ifthenon-controlling

    interestismeasuredatitsfairvalue,goodwillincludesamountsattributable

    tothenon-controllinginterest.Ifthenon-controllinginterestismeasured

    atitsproportionateshareofidentiablenetassets,goodwillincludesonly

    amounts attributable to the controlling interest that is the parent.

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    Consolidated and separate inancial statements

    Goodwillisrecognisedasanassetandtestedannuallyforimpairment,or

    more requently i there is an indication o impairment.

    Inraresituationsforexample,abargainpurchaseasaresultofadistressed sale it is possible that no goodwill will result rom the

    transaction.Rather,againwillberecognised.

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    Consolidated and separate inancial statements

    A discontinued operation is a component o an entity that can be

    distinguishedoperationallyandnanciallyfornancialreportingpurposes

    rom the rest o the entity and:

    representsaseparatemajorlineofbusinessormajorgeographicalarea

    o operation;

    ispartofasingleco-ordinatedplantodisposeofaseparatemajorline

    o business o geographical area o operation; and

    isasubsidiaryacquiredexclusivelywithaviewforresale.

    Anoperationisclassiedasdiscontinuedonlyatthedateonwhichthe

    operationmeetsthecriteriatobeclassiedasheldforsaleorwhenthe

    entity has disposed o the operation. There is no retrospective

    classicationifthecriteriaforthatclassicationarenotmetuntilafterthe

    balance sheet date.

    Discontinued operations are presented separately in the income statement

    and the cash fow statement. There are additional disclosure requirements in

    relation to discontinued operations.

    The date o disposal o a subsidiary or disposal group is the date on whichcontrol passes. The consolidated income statement includes the results o

    a subsidiary or disposal group up to the date o disposal; the gain or loss

    on disposal is the dierence between (a) the carrying amount o the net

    assets plus any attributable goodwill and amounts accumulated in other

    comprehensiveincome(forexample,foreigntranslationadjustmentsand

    available-for-salereserves);and(b)theproceedsofsale.

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    Consolidated and separate inancial statements

    28 Joint ventures IAS 31

    Ajointventureisacontractualarrangementwherebytwoormoreparties

    (theventurers)undertakeaneconomicactivitythatissubjecttojointcontrol.Jointcontrolisdenedasthecontractuallyagreedsharingofcontrolofan

    economic activity.

    Jointventuresfallintothreecategories:jointlycontrolledentities,jointly

    controlledoperationsandjointlycontrolledassets.Theaccountingtreatment

    dependsonthetypeofjointventure.

    Ajointlycontrolledentityinvolvestheestablishmentofaseparateentity,

    whichmaybe,forexample,acorporationorpartnership.Jointlycontrolled

    entitiesareaccountedforunderIAS31,Interestinjointventures,using

    eitherproportionateconsolidationorequityaccounting.SIC13,Jointly

    controlledentitiesnon-monetarycontributionsbyventurers,addresses

    non-monetarycontributionstoajointlycontrolledentityinexchangeforan

    equity interest.

    Jointlycontrolledoperationsandjointlycontrolledassetsdonotinvolvethe

    creationofanentitythatisseparatefromtheventurersthemselves.Inajointoperation,eachventurerusesitsownresourcesandcarriesoutitsownpart

    ofajointoperationseparatelyfromtheactivitiesoftheotherventurer(s).

    Eachventurerownsandcontrolsitsownresourcesthatitusesinthejoint

    operation.Jointlycontrolledassetsinvolvethejointownershipofoneor

    more assets.

    Whereanentityhasaninterestinjointlycontrolledoperationsorjointly

    controlledassets,itaccountsforitsshareoftheassets,liabilities,income

    and expenses and cash fows under the arrangement.

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    60 60

    Othersubjects

    Other subjects

    29 Related-party disclosures IAS 24

    Disclosures are required in respect o an entitys transactions with related

    parties. Related parties include:

    Subsidiaries.

    Fellowsubsidiaries.

    Associates.

    Jointventures.

    Theentitysanditsparentskeymanagementpersonnel(includingclosemembers o their amilies).

    Partieswithcontrol/jointcontrol/signicantinuenceovertheentity

    (includingclosemembersoftheirfamilies,whereapplicable).

    Post-employmentbenetplans.

    However,theyexclude,forexample,nanceprovidersandgovernmentsin

    the course o their normal dealings with the entity.

    The name o the ultimate parent entity is disclosed i it is not mentionedelsewhereininformationpublishedwiththenancialstatements.Thenames

    o the immediate and the ultimate controlling parties (which could be an

    individual or a group o individuals) are disclosed irrespective o whether

    there have been transactions with those related parties.

