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Accounting IFRS-1

IFRS1

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18 views

Accounting IFRS-1

IFRS1

Uploaded by

chiragjainbro1
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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IFRS 1 First-time Adoption of International Financial

Reporting Standards
IFRS 1 requires an entity that is adopting IFRS Standards for the first time to prepare a
complete set of financial statements covering its first IFRS reporting period and the
preceding year.

Implementation
IFRS 1 also prohibits retrospective application of IFRS Standards in some areas,
particularly when retrospective application would require judgements by management
about past conditions after the outcome of a particular transaction is already known.

IFRS 1 requires disclosures that explain how the transition from previous GAAP to IFRS
Standards affected the entity’s reported financial position, financial performance and cash
flows.

IFRS 2 Share-based Payment


IFRS 2 specifies the financial reporting by an entity when it undertakes a share-based
payment transaction, including issue of share options. It requires an entity to recognise
share-based payment transactions in its financial statements, including transactions with
employees or other parties to be settled in cash, other assets or equity instruments of the
entity. It requires an entity to reflect in its reported profit or loss and financial position
the effects of share-based payment transactions, including expenses associated with
transactions in which share options are granted to employees

Implementation
When the Committee rejects an issue, it publishes an Agenda Decision explaining the
reasons. In many cases, Agenda Decisions include information to help those applying the
relevant Standards. For example, if the Committee concludes that IFRS Standards already
contain sufficient material to determine the correct accounting, the Agenda Decision
might highlight the relevant paragraphs.

IFRS 3 Business Combinations


IFRS 3 establishes principles and requirements for how an acquirer in a business
combination:

• recognises and measures in its financial statements the assets and liabilities
acquired, and any interest in the acquiree held by other parties;
• recognises and measures the goodwill acquired in the business combination or a
gain from a bargain purchase;and
• determines what information to disclose to enable users of the financial statements
to evaluate the nature and financial effects of the business combination.

Implementation
core principles in IFRS 3 are that an acquirer measures the cost of the acquisition at the
fair value of the consideration paid; allocates that cost to the acquired identifiable assets
and liabilities on the basis of their fair values; allocates the rest of the cost to goodwill;
and recognises any excess of acquired assets and liabilities over the consideration paid (a
‘bargain purchase’) in profit or loss immediately. The acquirer discloses information that
enables users to evaluate the nature and financial effects of the acquisition.

IFRS 4 Insurance Contracts


An insurance contract is a contract under which one party (the insurer) accepts
significant insurance risk from another party (the policyholder) by agreeing to
compensate the policyholder if a specified uncertain future event (the insured event)
adversely affects the policyholder.

Implementation
IFRS 4 applies to all insurance contracts (including reinsurance contracts) that an entity
issues and to reinsurance contracts that it holds, except for specified contracts covered by
other Standards. It does not apply to other assets and liabilities of an insurer, such as
financial assets and financial liabilities within the scope of IFRS 9. Furthermore, it does
not address accounting by policyholders

IFRS 5 Non-current Assets Held for Sale and


Discontinued Operations
IFRS 5 requires:

• a non-current asset or disposal group to be classified as held for sale if its carrying
amount will be recovered principally through a sale transaction instead of through
continuing use;
• assets held for sale to be measured at the lower of the carrying amount and fair
value less costs to sell;
• depreciation of an asset to cease when it is held for sale;
• separate presentation in the statement of financial position of an asset classified as
held for sale and of the assets and liabilities included within a disposal group
classified as held for sale; and
• separate presentation in the statement of comprehensive income of the results of
discontinued operations.

Implementation

An entity is committed to a plan to sell its headquarters building and has initiated actions to
locate a buyer.The entity intends to transfer the building to a buyer after it vacates the building.
The time necessary to vacate the building is usual and customary for sales of such assets.

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