IFRS GLIMPSE

AK
 IFRS GLIMPSE
IFRS Glimpse (IG) has been created to assist in gaining a high-level overview of IASB Conceptual Framework,
International Accounting Standards (IASs) and International Financial Reporting Standards (IFRSs). IG does
not contain SIC and IFRIC interpretations.

IG provides a summary in the form of flowcharts and decisions tree about the recognition and measurement
requirements of the IFRSs issued by the International Accounting Standards Board (IASB).

IG includes all IASs and IFRSs issued and effective as at June 2020.

IG publication has been carefully prepared, but it has been written in overall terms and should be read as broad guidance only and does not constitute our
professional advise. IG cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein AK
without obtaining specific professional advice. Moreover, no representation or warranty (express or implied) is given as to the accuracy or completeness of the
information contained in this publication.
AK
CONTENTS PAGE

IFRS GLIMPES
IASB CONCEPTUAL FRAMEWORK……………………………….……………………………………………….………1
IAS 1 PRESENTATION OF FINANCIAL STATEMENTS…………………………………………………………….…2
IAS 2 INVENTORIES………………………………………………………………………………………………………….….3
IAS 7 STATEMENT OF CASH FLOWS………………………………………………………………………………….….4
IAS 8 ACCOUNTING POLICIES, CHANGES IN ACCOUNTING ESTIMATES AND ERRORS……………5
IAS 10 EVENTS AFTER THE REPORTING PERIOD…………………………………………………………………..6
IAS 12 INCOME TAXES ………………………………………………………………………………………………………..7
IAS 16 PROPERTY, PLANT AND EQUIPMENT ……………………………………………………………………….8
IAS 19 EMPLOYEE BENEFITS …………………………………………………………………………………………….…9
IAS 20 ACCOUNTING FOR GOVERNMENT GRANTS AND DISCLOSURES OF GOVERNMENT
ASSISTANCE……………………………………………………………………………………………………………………….10
IAS 21 THE EFFECTS OF CHANGES IN FOREIGN EXCHANGE RATES……………………………………..11
IAS 23 BORROWING COSTS……………………………………………………………………………………………….12
IAS 24 RELATED PARTY DISCLOSURES………………………………………………………………………………..13
IAS 26 ACCOUNTING AND REPORTING BY RETIREMENT BENEFIT PLANS…………………………..14
IAS 27 SEPARATE FINANCIAL STATEMENTS………………………………………………………………………..15
IAS 28 INVESTMENTS IN ASSOCIATES AND JOINT VENTURES…………………………………………….16
IAS 29 FINANCIAL REPORTING IN HYPERINFLATIONARY ECONOMIES………………………………..17
IAS 32 FINANCIAL INSTRUMENTS: PRESENTATION…………………………………………………………….18
AK
CONTENTS (CONTINUED) PAGE

IAS 33 EARNINGS PER SHARE……………………………………………………………………….……………………..20

IAS 34 INTERIM FINANCIAL REPORTING………………………………………………………….…………………..21
IAS 36 IMPAIRMENT OF ASSETS………………………………………………………………………….……………….23
IAS 37 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS………….……………….24
IAS 38 INTANGIBLE ASSETS………………………………………………………………………………….………………26
IAS 40 INVESTMENT PROPERTY……………………………………………….………………………………………….27
IAS 41 AGRICULTURE………………………………………………………………………….……………………………….28
IFRS 1 FIRST-TIME ADOPTION OF IFRSs…………..………………………………….………………………….…...30
IFRS 2 SHARE-BASED PAYMENT……………………………………………………………………………………….....31
IFRS 3 BUSINESS COMBINATIONS…………………………………………………………………………………….....32
IFRS 4 INSURANCE CONTRACTS…………………………………………………………………………………………..33
IFRS 5 NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS………………34
IFRS 6 EXPLORATION FOR AND EVALUATION OF MINERAL RESOURCES…….…………………………35
IFRS 7 FINANCIAL INSTRUMENTS: DISCLOSURES…………………………………….…………………………..36
IFRS 8 OPERATING SEGMENTS…………………………………………………………………………………………....37
IFRS 9 FINANCIAL INSTRUMENTS………………………………………………………………………………………..38
IFRS 10 CONSOLIDATED FINANCIAL STATEMENTS……………………………………………………………….40
IFRS 11 JOINT ARRANGEMENTS….…………………………………………………………………………..............43
AK
CONTENTS (CONTINUED) PAGE

IFRS 12 DISCLOSURE OF INTERESTS IN OTHER ENTITIES……….…………………….…………...........44

IFRS 13 FAIR VALUE MEASUREMENT……………………………………………………………………………….45
IFRS 14 REGULATORY DEFERRAL ACCOUNTS……………………….…………………………….…………….46
IFRS 15 REVENUE FROM CONTRACTS WITH CUSTOMERS….……………………………….….………..47
IFRS 16 LEASES………………………………………………….……………………………………………….....………..49
IFRS 17 INSURANCE CONTRACTS……………………….……………………………………………….…...........52
ABOUT THE AUTHOR and SUPPORT TEAM………………………………………………………………………55
REFERENCES………………………………………………………………………………………..………………………….56
 AK
IASB Conceptual Framework Issued March 2018 Page#1

Status and Purpose Focus

• Theoretical principles
• Assist IASB in standard
setting
• Bedrock of IFRS
• Doesn’t override IFRS

Objectives of Financial statements Underlying Elements of Financial

Users of financial Qualitative characteristics
general-purpose and reporting assumption Statements
information of useful financial entities
financial reporting information
Going Concern • Assets
To provide • Primary users • Liabilities
financial • Other users Reporting Financial • Equity
information Fundamental Enhancing Entities Statements • Incomes
about the • Expenses
reporting entity • Unit of Account
• Relevant • Comparative
that is useful to • Faithful • Verifiability
existing and Recognition and
representation • Timeliness
potential Derecognition Criteria
• Understandability
investors,
lenders and
creditors Measurement Basis

• Financial capital maintenance Capital and Capital

• Physical capital maintenance Maintenance
AK Effective date: Periods beginning on or after 1 Jan 2005
Page#2
IAS 1 Presentation of Financial Statements
Legends:
Financial statements = FS
Overall Considerations Components of Financial Statements Financial position = FP

• Structure & Contents

Statement of profit or Statement of cash Statement of changes in
• Fair presentation Statement of FP Notes
loss and other flows equity
• Compliance & structure and content comprehensive income
Departure
• Going concern • Statement of
Current and Other Cash and ▪ Operating Total Transactions
• Accrual basis compliance with
Comprehensive Cash activities; comprehensive with
• Materiality & Non-Current IFRS;
Income Equivalence ▪ Investing income shareholders
Aggregation distinction • Summary of
activities;
• Offsetting significant
• Expenses by ▪ Financing
• Reporting frequency • Will not be reclassified accounting
Function activities.
• Comparative subsequently to profit policies;
Information • Expenses by Nature or loss • Supporting
• Consistency • May be reclassified calculation on each
subsequently to profit item presented in
or loss when specific the financial
conditions are met statements;
• Other disclosures:
• Contingent
liabilities.
• Commitments.
• Non-financial
disclosures.
AK
IAS 2 Inventories Effective date: Periods beginning on or after 1 Jan 2005
Page#3
Scope:
All inventories except: Legends:
▪ FI (IAS 32, IFRS 9 & Inventories are measured at lower of cost and net releasable value (NRV). Fair value = FV
IAS 39. Financial Instruments = FI
▪ Biological assets (IAS Overhead = OH
41).

Note:
Definition:
Cost of Net Realizable
▪ Does not apply to 1. Inventories:
Inventory Value Inventories are assets:
producers of
agriculture & forest ➢ Held for sale in
products measured ordinary course of
at NRV. business;
For finished goods and work in process
▪ Minerals & mineral ➢ In process of
inventory
products measured Cost of purchase of direct material Excludes: production for such
at NRV. Add + irrecoverable taxes ▪ Abnormal waste sale;
Estimated selling price in the ordinary course of
▪ Commodity brokers Add + transport & handling charges ▪ Warehouse costs (unless ➢ In the form of
business
who measure Less – trade volume rebates/discounts necessary for production materials or supplies
less – Estimated costs of completion
inventory at FV less Costs of conversion process) to be consumed in
Less – estimated costs to make such sale
cost to sell. Direct labor ▪ Admin expenses production process or
Add + other direct cost ▪ Selling expenses in rendering of
Add + factory overhead cost (fixed and ▪ Interest charges / services.
variable) borrowing cost, except in NRV for material and supplies inventory is its
the cases where replacement cost.
inventory is a qualifying
Cost formulas: asset under IAS 23 Disclosure requirement:
▪ For non-interchangeable Standard cost ▪ Accounting policies adopted in measuring inventories, including the costing
items method methods.
- Specific identification ▪ Total carrying amount of inventories and the carrying amount in classifications.
▪ For interchangeable items ▪ Carrying amount of inventories carried at fair value less costs to sell.
- FIFO or Retail ▪ Amount of inventories recognised as an expense during the period.
- Weighted average cost method ▪ Amount of any write-down of inventories recognised as an expense in the period.
▪ Amount of any reversal of any previous write-down that is recognised in profit or
loss for the period.
▪ Circumstances or events that led to the reversal of a write-down of inventories to
net realisable value.
▪ Carrying amount of inventories pledged as security for liabilities.
 AK
IAS 7 Statement of Cashflows Effective date: Periods beginning on or after 1 Jan 1994 Page#4
Legend:
Long term assets = LTA
Operating activities Investing activities Financing activities Cash and Cash Equivalent
Single entity
Definition:
Relates to statement Relates to non- Relates to owner's • Unrestricted Cash in 1. Cash & cash
of profit or loss current assets and equity, non-current hand or at bank Split finance lease equivalence:
current investments liabilities and short- • Short term, highly instalments ▪ Short term
not part of cash & term borrowings liquid, readily Interest = operating (maturity 3
Cash generated cash equivalent convertible to known activities months or less);
from operations amount of cash Consolidated Capital = financing ▪ Highly liquid
Received or paid interest and dividends are disclosed • Less bank over-draft statement of activities investments;
separately and can be classified as operating,
cashflows ▪ Readily
Direct Indirect investing or financing, based on their nature and as • original maturity is 3
Method Method long as they are consistently treated from period to months or less, convertible to
period. irrespective of known amounts of
maturity timing post cash.
Important to consider: balance date ▪ Subject to
▪ Gross Vs. Net cash flows insignificance risk
▪ Foreign currency cash flows
of change in value.
▪ Cash flow per share is not a required disclosure
▪ Net reporting by financial institutions
▪ Reporting; forward contracts, futures, options and swaps Dividends Dividends Acquisition / Acquisition
▪ Reporting extra ordinary items paid to NCI received from disposal of of associate
▪ Acquisition and disposal of subsidiary and other group units associates and subsidiary or joint
joint ventures venture
Required Disclosures Classify as cash
The amount of significant cash and cash equivalent balances held by an entity flows from
which are not available for use by the group should be disclosed along with a financing Classify as cash Show net cash Show
commentary by management. flows from effects as part of payments
Recommended Disclosures Investing cash flows from under cash
a) The amount of undrawn borrowing facilities, indicating restrictions on their use, if activities Investing activities flows from
any; Investing
b) The aggregate amount of cash flows that are attributable to the increase in Disclosure in activities
operating capacity separately from those cash flows that are required to maintain
notes to the
operating capacity; and
c) The amount of the cash flows arising from the operating, investing and financing
statement
activities of each reportable segment determined in accordance with IFRS 8.
 AK Effective date: Periods beginning on or after 1 Jan 2005
IAS 8 Accounting policies, Change in Accounting Estimates and Errors Page#5
Legends:
Accounting policies = AP
Accounting policies Changes in Accounting Errors Earning per share = EPS
Estimates
Definitions:
Requirement: Impracticability Exception: 1.Accounting policies:
• If change in policy is due to new Comparative information The specific principles,
standard or interpretation, presented for a particular Requirement: Requirement bases, conventions, rules &
apply transitional provisions. prior period need not be Changes in estimates be Retrospective Restatement: practices applied by an
• If no transitional provision, restated if doing so is recognised prospectively Material prior period errors should be entity in preparing &
apply retrospectively. impracticable. corrected retrospectively by: presenting FS.
by including them in profit
1.Adjust the carrying amounts of assets and 2.Change in accounting
or loss in
Retrospective Inability to determine period-specific liabilities at the beginning of the first estimates:
1. The period of change if
application: effects: comparative period in the financial Adjustment of the carrying
the change affects that amount of an asset or
• adjust the opening 1. Adjust the carrying amounts of the assets statements for the amount of the
period only; or liability, or related expense,
balance of each affected and liabilities for the cumulative effect of correction.
2. The period of change resulting from reassessing
component of equity for applying the new accounting principle at 2.Offset the amount of the adjustment in
and future periods if the Step 1 (if any) by adjusting the opening the expected future benefits
the earliest prior period the beginning of the earliest period
presented, and
change affects both. balance of retained earnings for that and obligations associated
presented for which it is practicable to with the asset or liability.
• present other period.
make the computation, which may be the Disclosure: 3.Errors:
comparative amounts 3.Adjust the financial statements of each
disclosed for each prior
current period. • Nature & amount of the change Prior period errors are
individual prior period presented for the
period as if the new 2. Any offsetting adjustment required by affecting current period. effects of correcting the error on that omission from &
accounting policy had applying Step 1 is made to each affected • The fact that effect of future misstatement in, an entity’s
specific period (referred to as the period-
always been applied. component of equity (usually to beginning FS for one or more prior
period is not disclosed because of specific effects of the error).
retained earnings) of that period. periods arising from failure
impracticability. to use/misuse of reliable
Policies should be information:
Inability to determine effects of new When it is difficult to distinguish a Disclosure:
consistent for similar • Was available when FS
accounting principle on any prior periods: change in an accounting policy from • Nature of material prior period error.
transactions, events or for that period was
The new principle is applied prospectively as a change in an accounting estimate, • Each prior period presented, if practicable,
conditions. issued;
of the earliest date that it is practicable to the change is treated as a change in disclose correction to each line item and EPS. • Could have been
do so. an accounting estimate. • Amount of correction at beginning of the reasonably expected to
earliest comparative period; be taken in to account in
Disclosure: • For the current period and each prior period presented, the • If retrospective application is impracticable, those FS.
• Reference of the IFRS or IFRIC that caused amount of the adjustment to each line item affected and explain how error was corrected. Errors include;
the change; earnings per share. • Subsequent periods need to repeat these mathematical mistake,
• Nature of the change in policy; • Amount of the adjustment relating to prior periods not disclosures. mistake in AP, fraud &
• Description of the transitional provisions; presented. oversight of fact.
AK
IAS 10 Events after the Reporting Period
Adjusting Events
An event after the reporting date
that provides further evidence of
conditions that existed at the
reporting date.
It is an event that provides
additional information about
conditions in existence at the end
of a reporting period,
Examples:
• Events that indicate that the
going concern assumption in
relation to the whole or part of
the entity is not appropriate;
• Settlement after reporting date
of court cases that confirm the
entity had a present obligation
at reporting date
Adjusting events are accounted for
in the reporting period prior to the
period in which those happened.
Effective date: Periods beginning on or after 1 Jan 2005
Page#6
Legend:
Authorization Date Non-Adjusting Financial statements = FS
Events
The date when Financial Statements could be Definition:
considered legally authorised for issuance, generally by An event after the reporting date 1.Events after the
action of the board of directors of the reporting entity. that is indicative of a condition reporting period:
that arose after the reporting Favorable or unfavorable
It serves as the cutoff point after the end of reporting event, that occurs
date.
period, up to which the events qualify for treatment as between the reporting
It is an event that provides new
per IAS 10. date and the date that
information about conditions
that did not exist at the end of a the financial statements
reporting period. are authorized for issue.
Presentation and Disclosure Examples:
Where non-adjusting events are of such • Major business combinations
significance a disclosure should be made or disposal of subsidiary;
An entity shall present and disclose: of the: • Major purchase / disposal of
a) the date when the financial a)Nature of the event assets;
statements were authorised for issue b)Quantitative impact of an estimate of • Destruction of major plant.
b) who gave that authorization for its financial effect, or a statement that • Announcing a plan to
issuance such an estimate cannot be made discontinue operation.
c) If the entity’s owners or others have c) Qualitative impact of such event
the power to amend the financial However, not all non-adjusting events
statements after issue, the entity are significant enough to require Non-adjusting events are not
shall disclose that fact. disclosure. accounted for in the reporting
period prior to the period in
which those happened.
Updated Disclosure
Instead, specific disclosure is
provided considering the
a) If an entity receives information after the reporting period about conditions that materiality of the event that
existed at the end of the reporting period, it shall update disclosures that relate to has happened.
those conditions, in the light of the additional information.
b) In some cases, an entity needs to update the disclosures in its financial statements
to reflect information received after the reporting period, even when the
information does not affect the amounts that it recognises in its financial
statements.
AK
IAS 12 Income Taxes Effective date: Periods beginning on or after 1 Jan 1998
Page#7
Tax payable on profits for the year Tax on any part of accounting
profit (loss) which is payable Legends:
computed as per tax laws.
Current Tax (Amount actually payable to the (recoverable) in future accounting Deferred Tax Goodwill = GW
tax authorities) periods Taxable Temporary
Difference = TTB
• Tax for the current and prior Deductible Temporary
periods is recognised as a Deferred Tax Deferred Difference = DTD
liability to the extent it is Liabilities Tax Assets Carrying Amount = CA
unpaid. Tax Base = TB
• An asset is recognised if amount
paid exceeds the respective Recognize liabilities for all taxable temporary Recognize for deductible temporary differences, Definitions:
current tax. differences, extent it arises from: unused tax losses, unused tax credits to the extent 1.Temporary difference:
▪ Initial recognition of GW. that taxable profit will be available against which the Difference between the
Measurement ▪ Initial recognition of an asset/liability that does not asset can be used, except to the extent it arises from carrying amount of an
affect accounting or tax profit and the transaction is the initial recognition of an asset/liability that: asset/liability and its tax
not a business combination • Is not a business combination; and
Current tax liabilities are measured base.
▪ Liabilities from undistributed profits from • Doesn’t affect accounting / tax profit.
at the amount expected to be paid 2.Tax base of an asset:
investments in subsidiaries, branches and associates, Recognize for deductible temporary differences
to the taxation authorities, using Is the amount that will be
and interests in joint ventures where company can arising from investments in subsidiaries and
the tax rates (and tax laws) that deductible for tax
control the timing of the reversal. associates to the extent it is probable the temporary
have been enacted or substantially purpose against any
enacted by the end of the difference will reverse in the foreseeable future and taxable benefits that will
reporting period. their will be available tax profit to be utilized. flow to the entity when it
Measurement
Current tax assets are similarly recovers the carrying
measured at the amount expected amount of the asset.
to be recovered from the taxation • Measure the balance at tax rates that are expected to apply in the period in which the asset is 3.Tax base of a liability:
authorities. realized, or liability settled based on tax rates that have been enacted or substantively enacted by Its’ carrying amount less
the end of the reporting period; any amount that will be
Accounting Treatment • Deferred tax assets and liabilities are not discounted; deductible for tax
• The applicable tax rate depends on how the carrying amount of an asset or liability is recovered or purposes in respect of
Type For Asset For Accounting settled; the liability in future
of Diff Liability Treatment upon • Current and deferred tax shall be recognized as income or an expense and included in profit or loss periods.
creation for the period, except to the extent that the tax arises from a transaction or event which is 4.Tax base of income:
recognized, in the same or a different period, directly in equity or other comprehensive income, or a Is its’ carrying amount
Dr. Tax Expense
TTD CA > TB CA < TB business combination; less revenue that will not
Cr. Def Tax Liab.
• Current tax and deferred tax are charged or credited directly to equity or other comprehensive be taxable in future.
Dr. Def Tax Asset income if the tax relates to items that are credited or charged, in the
DTD CA < TB CA > TB
Cr. Tax Income • same or a different period, directly to equity or other comprehensive income.
 AK
IAS 16 Property, Plant and Equipment Effective date: Periods beginning on or after 1 Jan 2005
Page#8

