Ready for IFRS

Translation to the Presentation Currency from the Functional Currency

noreply@blogger.com (Hardi Cheng) — Sat, 13 Aug 2011 13:41:00 +0000

IAS 21, The Effect of Changes in Foreign Exchange Rates defines Presentation Currency as the currency in which the financial statements are presented. While the Functional Currency was defined as the currency of the primary economic environment in which...

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Recognition of PROVISIONS

noreply@blogger.com (Hardi Cheng) — Tue, 19 Jul 2011 10:51:00 +0000

IAS 37 regarding Provision, Contingent Liabilities and Contingent Assets defines PROVISIONS as liabilities of uncertain timing or amount. Provisions can be distinguished from other liabilities such as trade payables and accruals because there is...

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Capitalisation of Exchange Differences, permissible or not ?

noreply@blogger.com (Hardi Cheng) — Tue, 26 Apr 2011 08:32:00 +0000

IAS 21, The Effect of Changes in Foreign Exchange Rates requires recognition of foreign exchange differences as income or expense in the period in which they arise. Previously, there had been an allowed alternative treatment for certain losses...

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The Concept of Significant Influence

noreply@blogger.com (Hardi Cheng) — Mon, 25 Apr 2011 12:10:00 +0000

Based on IAS 24 : Related Party Disclosures, entities are considered to be related parties when one of them either : has the ability to control the other entity can exercise significant influence over the other entity in making financial and...

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Purpose of Related Party Disclosures

noreply@blogger.com (Hardi Cheng) — Mon, 25 Apr 2011 07:00:00 +0000

IAS 24 : Related Party Disclosures defines a related party as a person or entity that is related to the entity that is preparing its financial statements (reporting entity). (a) A person or a close member of that person’s family is related to a...

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The latest update of Financial Instruments, Insurance Contracts, Leases and Revenue Recognition discussions

noreply@blogger.com (Hardi Cheng) — Thu, 21 Apr 2011 02:21:00 +0000

Following is the report from IASB latest meeting on 12 April to 15 April, 2011 which was dropped into my inbox mail on April 20, 2011. The IASB met in London from Tuesday 12 April to Friday 15 April. The sessions on Tuesday and Wednesday and on...

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Using the With-and-without Method in Presenting the Compound Instruments in the Financial Statements

noreply@blogger.com (Hardi Cheng) — Wed, 23 Mar 2011 06:50:00 +0000

Sometimes issued nonderivative financial instruments contain both liability and equity elements. In other words, one component of the instruments meets the definition of a financial liability and another component of the instrument meets the definition...

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A Practical Guide to New IFRSs 2011 (PwC IFRS Publications)

noreply@blogger.com (Hardi Cheng) — Mon, 21 Mar 2011 10:22:00 +0000

In March 2011, one of the Big 4 accounting firm PricewaterhouseCoopers published its IFRS implementation guidance “A Practical Guide to New IFRSs for 2011”. Within the 24-page guide book in Q & A format, it provides a high-level outline of the key...

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Considering an entity’s Functional Currency

noreply@blogger.com (Hardi Cheng) — Tue, 08 Feb 2011 07:05:00 +0000

When a reporting entity prepares financial statements, IAS 21, The Effects of Changes in Foreign Exchange Rates, requires each individual entity included in the reporting entity – whether it is a stand-alone entity, an entity with foreign operations...

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The Objective and Scope of IAS 21

noreply@blogger.com (Hardi Cheng) — Wed, 19 Jan 2011 08:02:00 +0000

OBJECTIVES - The purpose of IAS 21, The Effects of Changes in Foreign Exchange Rates, is to set out how to account for transactions in foreign currencies and foreign operations. The Standard also shows how to translate financial statements into a...

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IFRS Practice Statement on Management Commentary – A Framework for Presentation

noreply@blogger.com (Hardi Cheng) — Thu, 09 Dec 2010 03:36:00 +0000

As dropped into my email INBOX on December 8, 2010, the IASB announced the publication of IFRS Practice Statement Management Commentary, a broad, non-binding framework for the presentation of narrative reporting to accompany financial statements prepared...

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Recognition and Measurement of Biological Asset and Agricultural Produce

noreply@blogger.com (Hardi Cheng) — Wed, 01 Dec 2010 03:02:00 +0000

The main objective of IAS 41, Agriculture is to prescribe the accounting treatment and disclosures related to agricultural activity. This Standard applies to biological assets, agricultural produce at the point of harvest, and government grants. The...

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The publication of 2011 IFRS (Blue Book) Consolidated without early application

noreply@blogger.com (Hardi Cheng) — Mon, 22 Nov 2010 09:04:00 +0000

Dropped into my email inbox on last Saturday, November 20, 2010, below was the announcement of the publication of 2011 IFRS Blue Book. The IFRS Foundation is pleased to announce that the 2011 IFRS (Blue Book) Consolidated without early application will...

