IAS & IFRS COMPENDIUM

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QUESTION

Write on the number of international accounting standards (IAS) and

international financial reporting standards (IFRS) as at date and their

names.

By Ajah Emmanuel Nnamdi. ACA, MBA, BSc

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International financial reporting standards (IFRS) is a

series of accounting pronouncements published by the

International Accounting Standards Board (IASB) to help

preparers of financial statements, throughout the world,

produce and present high quality, transparent and

comparable financial information.

Since 2001 International Financial Reporting Standards

(IFRS) are being developed and approved by the

International Accounting Standards Board (IASB). The IASB

is a stand-alone, privately funded accounting standard

setting body established to develop global standards for

financial reporting. It is the successor to the

International Accounting Standards Committee (IASC),

which was created in 1973 to develop International

Accounting Standards (IAS). Based in London the IASB

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assumed accounting standard setting responsibilities from

the IASC in 2001.

One of the basic features of IFRS is that it is a

principle based standard and seeks to avoid a rule based

mentality (Hlacuc et. al., 2009). Instead, the

application of IFRS requires exercise of judgment by the

preparer and the auditor in applying principles of

accounting on the basis of the economic substance of

transactions. The IASB framework establishes a general

requirement to account for transactions in accordance

with their substance, rather than only their legal form.

IFRS comprises of:

International Financial Reporting Standards (IFRSs)

- standards issued after 2001

International Accounting Standards (IASs) -

standards issued before 2001

Interpretations originated by the IFRS

Interpretations Committee (IFRIC) - issued after

2001

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Standing Interpretations Committee (SIC) - issued

before 2001.

In force today are 29 IAS and 14 IFRS. They include the

following:

1. Presentation of financial statements – IAS 1:

OBJECTIVE

The objective of this standard is to prescribe the basis

for presentation of general purpose financial statement

in order to ensure that the financial statements are in

accordance with the international reporting standard

(IFRS).

The key issues are to ensure comparability with the

entity’s financial statement of previous periods and with

financial statements of other entities. It also enables

informed users to rely on a formal definable structure

and facilitates financial analysis.

SCOPE OF THE STANDARD

What constitutes a complete set of financial

statements?

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- Statement of financial position (balance sheet)

- Statement of comprehensive income

- Statement of changes in equity

- Statement of cash flows

- Notes to the financial statements

The overall requirements for the presentation of

financial statements, including guidelines for their

structures;

The distinction between current and noncurrent

elements

Minimum requirements for the content of financial

statements.

2. Inventories – IAS 2:

OBJECTIVE

IAS 2’s objectives is to prescribe the accounting

treatment of inventories, including the calculation of

the cost of inventories, the type of inventory method

adopted, the allocation of cost to assets and expenses as

well as the valuation aspects associated with any write-

downs to net realizable value.

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Inventory comprises the goods held for sale and the cost

associated with the production thereof. It is often the

heart of entities and defines their business and

industry. Inventories are valued at the lower of cost and

net realizable value (NRV). NRV is the estimated selling

price in the ordinary course of business, less the

estimated costs of completion and estimated selling

expenses.

IAS 2, ‘Inventories’, requires the cost of items that are

not interchangeable or that have been segregated for

specific contracts to be determined on an individual-item

basis. The cost of other items of inventory used is

assigned by using either the first-in, first-out (FIFO)

or weighted average cost formula.

Last-in, first-out (LIFO) is not permitted. An entity

uses the same cost formula for all inventories that have

a similar nature and use to the entity. A different cost

formula may be justified where inventories have a

different nature or use. The cost formula used is applied

on a consistent basis from period to period.

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This standard deals with all inventories of assets that

are:

Held for sale in the ordinary course of the business

In the process of production for sale

In the form of materials or supplies to be consumed

in the production process; and

Used in rendering of services.

3. Cash flow statements – IAS 7

OBJECTIVE

In order to assess the viability of any entity,

particularly the solvency and liquidity position, the

users of financial statements require information about

the cash resources of an entity, the ability of the

entity to generate cash resources and the use by an

entity of its cash resources.