Recognition &
Disclosure
Measurement

Disclosure include but are not

Initial Subsequent limited to:
• Measurement bases used for
determining the gross carrying
amount;
• Depreciation methods used;
Recognition Measurement Cost Model Revaluation Model • Useful lives or the depreciation rates
used
• Gross carrying amount and the
• Initial record at cost; accumulated depreciation at the
▪ Probable that Cost Less The asset is carried at a
• Subsequent cost in beginning and end of the period;
economic benefits Accumulated revalued amount, being its
case it can be • A reconciliation of the carrying amount
will flow to entity; depreciation Less
measured and has an
fair value at the date of the at the beginning and end of the period
▪ Cost can be Impairment
revaluation, less subsequent showing: additions / assets classified as
measured reliably. additional economic
benefits flow to the depreciation, provided that held for sale or included in a disposal
entity. fair value can be measured group classified as held for sale / other
reliably. disposals / acquisitions through
Cost comprise: business combinations / changes
(a) Purchase price plus import resulting from revaluations and from
duties and taxes; impairment losses recognized or
(b) Any costs directly Asset Revaluation Changes Recognition reversed in other comprehensive /
attributable to bringing the Value increases Recognize in other comprehensive income and in the “revaluation impairment losses recognized in profit
asset to the location and or loss / impairment losses reversed in
surplus” equity account
condition necessary for it to profit or loss / depreciation / exchange
be capable of operating in a Value increases, and reverses a Recognize gain in profit or loss to the extent of the previous loss, differences / other changes;
manner intended by prior revaluation decrease with the remainder in other comprehensive income • Existence and amounts of restrictions
management; on title, and PPE pledged as security for
(c) The initial estimate of the Value decreases Recognize in profit or loss liabilities;
costs of dismantling and • Contractual commitments for the
removing the item and Value decreases, but there is a Recognize in other comprehensive income to the extent of the acquisition of PPE.
restoring the site on which it credit in the revaluation surplus credit, with the remainder in profit or loss
is located.
 AK IAS 19 Employee Benefits Effective date: Periods beginning on or after 1 Jan 2013
IAS 19 is applicable to both defined contribution and defined benefit pension plans. Page#9
Scope:
Applies to all
employees’ benefits Short term Post Employment Termination Other Long-term Legends:
except IFRS 2 shared- Employee Benefits Benefits Benefits Employee benefits Statement of Financial
based payment. Position = SOFP
Statement of
Payments to be made upon Long-term (sabbatical) leave,
Includes normal wages and salaries, compensated Payable after completion of Comprehensive Income =
termination of employment under long-term disability benefits
absences, profit sharing and bonuses, and such employment. SOCI
defined circumstances, generally and, if payable after 12 months
non-monetary fringe benefits as health insurance, ▪ Retirement benefits (e-g when employees are induced to beyond the end of the reporting
Defined benefit plan =
housing subsidies and employer-provided vehicles. pension, life insurance etc.) DBP
leave employment before normal period, profit sharing and bonus
▪ Others (e-g post emp. Life retirement age. arrangements and deferred
insurance.). Definition:
compensation.
1. Employee benefits:
all forms of consideration
given by an entity in
exchange for services
Defined Benefit Plan (DBP): Defined Contribution Plan: Multi Employer Plan: Disclosure: rendered or for the
IAS 19 prohibits delayed recognition ▪ Entity pay fixed ▪ Post employment plan Defined Contribution Plan: termination of
of actuarial gain/losses & past contribution into fund & other than state plans that Amount of expense included in current period earnings. employment.
service cost, with actual net defined doesn’t have obligation to pool asset of many entities Defined Benefit Plan:
benefit asset/liability in SOFP. pay further contrib. if fund (not under common
doesn’t hold sufficient asset
1. A general description of each plan.
control).
▪ Recognize contrib. 2. Accounting policy recognition of actuarial gains or losses.
▪ May be DCP or DBP.
expense/liability when ▪ If it is DBP, entity may
3. A reconciliation of the plan-related assets and liabilities.
SOFP SOCI employee rendered service. apply DCP accounting 4. Amount of plan assets used by the entity itself.
when info. Is not available 5. A reconciliation of movements (i.e., changes) during the
sufficient to apply reporting period in the net asset or liability.
Recognize net defined benefit Actuarial gain/loss in OCI as occur in the accounting requirement of 6. The amount of, and location in profit or loss of, the
liability/asset in SOFP. In case of period: DBP> reported amounts of current service cost, net interest
surplus in DBP it measures it at Past-service-costs are recorded in P&L as cost (income), remeasurements, past service cost, and
lower: incur. effect of any curtailment or settlement.
▪ Surplus in DBP Net interest on net defined benefit Presentation of three 7. The actual return earned on plan assets for the reporting
▪ Asset ceiling (being PV of any liability/asset is recognize in P&L: components of defined
economic benefit available in Equal to change of defined benefit
period.
benefit cost: 8. The principal actuarial assumptions used.
form or refund from plan or liability/asset. Determined by multiplying
• Service cost in P&L; 9. A sensitivity analysis on the significant actuarial
reduction in future it to discount rate.
• Net interest in P&L; assumptions.
contribution) using discounted
rate in reference to mkt yield at • Remeasurement in OCI. 10.A description of the risks and characteristics of the
period end on high quality defined benefit plans.
quarter bonds.
 AK Effective date: Periods beginning on or after 1 Jan 2005
IAS 20 Accounting for Government Grants and Disclosures of Government Assistance Page#10
Scope:
Not applies to:
▪ Government Definition:
assistance that Types of Grants Disclosure 1. Government Grants:
is provided for ▪ Assistance from
an entity in the government;
form of ▪ In form of resources
Disclosure include but are not limited from government;
benefits that
are available in
Grants related Grants related to: ▪ In return to past /
determining to Income to Assets ▪ Accounting policy adopted for future compliance
taxable income grants, including method of with certain
or are statement of financial position conditions relating to
determined or presentation; operating activities of
the entity;
limited to the ▪ Nature and extent of grants
basis of income Presentation Recognition recognized in the FS;
Presentation Recognition
tax liability; ▪ An indication of other forms of
▪ Government government assistance from which
participation in Can be There is a reasonable Can be presented The grant is recognized as the entity has directly benefited;
the ownership presented in assurance: in two ways: income over the period ▪ Unfulfilled conditions and
of an entity; two way: 1. The entity will 1. As deferred necessary to match it with the contingencies attaching to
▪ Government 1. Separately comply to all income; or related costs, for which it is recognized grants.
grants covered as “other conditions 2. Deduction from intended to compensate on a
by IAS 41. income”. attached to the the assets systematic basis and should
2. Deduction grants; & carrying not be credited directly to Repayment of Government Grants
from 2. The grant will be amount. equity.
related received.
expenses. Repayment of a grant related to income should:
1. First apply against any unamortised deferred income; and
Non-Monetary Grant 2. The repayment in excess to step 1, should be recognised immediately
as an expense.
Government grant may take the form of a transfer of a non-monetary asset, such as grant of a plot of Repayment of a grant related to an asset should be:
land or a building in a remote area. In these circumstances the standard prescribes the following 1. Recorded by increasing the carrying amount of the asset or reducing
optional accounting treatments: the deferred income balance by the amount repayable; and
1. To account for both the grant and the asset at the fair value of the non- monetary asset; or 2. The cumulative additional depreciation that would have been
2. To record both the asset and the grant at a “nominal amount.” recognised to date as an expense in the absence of the grant should be
recognised immediately as an expense.
 AK Effective date: Periods beginning on or after 1 Jan 2005
IAS 21 The Effects of Changes in Foreign Exchange Rates Page#11
Monetary Vs. Non-
monetary Items: Foreign Currency ? Legends:
Monetary items are those Currency other than the functional currency of the entity Net Investments = NI
granting or imposing “a Net Realizable Value =
right to receive, or an NRV
obligation to deliver, a Revalued amount = RA
fixed or determinable Financial Statements = FS
number of units of Foreign Currency Consolidation of Foreign
currency.” In contrast, Transaction Operations Definition:
non-monetary items are Functional currency is defined as being
those exhibiting “the the currency of the primary economic
absence of a right to environment in which an entity
receive, or an obligation to Initial Disposal of Loan Forming part of Translation into operates. This is normally, but not
Subsequent
deliver, a fixed or Recognition Foreign net investment in presentation necessarily, the currency in which that
Measurement
determinable number of Operation Foreign Operation entity principally generates and
currency:
units of currency.” expends cash.
▪ Assets &
At spot rate; or At Monetary Non-Monetary Liabilities; at
Foreign operation is an average rate if Items Items Exchange gains and closing Scope:
entity that is a subsidiary, fluctuation is losses to equity on exchange rate ▪ Does not apply to derivates that
associate, joint insignificant consolidation only. ▪ Income & come under IFRS 9. However, those
arrangement or branch of ▪ At a rate on transaction foreign currency derivatives that are
Recorded in SOPL in expenses; at
a reporting entity, the date (if the item was on not within the scope of IFRS 9 (e.g.,
▪ At closing rate on the separate FS. exchange rate
activities of which are historical cost) some foreign currency derivatives
reporting date on transaction
based in a country or ▪ At a rate on revaluation
▪ Gain/loss is date or that are embedded in other
currency other than those date (if the item was contracts), and the translation of
recognized in SOPL. average rate.
of the reporting entity. carried at revalued The cumulative amount of
amounts relating to derivatives from
amount). exchange differences that
Resulting its functional currency to its
was recognized in OCI is
Key Notes: exchange gain or presentation currency are within the
reclassified to SOPL
▪ No need to present FS in functional currency. A In case the asset is subject to loss in OCI. scope of this standard;
(recycled).
presentation currency can be selected. impairment under IAS 2 or IAS 36: ▪ Applies in translating the financial
▪ Accounting records must be kept in functional At lower of either: position and financial results of
currency. ▪ Cost/CA at historical rate. foreign operations as a result of
▪ A group does not have a functional currency. ▪ NRV/RA at closing rate on consolidation or the equity method;
Functional currency is assessed separately for reporting date. and
each entity in the group. Translation gain or loss in SOPL. ▪ Applies in translating an entity’s
financial statements into a
presentation currency.
 AK
IAS 23 Borrowing Costs Effective date: Periods beginning on or after 1 Jan 2009
Page#12

Key Notes:
• Borrowing costs that
are directly
attributable to the
acquisition,
construction or
production of a
qualifying asset are
required to be
capitalized as part of
the cost of that asset;
• Other borrowing costs
are recognized as an
expense when
incurred.
Definitions:
Specific General Disclosure 1. Borrowing costs:
Borrowing Borrowing Borrowing costs are
interest and other costs
incurred by an entity in
connection with the
Borrowing cost eligible to be Borrowing cost eligible to be ▪ Amount of borrowing borrowing of funds.
capitalized is actual borrowing capitalized is determined by cost capitalized during 2. Qualifying asset:
cost incurred on specific applying weighted average rate on the period; An asset that necessarily
borrowing general (overall) borrowings. ▪ Capitalization rate used. takes a substantial period of
time to get ready for its
intended use or sale.
Less: income on temporary Note:
Amount of borrowing cost
investment (if any) of the
excess borrowing not yet used. capitalized cannot exceed in the
period on amount of borrowing
cost incurred.