    Wheretherehavebeenrelated-partytransactions,managementdiscloses

    thenatureoftherelationship,theamountoftransactions,outstanding

    balances and other elements necessary or a clear understanding o the

    nancialstatements(forexample,volumeandamountsoftransactions,provisions or bad and doubtul debts and pricing policies). Disclosure is

    madebycategoryofrelatedpartyandbymajortypeoftransaction.Items

    ofasimilarnaturemaybedisclosedinaggregate,exceptwhenseparate

    disclosureisnecessaryforanunderstandingoftheeffectsofrelated-party

    transactionsonthereportingentitysnancialstatements.

    Disclosuresthatrelated-partytransactionsweremadeontermsequivalentto

    those that prevail or arms length transactions are made only i such terms

    can be substantiated.

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    Othersubjects

    IAS24,Relatedpartydisclosures,wasrevisedinNovember2009toclarify

    thedenitionofarelatedpartyandsimplifythedisclosurerequirementsfor

    government-relatedentities.Theamendmentappliesforannualperiods

    beginning on or ater 1 January 2011; early adoption is permitted.

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    Othersubjects

    31 Interim reports IAS 34

    ThereisnoIFRSrequirementforanentitytopublishinterimnancial

    statements.However,anumberofcountrieseitherrequireorrecommendtheirpublication,inparticularforpubliccompanies.

    IAS34,Interimnancialreporting,applieswhereanentitypublishes

    aninterimnancialreportinaccordancewithIFRS.IAS34setsoutthe

    minimumcontentthataninterimnancialreportshouldcontainandthe

    principles that should be used in recognising and measuring the transactions

    and balances included in that report.

    EntitiesmayeitherpreparefullIFRSnancialstatements(conformingtothe

    requirementsofIAS1,Presentationofnancialstatements)orcondensed

    nancialstatements.Condensedreportingisthemorecommonapproach.

    Condensednancialstatementsincludeacondensedbalancesheet,

    acondensedincomestatement(ifpresentedseparately),acondensed

    statementofcomprehensiveincome,acondensedcashowstatement,a

    condensed statement o changes in equity and selected note disclosures.

    An entity generally uses the same accounting policies or recognisingandmeasuringassets,liabilities,revenues,expensesandgainsand

    losses at interim dates as those to be used in the current year annual

    nancialstatements.

    There are special measurement requirements or certain costs that can only

    bedeterminedonanannualbasis(forexample,itemssuchastaxthatis

    calculatedbasedonafull-yeareffectiverate),andtheuseofestimatesin

    theinterimnancialstatements.Animpairmentlossrecognisedinaprevious

    interimperiodinrespectofgoodwill,oraninvestmentineitheranequityinstrumentoranancialassetcarriedatcost,isnotreversed.

    Asaminimum,currentperiodandcomparativegures(condensedor

    complete) are disclosed as ollows:

    Balancesheetasofthecurrentinterimperiodendwithcomparatives

    or the immediately preceding year end.

    Statementofcomprehensiveincome(and,ifpresentedseparately,

    incomestatement)currentinterimperiod,nancialyeartodateandcomparatives or the same preceding periods (interim and year to date).

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    Othersubjects

    Cashowstatementandstatementofchangesinequitynancialyear

    to date with comparatives or the same year to date period o the

    preceding year.

    Explanatorynotes.

    IAS 34 sets out some criteria to determine what inormation should be

    disclosedintheinterimnancialstatements.Theseinclude:

    Materialitytotheoverallinterimnancialstatements.

    Unusualorirregularitems.

    Changessincepreviousreportingperiodsthathaveasignicanteffect

    ontheinterimnancialstatements(ofthecurrentorpreviousreporting

    nancialyear).

    Relevancetotheunderstandingofestimatesusedintheinterim

    nancialstatements.

    Theoverridingobjectiveistoensurethataninterimnancialreportincludes

    allinformationthatisrelevanttounderstandinganentitysnancialposition

    and perormance during the interim period.

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    Othersubjects

    32 Service concession arrangements SIC 29 and IFRIC 12

    ThereisnospecicIFRSthatappliestopublic-to-privateserviceconcession

    arrangementsfordeliveryofpublicservices.SIC29,Serviceconcessionarrangements:Disclosures,containsdisclosurerequirementsinrespectof

    public-to-privateservicearrangementsbutdoesnotspecifyhowtheyare

    accountedfor.IFRIC12,Serviceconcessions,clarieshowIFRSshouldbe

    appliedbyaprivatesectorentityinaccountingforpublic-to-privateservice

    concession arrangements.