The purpose of 1AS 7 is to provide guidance regarding the

manner in which the cash flow information should be

presented. The statement of cash flows is also relevant

for identifying the following:

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Movement in cash balances for the period;

Ability of the entity to generate cash resources

Prediction of future cash flows.

Timing and certainty of cash flows;


All entities are required to present a statement of cash

flows that reports cash flows during the reporting

period, classified by;

Operating activities ( Direct or Indirect method)

Investment activities and

Financing activities

4. Accounting policies, accounting estimates and errors –

IAS 8

OBJECTIVE

The objective of IAS 8 is to provide entities with

guidance on the process to be followed when selecting

accounting policies to use in preparing financial

statements and how the entities should account for a

change in the accounting policies. The standard also

deals with accounting for changes in estimates and how to

account for prior-period error.

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IAS 8 covers situations where the entity

Is selecting and applying accounting policies

Is accounting for changes in accounting policies

Has changes in accounting estimates

Has a correction for prior-period error.

5. Events after the reporting period– IAS 10

OBJECTIVE

There will always be a time delay between the end of the

reporting period and the date on which the financial

statements are authorized for issue. During the delay,

there will almost certainly be events that will take

place and the question arises as to how those events

might indicate the need for adjustments to the amounts

recognized in the financial statements or require

disclosure. IAS 10 addresses the effect of such events on

the information that is provided in the financial

statement.


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IAS 10 should be applied in the accounting for and

disclosure of events after the reporting period.

Events after the reporting periods are those events,

favorable and unfavorable, that occur between the end of

the reporting period and the date when the financial

statements are authorized for issue. This standard

prescribes the appropriate accounting treatment for such

events and whether adjustments or simple disclosure is

required.

This standard also requires that an entity should not

prepare its financial statement on a going-concern basis

if events after the reporting period indicate that the

going –concern assumption is not appropriate.

6. Construction Contract IAS-11

OBJECTIVE

The objective of this standard is to give guidance on

the appropriate criteria for recognition of construction

contract revenue and costs, within a focus on the

allocation of contract revenue and costs to the

accounting periods in which construction work is

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performed. The primary challenge in accounting for

construction contracts is to allocate contract revenue

and costs to the correct accounting periods.


The standard applies to accounting for construction

contracts in the financial statements of contractors only

and does not account for the client or contractee.

7. Income Taxes-IAS 12

OBJECTIVE

The key objectives for IAS 12 are to prescribe the

accounting treatment for income taxes and the

reconciliation of the legal tax liability (actual tax

payable per tax regulation) with the tax liability

expense for accounting disclosures purposes. Other issues

addressed include;

The distinction between permanent and timing

differences;

The future recovery or settlement of the carrying

amount of deferred tax assets or liabilities in the

statement of financial position; and

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Recognizing and dealing with loses for income tax

purposes.


This standard must be applied to accounting for all

income taxes, including domestic, foreign, and

withholding taxes, as well as the income tax consequences

of dividend payment

8. Property, plant and equipment – IAS 16

OBJECTIVE

The objective of IAS 16 is to prescribe the accounting

treatment for property plant and equipment (PPE),

including

Timing of recognition, derecognition, and

amortization

Determination of the carrying amount of the assets

under the cost model and the revaluation model;

Depreciation charges and impairment losses to be

recognized in profit or loss; and

Disclosure requirements.


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This standard deals with all property, plant and

equipment, including that which is held by a lessee under

a finance lease (IAS 17)

This standard does not apply to

Property, plant and equipment that is classified as

held for sale (see IFRS 5, Noncurrent asst held for

sale and discontinued operations)

Biological assets related to agricultural

activities(see IAS 41, Agriculture)

Exploration Assets (See IFRS 6 Exploration For And

Evaluation Of Mineral Assets)

9. Leases -IAS 17

OBJECTIVE

Lease accounting is mainly concerned with the appropriate

criteria for the recognition as well as the measurement,

of the leased asset and liability from the perspective of

both a lessor and a lessee. Associated with these

objectives is the distinction between a finance lease

(which is recognized as an asset by the lessee and is

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depreciated) and an operating lease (which is expensed by

the lessee as the charges occur). Substance over legal

form is imperative in lease accounting as the legal form

of lease transactions does not always coincide with its

substance and resulting accounting treatment.