Capitalization Capitalization Capitalization

Commencement Suspension Ceases

When:
▪ Expenditures for the asset are
being incurred;
▪ Borrowing costs are being
incurred;
▪ Activities that are necessary to
prepare the asset for its intended
use or sale are in progress.
When:
Active development is
interrupted (during that period).
When:
Substantially all the activities necessary to prepare the qualifying
asset for its intended use or sale are complete.
Note: When construction of a qualifying asset is completed in
parts and each part is capable of being used while construction
continues on other parts; capitalization of borrowing costs
ceases when substantially all the activities necessary to prepare
that part for its intended use or sale are completed.
AK
Focus:
• Disclosure of related party
relationships
• Disclosure of related party
transactions
• Disclosure of outstanding
balances with related parties
• Disclosure of commitments
to related parties
Application:
• To identify the circumstances
in which disclosure is
required; and
• To determine the disclosures
to be made
RP include:
• Other subsidiaries under
common control
• Owners of a business, its key
managers, and their families
• The parent entity
• Post-employment Benefit
Plans for the benefit of
employees
• An entity that provides Key
Management Personnel
Services to the reporting
entity
For possible RP relationship
consider the substance of
relationship and not merely
the legal form.
Effective date: Periods beginning on or after 1 Jan 2011
IAS 24 Related Party Disclosures Page#13
Legends:
Disclosure Requirements Related Party (ies) = RP
Key Management
Personnel = KMP
General Compensation Transaction Level KMP Services Govt Control
Definitions:
The nature of all The total amount of For specific related party The amounts Transaction-level 1. Key Management
related party compensation for key transactions; nature of incurred for KMP disclosures are not Personnel:
relationships, management the relationship, services from a required when the Persons having authority
even in the personnel, as well as transaction terms and separate related party is a & responsibility for:
absence of any for their short-term conditions, outstanding management government entity that Planning, directing &
transactions benefits, post- balances, commitments entity. has control or influence controlling the activity of
between the employment benefits, or guarantees, related over the business, or entity
parties, and the other long-term collateral arrangements, another entity over (directly/indirectly)
name of the benefits, termination provisions for related which the same including all directors.
ultimate benefits, and any doubtful debts, and any government entity also 2. Close Family Member:
controlling party share-based related bad debt exercises control or Includes but not limited:
(usually the payments. expense recognized influence. ▪ Children, &
parent entity). during the period. dependence;
These disclosures should ▪ Spouse/partner;
RP do not include: be reported separately Instead, disclose the ▪ Children &
• Lenders; for the parent entity, any name of the government dependents of
• Trade unions; entities with joint control entity and the nature of spouse/partner.
• Public utilities; or influence over the the relationship with it, (Must access level of
• Government entities that do not control the business, subsidiaries, as well as the nature and influence case by case).
business; associates, joint amount of those
• Entities that have a director or key manager ventures, KMP, and Transactions between
transactions, if
in common; other related parties. related parties cannot be
considered significant.
• Fellow joint venturers who jointly control a presumed to be at an
venture. arm’s length.
 AK Effective date: Periods beginning on or after 1 Jan 1998
IAS 26 Accounting & Reporting by Retirement Benefits Plan Page#14
Scope: Retirement
Applies to FS of RBP. Legends:
Benefits Plans Defined benefit plan =
It does not establish a mandate for the
publication of such reports by retirement DBP
Retirement benefit plans are usually described as being either defined contribution or defined benefit plans. Defined contribution
plans.
IAS 26 regards a RBP as a separate entity, plan = DCP
distinct from the employer of the plan’s Retirement benefits plan
Defined Benefits Defined = RBP
participants. Plans Contribution Plans
Determined by formulae which involve factors such as years of service and salary level at the time of retirement. Quantum of the future benefits payable to the RBM Definitions:
Ultimate responsibility for payment remains with the employer. Reporting DBP includes: participants is determined by the contributions 1. Retirement benefit
1. Description of significant activities for the period & the effect of changes, its membership and terms & together with investment earnings thereon. plans:
conditions. Reporting of a DCP contains a statement of the net Arrangements by which an
entity provides benefits
2. SOPL and SOFP at the end of the period assets available for benefits and a description of the
(annual income or lump
3. Actuarial information either as part of the FS or separately. funding policy. sum) to employees after
4. A description of the investment policies. • Recognize plan investment at fair value they terminate from
If an actuarial valuation has not been prepared on the date of the report, the most recent valuation should be • Disclosure of the reason if fair value can not be service.
used as the basis for preparing the FS. estimated 2. Defined benefit plans:
• Recognize plan investment at fair value A Plan by which employees
• Disclosure of the reason if fair value can not be estimated Disclosure receive benefits based on a
Report of a DBP should contain either: Requirements formula usually linked to
1. A statement that shows: employee earnings.
a. The net assets available for benefits; 3. Defined Contribution
Main disclosure: plans:
b. The actuarial present value of promised retirement benefits, distinguishing
1. Changes in net assets available for benefits; A retirement benefit plan
c. between vested and non-vested benefits; and
2. Summary of significant accounting policies; and by which benefits to
d. The resulting excess or deficit;
3. Description of the plan and the effect of any employees are based on
2. A statement of net assets available for benefits, including either:
changes in the plan during the period. the amount of funds
a. A note disclosing the actuarial PV of retirement benefits, distinguishing b/w vested and non-vested; or contributed to the plan plus
b. A reference to this information in an accompanying actuarial report. investment earnings
thereon.
Report may include following statements and descriptions, if applicable:
1) Net assets available for benefits disclosing suitably classified ending balance of assets, valuation basis of assets, singly investment exceeding 5%, investment in employer,
liability other than actuarial PV. 2) Changes in net assets showing employer & employee contribution, investment income, other income, benefits paid/payable, operating &
tax expenses, G/L on investment. 3) Funding policy. 4) For DBP; actuarial PV of promised retirement benefits and description of significant actuarial assumptions.
Report of RBP may contain: a) names of the employers and the employee groups covered, b) number of participants , c) type of plan, d) note as to whether participants
contribute to the plan, e) retirement benefits promised to participants, f) plan termination terms, g) any change during the period covered by the report.
 AK
IAS 27 Separate Financial Statements Effective date: Periods beginning on or after 1 Jan 2013
Page#15

Scope: Investment in Dividend Income from Legends:

Subsidiaries, JV & Associates Investment in Disclosure Joint Venture = JV
A parent entity may Fair Value = FV
Subsidiaries, JV and Associates Requirements
sometimes elect or
be required to issue Normal Investment Investment is Held for Sale Definitions:
separate financial 1. Separate Financial
statements. • Dividend received from Statements:
• Fact that separate financial
• At cost, • As per IFRS 5, if subsidiaries; JVs, & associates FS presented by a parent
Separate financial statements have been
• At fair value as per previously accounted for are recognized when right to (i.e. an investor with control
statements are the issued, and the exemption of a subsidiary) or an
IFRS 9, or at cost receive the dividend is
financial statements • Using the equity • As per IFRS 9, if under which they were investor with joint control
established.
of a parent entity, in method previously accounted at • Dividend is accounted for as
issued. of; or significant influence
• Name and principal place over an investee, in which
which investments in FV as per IFRS 9. follows: the investments are
subsidiaries, JVs and The entity should 1. In SOPL, if the investment of business of the entity accounted for at cost, at FV,
Associates are apply the same is measured at cost or fair whose consolidated or using the equity method.
accounting for each value; financial statements are 2. Consolidated Financial
recorded at their cost,
category of 2. As reduction from available for public use, and Statements:
at fair value, or using
investments. carrying value of where these statements FS of a group in which the
the equity method. assets, liabilities, equity,
investments, if can be obtained.
investment is accounted income, expenses, and cash
An entity that is • Itemization of the flows, of the parent and its
for using the equity significant investments of
exempt in accordance method. subsidiaries are presented
with IFRS 10.4(a) from the parent in subsidiaries, as a single economic entity.
consolidation or IAS joint ventures, and
28.17 (as amended in associates, including their
2011) from applying names, principal places of
the equity method business, and the parent’s
may present separate ownership percentages.
financial statements • Methodology upon which
as its only financial the accounting for these
statements. investments is based.
 AK
IAS 28 Investments in Associates and Joint Ventures
Scope:
Applies to all the
entities that are
investors with Joint
control of, or Equity Method
significant influence
over, an investee.
Initial Subsequent
Recognition Measurement
Initial investment at cost
At Cost +/- Post acquisition
Investor’s share in
investee’s profit or loss
- Dividends received from
the investee
Key Notes:
• Equity method is used
from the date of
significant influence
arises, to the date
significance influence
ceases.
• The investor’s share of
the investee’s profits and
losses are recorded within
profit or loss for the
investor.
• If the investee records
changes in its OCI, the
investor should record its
share of these items
within OCI, as well.
Effective date: Periods beginning on or after 1 Jan 2013
Page#16
Application
Definitions:
1. Associate:
Disclosures An entity over which the
investor has significant
influence;
An investment in an associate or
2. Joint Venture:
joint venture should be classified A Joint arrangement
as a non-current asset. However, whereby the parties that
Discontinuation
Exemption if the intent of the investor is to have joint control of the
of Equity Method
sell the investment, the proper arrangement have rights to
classification is to list the the net assets of the
investment as held for sale. arrangement.
If the entity is a parent that is
exempt from preparing
Use of the equity method should be Impairment loss
consolidated FS, or if:
discontinued as of the date when the
1. The investor is a wholly owned
investee can no longer be classified as
subsidiary and its owners have
an associate or a JV. Specifically, the
been informed about the Goodwill that forms part of the carrying amount
following circumstances cancel use of
decision of an investment in an investee is not
the equity method:
2. The investor’s debt or equity separately recognized &
• The investee becomes a subsidiary,
instruments are not publicly therefore not tested separately for impairment,
in which case its financial
traded instead the entire investment is tested as per
statements are consolidated with
3. The investor did not file its FS IAS 36.
those of the parent entity.
with a securities commission or
• The investment is classified as a
other regulator for the If impairment has occurred, the investor
financial asset, in which case the
purposes of issuing its shares to records an impairment loss in the amount by
investment is measured and
the public which the recoverable amount is less than the
recognized at its fair value.
4. The ultimate or intermediate carrying amount; this is used to reduce the
parent of the investor produces recorded investment in the investee.
When use of the equity method is
consolidated financial
discontinued, and if the investor had
statements that comply with If the value of an investment subsequently
previously recorded its share of
IFRSs. increases, the impairment loss can be reversed,
investee transactions in other
comprehensive income, these items to the extent that the recoverable amount of
should be reclassified to profit or loss. the investment increases.
AK IAS 29 Financial Reporting in Hyperinflationary Economies Effective date: Periods beginning on or after 1 Jan 2007

Scope: Page#17
Applies to all Restatements of Financial Statements – Hyperinflationary economies
entities whose Legend:
functional General Price Index = GPI
currency is the
currency in Historical Cost Current Cost
hyperinflationary Financial Statements Financial Statements
economy.

Comparative &
SOCI SOFP SOCI SOFP Statement of
Cashflows

All items in SOCI are expressed SOFP not already
in terms of the measuring unit expressed in terms of the
current at the end of the measuring unit current at
reporting period. Therefore all the end of the period are
amounts need to be restated restated by applying a
by applying the change in the general price index (GPI).
general price index from the
dates when the items of
income and expenses were
initially recorded in the FS.
Assets & liabilities
linked by agreement
to changes in prices
are adjusted in
accordance with the
agreement in order to
ascertain the amount
outstanding at
the end of the period.
Items at current cost All items in the SOCF
All amounts are
are not restated are expressed in
restated into the
because they are terms of the
measuring unit current
already expressed in measuring unit
at the end of the
the unit of current at the end of
reporting period by
measurement current the reporting period.
applying a GPI.
at the end of the Corresponding
period. figures for the
previous reporting
period, whether
based on either a
Monetary items are Remaining other assets and historical cost
not restated liabilities are nonmonetary. approach or a current
because Some non-monetary items cost approach, are
they are already are carried at amounts restated by applying
expressed in terms current at the end of the a GPI.
of period, such as NRV &
the monetary unit market value, so they are not
current at the end restated. All other
of nonmonetary assets and
the period. liabilities are restated.
 AK
IAS 32 Financial Instruments: Presentation Effective date: Periods beginning on or after 1 Jan 2005
Page#18
Scope: Legends:
Applies to all type Financial Distinguish Equity Instrument and Financial Instruments = FI
of FI except: Instruments Financial Liability Financial Assets = FA
▪ Those interest in Financial liabilities = FL
subsidiaries, Equity Instruments = EI
associates & JVs. Based on substance
▪ Obligation under Financial and definition Equity
employee Financial liability
Financial Equity Instruments
benefits plan.
Assets Liabilities Instruments
▪ Insurance Exception – Puttable
Contracts. instrument (features) Exception – If not genuine
▪ FI contracts,
FA is: FL is: Equity = Option to
contracts & Contingent
• Cash; • Contractual Assets - Liabilities settle in
obligation under provisions
• Investment in obligations to cash or Note: Preference share
share-based
shares; deliver (cash, share with redemption option.
payment.
• Contractual another financial
right to receive asset, potentially
(cash, another un-favorable (1) Subordinate to all shares (2) Identical
financial asset, derivates). features (3) No other obligation to deliver
potentially • Settlement in
favorable
cash than redemption (4) Prorate share in net
entity’s own
derivates). assets (5) Expected cash flow from P&L,
equity
• Settlement in change in net asset and FV change in net
instruments
entity’s own (variable number assets only.
equity of equity Reclassifications
instruments instruments).
(variable
number of Difference b/w CA of EI FL to EI No
EI to FL
equity & FV of FL in equity Gain/Loss
instruments).
 AK
IAS 32 Financial Instruments: Presentation (continued) Effective date: Periods beginning on or after 1 Jan 2005
Page#19
Scope:
Applies to all Legends:
Compound Financial Offsetting Financial Instruments = FI
type of FI except:
▪ Those interest Instruments Financial Assets = FA
in Financial liabilities = FL
A financial asset and a financial
subsidiaries, Equity Instruments = EI
Financial Equity liability are offset only when
associates & there is a legally enforceable
JVs (IFRS-10,
Liability Instrument Definition:
right to offset and an intention
IAS-27/28). 1. Compound Financial
to settle net or to settle both
▪ Obligation Instruments:
amounts simultaneously
under FV by discounting By deducting FV of FL Compound instruments
(mutually agreed).
employee using mkt Interest rate from FV of CFI that have both liability
benefits plan and equity characteristics
(IAS-19). 1. Interest, dividend, losses/gains are split into these
▪ Contracts components. The split is
related to FL recognized as
within the made on initial
expense in P&L; recognition of the
scope of IFRS- At maturity
2. Dividend related to EI instruments and is not
17 except recognized in equity.
1. Conversion; subsequently revised.
derivates that
are embedded The equity component of
2. Repurchase. the compound
in contracts
(certain instrument is the residual
condition). amount after deducting
▪ FI contracts, Before maturity the fair value of the
contracts & liability component from
1. Conversion; the fair value of the
obligation
under share- instrument as a whole.
2. Repurchase.
based No gain/loss arises from
payment initial recognition.
(IFRS-2).
Induced conversion (if any): Additional
payment recognize as loss in P&L
 AK
Scope:
Applies to those Separate
or individual FS of an entity
and to those consolidated
FS of a group with a
parent:
• whose ordinary shares or
potential ordinary shares
are traded in a public
market
• that files, or is in the
process of filing, its
financial statements with
a securities commission or
other regulatory
organisation for the
purpose of issuing
ordinary shares in a public
market
(a) profit/loss from continuing
operations attributable to the
parent entity; and
(b) profit/loss attributable to
the parent entity,
shall be the amounts in (a) and
(b) adjusted for the after-tax
amounts of preference
dividends, differences arising on
the settlement of preference
shares, and other similar effects
of preference shares classified
as equity.
Increase or decrease in Ordinary shares may happen without a
corresponding change in resources. Examples include:
• a capitalisation or bonus issue
• a bonus element in any other issue, e.g., a bonus element in a rights
issue to existing shareholders;
• a share split; and a reverse share split.
IAS 33 Earnings Per Share Effective date: Periods beginning on or after 1 Jan 2005
Page#20
Presentation and
TYPES of Earnings Per Share Disclosure Legends:
Earnings Per Share = EPS
Weighted average no. of
Present in the SOCI basic and diluted earnings per
Basic EPS Diluted EPS shares = WANS
share for profit or loss from continuing operations
(to be disclosed on (to be disclosed on attributable to the ordinary equity holders of the
face of SOCI) Definitions:
face of SOCI) parent entity and for profit or loss attributable to
1. Ordinary Share:
the ordinary equity holders of the parent entity for
is an equity instrument
the period for each class of ordinary shares that
Earnings attributable to the ordinary share holders / Weighted average no. that is subordinate to all
has a different right to share in profit of the
of ordinary shares (WANOS) outstanding other classes of equity
period.
instruments.
An entity that reports a discontinued operation
2. Potential Ordinary
shall disclose the basic and diluted amounts per
Basic Basic Diluted Diluted Share:
share for the discontinued operation either in the
is a financial instrument
Earnings WANOS Earnings WANOS SOCI or in the notes.
or other contract that
may entitle its holder to
The weighted average adjust profit or loss The number of ordinary shares shall be the ordinary shares.
number of ordinary shares attributable to ordinary weighted average number of ordinary shares 3. Dilution:
outstanding during the equity holders, by the calculated in the determination of basic earnings is a reduction in earnings
period and for all periods after-tax effect of: per share and adjusted earnings per share, taking per share or an increase
presented shall be adjusted (a) any dividends, interest into account potential ordinary shares plus the in loss per share resulting
for events, other than the or other items related to weighted average number of ordinary shares that from the assumption that
conversion of potential dilutive potential ordinary would be issued on the conversion of all the convertible instruments
ordinary shares that have shares; and dilutive potential ordinary shares into ordinary are converted, that
changed the number of (c) any other changes in shares. options or warrants are
ordinary shares outstanding income or expense that Dilutive potential ordinary shares shall be deemed exercised, or that
without a corresponding would result from the to have been converted into ordinary shares at ordinary shares are
change in resources. conversion of the dilutive the beginning of the period or, if later, the date of issued upon the
potential the issue of the potential ordinary shares. satisfaction of specified
ordinary shares. conditions.
Dilutive potential ordinary shares
Potential ordinary shares shall be treated as dilutive when, and only
when, their conversion to ordinary shares would decrease earnings per
share or increase loss per share from continuing operations.
 AK
IAS 34 Interim Financial Reporting Effective date: Periods beginning on or after 1 Jan 1999
Scope:
Applies to entities
Page#21
required by legislation
Accounting Presentation Recognition and Definitions:
or other
pronouncements or that policies Measurement 1.Interim Period:
elect to publish interim Financial period shorter
financial reports than full year (12
• There is no requirement Entity may present complete set of Definitions of assets, liabilities, income
• IAS 34 does not apply months);
under IFRS that entities FS in the interim report or may and expense are the same for interim
where interim 2.Interim financial
must prepare interim present condensed set of FS in the period reporting as for annual reporting
financial statements report:
financial statements. interim report.
included in a Either a complete (IAS 1)
• Even if annual financial Use of Depreciation &
prospectus Estimates Amortization or condensed set of FS.
statements are prepared
• Standard does not Full Set of; Follow IAS 1 Condensed Set of FS
in accordance with IFRS, Interim reports
mandate which • A condensed SOFP Compliance:
the reporting entity is Consistency require a
entities should • A condensed SOCI Disclose the fact that
free to present interim Interim period financial greater use of
produce interim • A condensed SOCE interim FS comply with
financial statements on statements should be estimates than Inventories
financial reports. • A condensed SOCF IAS 34.
bases other than IFRS, as prepared using the same annual reports.
• Selected explanatory
long as they are not accounting principles
Restatement notes Uneven Cost
misrepresented as being that had been employed
A change in accounting IFRS compliant. Anticipated or
policy should be in the most recent deferred only if
• If interim financial annual financial
reflected by restating it would be Foreign
statements are IFRS statements
the financial statements possible to currency
based, then interim
of prior interim periods defer or translation
financial data should be Consolidation
of the current year and prepared in conformity If the most recent annual anticipate at
the comparable interim with accounting policies financial statements year end.
periods of the prior used in its annual were presented on a Use of
financial year. Seasonal, Cyclical or Occasional Revenue Estimates
financial statements. consolidated basis, then • Revenue received during the year should
• Recognition of assets, the interim financial not be anticipated or deferred where
Materiality liabilities, expenses and reports in the immediate
Materiality for interim anticipation would not be appropriate at
income, however, is the succeeding year should year end
reporting purposes may same as for the annual also be presented Impairment of
differ from that defined • Recognise revenue as it occurs. Asset
financial statements. similarly
in the context of an
annual period. Income Taxes
the rate to be applied to interim period earnings will take into account the expected level of earnings for the
entire forthcoming year, as well as the effect of enacted (or substantially enacted) changes in the tax rates
to become operative later in the fiscal year.
AK
IAS 34 Interim Financial Reporting (continued) Page#22