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In the Absence of an IFRS, where to turn to ?

noreply@blogger.com (Hardi Cheng) — Fri, 12 Nov 2010 03:19:00 +0000

The IASB publishes its standards in a series of pronouncements called International Financial Reporting Standards (IFRSs). The term ‘International Financial Reporting Standards’ includes IFRSs, IASs and Interpretation developed by the IFRIC or its...

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Revenue Recognition from Rendering of Services

noreply@blogger.com (Hardi Cheng) — Thu, 11 Nov 2010 09:05:00 +0000

In general, IAS 18, Revenue states that revenue is recognized when it is probable that future economic benefits will flow to the entity and these benefits can be measured reliably. How this standard regulates the revenue recognition particularly from...

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The IFRS Framework

noreply@blogger.com (Hardi Cheng) — Tue, 09 Nov 2010 04:31:00 +0000

As described in the Introduction section of IFRS 2010 (Part A), the IASB has a Framework for the Preparation and Presentation of Financial Statements. The FIRS Framework deals with the : objective of financial reporting qualitative...

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Revenue recognition while an entity is acting as a Principal or as an Agent

noreply@blogger.com (Hardi Cheng) — Fri, 05 Nov 2010 07:07:00 +0000

Based on IAS 18, Revenue, in general term, revenue is recognized only when it is probable that the economic benefits associated with the transaction will flow to the entity and these benefits can be measured reliably. Para. 8 of IAS 18 states that...

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The Requirements to classify an asset as HELD FOR SALE

noreply@blogger.com (Hardi Cheng) — Tue, 02 Nov 2010 09:32:00 +0000

IFRS 5, Non-current Assets Held for Sale and Discontinued Operations issued by the IASB in March 2004 replacing IAS 35, deals with the measurement and presentation in the statement of financial position of non-current assets (and disposal groups) held...

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Learning IFRS for SMEs from PWC Publications

noreply@blogger.com (Hardi Cheng) — Wed, 27 Oct 2010 08:48:00 +0000

On July 9, 2009 the IASB published the International Financial Reporting Standard for Small and Medium-size Entities (IFRS for SMEs). The IFRS for SMEs applies to all entities that do not have public accountability. An entity has public accountability if...

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The main changes of IAS 40 (2003 revised)

noreply@blogger.com (Hardi Cheng) — Wed, 27 Oct 2010 07:23:00 +0000

In December 2003, the IASB issued a revised version of IAS 40 Investment Property. There are several main changes of revised IAS 40 from the previous version as described below (IN4 to IN11 of IAS 40) : IN5 of IAS 40 states that a property interest...

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The basic concept of Investment Property

noreply@blogger.com (Hardi Cheng) — Thu, 21 Oct 2010 08:07:00 +0000

IAS 40 Investment Property shall be applied in the recognition, measurement and disclosure of transactions regarding investment property. What is the definition of Investment Property ? Based on Para. 5 of IAS 40, Investment Property is property...

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What are the threshold of criteria #3 and #4 of IAS 17 have to be met to be classified as a finance lease ?

noreply@blogger.com (Hardi Cheng) — Mon, 11 Oct 2010 09:39:00 +0000

IAS 17 Leases stipulates that whether a lease is a finance lease or an operating lease depends on the substance of the transaction rather than the form of the contract. Situations that, individually or in combination, would normally lead to a lease...

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A Guide through IFRS July 2010

noreply@blogger.com (Hardi Cheng) — Mon, 20 Sep 2010 06:51:00 +0000

The IFRS Foundation will shortly publish an updated version of "A Guide through IFRSs July 2010". This 2010 edition is presented in two volume parts (Part A and B), sold together as a set. This new guide will include : All IFRSs and...

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Proposed amendments to IAS 12 Deferred Tax : Recovery of Underlying Assets

noreply@blogger.com (Hardi Cheng) — Wed, 15 Sep 2010 10:26:00 +0000

On 10 September 2010, the IASB published for public comment an exposure draft (ED) of Deferred Tax : Recovery of Underlying Assets. The proposal would amend one aspect of IAS 12 Income Taxes. Under IAS 12, the measurement of deferred tax liabilities...

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Effect of Operating and Finance Leases on Lessee Financial Statements and Key Financial Ratios

noreply@blogger.com (Hardi Cheng) — Mon, 06 Sep 2010 14:57:00 +0000

As stated in IAS 17 : Leases, there are two classifications of lease transaction that applicable in the financial statements of the lessee : (1) Operating leases and (2) Finance leases. Followings are the effect of operating and finance leases on...

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