The standard prescribes, for lessees and lessors, the

appropriate accounting policies and disclosure that

should be applied to various types of lease transaction.

It specifies the criteria for distinguishing between

finance leases, and operating leases, the recognition and

measurement of the resulting assets and liabilities, as

well as disclosure.

10. Revenue- IAS 18

OBJECTIVE

The purpose of IAS 18 is to determine when and how

revenue should be recognized. IAS 18 defines revenue as

the inflow of economic benefits that derives from

activities in the ordinary course of business. Key

issues in IAS 18 are the definition of revenue and other

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income (for example, gains on disposal of noncurrent

assets or on translating foreign balances).


The standard describes the accounting treatment of

revenue. The following aspects are addressed:

Revenue is distinguished from income ( income

includes both revenue and gains)

Recognition criteria for revenue identified

Practical guidance is provided on the timing of

recognition, amount to be recognized, and disclosure

requirements.

This standard deals with the accounting treatment of

revenue that arises from

Sale of goods

Rendering of services

Use by others of entity yielding interest

Royalties; and

Disclosure requirements.

11. Employee Benefits- IAS 19

OBJECTIVE

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IAS 19 requires entities to identify and recognize all

the benefits that they are obliged to provide to

employees, regardless of the form or timing of the

benefits. While some employee benefits such as salaries

are paid to employees as they render services to the

entity, other benefits such as long service awards and

retirement benefits are only paid to employees after the

services have been rendered to the entity. IAS 19

provides guidance on how to recognize and measure all

types of benefits. The goal is that the entity recognizes

the related expenses as the employee renders the service

rather than when they receive payment for the services

rendered.


IAS 19 applies to all employee benefits, including

benefits provided under formal arrangement, legislative

requirements, and informal practices. The standard does

not cover equity compensation benefits which are within

the scope of IFRS 2 (share based payment)

The standard identifies five types of employee benefits:

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1. Short-term employee benefits (for example, bonuses,

wages, social security)

2. Postemployment benefits ( for example, pensions, and

other retirement benefits)

3. Long term employee benefits ( for example, long

service leave and, if not due within 12 months,

profit sharing, bonuses and deferred compensation)

4. Termination benefits

5. Equity compensation benefits (for example, employee

share option IFRS 2).

12. ACCOUNTING FOR GOVERNMENT GRANTS AND DISCLOSURE OF

GOVERNMENT ASSISTANCE- IAS 20

OBJECTIVE

IAS 20 deals with the accounting of grants and other

forms of assistance from the government.

This standard addresses the accounting and disclosure for

government grants and other forms of government

assistance.

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Government grants are recognized when there is reasonable

assurance that the entity will comply with the conditions

related to them and that the grants will be received.

Grants related to income are recognized in profit or loss

over the periods necessary to match them with the related

costs that they are intended to compensate. They are

either offset against the related expense or presented as

separate income. The timing of such recognition in profit

or loss will depend on the fulfillment of any conditions

or obligations attaching to the grant.

Grants related to assets are either offset against the

carrying amount of the relevant asset or presented as

deferred income in the balance sheet. Profit or loss will

be affected either by a reduced depreciation charge or by

deferred income being recognized as income systematically

over the useful life of the related asset.