    IFRIC12appliestopublic-to-privateserviceconcessionarrangementsin

    which the public sector body (the grantor) controls and/or regulates the

    services provided with the inrastructure by the private sector entity (the

    operator). The regulation also addresses to whom the operator should

    providetheservicesandatwhatprice.Thegrantorcontrolsanysignicant

    residual interest in the inrastructure.

    Astheinfrastructureiscontrolledbythegrantor,theoperatordoesnot

    recognisetheinfrastructureasitsproperty,plantandequipment;nordoes

    theoperatorrecogniseananceleasereceivableforleasingthepublic

    serviceinfrastructuretothegrantor,regardlessoftheextenttowhichtheoperator bears the risk and rewards incidental to ownership o the assets.

    Theoperatorrecognisesanancialassettotheextentthatithasan

    unconditional contractual right to receive cash irrespective o the usage o

    the inrastructure.

    The operator recognises an intangible asset to the extent that it receives a

    right (a licence) to charge users o the public service.

    Underboththenancialassetandtheintangibleassetmodels,theoperator

    accounts or revenue and costs relating to construction or upgrade services

    inaccordancewithIAS11,Constructioncontracts.Theoperatorrecognises

    revenueandcostsrelatingtooperationservicesinaccordancewithIAS18,

    Revenue.Anycontractualobligationtomaintainorrestoreinfrastructure,

    exceptforupgradeservices,isrecognisedinaccordancewithIAS37,

    Provisions,contingentliabilitiesandcontingentassets.

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    Industry-specifictopics

    Industry-specic topics

    33 Agriculture IAS 41

    Agriculturalactivityisdenedasthemanagedbiologicaltransformation

    and harvest o biological assets (living animals and plants) or sale or or

    conversion into agricultural produce (harvested product o biological assets)

    or into additional biological assets.

    Allbiologicalassetsaremeasuredatfairvaluelesscoststosell,with

    thechangeinthecarryingamountreportedaspartofprotorlossfrom

    operating activities. Agricultural produce harvested rom an entitys biologicalassets is measured at air value less costs to sell at the point o harvest.

    Coststosellincludecommissionstobrokersanddealers,leviesby

    regulatory agencies and commodity exchanges and transer taxes and

    duties. Costs to sell exclude transport and other costs necessary to get

    assets to market.

    The air value is measured using an appropriate quoted price where

    available. I an active market does not exist or biological assets or harvestedagriculturalproduce,thefollowingmaybeusedindeterminingfairvalue:the

    mostrecenttransactionprice(providedthattherehasnotbeenasignicant

    change in economic circumstances between the date o that transaction and

    thebalancesheetdate);marketpricesforsimilarassets,withadjustments

    toreectdifferences;andsectorbenchmarks,suchasthevalueofan

    orchardexpressedperexporttray,bushelorhectareandthevalueof

    cattleexpressedperkilogramofmeat.Whenanyofthisinformationisnot

    available,theentityusesthepresentvalueoftheexpectednetcashows

    fromtheassetdiscountedatacurrentmarket-determinedrate.

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    34 Retirement benet plans IAS 26

    Financialstatementsforretirementbenetplanspreparedinaccordance

    withIFRSshouldcomplywithIAS26,Accountingandreportingbyretirementbenetplans.

    Thereportforadenedcontributionplanincludes:

    Astatementofnetassetsavailableforbenets.

    Astatementofchangesinnetassetsavailableforbenets.

    Asummaryofsignicantaccountingpolicies.

    Adescriptionoftheplanandtheeffectofanychangesintheplan

    during the period.

    Adescriptionofthefundingpolicy.

    Thereportforadenedbenetplanincludes:

    Eitherastatementthatshowsthenetassetsavailableforbenets,the

    actuarialpresentvalueofpromisedretirementbenetsandtheresulting

    excessordecit,orareferencetothisinformationinanaccompanying

    actuarial report. Astatementofchangesinnetassetsavailableforbenets.

    Acashowstatement.

    Asummaryofsignicantaccountingpolicies.

    Adescriptionoftheplanandtheeffectofanychangesintheplan

    during the period.

    The report also explains the relationship between the actuarial present value

    ofpromisedretirementbenetsandthenetassetsavailableforbenets,

    andthepolicyforthefundingofpromisedbenets.Investmentsheldbyallretirementplans(whetherdenedbenetordenedcontribution)arecarried

    at air value.

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    Industry-specifictopics

    35 Extractive industries IFRS 6

    IFRS6,Explorationforandevaluationofmineralresources,addresses

    thenancialreportingfortheexplorationforandevaluationofmineralresources. It does not address other aspects o accounting by entities

    engaged in the exploration or and evaluation o mineral reserves (such as

    activities beore an entity has acquired the legal right to explore or ater the

    technical easibility and commercial viability to extract resources have been

    demonstrated). Activities outside the scope o IFRS 6 are accounted or

    accordingtotheapplicablestandards(suchasIAS16,Property,plantand

    equipment,IAS37,Provisions,contingentliabilitiesandcontingentassets,

    andIAS38,Intangibleassets.)