Quarter 1 Quarter 2 Quarter 3 Quarter 4

01.01.2015 - 31.03.2015 01.04.2015 - 30.06.2015 01.07.2015 - 30.09.2015 01.10.2015 - 31.12.2015
Comparative Interim Financial Statements
Statement Current Comparative
At the end of current interim period As at the end of the immediately preceding financial
Statement of period end
Financial Q1 Q2 Q3 Q4
Q1 Q2 Q3 Q4
30/09/15
Position 31/12/2014

Current interim period and cumulative year to Comparable interim period and year to date of
Statement of date immediately preceding year
Comprehensive Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Income 30/09/15 30/09/14

1/1/2015 TO 30/09/15 1/1/2014 TO 30/09/14

Cumulatively to the current financial year to date Comparative year to date of immediately preceding year
Statement of
Changes in Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

1/1/2015 TO 30/09/15 1/1/2014 TO 30/09/14

Equity
Cumulatively for the current financial year to date Comparative year to date of immediately preceding year
Statement of
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Cash Flows 1/1/2014 TO 30/09/14
1/1/2015 TO 30/09/15
 AK
IAS 36 Impairment of Assets Effective date: Periods beginning on or after 31 Mar 2004
Scope: Page#23
Applies to
All assets, except Legends:
inventories, contract Cash Generating Units =
assets and assets CGU
arising from costs to Value in Use = VIA
obtain or fulfill a Impairment WHEN TO DO
Assets to be
contract, deferred IMPAIRMENT TEST ?
Reviewed
tax assets, employee Is there any INTERNAL INDICATORS
benefits, financial Indicators ?
assets, investment Impairment =
property measured Carrying amount –
at fair value, Recoverable amount EXTERNAL
biological assets, Annual
Individual INDICATORS
insurance contract CGUs Impairment Test ▪ Significant
Assets decline in
assets, and non-
current assets market value;
held for sale. Higher of FV less Compulsory for: ▪ Changes in
cost to sell and VIU ▪ Intangible assets with an technological
▪ Evidence of , market,
indefinite useful life;
Disclosures obsolescence or economic or
▪ Intangible assets not yet physical legal
available for use; damage; environment;
SOPL & OCI: ▪ CGUs to which goodwill ▪ Discontinuance, ▪ Changes in
• Impairment loss during the year disposal or interest
• Reversal of Impairment loss Fair Value is the Value in Use Reversal of restructuring rates;
• Impairment loss on revalued assets price that would Represents the Impairment plans; ▪ Carrying
• Reversal of impairment loss on revalued assets be received to discounted ▪ Declining asset amount of
sell an asset or future net cash Individual asset: CGU: performance. the net
Notes: paid to transfer flows from the Increased amount Allocated to the assets of assets of the
• Events and circumstances a liability in an continuing use shall not exceed the the unit, except for entity is more
• Amount, nature and segment orderly and ultimate carrying amount had goodwill, pro rata with the than its
• Description of CGU transaction disposal of the carrying amounts of those market
no impairment loss
• Level of FV hierarchy and valuation techniques between market asset. assets. capitalization
been recognised for
• Discount rates, growth rate used for VIU participants at
the asset in prior
• Period of cash flow projection assumed the Goodwill:
years.
• Carrying amount of goodwill allocated measurement An impairment loss recognised for goodwill shall
• Basis of determining CGU date. not be reversed in a subsequent period.
 AK Effective date: Periods beginning on or after 1 Jul 1999
Scope: IAS 37 Provisions, Contingent Liabilities and Contingent Assets Page#24
Except the Measurement
provisions, Recognition & Measurement
contingent
liabilities and Recognition
contingent assets:
(a) those resulting
▪ Provisions are measured at the best estimate of the
from executory expenditure required to settle the present obligation at
contracts, except Provisions Contingent Contingent
year end;
where the contract Liabilities Assets ▪ Where the provision being measured involves a large
is onerous; and population of items, the obligation is estimated by
(b) those covered Recognized if: weighting all possible outcomes by their associated
by another • Entity has a present as a result of Do nothing probabilities;
a past event; Disclose only if not remote ▪ In determining the best estimate, the related risks and
Standard, when
another Standard • It is probable that an outflow of uncertainties are taken into account;
deal with a specific economic benefits will be ▪ Where the effect of the time value of money is material,
type of provision, required to settle the obligation; RESTRUCTURING the amount of the provision is the present value of the
and expenditures expected to be required to settle the
contingent liability Restructuring provisions are only permitted to be recognized when an obligation. The discount rate used is a pre-tax discount
or contingent • A reliable estimate can be made
of the amount of the obligation. entity has: rate that reflects current market assessments of the time
asset. ▪ A detailed formal plan for the restructuring identifying: - The value of money and the risks specific to the liability
Obligation: business or part of business concerned; principal locations - The discount rate does not reflect risks for which future
affected; location, function, approximate number of employees to cash flow estimates have been adjusted;
Legal obligation
be compensated for termination of their services; expenditures ▪ Future events that may affect the amount required to
Constructive obligation settle the obligation are reflected in the amount of the
that will be undertaken and when the plan will be implemented.
▪ Has raised a valid expectation in those affected that it would carry provision where there is sufficient objective evidence that
Specific application: out the restructuring by starting to implement that plan or they will occur;
• No provision for future operating losses. announcing (e.g. by a public announcement) its main features to ▪ Gains from the expected disposal of assets are not taken
• No obligation arises for the sale of an operation until there is those affected before the end of the reporting period; into account in measuring the provision;
a binding sale agreement. ▪ Reimbursements from third parties for some or all
▪ Restructuring provisions only include the direct expenditures
• A provision for restructuring costs is recognised only when the expenditure required to settle a provision are recognized
arising from the restructuring – i.e. those that are both necessarily
general recognition criteria are met. only when it is virtually certain that the reimbursement will
entailed by the restructuring and not associated with the entity’s
be received. The reimbursement is treated as a separate
• Provisions should be made for onerous contracts on-going activities. asset, which cannot exceed the amount of the provision;
▪ Provisions are reviewed at each reporting date and
Presentation and Disclosure: adjusted to reflect the current best estimate;
1. the carrying amount at the beginning and end of the period; ▪ If it is no longer probable that an outflow of economic
2. additional provisions made in the period, including increases to existing provisions; benefits will be required to settle the obligation, the
3. amounts used (i.e. incurred and charged against the provision) during the period; provision is released;
4. unused amounts reversed during the period; and ▪ Provisions are not recognized for future operating losses.
5. the increase in the discounted amount arising from the passage of time and the effect of any change in the discount rate.
AK
IAS 37 Provisions, Contingent Liabilities and Contingent Assets (continued)
Page#25
Decision Tree
 AK IAS 38 Intangible Assets Effective date: Periods beginning on or after 31 Mar 2004
Scope: Page#26
Exclusions: Recognition and Measurements
Financial and Definition:
intangible assets 1.Intangible assets:
covered by other Identifiable non-
IFRSs (IAS 2, IAS monetary assets, without
12, IAS 17, IAS Initial physical.
19, IAS 32, IFRS 4, Measurement
IFRS 5).

Separate Acquired in Internally Exchange of: Internally Government

Acquisition Business Generated Generated Grants
Combination

a. Probable – Research Phase: ▪ Measure

acquired asset Internally generated Initially recognized at
expected a. Probable – always Expense costs as incurred. goodwill cannot be
at its FV; either:
future met if FV can be
▪ If not possible, recognized as it is not ▪ Fair value;
economic determined; FV Development Phase:
at carrying an identifiable ▪ Nominal value plus
benefits will reflects Capitalize if all criteria met: resource that can be
value of asset direct expenses to Subsequent
flow to the expectation of i. Technical feasibility of measured reliably.
given up. prepare for use.
entity; & future economic completion of intangible Measurement
benefits. asset; Examples include: Examples include:
a. Cost can be b. Cost – FV at ii. Intention to complete; ✓ Internally ✓ License to operate
reliably acquisition date. iii. Ability to use or sell the generated brands; national lottery;
measured. (a) Acquirer intangible asset; ✓ Customer lists. ✓ Radio station.
recognizes it iv. Adequate technical,
Recognition at separately from financial and other
cost. goodwill (b) resources to complete;
Irrespective of v. Probable future
whether the economic benefits; Choose either Cost Indefinite useful life:
acquiree had vi. Expenditure measured Model or
recognized it reliably. Revaluation Model
before ▪ Not amortized;
acquisition. ▪ Annual impairment review test.
AK
IAS 40 Investment Property Effective date: Periods beginning on or after 1 Jan 2005
Scope: Page#27
Applies in the Recognition & Measurement
recognition,
measurement
and disclosure of
investment Measurement Recognition Derecognition Classification
property.