13. The Effects Of Changes In Foreign Exchange Rates –

IAS 21

OBJECTIVE

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The objective of IAS 21 is to establish principles for

the accounting treatment of foreign currency

transactions, balances and foreign operations. The

principal aspects addressed are:

Exchange rate differences and their effects on

transactions in financial statements; and

Translation of the financial statements of foreign

operations (where the presentation currency differs

from the functional currency)


The standard prescribes the accounting treatment in

relation to;

Accounting for transactions and balances in foreign

currencies

Translating the results and financial position of

foreign operations included in the financial

statement of an entity;

Translating the result and financial position of an

entity into its presentation currency ; and

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The treatment of monetary and non monitory gains and

losses related to foreign currency translations,

balances, and translations.

14. Borrowing cost- IAS 23

OBJECTIVE

IAS 23 defines a qualifying asset and provides guidance

on which borrowing cost should be capitalized and

included in the carrying amount of a qualifying asset.

This guidance addresses instances in which the funds are

specifically borrowed to obtain a qualifying asset and

where the entity utilizes funds from their general

borrowings.


IAS 23 is to be applied in accounting for all borrowing

costs, which are defined as interest and other costs

incurred by an entity in connection with the borrowing of

funds.

15. Related Party Transaction- IAS24

OBJECTIVE

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The objective of this standard is to define related party

relationships and disclose their effects on an entity’s

financial position and performance. Related-party

relationships and transactions can have an effect on the

financial position and operating results of the reporting

entity because the transactions may not be at arms’

length basis.


This standard should be applied when identifying related-

party relationships, transactions, and outstanding

balances between related parties and the circumstances

under which these aspects should be disclosed.

16. Accounting And Reporting By Retirement Benefit Plans-IAS

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OBJECTIVE

IAS 26 prescribes the information that a retirement

benefit plan should include in its financial statement

for all participants. The standard specifically

distinguishes between the information requirements for

defined benefit and defined contribution plans.

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This standard should be applied in retirement benefit

plan’s financial statements that are directed to all

participants. The standard’s requirements apply to both

defined contribution and defined benefit plans that are:

Funded by a separate trust or from general revenues;

Managed by an insurance company;

Sponsored by parties other than employers; and

Documented by formal or informal agreements.

17. Consolidated And Separate Financial Statement- IAS 27

OBJECTIVE

The main objective of IAS 27 is to define when an entity

is a parent and to ensure that the parent entities

provide consolidated financial statements incorporating

all subsidiaries, jointly controlled entities and

associates.


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This standard should be applied in:

The preparation and presentation of consolidated

financial statements for a group of entities under

the control of a parent; and

Accounting for investments in subsidiaries

associates, and joint venture in the separate

financial statements of the parent.

18. Investment In Associates- IAS 28

OBJECTIVE

The main objective of this standard is to prescribe the

appropriate accounting treatment for the parent’s

investment in the associate. IAS 28 identifies the amount

of influence needed for an entity to be classified as

associate.


IAS 28 applies to each investment in the associate. IAS

28 does not apply to joint ventures or entities that are

subsidiaries.

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19. Financial Reporting In Hyperinflationary Economics- IAS

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OBJECTIVE

This standard prescribes the accounting in the financial

statements of an entity whose functional currency is in a

hyperinflationary economy


IAS 29 should be applied by entities that report in the

currency of a hyperinflationary economy. The

characteristics of a hyperinflationary economy include

the following;

The general population prefers to keep its wealth in

nonmonetary assets or in a relatively stable foreign

currency

Prices are normally quoted in a stable foreign

currency

Credit transactions takes place at prices that

compensate for the expected loss or purchasing power

Interest, wages, and prices are linked to price

indexes.

20. Interest In Joint Ventures- IAS 31

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OBJECTIVE

The overall objective of IAS 31 is to provide users with

information concerning the investing owners (venturers)

interest in the earnings and the underlying net assets of

the joint venture.


IAS 31 applies to all interest in joint ventures and the

reporting of the joint venture’s assets, liabilities,

income, and expenses in the financial statements of the

ventures, regardless of the joint ventures’ structures or

forms. The standard specifically outlines

The characteristics necessary to be classified as a

joint venture, and

The distinction between jointly controlled

operations, assets, and entities and the specific

accounting requirements for each.