    The accounting policy adopted or the recognition o exploration and

    evaluation assets should result in inormation that is relevant and reliable. As

    aconcession,certainfurtherrulesofIAS8,Accountingpolicies,changes

    inaccountingestimatesanderrors,neednotbeapplied.Thispermits

    companiesinthissectortocontinue,forthetimebeing,toapplypolicies

    that were ollowed under national GAAP that would not comply with the

    requirements o IFRS. The accounting policy may be changed only i the

    changemakesthenancialstatementsmorerelevantandnolessreliable,ormorereliableandnolessrelevantinotherwords,ifthenewaccounting

    policytakesitclosertotherequirementsintheIASBsFramework.

    Exploration and evaluation assets are initially measured at cost. They are

    classiedastangibleorintangibleassets,accordingtothenatureofthe

    assetsacquired.Managementappliesthatclassicationconsistently.After

    recognition,managementapplieseitherthecostmodelortherevaluation

    modeltotheexplorationandevaluationassets,basedonIAS16,Property,

    plantandequipment,orIAS38,Intangibleassets,accordingtonatureo the assets. As soon as technical easibility and commercial viability are

    determined,theassetsarenolongerclassiedasexplorationand

    evaluation assets.

    IFRS pocket guide 2010 PricewaterhouseCoopers

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    The exploration and evaluation assets are tested or impairment when

    acts and circumstances suggest that the carrying amounts may not be

    recovered.Theassetsarealsotestedforimpairmentbeforereclassication

    outofexplorationandevaluation.Theimpairmentismeasured,presentedanddisclosedaccordingtoIAS36,Impairmentofassets.Exploration

    andevaluationassetsareallocatedtocash-generatingunitsorgroupsof

    cash-generatingunitsnolargerthanasegment.Managementdiscloses

    theaccountingpolicyadopted,aswellastheamountofassets,liabilities,

    income and expense and investing cash fows arising rom the exploration

    and evaluation o mineral resources.

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    Index by standard and interpretation

    Standards Page

    IFRS 1 First-timeadoptionofInternationalFinancialReportingStandards 3

    IFRS 2 Share-basedpayment 31

    IFRS 3 Businesscombinations 53

    IFRS 4 Insurance contracts 23

    IFRS5 Non-currentassetsheldforsaleanddiscontinuedoperations 56

    IFRS 6 Exploration or and evaluation o mineral resources 68

    IFRS 7 Financial instruments: Disclosures 11

    IFRS 8 Operatingsegments 27

    IFRS9 Financial instruments 11

    IAS 1 Presentationofnancialstatements 5

    IAS 2 Inventories 44

    IAS 7 Cash fow statements 62

    IAS 8 Accountingpolicies,changesinaccountingestimatesanderrors 9

    IAS 10 Events ater the balance sheet date 48

    IAS 11 Constructioncontracts 25

    IAS 12 Income taxes 33

    IAS 16 Property,plantandequipment 38

    IAS 17 Leases 43

    IAS 18 Revenue 24

    IAS19 Employeebenets 28

    IAS 20 Accounting or government grants and disclosure o government assistance 26

    IAS 21 The eects o changes in oreign exchange rates 21

    IAS 23 Borrowingcosts 39

    IAS 24 Related-partydisclosures 60

    IAS 26 Accountingandreportingbyretirementbenetplans 67

    IAS 27 Consolidatedandseparatenancialstatements 51

    IAS 28 Investmentinassociates 58

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    Index by standard and interpretation

    Standards Page

    IAS29 Financial reporting in hyperinfationary economies 21

    IAS 31 Interestsinjointventures 59

    IAS 32 Financial instruments: presentation 11

    IAS 33 Earningspershare 35

    IAS 34 Interimnancialreporting 63

    IAS 36 Impairment o assets 41

    IAS 37 Provisions,contingentliabilitiesandcontingentassets 45

    IAS 38 Intangible assets 36

    IAS39 Financial instruments: Recognition and measurement 11

    IAS 40 Investment property 40

    IAS 41 Agriculture

    Interpretations

    IFRIC 12 Serviceconcessionarrangements 65

    IFRIC 13 Customerloyaltyprogrammes 25

    IFRIC 14 IAS19Thelimitonadenedbenetasset,minimumfundingrequirements

    and their interaction 30

    IFRIC15 Agreements or the construction o real estate 26

    IFRIC 18 Transferofassetsfromcustomers 25,38

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