Excludes:
▪ An owned investment
1. Biological Initial Subsequent property is recognized as an
assets related
to agriculture asset when it is probable that Inter-company rental: Transfers:
activity (IAS ▪ Initially the future economic benefits
that are associated with the Property related to Only permits assets
41 & IAS 16); measured at
Cost Model related parties is not to be reclassified into
& cost, Fair Value Model property will flow to the
investment property or out of the
2. Mineral rights including enterprise, and the cost of
in consolidated FS that investment property
& reserves the property can be reliably
transaction include both lessor & category when and
such as oil, Entity can measured.
natural gas, &
costs; lessee, because it is only when there is a
Cost model as choose either; ▪ An investment property held owner occupied from change in use and
similar non- per IAS 16. FV model or cost by a lessee as a right-of-use
Note: prospective of the provides examples. In
regenerative model.
Cost does not asset shall be recognized in group. isolation, a change in
resources. include start-up accordance with IFRS 16. management’s
costs, abnormal
Switching the Model ? intention does not
Disclosure: waste, or Transfer from & to Investment Property ?
initial operating Entity can change from provide evidence of a
▪ Selected Transfer is possible when there is a change in use or change in use.
losses incurred one model to other if Two circumstances:
model; before the asset’s purpose:
and only if change
▪ FV derived investment ▪ Start renting out the property that previously used 1. On disposal;
results in the FS 2. When investment
how? property achieves as office building (head-quarter) (transfer to
providing better, more property is
▪ Classification the planned level of investment property from owner-occupied
occupancy. reliable information permanently
criteria; property under IAS-16).
about the Company’s withdrawn from use
▪ Movement ▪ Investment ▪ Stop renting out the building & entity start using
financial position, & no future
during property held for it-self; economic benefits
by lessee as results & other events.
period; ▪ Entity held a land for undefined purpose & are expected.
▪ and so on… ROU asset shall
recently decided to construct an apartment house
be measured
initially at cost.
to sell when they are built (transfer from
investment property to inventory).
 AK Effective date: Periods beginning on or after 1 Jan 2003
IAS 41 Agriculture
Scope: Page#28
Applies to: Recognition & Measurement
▪ Biological assets; Definitions:
▪ Agriculture
1. Active market:
produce;
Exists when; the items
▪ Government Measurement
grants related to
Recognition traded are homogenous,
willing buyers and sellers
biological assets.
can normally be found at
Biological assets or agricultural produce are any time and prices are
Agriculture Biological Assets recognized when: available to the public.
Produce 2. Agriculture activity:
The management of the
FV Gain/Loss (a) Entity controls the asset as a result of a
transformation of a
past event; biological asset for sale
The gain or loss ▪ Produce
Initial Subsequent into agricultural produce
on initial harvested (b) Probable that future economic benefit
from Measurement Measurement or another biological
recognition is will flow to the entity; & asset.
included in biological 3. Biological assets:
included in assets is (c) Fair value or cost of the asset can be A living animal or plant.
measured at • At FV less • At FV less estimated
profit or loss in measurement reliably. 4. Agriculture
FV less costs estimated point-of-sale costs
the period in produce:
to sell at the point-of-sale (except where fair
which it arises. The harvested produce
point of costs (except value cannot be of entity’s biological
harvest; where fair estimated reliably); assets.
▪ Such value cannot 5. Biological
measurement be estimated • If no reliable transformation:
is the cost at reliably); measurement of fair The process of growth,
value, biological
FV Gain/Loss degeneration, production
the date when
applying IAS 2 • f no reliable assets are stated at ▪ The gain or loss on initial recognition is & procreation that
measurement cost less included in P&L in the period in which it cause an increase in the
or other
of fair value, accumulated arises; value or quantity of the
relevant IFRS. biological asset.
biological depreciation and ▪ Subsequent change in fair value is
included in P&L in the period it arises. 6. Harvest:
assets are accumulated
The process of detaching
stated at cost. impairment losses produce from biological
(if any). asset or cessation of its
life.
AK
IAS 41 Agriculture (continued)
Government
Grants
▪ Unconditional government
grant related to a biological
asset measured at FV less
estimated point-of-sale
costs is recognized as
income when, and only
when, the government
grant becomes available;
▪ A conditional government
grant, including where a
government grant requires
an entity not to engage in
specified agricultural
activity, is recognized as
income when and only
when, the conditions of the
grant are met.
Inability to
Measure FV
▪ A the FV of the biological
asset becomes reliably
measure-able, the FV must
be used to measure the
biological asset;
▪ Once a non-current
biological asset meets the
criteria to be defined as held
for sale (or as part of a
disposal group classified as
held for sale) then it is
presumed FV can be
measured reliably.
Effective date: Periods beginning on or after 1 Jan 2003
Page#29
Disclosure
▪ aggregate gain or loss from the initial
recognition of biological assets and
agricultural produce and the change in fair
value less costs to sell during the period;
▪ description of an entity's biological assets, by
broad group;
▪ description of the nature of an entity's
activities with each group of biological assets
and non-financial measures or estimates of
physical quantities of output during the
period and assets on hand at the end of the
period;
▪ information about biological assets whose
title is restricted or that are pledged as
security;
▪ commitments for development or acquisition
of biological assets;
▪ financial risk management strategies;
▪ reconciliation of changes in the carrying
amount of biological assets, showing
separately changes in value, purchases, sales,
harvesting, business combinations, and
foreign exchange differences.
 AK Effective date: Periods beginning on or after 1 Jul 2009
IFRS 1 First-time adoption of IFRSs Page#30
Scope: Recognition and
▪ Applies to first set of measurement
FS. Legends:
▪ Accounting polices Balance sheet = SOFP
should be apply for Financial Statements = FS
IFRSs effective and not Financial Instruments = FI
yet effective but early Exceptions (Choice): SOFP: Policies: Presentation and Transition to Financial assets = FA
adoption permit. ▪ Business Combination; ▪ Opening IFRS ▪ Same Disclosure: IFRS: Financial liabilities = FL
▪ Recognize/derecogniz ▪ Borrowing costs; SOFP is made accounting ▪ First set of FS must Entity must
e assets/liabilities ▪ Joint arrangements; on transition policies in present 3 column explain the Restructuring of IFRS:
where necessary, ▪ Leases; date; opening FS in SOFP. E-g for 2019 FY effect on FS from IFRS-1 has been
make reclassification ▪ Share based payments; ▪ Consistent first time (Opening 2018, YE previous GAAP amended many time.
where necessary to ▪ FV or revaluation as applications of adoption; 2018 & 2019) to IFRS and shall
make FS as per IFRS. deemed cost; all IFRSs ▪ Change in ▪ And below notes for disclose: Current Versions of
▪ Compound FI; (including accounting first time adoption: IFRSs:
▪ Investments in shares; comparatives). policies for first a) Reconciliation of 1. Reason it IFRS requires first time
▪ Cumulative translation year; IAS 8 do equity under stopped adopter to apply the
Note applies when applying
differences; no applies. previous framework current version of IFRSs,
entity: IFRSs; and
▪ Extinguishing FL with EI; and under IFRS now; without considering
1. Stops presenting FS 2. Reason it is
▪ Severe hyperinflations; b) Recon. of total superseded or amended
as per national Restriction for resuming the
▪ Government loan & comprehensive versions. This:
requirements; retrospective: application
Stripping cost in production income under ▪ Enhances
2. Presented FS in ▪ Derecognition of FA of IFRSs.
phase of surface mine; previous framework comparability;
previous year as per & FL.;
▪ Insurance contracts; and under IFRS now; ▪ Avoids unnecessary
national ▪ Hedge accounting;
▪ Embedded derivates. c) In case of interim costs.
requirements; ▪ Estimates;
▪ Designation of previously financial reports, the
3. Presented FS in ▪ NCI.
recognized FI; above recon. as well.;
previous compliance
▪ Decommission liabilities; d) Errors made Use of FV as deemed cost:
to IFRS (Despite of
▪ Assets recognized as per previously should be If the entity uses FV in its opening IFRS
auditor
IFRIC 12 (Service separately SOFP as deemed cost, it shall disclose for
qualifications).
concession); distinguished; each line item in opening IFRS SOFP:
e) Additional disclosure 1. Aggregate of those FVs; and the
as set by IFRS 1. 2. Aggregate adjustments to the
carrying amount reported under
Entity that has applied IFRSs in a previously, but whose recent FS do not contain statement of compliance with IFRSs, must either apply IFRS 1 or else previous GAAP.
apply IFRSs retrospectively in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors.
 AK Effective date: Periods beginning on or after 1 Jan 2005
IFRS 2 Share-based payment Page#31
Scope: Recognition and
Applies to: measurement Legends:
▪ Equity settled; Net assets = NA
▪ Cash settled (by Share-based payment Disclosures Joint venture = JV
incurring liability to Requirements Fair value = FV
supplier) that is based
on share price); Recognition Measurement Definitions:
▪ Transaction in which 1. Vesting Conditions:
entity received That determine whether
Vesting Non-Vesting entity receive services that
goods/services and ➢ Recognize
either party has option Conditions Conditions when entitle the counter party to
receive shared-based
to settle either in cash goods/services
payment and is either; a
or equity. received. service condition or a
➢ Included in grant date FV ➢ Increase an
calculation performance condition.
equity (equity 2. Performance target:
IFRS 2 not applies to: Service Performance ➢ No adjustment to No. of shares settled). Defined by reference to;
▪ When IFRS 3 or IFRS 11 condition condition or vesting date amount for actual ➢ Record liability ➢ Entity’s own operations
applies (Acquires goods as results. (cash settled). or the operations of
part of NA or contribution in
➢ If goods/service another entity in the
business in JV). Require the Require the same group or
Nature & extent of received do not
▪ Shared based payments counterparty counterparty to ➢ The price of entity’s EI
share-based payment qualify for
under contract in scope of IAS to complete complete a specified or EI of another entity in
containing; (a) recognition as
32 or IFRS 9. a specified period or service & the same group.
description of each assets,
▪ Transactions with employees. period or Specified performance A Performance target might
type of arrangement, recognize as either relate to
service. target to be met. expense.
➢ Excluded from grant date (b) no. & weighted performance of entity as a
FV calculation. avg. exercise option; whole or to some part of
(c) price on which the entity (or part of
➢ Adjust to No. of share
option is exercise; (d) group), such as division or
and/or vesting date Non-Mkt Mkt range of exercise
employee.
amount for actual results.
condition condition price.
Group settled
Equity settled
Choice Cash settled
Entity is required to record in
Transaction with employee: Measure at FV of EI at grant date, FV separate FS: Who receive
never remeasured and grant date FV is recognized over vesting Counter party has right to choose: Consider entity has Measure liability at FV, good/service regardless who
period. Transaction with non-employee: Measure at FV of issued compound EI. remeasure FV of liability settle. The term group mean as
goods/service received if FV of that cannot be measured than FV of Entity has right to choose: Entity will determine if they has each YE and settlement per IFRS 10 (Parent &
EI granted. present obligation to settle in cash than cash else vice versa. date, record change in P&L. subsidiaries)
 AK
Scope:
Transaction or event
in which acquirer
Disclosure
obtains control over
business
E-g: Acquisition of
shares/net assets,
mergers and reverse
acquisition).
IFRS 3 not applies to:
▪ Formation of Joint
arrangements.
▪ Acquisition of
assets/group of
assets not a business
combination.
▪ Combination under
common control.
Acquirer shall disclose; nature &
financial effect of business
combination occurs either;
1. During current period;
2. After period end but before
FS authorized to issue.
▪ At acquisition date, acquirer recognizes (separately from GW), the
assets acquired, liabilities assumed and any NCI in acquiree;
▪ Assets/liabilities to be measured at acquisition date FV;
▪ Certain exceptions to be recognition: contingent liabilities, income
tax, employee benefits, and so on;
▪ NCI measured at acquisition date at FV or under proportionate
method.
Effective date: Periods beginning on or after 1 Jul 2009
IFRS 3 Business Combinations
Acquisition Method
Key Notes
Recognize and measure GW
Step#1
or gain from bargain purchase
Identify the acquirer:
IFRS 10 identify the acquirer -
Entity that obtains control of ▪ GW is excess between total
the acquiree. consideration transferred & any
NCI VS net assets acquired (FV)
including any deferred taxes;
Step#2 ▪ GW can be grossed up to
include amounts attributable to
Determine acquisition date:
NCI (If NCI is measured at FV);
Date on which acquirer
▪ Gain from bargain purchase
obtains control.
immediately recognized in P&L;
▪ Consideration transferred is
Step#3 measured at FV (including
contingent);
Recognize & ▪ Contingent consideration is
measuring the either classified as liability or EI
identifiable assets (IAS 32);
acquired, liabilities Step#4 ▪ Contingent consideration
measured as per IFRS 9 (FL)
assumed & any NCI
need to be remeasured at FV
in the acquiree.
with changed reported in P&L.
Measurement period:
Applies when initial accounting is
incomplete at end of YE of business
combination. Measurement period ends
when acquirer receives information
about fact, not to exceed 1 year after
acquisition.
Page#32
Legends:
Non-controlling interests
= NCI
Business combination achieved in
Goodwill = GW
stages:
▪ When acquirer obtain control on Definitions:
acquiree in which it held an equity 1. Control:
interest immediately before Refer IFRS 10 for control definition.
acquisition date is known as 2. Business:
business combination achieved in Integrated set of activities and
stages. assets that is capable of being
▪ Acquirer remeasure its previously conducted and managed for the
held equity interest in acquiree at
purpose of providing goods/service
acquisition date FV, any resulting to customer, generating
gain/loss record in P&L.
investment income or generating
other income from ordinary
Business combination achieved
activities.
without transfer of consideration:
▪ Acquisition method applies too.
Subsequent measurement:
▪ Such circumstances include:
▪ Subsequently acquirer
✓ Acquiree repurchase sufficient no. measures its assets &
of its own shares for existing
liabilities in accordance with
investor to obtains control.
other applicable IFRSs
✓ The acquirer & acquiree agree to
▪ But, IFRS 3 includes
combine their business by contract
accounting requirements for
alone.
reacquired rights, contingent
liabilities, contingent
What can be the part of
consideration &
Business Combination ?
Acquisition and other costs: indemnification assets.
Cannot be capitalized and be expense
IFRS 3 Requires that assets &
in P&L in period incurred.
liabilities acquired need to
Cost to issue debt/equity are recognized
constitute a Business!
as per IAS 32 & IFRS 9.
Business should have;
1. Input; (2) Process; (3) Output.
Pre-existing relationship:
In case of pre-existing relationship in b/w
acquirer & acquiree, this must be accounted
for separately from business combination.
AK
Scope:
▪ Insurance contracts
that an entity issues and
reinsurance contracts
that it holds
▪ FI that an entity issues
with a discretionary
participation features.
If insurance contracts
include a deposit
component, unbundling
may be required.
Not insurance contracts:
▪ Investment contracts (do
not expose issuer to
significant risk).
▪ Contract that pass all
significant risk back to
policyholder.
▪ Self insurance.
▪ Gambling contracts.
▪ Derivates that expose one
party to FR but not IR.
▪ Credit related guarantee.
▪ Product warranties.
▪ Financial guarantee-IAS 39.
▪ Does not address the
accounting for FS held by
issuers, but temporary
exempt from IFRS 9 (until
January 1, 2023).
▪ Overlay approach
permitted for designated
FA.
IFRS 4 Insurance Contracts
▪ Life insurance & prepaid funeral
expenses;
▪ Life-contingent annuities and
pensions;
▪ Disability and medical cover.
▪ Surety/fidelity/performance/bid
bonds;
▪ Credit insurance;
▪ Product warranties (other than
those issued directly by a
manufacturer, dealer or retailer);
▪ Title insurance and Travel
assistance;
▪ Catastrophe bonds that provide
for reduced payments of
principal, interest (or both) if a
specified event adversely affects
the issuer of the bond;
▪ Insurance swaps and other
contracts that require a payment
based on changes in climatic,
geological or other physical
variables that are specific to a
party to the contract;
▪ Examples of contracts that are
insurance contracts (if transfer of
insurance risk is significant);
▪ Insurance against theft or
damage to property;
▪ Insurance against product
/professional/civil/legal liability
expense;
▪ Reinsurance contracts.
Effective date: Periods beginning on or after 1 Jan 2005
Page#33
Recognition & Liability Adequacy
Measurement Test Legends:
Financial Instruments = FI
Financial risk = FR
Insurer is required to assess at each YE if its Insurance risk = IR
recognized IL are adequate, using current Financial asset = FA
Point to consider: estimates of future cash flows under its Insurance liability = IL
Accounting insurance contracts. If it shows that the carrying
policies changes amount of its IL is not sufficient, the liability is
are restricted. increased, and a corresponding expense is
recognized in P&L.
Key Notes Disclosure
IFRS provides additional Disclosures that identifies & explains amount arising
guidance to: from insurance contracts:
➢ Change in accounting ➢ Accounting policy & related
policies. assets/liabilities/income/expense.
➢ Prudence. ➢ Recognized assets/liabilities/income/expense.
➢ Insurance contract acquired ➢ Effect of change in assumptions.
in business. combinations or ➢ Recon. of changes in liabilities & assets.
portfolio transfer.
➢ Discretionary participation Disclosures that enable users to evaluate the nature
features. & extent of risk from insurance contracts:
Its highly recommended that ➢ Objective, policies & processes for managing risk.
insurer gain a full ➢ Information about
understanding of IFRS 4 as insurance/credit/liquidity/market risk.
requirements & disclosures are ➢ Exposure to mkt risk arising from embedded
onerous. derivates.
AK
IFRS 5 Non-current Assets Held for Sale and Discontinued Operations
Scope:
Applies to:
▪ All NCA & disposal
groups of entity that are;
held for sale or held for
distribution to owners.
▪ Assets classified as NCA
as per IAS 1 shall be only
reclassified to CA if it
meets criteria of IFRS 5.
▪ If entity disposed entire
CGU, then IFRS 5 applies
to the group as whole.
IFRS 5 doesn't applies to:
▪ Deferred tax assets
(IAS 12).
▪ Asset arise from
employee benefits (IAS
19).
▪ FA scope (IAS 39/IFRS
9)
▪ NCA accounted for FV.
▪ FA measured at FV less
cost to sell as per IAS
41
▪ Contractual rights
under insurance
contract IFRS 4
Classification of NCA held for
sale or distribution to owners
Classify as NCA as held for sale if it’s
carrying amount will be recovered
principally through a sale transaction
rather than through continuing use.
Below criteria must met:
➢ Asset is available for immediate
sale
➢ Term of sale must be usual &
customary for sale of such assets
➢ Sale must be highly probable
➢ Mngt. is committed to a plan to
sell
➢ Asset must be actively marketed
for sale at reasonable price in
relation to its FV.
➢ Sale should be complete with in 1
year
➢ Special rule for subsidiaries
acquired with a view for resale
Reclassification from held for sale to
held for distribution to owners is not
a change to a plan and therefore not
a new plan!
Effective date: Periods beginning on or after 1 Jan 2005
Page#34
Legends:
Measurement: Non-current asset = NCA
Discontinued
▪ Prior to classification assets Current assets = CA
measured with applicable IFRSs; operations Cash generating unit =
▪ After reclassification, assets are CGU
measured at lower of carrying Financial asset = FA
amount & FV less cost to sell.; Presentation: Fair value = FV
▪ Impairment must be considered at ▪ Classification depends when Statement of
time of classification as held for sale operations meets requirements comprehensive income =
& subsequently; of held for sale; SOCI
▪ Subsequent increases in FV cannot ▪ Results are presented as single
be recognized in P&L in excess of line item in SOCI; Definitions:
cumulative impairment losses that ▪ Disclosure for cashflows; 1. CGU:
have with this IFRS or IAS 36; ▪ Comparatives restated. The smallest identifiable
▪ NCA classified as held for sale are group of assets that
not depreciated; generates cash inflows
▪ Adjustment of No. of shares and/or
Disposal Group ?
that are largely
vesting date amount for actual A new concept
independent of the cash
result. introduced by IFRS-5 and inflows from other assets
it represents a group of or groups of assets.
assets and liabilities to be
Disclosure: 2. Discontinued
disposed of together as a
▪ NCA held for sale are disclosed operation:
separately from other assets in group in a single Component of entity that
SOFP; transaction. either has disposed of or
▪ Gain/los arising from initial or is classified as held for
subsequent FV measurement of sale & either:
disposal group or NCA held for sale ➢ Represent separate
if not presented separately in SOCI major line of business
& line item that includes that ➢ Is part of single plan
gain/loss; to dispose separate
▪ Prior year balances in SOFP are not major line of business
classified as held for sale; ➢ Is a subsidiary
▪ If applicable the reporting segment acquired exclusively
in which NCA or disposal group is with a view to resale.
presented.
AK Effective date: Periods beginning on or after 1 Jan 2005
IFRS 6 Exploration for and Evaluation of Mineral Resources
Scope: Page#35
Applies to:
▪ Expenses incurs on Legends:
E&EMR
Recognition and Presentation & Exploration & Evaluation
measurement disclosure of Mineral Resources =
IFRS 6 not applies to: E&EMR
Expenses incurred:
▪ Before E&EMR (i-e
Prior to obtain Initial Subsequent Presentation Disclosure
legal license to
explore).
▪ After technical Cost
feasibility &
Revaluation Tangible Intangible
commercial Cost Model
viability of model
extracting mineral
resource are
demonstrable. ▪ Accounting policies of
E&EMR expenses &
▪ Entity determine its Impairment: Key Note: evaluation assets;
policy to recognize Entity should test for impairment If; IFRS 6 allows impairment ▪ Amount of
expenses as E&EMR. ✓ Right to explore is expired or will expire soon (& entity to be assessed at a level assets/liabilities/income/
▪ Below example might has no intention to renew).
higher than the CGU expenses/operating &
be included in initial ✓ Substantive expenses required on E&EMR is neither investing cashflows from
under IAS 36, but require
measurement: budgeted nor planned. E&EMR.
✓ E&EMR have not led to discovery of commercially viable measurement of the
✓ Acquisition of rights to impairment in accordance ▪ Discloses as separate
quantities & entity decided to discontinue such activities
explore; with IAS 36. class of assets either as
✓ CA of asset is unlikely to be recover in full-from
✓ Topographical, per IAS 16 or IAS 38.
successful development or sale.
geological,
geochemical &
geophysical studies.
✓ Exploratory drilling and
trenching.
 AK Effective date: Periods beginning on or after 1 Jan 2007
IFRS 7 Financial Instruments: Disclosures Page#36
Scope:
Applies to: Conditions Legends:
▪ All Non-financial asset = NFA
recognized/unrecognize Financial Instruments = FI
d FI (including contract Statement of Financial
to buy or sell NFA) SOFP & Position = SOFP
Risk from FI
performance Statement of
Exempt from IFRS 7: comprehensive income =
▪ Interest in SOCI
subsidiaries/Associates/J
Vs in case of IAS 27/28 or Quantitative Qualitative Definitions:
IFRS 10/11 permits SOFP SOCI Others 1. Liquidity risk:
accounting as per IAS When entity encounter
39/IFRS 9. difficulty in meeting
▪ Assets/liabilities arise ▪ CV of each
Liquidity risk Credit risk Market risk obligations associated FL.
▪ Gain/loss arising for
under IAS 19. category of FI on each category of FI. 2. Credit risk:
▪ Insurance contracts. face of SOFP & in ▪ Total interest income When one party to FI cause
▪ Maturity ▪ Maximum ▪ Sensitivity
▪ FI, contracts/obligation notes. & interest expense. financial loss for other party
analysis of FL. exposure to analysis for by failing to discharge an
as per IFRS 2 except ▪ Info. Of FV of ▪ Fee income/fee ▪ Time bands & credit risk. each market obligation.
under scope of IAS loans/receivables. ▪ Interest on impaired interest rate as ▪ Collateral held as risk and 3. Market risk:
39/IFRS 9. ▪ FL designated FA. based on security & other showing When FV or future
▪ Puttable instruments FVTPL. ▪ Amount of entity credit impact on cashflows of FI will fluctuate
(IAS 32). ▪ FA reclassified. impairment loss for judgements. enhancement. P&L. due to change in market
▪ Detail of FA each FA. ▪ How this risk is ▪ Information on ▪ In case prices.
Fair Value Hierarchy: pledged.
managed. FA that are sensitivity
All FI measured at FV must ▪ Recon. of ▪ Accounting policies. either past due analysis is
be classified into levels allowance ▪ Hedge accounting. or impaired. prepared,
below: account for credit ▪ FA for each class of ▪ Information showing that Currency risk
Level-1: Quoted price in loss FI. disclosure method about collateral interdepend
active marker. ▪ Compound FI & assumption to & other credit encies
Level-2: No quoted price ▪ Detail of default calculate FV and enhancement between risk Interest rate risk
but observable price from & loan breaches. disclosure if FV obtained. variables and
mkt. cannot be it is used to
Level-3: Input that are not determined. managed
based on observable Other price risk
financial risk.
market. Sensitivity Analysis
AK
Scope:
IFRS 8 Operating Segments Effective date: Periods beginning on or after 1 Jan 2009
Page#37
Applies to:
Annual & interim FS Legends:
Entity required to disclose all to enable users of FS to evaluate
(separate/standalone or Core Principle Financial statements = FS
consolidated FS of group) nature & financial effect of business activities in which it engages. Non-current asset = NCA
with parent:
Chief operating decision
▪ Whose debt or EI are
trade in public market; or maker = CODM
▪ Files FS to securities
commission or other Quantitative Operating Reportable Reconciliation Disclosures
relevant regulatory Thresholds Segments
Segments
body.
Major disclosures:
Reconciliation ▪ Measure of P/L & total assets
▪ Information must be An operating segment is a Separate of total assets of reportable segments (if
disclosed about an component: to the entity’s information if provided
disclosure is
operating segment if they ▪ That engage in assets should regularly to CODM) .
meet any below:
required
business activity (earn only be ▪ Judgement made by
✓ Reported revenue is 10% about each
revenue & incur provided if the management for purpose of
Aggregation or more of combined expenses). segment that
segment aggregating operating
revenue of all operating ▪ Whose operating exceed
Criteria reporting assets are segments.
segments. results are regularly ▪ Its not necessary IFRS
✓ Absolute profit is 10% or reviewed by CODM. threshold. regularly
compliant inf. as it is based
more of combined profit of ▪ For which discrete provided to
Two or more segments on amount reported
all operating segments. financial information is the Chief
may be aggregated if internally.
✓ Assets are 10% or more of available. Operating ▪ Operating segment inf.
they are similar in any of combined assets of all Decision disclosed must be reconciled
below: operating segments.
✓ Nature of Maker. to IFRS amount in FS.
▪ If total external revenue by ▪ Following geographical inf. If
product/service.
operating segment
✓ Nature of production. available: (Revenue from
constitute less than 75% of external customer, NCA
process.
✓ Type/class of total revenue, additional located in country local or
customer. operating segment shall be outside.
✓ Method used to identified as operating ▪ Extent of reliance on major
distribute their segments until at least 75% customers. It will disclose if
product/service. of entity revenue in more than 10% revenue from
✓ Nature of regulatory included in reportable one customer.
environment. segments.
 AK Effective date: Periods beginning on or after 1 Jan 2018
IFRS 9 Financial Instruments Page#38
Legends:
Fair value = FV
Recognition & Impairment of FA
Financial assets = FA
measurements Financial liabilities = FL
▪ Meet SPPI contractual Fair value through profit
cashflows test. General or loss = FVTPL
Simplified
▪ Entity holds instrument to Fair value through other
Initial Subsequent collect cashflow & to sell FA.
Approach Approach comprehensive income =
Subsequent: Amortized FVTPL FVTOCI
▪ FV, all gain/loss (not relating cost Equity instruments = EI
At FV to impairment in P&L) Step#1 Debts Instruments = DI
Financial recognized in OCI. ▪ FL held Expected credit loss=ECL
▪ Change in FV recorded in OCI ▪ All FL with for 12-month ECL (gross interest): Embedded derivates=ED
Liabilities are recycled to P&L on some trading. ▪ When no significant increase Non-financial asset = NFA
Financial Assets derecognition or exceptions ▪ Derivates Hedging instrument = HI
in credit risk.
reclassification. like one on FL. ▪ Interest on gross basis.
FVTPL, Subsequent:
Financial FV, all Short term receivables:
DI guarantee gain/loss Step#2 ▪ Life-time ECL (stage#2) only.
Amortized FVTPL FVTOCI & recognized in ▪ ECL on Trade receivable based
cost EI commitme P&L. on provision matrix.
Life-time ECL (gross interest):
nt to ▪ When significant increase ▪ Adjustments of historical
provide a in credit risk. provision rates to reflect
Assessment ▪ FA not meet amortized cost (included ▪ Available for loan. relevant information about
▪ Interest on gross basis.
assets held for trade. investments in EI current condition & reasonable
▪ Option to designate is available if doing (not held for & supportable forecasts about
so eliminates/reduce inconsistencies. trading). Step#3 future expectations.
▪ Subsequently, FV
(1) Business (2) Contractual gain/loss record in Life-time ECL (net interest):
Model Cashflows OCI. ▪ When credit impairment.
Note:
Option to designate ▪ Change in FV not ▪ Interest on net basis.
if irrevocable. recycled
subsequently to P&L. Practical Expedients: (30-days rebuttable presumptions):
Overall Instrument by
Subsequent: ▪ Dividends in P&L. ▪ That credit risk has increased significantly when contract payments are more than 30 days due.
business instrument
FV, all gain/loss Note: ▪ Hence, FA is in stage#2 and life-time ECL would be recognized.
recognized in P&L. Designation in initial ▪ It can be used when that “even payments are 30 days or more due, it does not have significant increase in
recognition is optional & credit risk of FI.
irrevocable.
 AK Effective date: Periods beginning on or after 1 Jan 2018
IFRS 9 Financial Instruments (continued) Page#39
Legends:
Fair value = FV
Derecognition Embedded Derivates Hedge Accounting Financial assets = FA
Financial liabilities = FL
Fair value through profit
or loss = FVTPL
Financial Financial ED within FA ED within host (1) Hedging (2) Designation Fair value through other
host contract contract that is FL relationship & comprehensive income =
Assets Liabilities documentation FVTOCI
YES Equity instruments = EI
Have the right to cashflow Must consist Debts Instruments = DI
Derecognize asset
from asset expired? of: Must finalize at Expected credit loss=ECL
Whole contract in ▪ Separated
▪ FL derecognized when ✓ Eligible HI. inception: Embedded derivates=ED
NO its entirety is from host
extinguished. ✓ Eligible ✓ Hedge Non-financial asset = NFA
accounted for a contract.
▪ Difference b/w CV of FL Hedge relation. Hedging instrument = HI
Entity transferred its right single contract as ▪ Account for
extinguished/transferred to Item. ✓ Risk Mngt.
to receive cash flow from per IFRS 9. as per IFRS 9
3rd party & consideration (FVTPL) as Strategy & Definition:
asset?
paid is recognized in P&L. derivate. objective for 1. Embedded derivates:
NO Note: undertaking These are components of
Host contract the hedge. hybrid contracts that cause
Entity assumed an
NO (NFA)is ✓ Hedge item & some (or all) of contractual
obligation to pay cashflow Continue HI. cashflows to be modified
accounted for in according to specified
from asset (IFRS 9)? recognize asset ✓ How hedge will
relevant IFRSs. variables (e-g interest rate,
be assessed.
YES commodity price, foreign
exchange rate, index etc..).
Entity transferred YES
substantially all risk & Derecognize asset (3) All 3-hedge effectiveness requirements met:
reward?