21. Financial Instrument: Presentation- IAS 32

OBJECTIVE

IAS 32 provides the guidance for the presentation of

financial instrument in the financial statements,

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including requirements for offsetting financial assets

and financial liabilities. Additionally, the standard

deals with the accounting treatment of treasury shares.

This standard also establishes the principles for the

classification of financial instruments as financial assets,

financial liabilities, or equity instrument.


The standard deals with all types of financial

instruments, both recognized and unrecognized, and should

be applied to contracts to buy or sell a non financial

item that can be settled net as follows:

In cash

By another financial instrument; or

By exchanging financial instruments, as if the

contracts were financial instruments.

Presentation issues addressed by IAS 32 relate to;

Distinguishing financial liabilities from equity

Classifying compound instrument

Reporting interest, dividends, losses and gains; and

Offsetting of financial assets and liabilities.

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22. Earnings Per Share- IAS 33

OBJECTIVE

The objective of this standard is to prescribe the

principles for the determination and presentation of

earnings per share, focusing on the denominator (number

of shares) of the calculation because a consistently

determined denominator results in enhanced performance

reporting.

This improves the performance comparisons between the

different entities and different reporting periods of the

same entity. The standard distinguishes between the

notions, calculation methods, and disclosure of basic as

well as diluted earnings per share.


This standard applies to entities whose shares are

publicly traded (or in the process of being issued in

public securities market) and other entities that choose

to disclose earnings per share. It is applicable to

consolidated information only if the parent prepares

consolidated financial statements. Where an entity

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prepares both separate and consolidate financials, this

information need only be presented in the consolidated

financials.

23. Interim Financial Reporting- IAS 34

OBJECTIVE

IAS 34 defines and prescribes the minimum content of an

interim financial report, including disclosures, and

identifies the accounting recognition and measurement

principles that should be applied in an interim financial

report. Thus, this standard prescribes the following for

interim financial reports:

Minimum contents; and

The principles for recognition and measurement in a

complete or condensed financial statement.


This standard applies to all entities that publish

interim financial report covering a period shorter than a

full financial year (for example, a half year or a

quarter). This standard applies whether such reporting is

required by law or regulations or if the entity

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voluntarily publishes such report. Public traded entities

are encouraged to publish interim financial reports that

comply with this standard at least at the end of the

first half of the financial year and to make these

reports available within 60 days of the interim period.

24. Impairment Of Assets- IAS 36

OBJECTIVE

The purpose of this standard is to provide entities with

guidance to determine whether an asset is impaired and

how the impairment should be recognized. The key concept

is the identification and recognition of movements in the

value of asset subsequent to initial recognition when

such movements results in a reduction of asset value.

The principles in this standard apply to all assets where

impairment is not specifically addressed in another

standard. (For example, property, plant and equipment and

intangible assets are addressed in other standards.)


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IAS 36 prescribes:

The circumstances in which an entity should

calculate the recoverable amounts of its assets,

including internal and external indicators or

impairment

The measurement of recoverable amounts for

individual assets and cash-generating units; and

The recognition and reversal of impairment losses.

25. Provisions, Contingent Liabilities, And Contingent

Assets- IAS 37

OBJECTIVE

The main objective of IAS 37 is to provide guidance for

recognition of provisions and the disclosure of

contingent liabilities. Provisions are recognized only

when established criteria of reliability of the

obligation are met. In contrast, contingent liabilities

and assets are not recognized but should be disclosed so

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that such information is available in the financial

statements.


IAS 37 prescribes the appropriate accounting treatment as

well as the disclosure requirements for all provisions,

contingent liabilities, and contingent assets to enable

users to understand their nature, timing, and amount.

The standard sets out the conditions that must be

fulfilled for a provision to be recognized. It guides the

preparers of financial statements to decide when, with

respect to a specific obligation, they should:

Provide for it (recognize it)

Only disclose information; or

Disclose nothing.