NO (a) Economic relation exist b/w hedge item & HI.

NO (b) Credit risk doesn’t dominate change in value.
Entity retained control of (c) Hedge rate is same for both the:
Derecognize asset
asset? ➢ Hedge instruments;
YES
➢ Qty of hedge item actually hedged, & Qty of
HI used to hedge it.
Continue to recognize asset?
AK Effective date: Periods beginning on or after 1 Jan 2013
IFRS 10 Consolidated Financial Statements (presented as Group Accounts) Page#40

Group accounts Subsidiary: An entity Legends:

Scope: (P+S) that is controlled by Parent = P
another entity Subsidiary = S
Applies to:
Non-controlling interest =
Parent to present Single entity concept Legal form: Each company is a NCI
consolidated financial applying substance separate legal person. Provision for unrealized
statements. over form Substance: Group is a single profit = PURP
economic entity
IFRS 10 doesn’t applies to: Control and ownership Definitions:
1. Is not an ultimate Parent 1. Control:
+ unlisted entity + No Disclosures: An investor control the entity
SCA requirements + Its Refer to IFRS 12 if it has all of the following:
ultimate parent do Consolidated statement Consolidated “Disclosures of (a) Power over investee
consolidation. of profit or loss statement of financial interests in other
(b) Exposure, or rights, to
position variable returns from its
2. An Investment entity. entities” involvement with
investee
Shows revenue and Shows resources (c) The ability to use its
expenses under group under group control power, to effect amount
control by the line-by- by the line-by-line of investor’s return.
line addition of S’s addition of S’s net 2. Investment entities:
revenue and costs assets ➢ Obtains funds from one
or more investors for
purpose of providing
And shows ownership And shows ownership them investment
split between split between management services.
➢ Commits to its investors
that its business purpose
Parent Non- is to invest fund solely for
Parent company’s Non-controlling return from capital
company’s controlling
share interest share appreciation, investment
share interest share
income, or both.
➢ Measure & evaluate
performance of
substantially all of its
of PAT of equity investments on FV basis.
AK Effective date: Periods beginning on or after 1 Jan 2013
Page#41
IFRS 10 Consolidated Financial Statements (presented as Group Accounts) (continued)
Legends:
Parent = P
Subsidiary = S
Single entity concept Control & ownership Non-controlling
interest = NCI
Provision for
unrealized profit =
PURP

If mid-year acquisition:
✓ Assume profits accrue over time; Consolidated statement
✓ Usually assume dividends paid by S are paid of financial position
out of post-acquisition profits.

Intra-group Fair value Other

Goodwill Workings Unrealized profit
balances adjustments adjustments

Adjust net assets

1 Group
working for fair
Measured as the excess structure
value
of the consideration 2 Net assets
increase/decrease
transferred plus the NCI 3 Goodwill Inventories Transfer of
at acquisition over the fair 4 Non- - non-current
value of the net controlling Loans, Consolidat assets
Intra-
identifiable assets and interest debenture & e at lower - Consolidate at
group
liabilities acquired 5 Retained redeemable of cost and cost to group Accounting
trading Loss-making Other
earnings preference NRV to the less policy
subsidiary/negative reserves
shares group depreciation alignments
reserve -Recognize
- Recognize as an Gain on bargain group share - Adjust S to
- Consolidate group
intangible non- purchase of post- reflect
share of post-
current asset - Recognize in profit or acquisition accounting
Cancel credit balance in one company If the subsidiary makes the sale acquisition
- - Annual impairment loss in period in which increase/dec policies of
against debit balance in the other. the NCI bears its share. loss/negative
review acquisition is made rease. Parent.
reserve
 AK Effective date: Periods beginning on or after 1 Jan 2013
IFRS 10 Consolidated Financial Statements (presented as Group Accounts) (continued)
Page#42
Consolidated Statement of Profit or Loss Legends:
Consolidated Statement of Changes in Equity
Parent = P
Subsidiary = S
Non-controlling
interest = NCI
Provision for
Transfer of Other Intra- Owners of the Non-
Intra-group Mid-year Dividends unrealized profit =
Workings non-current group parent controlling
trading acquisition PURP
assets transactions interest

P’s
1-Groupstructure dividend Separate analysis
income Changes
2-Consolidation columns for each presented in a
schedule from S is type of share capital
Eliminate Adjust
not single column
3-NCI Profit/Loss on increase/ - and reserve
consolidate
transfer against decrease Consolidated
in dep’n d in S
seller’s books post-
against dividend is
acquisition
seller’s shown in
profits only
books CSCE
- Time-
apportion NCI b/f = If S is acquired in the
results of S Redeemable Interest/ NCI%*S’s year, NCI added on
Remove Create PURP
sale from then preference manage share capital acquisition is amount
(increase cost plus reserves
revenue deduct shares ment included in goodwill
of sales of b/f.
and cost post- charges calculation.
selling
of sales acquisition
company)
intra-group Distributions
items treated as a Cancel on
- Recognize finance cost consolidation. NCI share of TCI for the
Doesn’t Affects - goodwill year from SCPLOCI.
affect NCI if S is impairment
NCI selling as
Cancel on
company expense(if
consolidation.
any).
AK Effective date: Periods beginning on or after 1 Jan 2013
IFRS 11 Joint Arrangements
Scope: Page#43
Applies to: Recognition &
All parties subject to measurement Legends:
JA. Joint arrangements = JA
Joint operation = JO
Joint venture = JV
Financial statements = FS
Joint Joint Ventures Definitions:
Operations 1. Joint arrangements:
Joint Arrangement Consolidated/individual FS: A joint arrangement:

Consolidated/individual FS:
Decision Tree Apply equity method IAS 28. (a) Binds parties by
contractual
A joint operator recognizes in agreement;
relation to interest in JO; Separate FS:
Recognize interest either; (b) Gives two (or more)
(a) Its assets/liabilities, including its parties joint controls.
share of assets/liabilities held (a) At cost;
jointly. (b) FV (IFRS-9/IAS-39);
Not a separate Separate (c) Equity method (IAS 28).
2. Joint venture:
(b) Its revenue/expenses from sale A joint arrangement in
of its share of output/expenses
vehicle vehicle
which the venturers have
arising from JO. rights to the net assets of
Above are accounted as per the venture.
applicable IFRSs.
Separate FS: Disclosures: 3. Joint operation:
Same treatment as for NO Following should be check:
Refer to IFRS 12 A joint arrangement
consolidated/individual FS as above. (a) Legal form; whereby each joint
“Disclosures of
Joint operation (b) Contractual terms; operator has rights to
interests in
(c) Other facts other entities”
assets and obligations for
the liabilities of the
YES operation.
Note:
The acquisition of an interest in a joint
operation in which the activity constitutes a Joint Venture
business should be accounted for using the
principles of IFRS 3.
 AK
Scope:
Applies by entities that have
interest in :
▪ Subsidiaries, JA,
Associates &
Unconsolidated
structured entities.
IFRS 12 not applies to:
▪ Employee benefits IAS 19
▪ Separate FS IAS 27.
▪ Interest held by entity
that participates in but
doesn’t have JC or
significant influence over
a JA.
▪ Interest accounted for as
per IFRS 9 except for
interest measured in
associates or JV at FV as
required by IAS 28.
Note:
Some, but not all, disclosure
requirements apply to
interests classified as held
for sale as per IFRS 5.
Effective date: Periods beginning on or after 1 Jan 2013
IFRS 12 Disclosure of Interests in Other Entities Page#44
Legends:
Joint arrangements = JA
Required Disclosures
Joint control = JC
Joint venture = JV
Structured entity = SE
Unconsolidated
Interest in Interest in JA & Significant Judgments
Interest in UCSE & Assumptions structured entity = UCSE
Subsidiaries Associates Consolidated structured
entity = CSE
Non-controlling interest
Information that enable Information that enable Information that enable users Disclosure in = NCI
users to understand & users to evaluate: to understand & evaluate: determining:
evaluate: (a) Nature of & changes in (a) Nature & extent of its Definitions:
▪ Control over entity.
(a) Composition of group risk associated with interest in UCSE.
▪ JC over 1. Structured entities:
& NCI interest interests held. (b) Nature of & changes in
(b) Nature & extent of arrangement. Entity that has been
(b) Nature, extent, & risk associated with its
significant restriction interest in UCSE. ▪ Significance designated so that voting
financial effects of
on ability to access or interest in JA & Including information influence over or similar rights are not
use assets, & settle associates (including about exposure to risk another entity; the dominant factor in
liabilities, of group contractual from involvement in ▪ When JA is deciding who control the
(carrying amount of relationships with previous periods (even if structured through entity.
assets/liabilities to other investors & JC or entity no longer has any separate vehicle, its 2. Income from SE:
which those restriction significant influence). contractual involvement classification (e-g JO Includes fee, interest,
applies). with entity at financial dividend, gain/loss on
or JV)
(c) Nature of & changes in period).
remeasurement or
risk associated with
interest in CSE. derecognition of interest
(d) Consequences of in SE & gain/loss from
changes in ownership transfer of asset &
interest in subsidiary liabilities to SE.
that do not result in 3. Interest in another
loss of control. entity:
(e) Consequences of losing Contractual/non-
control of a subsidiary contractual environment
during financial period. that exposes an entity to
variability of returns
from the performance of
other entity.
 AK Effective date: Periods beginning on or after 1 Jan 2013

Scope: IFRS 13 Fair Value Measurement Page#45

Applies when other IFRS
Legends:
requires or permit FVM.
Fair value = FV
Application to FA Fair value measurement
Application to Application to Disclosure = FVM
Exemption to above scope Application to NFA & FL with
liabilities entity’s own EI Non-financial asset = NFA
from measurement & offsetting position
disclosure (both): Equity instruments = EI
▪ Share base payment IFRS 2 Highest & best use = HBU
Highest & best use: It is assumed that It is assumed that these Financial asset = FA
▪ Leases under IFRS 16 FV measurement of would remain outstanding
these would remain Financial liability = FL
▪ Measurement that have
NFA consider mkt. outstanding & mkt & mkt participant
some similarities to FV but
are not FV, such as:
participant’s ability participant transferee transferee would take on Definition:
(a) NRV (IAS-2) to either: would be required to rights & responsibilities 1. Fair Value:
(b) Value in use (IAS-36) (a) Generate fulfill the obligation. It associated with The price that would be
economic wouldn’t be instruments. It wouldn’t be received to sell an asset or
Exemption to above scope benefits by settled/extinguished cancelled/extinguished at paid to transfer a liability in
an orderly transaction b/w
from disclosure only: using asset in its on measurement date. measurement date.
mkt participants at
▪ Plan assets measured at HBU. measurement date.
FV under IAS-19. (b) Sell asset to
(i) Market risk (ii) Credit risk
▪ Retirement benefits plan another mkt.
investments measured at Offsetting exemption
participant who Depend on the
FV under IAS 26.
would then use nature of FV
▪ Assets for which
recoverable amount is FV
asset in its HBU. FV would be based on price: measurement & the
- Received to sell net long level in which it is
less cost to sell in IAS 36. FV Hierarchy
position (i-e an asset) for classified.
particular risk exposure.
Physically Legally Financially - To transfer a net short Disclosure
possible permissible viable position (i-e a liability) for requirements are
a particular risk exposure most extensive when
Valuation techniques: in orderly transaction b/w level 3 inputs are
Must use appropriate techniques. Change in valuation technique or its Level-1 Level-2 Level-3 mkt participants. used, including
application are accounted for as per IAS 8. FV of this “offset group” of sensitivity analysis.
Input to valuation techniques:
FA & FL is made consistently
• Must aim to maximize the use of relevant observable inputs.
Quoted No quoted price with how mkt. participants
• If any asset/liability measured at FV has both a bid & ask price, the price Unobserva
within the bid-ask spread that is most representative of FV is used, price but observable would price the net
ble inputs
regardless of where the input is categorized within the FV hierarchy. mkt data exposure.
AK
IFRS 14 Regulatory Deferral Accounts Effective date: Periods beginning on or after 1 Jan 2016
Scope: Page#46
Applies to:
▪ Entities conduct rate Legends:
regulatory activities. Recognition and Presentation & Financial statements = FS
measurement disclosure Financial position = FP
Financial performance =
IFRS 14 not applies FP.
to:
Entity has not Definitions:
recognized regulatory First IFRS FS Not First IFRS FS Presentation Disclosure 1. Rate regulated
deferral balances that Activities:
it has previously YES Activities that are
elected to recognize subject to rate
Irrevocable election
in accordance with Voluntary irrevocable (Whatever opted from Disclosures on: regulations.
IFRS (Not on first election whether to option 1) ▪ Nature & risk 2. Rate regulation:
annual IFRS FS). recognize deferral as SOFP SOCI associated with A framework that
per IFRS 14 or not rate regulation establishes prices for
(option). the entity is
goods/services that are
Must be presented Net movement in exposed to.
subject to
in total (Total regulatory deferral ▪ Effect of that rate
regulatory deferral to: regulations of oversight/approval of
If opted to follow in ‘rate regulator’.
(Dr.)/(Cr.). ▪ P&L (related to entity’s FP & FP.
first IFRS FS 3. Regulatory deferral:
No split in to P&L).
current & non- ▪ OCI (related to Accounts balance:
current. OCI). A balance that
Must apply all wouldn’t otherwise be
Changes are permitted requirements as per recognized in
if it results more previous GAAP to all accordance with other
relevant & reliable FS! its regulatory deferral IFRS but qualify for
accounts balances
deferral as it is
(expected to be)
included in establishing
(range of) rates.
AK Effective date: Periods beginning on or after 1 Jan 2018

Scope:
IFRS 15 Revenue from Contracts with Customers Page#47
Applies to all contracts YES
Separate contracts
with customers except: Contract (i) Distinct Goods & Legends:
▪ Lease contracts 5 – Steps Model modifications Service; (ii) SSP Performance Obligations
(IFRS 16). Not a Separate = PO
NO
▪ Insurance contracts contracts Financial Instruments = FI
Combination of Standalone Selling Price =
IFRS 4 / IFRS 17. Step # 1 multiple contracts
▪ FI & other SSP
contractual rights & Financing component=FC
Identify the Contact IF
obligations (IFRS 9 / Present value = PV
Replacement of Continuation of
IAS 39, IFRS 10, IFRS Either; modification in
original contract
11, IAS 27 & IAS 28). I. Contracts are negotiated as package; with new contract existing contract
Definition:
▪ Certain non- Step # 2 1. Performance
II. Consideration for each contract is
monetary interdependent obligations:
exchanges. Identify the PO(s) III. Overall goods/services of contracts Prospective Catch up basis A promise to transfer to the
represent single PO. modification modification customer either;
(a) A distinct good(s) or
Distinct service(s);
Step # 3 Variable consideration e-g discount, rebates, refund, credits, concession, incentive, bonus, penalties, contingent payments. (b) A series of substantially
goods/services
the same distinct goods
Determine
Significant FC (Record on PV) or services that have
Transaction price the same pattern of
I. Customer Entity should a/c for this transfer to the
Consideration payable
can benefit as reduction in customer, and the
Step # 4 to customer
pattern of transfer is
from goods transaction price (ONLY
if not in exchange for (i). both over time and
on its own; Allocate the (ii). Most
Non-cash consideration Expected represents the
II. Goods/ Transaction price to PO distinct goods/services). likely
value progress towards
service are method complete satisfaction
separable method
Accounted for at FV of the performance
from each Step # 5 obligation.
other YES Based on SSP
Recognize revenue
when each PO is Standalone (observable)
satisfied price 1. Adjusted market
assessment approach
NO 2. Expected cost-plus
margin approach
3. Residual approach
AK
IFRS 15 Revenue from Contracts with Customers (continued)
5 – Steps Model
Step # 5
Recognize revenue
when each PO is
satisfied
Point in Time Over the Time
Immediately as Below 3 criteria must meet:
sales occurred 1. Customer simultaneously
(controlled receives & consumes all
transferred). E-g: benefits (e-g recurring
service contract such as
Delivery of tangible
cleaning services).
goods, let say
2. Entity’s work
selling of laptops,
mobile phones, creates/enhances asset
grocery items. controlled by customer (e-g
work in progress & could be
tangible or intangible).
3. Entity’s performance
doesn’t create an asset
with alternative use to
entity, & entity has
enforceable right to
payment for performance
completed to date.
Effective date: Periods beginning on or after 1 Jan 2018
Input Method (e-g Milestone Presentation
reached, units
produced/delivered, survey of
performance complete to date).
Output Method (e-g Resources
consumed, cost incurred, time
lapse)
Statement of
Financial Position
▪ Contract asset & ▪ Line item
contract liabilities
to be presented
separately.
▪ Unconditional
rights to
consideration are
presented
separately as
receivable.
Page#48
Legends:
Presentation & Performance Obligations
Disclosure = PO
Financial Instruments = FI
Standalone Selling Price =
SSP
Financing component=FC
Present value = PV
Contract asset = CA
Contract liability = CL
Disclosure
Disclosure of sufficient info. about
nature, amount, time, & uncertainty
of revenue & cashflows arising from
contract with customer:
➢ Contract with customer:
- Disaggregation of revenue;
- CA & CL & PO.
Statement of ➢ Use of practical expedient
Comprehensive (related to):
Income - Significance FC (12 month)
- Contract costs (12 month)
➢ Significant judgement:
- PO satisfaction.
(revenue & - Transaction price.
impairment - Determining contract cost
) are capitalized.
presented ➢ Contract cost capitalize:
separately - Method of amortization.
in - Closing balance by asset type.
accordance - Amortization & impairment.
with IAS 1.
AK Effective date: Periods beginning on or after 1 Jan 2019
IFRS 16 Leases Page#49
Scope:
All arrangements that
Legends:
meet the definition of
Right-of-use = ROU
lease except for: Lessee Lessor Implicit rate in lease = IR
(a) Leases to explore
Incremental borrowing
mineral, oil, natural gas &
rate = IBR
similar non-regenerative
Variable lease payment =
resources (b) Leases of
biological assets within Lease Liability ROU asset Operating Lease Finance Lease
VLP
Lease payment = LP
the scope of IAS 41. (c)
Residual value guarantee
Service concession
= RVG
arrangements within the
➢ Lease asset is Lease liability = LL
scope of IFRIC 12 Subsequent
(d) Licenses of
Initial Subsequent Initial derecognized & Revaluation model = RM
gain/loss is Investment property = IP
intellectual property
recorded. Statement of Financial
granted by a lessor
Recognize for Subsequently, lessee Recognize at cost, ➢ Lessor recognizes Position = SOFP
within IFRS 15. (e) Rights remeasure:
unpaid portion of comprising: Cost RV IP receivable in
held by a lessee under a (a) Increasing carrying Definitions:
payments, (a) LL recognized; Model Model (IAS 40) SOFP equal to net
licensing agreement amount to reflect 1. Lease:
discounted at IR, or (b) Lease payment (IAS 16) (IAS 16) investments in
within IAS 38 (e.g. Rights interest on LL. A contract or part of a
if IR not available, made at/before lease.
to motion pictures, video (b) Reducing carrying contract that conveys the
the IBR, comprising: amount to reflect commencement ➢ Finance income is ROU an asset (the
recordings, plays, patents
(a) Fixed payments, LP made & date, less any recognized based underlying asset) for a
& copyrights, etc.) ➢ Lessor retains
less any lease (c) Remeasuring incentive; on pattern period in exchange for
A lessee is also leased asset in its
incentive; carrying amount (c) Initial direct cost; reflecting consideration.
permitted, but not SOFP.
(b) VLP based on to reflect any (d) Dismantling cost constant periodic 2. Lease term:
required, to apply IFRS ➢ Lease income is
index or rate; reassessment, (if any). rate of return on The non-cancellable period
16 to leases of intangible lease modification recognized
(c) RVG; net investment in for which a lessee has the
assets other than those or revised in normally on ROU an underlying asset,
(d) Exercise price of the lease.
described in (e) above. substance lease straight line basis together with both (a)
reasonably
fixed payment. over lease term. periods covered by an
certain
option to extend the lease
purchase Variable Lease if the lessee is reasonably
option. payment: certain to exercise that
(e) Lease Variable lease option; & (b) periods
termination payment not included covered by an option to
penalties (if initially in LL are record terminate the lease if the
any). in P&L in period it lessee is reasonably certain
occurs. not to exercise that option.
 AK
IFRS 16 Leases (continued) Effective date: Periods beginning on or after 1 Jan 2019
Page#50