26. Intangible Assets- IAS 38

IAS 38 defines an intangible asset as an identifiable

nonmonetary asset

Without physical substance

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That is separable

That arises from contractual or other legal rights

OBJECTIVE

The objective of IAS 38 is to allow entities to identify

and recognize separately the value of intangible assets

on the statement of financial position, provided certain

conditions are satisfied. IAS 38 enables users to more

accurately assess the value as well as the makeup of

assets of the entity.


IAS 38 applies to all intangible assets that are not

specifically dealt with in another standard. Examples

include brand names, computer software, licenses,

franchises, intangibles under development and goodwill.

IAS 38 prescribes the accounting treatment of intangible

assets, including

The definition of an intangible assets

Recognition of an asset

Determination of the carrying amount

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Determination and treatment of impairment losses;

and

Disclosure requirement.

27. Financial Instruments: Recognition And Measurement- IAS

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OBJECTIVE

IAS 39 establishes principles for recognizing and

measuring financial instruments in the financial

statement. This standard significantly increases the use

of fair value in accounting for financial instruments,

particularly on the asset side of the statement of

financial position.


The standard distinguishes between four classes of

financial assets:

Held at fair value through profit and loss

Available for sale

Held to maturity; and

Loans and receivables

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IAS 39 also identifies two classes of financial

liabilities:

Those held at fair value, and

Those shown at amortized cost.

28. Investment Property- IAS 40

OBJECTIVE

The objective of IAS 40 is to prescribe the accounting

treatment and disclosure requirements for investment

property. The main issue in accounting for investment

properties is to distinguish these properties separately

from owner-occupied properties.


IAS 40 applies to all investment property. Investment

property includes land and buildings or part of a

building or both. The standard defines an investment

property as a property (land and building or both) that

is held by the owner or by the lessee under a finance

lease to earn rentals, or for capital appreciation, or

both, rather than for use in the production or supply of

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goods or services or for administration or for sale in

the ordinary course of business.

29. Agriculture- IAS 41

OBJECTIVE

IAS 41 prescribes the accounting treatment, financial

statement presentation, and disclosures related to

biological assets and agricultural produce at the point

of harvest insofar as they relates to agricultural

activity.


This standard should be applied to the following when

they relate to agricultural activity:

Biological assets;

Agricultural produce at the point of harvest; and

Related government grants

IAS 41 specifically defines Agricultural activity as the

measurement by an entity of the biological transformation

and harvest of biological assets for sale or for

conversion into agricultural produce or into additional

biological assets.

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1. First Time Adoption Of IFRS- IFRS 1

OBJECTIVE

IFRS 1 provides guidance on the process to be followed

when adopting IFRS. The purpose of IFRS 1 is to ensure

that the entity’s first financial statement (including

interim financial report for that specific reporting

period) under IFRS contains high-quality information that

is transparent and comparable over all periods presented

and to ensure that it is generated at a cost that does

not exceed the benefits.


IFRS 1 applies when an entity adopts IFRS for the first

time by an explicit and unreserved statement of

compliance with IFRS. The standard specifically covers

Comparable (prior period) information that is to be

provided;

Identification of the basis of reporting

Retrospective application of IFRS information; and

Formal identification of the reporting and

transition date.

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2. Share-Based Payment-IFRS 2

OBJECTIVE

IFRS 2 covers situation where the entity makes any share-

based payment. Share-based payments are transactions

where an entity settles an obligation in shares or incurs

a cash obligation linked to the share price of the

entity. IFRS 2 includes transactions where the obligation

is settled in or referenced to the equity of the entity’s

parent entity, or any other entity under common control.

The primary issues addressed by the standard relate to if

and when a share-based payment should be recognized, when

the transactions should be reflected as an expense in the

statement of comprehensive income, and how the amount

should be measured.


This IFRS should be applied to all share-based payment

transactions. IFRS 2 covers both employee share-based

payment arrangements and the issuance of shares of shares

(and rights to shares) in return for service and goods.

The standard specifically covers:

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The criteria for defining a share-based payment; and

The distinction and accounting for various types of

share-based payments, specifically equity settled,

cash settled, and transactions in which there is an

option to settle the transaction in cash (or other

assets) or by issuing equity instruments.

DISCLOSURE

An entity should reflect in its profit and loss and

financial position statements the effects of share-based

payment transactions, including expenses associated with

transactions in which employees receive share options.

3. Business Combination- IFRS 3

OBJECTIVE

The objective of IFRS 3 is to improve the relevance,

reliability, and comparability of the information that a

reporting entity provides in its financial statement

about a business combination and its effects. IFRS 3

prescribes the accounting treatment for business

combination on the date that control is established.

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The standard establishes principles and requirement for

how the acquirer recognizes and measures the identifiable

net assets and goodwill, or its gain from a bargain

purchase, acquire in the business combination.


IFRS 3 applies to all transactions that in substance meet

the definition of a business combination. It applies to

the initial recognition and measurement of such

combinations and, in a few specific instances, to

subsequent measurement.

IFRS 3 sets out:

The accounting treatment at the date of acquisition

The purchase method of accounting

The fair value as the basis for initial measurement

of the identifiable assets acquired as well as

liabilities and contingent liabilities assumed in a

business.

The accounting issue related to goodwill and

intangible assets acquired in a business

combination.

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4. Insurance Contract- IFRS 4

OBJECTIVE

IFRS 4 provides guidance to user on the disclosure,

amount and timing as well as uncertainty of future cash

flows from insurance contracts.


This standard requires entities to apply IFRS to:

Insurance contracts (including reinsurance

contracts) that it issues;

Reinsurance contracts that it holds; and

Financial instruments that it issues which contain a

discretionary participation feature.

5. Noncurrent Assets Held For Sale And Discontinued

Operations- IFRS 5

OBJECTIVE

The objective of IFRS 5 is to specify how noncurrent

assets and disposal groups that are held for sale should

be measured and presented in financial statements. It

further specifies how a discontinued operation should be

presented and disclosed in financial statements.

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IFRS 5 presentation requirements apply to:

All noncurrent assets and disposal groups (including

the associated liabilities) held for sale; and

Discontinued operations.

6. Exploration For And Evaluation Of Mineral Resources- IAS

6

OBJECTIVE

IFRS 6 provides guidance for entities that recognizes

assets used in the exploration for and evaluation of

mineral resources. The key issues are the initial

recognition criteria and the measurement basis for these

assets, measurement subsequent to initial recognition,

and the tests for impairment of such assets in accordance

with IAS 36


This standard is specifically concerned with the initial

recognition criteria for exploration and evaluation

expenditure, the measurement basis thereafter (cost or

revaluation model), the testing for any subsequent

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impairment of asset value, and the disclosures of amounts

in financial statements arising from exploration for and

evaluation of mineral resources.

7. Financial Instrument: Disclosure- IFRS 7

OBJECTIVE

IFRS 7 provides information about an entity’s exposure to

risks and how those risks are managed. This standard

adopts a dichotomous approach to disclosures in respect

of financial instrument. The first part of the standard

requires entities to provide disclosures in their

financial statements that enable users to evaluate the

significance of financial instruments for the entity’s

financial position and performance. The second part of

the standard requires entities to disclose quantitative

and qualitative information about the nature and extent

of risks arising from financial instruments to which they

are exposed during the period under review and at the

reporting date, and how they manage those risks.

8. Operating Segments- IFRS 8

OBJECTIVE

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IFRS 8 establishes standards for reporting information by

operating segments that is information about the

different business activities of an entity and the

different economic environments in which it operates.

IFRS 8 requires the identification of operating segments

on the basis of internal reports that senior management

(chief operating decision maker) use when determining the

allocation of resources to a segment and assessing its

performance


This standard applies to the stand alone financial

statements of individual entities and the consolidated

financial statements of a group with a parent, whose

equity or debt securities are traded in a public

securities market or that are in the process of issuing

such instruments.