Sale & lease back Legends:

Presentation & disclosure
Right-of-use = ROU
Implicit rate in lease = IR
Incremental borrowing
Presentation Disclosure
rate = IBR
For Lessee For Lessor Variable lease payment =
VLP
Lease payment = LP
IFRS 15 guidance:
IFRS 15 guidance: For Lessee Residual value guarantee
For Lessee For Lessor = RVG
In case transfer is a sale:
In case transfer is a Lease liability = LL
▪ Account for purchase of
sale: Revaluation model = RM
asset as per applicable
▪ ROU asset is IFRS 16 requires Investment property = IP
IFRS. Extensive significantly
recorded in Statement of Financial
▪ Account for lease under SOCF SOFP SOCI disclosure including enhanced disclosure
proportion to Position = SOFP
lessor accounting as per qualitative compared to IAS 17.
previous carrying Statement of cashflows =
IFRS 16. information on the Lessor must disclose
amount of asset that lessee’s leasing SOCF
qualitative &
relate to ROU activities & the quantitative Financial asset = FA
If transfer is not a sale: ROU Assets: Interest exp.
retained. rights & information about Financial liability = FL
▪ Do not recognize (a) Present ROU asset on LL is
▪ Gain/loss limited to obligations arising its leasing activities
transferred asset & separately from other presented
amount relate to from its major including the nature
recognize a FL equal to asset; or separately
rights transferred. lease contracts, as of the lessor’s
transfer proceed. (b) Include ROU asset from
▪ Adjust if sale not at well as significant leasing activities,
▪ FA is accounted for as within same line item depreciation quantitative how the
FV or LP not at mkt
per IFRS 9. as underlying assets. of ROU disclosure on lease lessor manages risks
rates.
asset, as commitments, associated with any
Lease liabilities: component VLP, extension and retained rights in
If transfer is not a sale: termination
(a) Present separately of finance assets, a maturity
▪ Asset continue to be options, RVG, & analysis of lease
from other liabilities cost.
recognized & FL is whether the option payments receivable
or disclose line item in
recognized equal to to and a reconciliation
▪ Principal payment on LL as which they are
proceed transferred. exclude short-term of the discounted
Financing activities. included.
▪ FL is accounted for and low-value lease payments
▪ Interest paid as per IAS 7. leases has been receivable to the net
as per IFRS 9.
▪ Short term/low value asset used. investment in the
leases & VLP are classified in lease.
operating activities.
 AK Effective date: Periods beginning on or after 1 Jan 2019
IFRS 16 Leases (continued) Page#51
Conditions:
COVID – 19 Related 1. Change in lease payment is substantially the same, or less than Transition Approaches
Rent Concessions consideration immediately preceding the change.
2. Reduction in lease payment original due on or before June 30, 2021.
3. No other substantive change in terms & conidiations of lease.
Fully Modified
What is the accounting relief ?? Retrospective
Accounting relief is from
(2) Rent (3) Rent deferral Lease Modification.
(1) Rent
deferral with extended Option – 1 Option – 2
waiver
lease term (Modified (Simplified
Periods beginning on or after 1 Jun 2020
retrospective) approach)
Practical Expedients & cost of Implementation How to adopt IFRS 16 Leases?
 AK
IFRS 17 Insurance Contracts Effective date: Periods beginning on or after 1 Jan 2023 Page#52
Scope:
Compulsory: Legends:
Models
▪ Insurance Financial guarantee = FG
contracts that an Financial instrument = FI
entity issues and Non-financial risk = NFR
reinsurance
Premium Allocation Variable fee
General Model Approach Contractual service margin
contracts that it Approach
= CSM
holds
▪ Insurance contracts
with discretionary Incurred Remaining Incurred Remaining For PV of future Definitions:
feature if entity also claim coverage claim coverage cashflows: 1. Insurance risk:
issue insurance Accretion of discount Other than financial risk,
contract in P&L or OCI. transfer from holder to issuer
Others: Component: For risk adjustment for 2. Financial risk:
PV of future cashflows: Initial & subsequent Risk of possible change in one
▪ FG contracts if entity NFR:
Estimate of all cashflow within boundary of each contract in the group. measurements is consistent Release of risk or more specified interest rate,
has asserted it
Risk adjustment for NFR: with general model, However overtime in insurance FI price, commodity price,
regard such
Compensation an entity requires for bearing uncertainty about amount discounting is not required, if revenue, unless currency ex. rate, index of
contracts as
insurance contracts. & time of cashflow that arise from NFR as entity fulfil insurance cashflow on incurred claim is elected (accounting price, credit rate/index or
▪ Some service contract. expected to be pain in one policy choice) in reflect other variable provided in case
contracts, such as Contractual service margin (CSM): year or less from date of in insurance finance of non-financial variable that
Represent unearned profit entity will recognize as it provides insurance claim incurred. expense. variable is not specific to a
separately priced
contracts in group/ For contractual service party to a contract.
warranties on
consumer goods that margin (CSM): 3. Insurance contract:
are serviced by third Incurred Accretion of discount When one party accept
party rather than Initial Subsequent Other claim in P&L or OCI effect of significant insurance risk from
manufacturer. measurement measurement comprehensive change in estimate are another party; (a) coverage for
income effect Remaining recorded in insurance insured event; (b) insurance
service exp. contract without direct
For PV of future cashflows: coverage
participation, generation of
Estimate must be unbiased & reflect prospective of For PV of future cashflows: investment return for policy
entity, no undue cost/efforts (should be reasonable). Update each period with effect of discount unwind over time. holder & (c) insurance contract
For PV of future cashflows:
For risk adjustment for NFR: For risk adjustment for NFR: for direct participation feature,
Accretion of discount in P&L or OCI
It should be entity specific & explicit, it should be Update each period with effect of discount unwind over time. The the management pf underlying
with movement related to service
amount of compensation entity would require to make release from risk may occur evenly over time or not depend on item on behalf of policy holder.
provided.
itself indifferent b/w fixed series of cashflows & nature of risks insured. 4. Reinsurance contract:
For risk adjustment for NFR:
uncertain cashflows in group of contracts. For contractual service margin (CSM): (Not for Incurred Claims) Issued by one party to
Effect of change in estimate record in
For contractual service margin (CSM): (Not for Incurred It is updated for unwind discount effect & CSM unwinding as compensate another for claim
insurance service expense.
Claims) insurance contract service are provided in future based on CSM arise from one or more
CSM is set an amount that make group insurance allocation over current & remaining period coverage. insurance contract issued by
contract zero at time of initial recognition, loss that other party.
immediately recognize & no CSM exist.
 AK Effective date: Periods beginning on or after 1 Jan 2023
IFRS 17 Insurance Contracts (continued) Page#53

Models Legends:
Financial guarantee = FG
Financial instrument = FI
Premium Allocation Variable fee Non-financial risk = NFR
General Model Approach Approach Contractual service
margin = CSM

Incurred Remaining Incurred Remaining

Explained on previous page! coverage coverage
claim claim

Measurement is Like the general model, except that

Initial measurement
If certain conditions met, simplified measurement
equal to:
a) Premium received at initial recognition;
b) Minus insurance acquisition cashflows; ***plus
c) Plus or minus amount arise from derecognition at
date of any pre-coverage period contract
acquisition cash flows; & any other asset liability
previously recognized for cashflows related to the
group of contracts are required by IFRS 17.
*** May elect to expense as incurred.
Conditions required to be met:
1. There is reasonable expectation that
measurement of the liability will not be materially
different from measurement using full model in
IFRS 17; and
2. The coverage period of each contract in the group
(including insurance contract services arising from
all premium within contract boundary) is 1 year or
less.
Subsequent measurement
If certain conditions met, simplified measurement
equal to:
a) Carrying amount at start of period;
b) Plus premium received in the period;
c) Minus insurance acquisition cashflows; AAA
d) Plus any amount relating to periodic
amortization of insurance acquisition cashflows
recognized as expense;
e) Plus adjustment for financing component;
f) Minus amount recognized as insurance revenue
for services provided in that period; BBB
AAA May expense acquisition cashflows as incurred.
BBB Expected premiums are allocated to revenue on
the basis of passage of time unless the expected
pattern of release risk during coverage period differs
significantly from the passage of time.
consistent with
general model.
TRANSITIONS APPROACHES:
1. Fully retrospective;
2. Modified retrospective;
3. Fair value approach.
Effective from period beginning
on or after Jan 1, 2023.
Note:
Early adoption is permitted if
entity has adopted IFRS 15, IFRS
9 before date of initial
application of IFRS 17.
changes in estimates relating to the
future fees an entity expects to earn
from direct participating contract
policyholders are adjusted against the
contractual service margin.
The contractual service margin on
direct participating contracts is
recognized in profit or loss as part of
insurance service results based on the
passage of time.
The accretion of interest relating to the
contractual service margin is based on
a current rate included in balance
sheet measurements of specific assets,
rather than a locked in rate as required
in the general model.
AK
IFRS 17 Insurance Contracts (continued)
Investment Contracts
with Discretionary
Participation Features
General model is modified as follows:
a) The date of initial recognition is the date
the entity become party to the contract;
b) the contract boundary is modified so that
cash flows are within the contract
boundary if they result from a substantive
obligation of the entity to deliver cash at a
present or future date. The entity has no
substantive obligation to deliver cash if it
has the practical ability to set a price for
the promise to deliver cash that fully
reflects the amount of cash promised &
related risks.
c) the allocation of the CSM is modified so
that it is recognized over the duration of
the group of contracts in a systematic way
that reflects the transfer of investment
services under the contract.
SOFP
- Insurance contracts issued - Insurance revenue;
that are assets; - Insurance service expense;
- Insurance contracts issued - Insurance finance
that are liabilities. income/expense.
Effective date: Periods beginning on or after 1 Jan 2023
Page#54
Legends:
Financial guarantee = FG
Modifications Financial instrument = FI
Reinsurance Presentation &
Non-financial risk = NFR
Contracts Held disclosure
Contractual service
Derecognize original capital if one of the following margin = CSM
apply;
General model is modified as follows: (a) Had the modified terms been included at
Group of reinsurance contracts held contract inception:
Note:
recognized from earlier of following: (i) It would have been outside IFRS 17; The CSM is subsequently
(ii) Different components would have measured as the previous
a) The beginning of the coverage period of been separated from the host contract; carrying amount adjusted
the group of reinsurance contracts held; & (iii) It would have had a substantially different for:
contract boundary; or (a) The effect of any new
b) The date the entity recognizes an onerous
(iv) It would have been included in a different contracts;
group of underlying contracts, if the entity
group of insurance contracts. (b) Interest accrued on the
entered into the related reinsurance
contract held in the group of reinsurance CSM;
(b) The original, but not modified, contract met
contracts held at or before that date. (c) Changes in the fulfilment
the definition of an insurance contract with direct
participation features (or vice
cash flows;
The net cost or net gain from a group of versa). (d) The effect of any foreign
reinsurance contracts is deemed to be the exchange; and
CSM, unless the reinsurance covers underlying (c) The premium allocation approach was applied (e) The allocation of the
onerous contracts. In this case, the gain is to the original contract, but the eligibility criteria CSM.
for that approach is not met for the modified
recognized immediately if the reinsurance
contract. Changes in fulfilment cash
contract held is recognized before or at the
same time as the loss arising on the underlying flows that result from
If none of the above apply, do not derecognize changes in the risk of non-
contracts. the contract and instead treat changes in cash
performance by the issuer
flows caused by the modification as changes in
estimates of fulfilment cash flows .
of the reinsurance contracts
held do not relate to future
SOCI Presentation Disclosure service and therefore do not
adjust the CSM.
Disclosure should include qualitative & quantitative info. about amount recognized The premium allocation
in SOFP, SOCI, SOCF, including recon. of amounts & component comprise insurance approach may be used for
contract assets/liabilities & significant judgement concerning their recognition & reinsurance contracts held if
valuation. certain criteria are met.
 Page#55

About the Author Support Team

Adil Khan is a Chartered Accountant
and currently associated with Mazars
Abu Dhabi, UAE as a Manager Audit &
Assurance Services. He is also a
member of the IIA-USA, ACFE-USA,
IFC-Canada & IPSAS Certified from
ACCA. He is a Commerce Graduate
and holds a Master degree in
Economics and Finance.
Driven by his passion to share his expertise and
knowledge to his fellow professionals, he has created
the “IFRS Glimpse (IG)”.
Advisory:
Mr. Mohammed Abu Hijleh, AICPA
Managing Partner
Mazars, UAE
Technical:
Mr. Mian Ahmad Farhan, FCA
Owner MAF Online, Founding Team Member of The
Institute of Taxation, Pakistan, Former Vice President
of The Institute of Chartered Accountants of Pakistan,
UAE Chapter

IG is created with the purpose of assisting

professionals in the field of auditing and accounting to
have a high-level overview of International Accounting
Standards (IASs) and International Financial Reporting
Standards (IFRSs). AK
 Page#56

References:
▪ https://www.ifrs.org/
▪ IASB, The Annotated IFRS® Standards issued at January 1, 2020, reflecting changes not yet required

Links of other relevant articles published by the Author:

IFRS 3 – Business Combinations
https://www.linkedin.com/pulse/ifrs-3-business-combinations-adil-khan/

IFRS 10 – Consolidated Financial Statements

https://www.linkedin.com/pulse/definition-control-under-ifrs-10-adil-khan/
https://www.linkedin.com/pulse/investment-entities-exemption-from-consolidated-financial-adil-khan/

IFRS 11 – Joint Arrangements

https://www.linkedin.com/pulse/auditor-ifrs-11-joint-arrangements-adil-khan/

IFRS 16 – Leases
https://www.linkedin.com/pulse/whether-contract-contains-lease-per-ifrs-16-adil-khan/

IAS 32 – Financial Instruments: Presentation

https://www.linkedin.com/pulse/ias-32-financial-instruments-presentation-adil-khan/

AK
 THANK YOU!

IG publication has been carefully prepared, but it has been written in overall terms and should be read as broad guidance only and does not constitute our
professional advise. IG cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein AK
without obtaining specific professional advice. Moreover, no representation or warranty (express or implied) is given as to the accuracy or completeness of the
information contained in this publication.