9. Financial Instrument , Classification And Measurement-

IFRS 9

OBJECTIVE

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This standard is a replacement of IAS 39 which has been

criticized for being rule based too complex and

permitting too many alternatives in respect of

recognition and measurement of financial instruments.

IFRS 9 deals with the classification and measurement of

financial instrument. This standard applies to all

financial assets that are in the scope of IAS 39.

10. Consolidated Financial Statement- IFRS 10

OBJECTIVE

IFRS 10 objective is to establish principles for

presenting and preparing consolidated financial

statements when an entity controls one or more entities.

IFRS 10 is the main output of the IASB’s consolidation

project, resulting in a single definition of control.


This standard:

Sets out the requirements for when an entity should

prepare consolidated financial statements;

Defines the principles of control; and

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Explains how to apply the principles of control and

the accounting requirements for preparing

consolidated financial statements.

11. Joint Arrangements- IFRS 11

OBJECTIVES

The IASB issued IFRS 11, ‘Joint arrangements’, in May

2011. A joint arrangement is a contractual arrangement in

which at least two parties agree to share control over

the activities of the arrangement. Unanimous consent over

decisions about relevant activities is required in order

to meet the definition of joint control.

Joint arrangements can be joint operations or joint

ventures. The classification is principle-based and

depends on the parties’ exposure to the arrangement. When

the parties’ exposure to the arrangement only extends to

net assets of the arrangement, the arrangement is a joint

venture.

12. Disclosure Of Interests In Other Entities- IFRS12

OBJECTIVE

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IFRS 12 aims to provide the users of financial statements

with sufficient disclosures for them to assess the nature

of, and risks and financial effects associated with, the

entity’s interests in subsidiaries, joint arrangements,

associates and unconsolidated structured entities.

SIGNIFICANT JUDGMENTS AND ASSUMPTIONS

IFRS 12 requires an entity to disclose information about

the significant judgments and assumptions it has made,

including those relating to whether it has control of

another entity and where changes in circumstances alter

the entity’s conclusion about whether it has control.

13. Fair Value Measurement-IFRS 13

OBJECTIVE

IFRS 13 consolidates fair value measurement guidance from

across various IFRSs into a single standard. IFRS 13 does

not change when fair value can or should be used.

Many of the IFRS 13 requirements are largely consistent

with valuation practices that already operate today. IFRS

13 is therefore unlikely to result in substantial change

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in many cases. The new standard is effective for annual

periods starting on or after 1 January 2013. Earlier

application is permitted; it is subject to EU

endorsement.

14. Regulatory Deferral Account- IFRS I4

The objective of the interim standard IFRS 14 is to

enhance the comparability of financial reporting by

entities with rate – regulated activities until IASB

completes its comprehensive project on rate regulation.

The standard was issued in January 2014, and is effective

from 1st January, 2016, with earlier application

permitted.

15. Revenue from Contracts with Customers IFRS 15

IFRS 15 establishes a comprehensive framework for

determining when to recognize revenue and how much revenue

to recognize.

The core principle in that framework is that a company

should recognize revenue to depict the transfer of

promised goods or services to the customer in an amount

that reflects the consideration to which the company

expects to be entitled in exchange for those goods or

services.

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Disclosure

IFRS 15 requires a company to disclose quantitative

and/or qualitative information about:

- Revenue recognized from contracts with customers,

including the disaggregation of revenue into

appropriate categories;

- contract balances, including the opening and closing

balances of receivables, contract assets and

contract liabilities;

- Performance obligations, including when the company

typically satisfies its performance obligations and

the amount of the transaction price that is

allocated to the remaining performance obligations

in a contract;

- significant judgments, and changes in judgments,

made in applying the requirements; and

- Assets recognized from the costs to obtain or

fulfill a contract with a customer.

IAS & IFRS COMPENDIUM

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