Section 26: Share-based payments
continued
IFRS for SMEs Section 26 Share-based Payment
IFRS IFRS 2 Share-based Payment
Impact assessment
The entity recognises the goods or services received or acquired in a share-based payment transaction when it obtains the goods or as the services are received.
The goods or services received or acquired in a share-based payment transaction are recognised when the entity obtains the goods or receives the services.
There is no difference in the general recognition principles of the frameworks.
The entity recognises a corresponding increase in equity if the goods or services were received in an equity-settled share-based payment transaction, or a liability if the goods or services were acquired in a cash-settled share-based payment transaction.
The entity also recognises a corresponding increase in equity if the goods or services were received in an equity-settled share-based payment transaction, or a liability if the goods or services were acquired in a cash-settled share-based payment transaction.
Recognition
When the goods or services received do not qualify for recognition as an asset, the entity recognises an expense.
When the goods or services received do not qualify for recognition as assets they are recognised as an expense.
Recognition of vesting conditions IFRS for SMEs only considers vesting in the context of employees. If the equity instruments granted do not vest until the
The principle applied is that if the share-based payments do not vest until the completion of a specied period of service, the entity presumes the services rendered by the counterparty will be received during the vesting period. Hence, the entity recognises the share-based payment for those services received during the vesting period.
counterparty completes a specied period of service, the entity shall presume that the services will be received in the future, during the vesting period.
Although only given in the context of employees, the principles of recognition where there are vesting conditions is the same under both frameworks.
Section 26: Share-based payments
continued
IFRS for SMEs Section 26 Share-based Payment
IFRS IFRS 2 Share-based Payment
Impact assessment
For equity-settled share-based payment transactions, the entity measures the goods or services received and the corresponding increase in equity at the fair value of the goods or services received. If the entity cannot estimate reliably the fair value of the goods or services received, the entity measures the transaction by reference to the fair value of the equity instruments granted.
The general measurement principles are the same between both frameworks other than when there is optionality in the manner of settlement.
Measurement
For equity-settled share-based payment transactions, the entity measures the goods or services received and the corresponding increase in equity at the fair value of the goods or services received. If this fair value cannot be estimated reliably (includes employee transactions), the entity measures the transaction by reference to the fair value of the equity instruments granted. The fair value of the equity instruments is measured at grant date. The standard differentiates between a market vesting condition and a non-market vesting condition for the purposes of measurement. Non-market vesting conditions are not taken into account to determine the fair value of the award. These conditions are used to determine the number of shares that are expected to vest. Market vesting conditions are used to determine the value of the award at grant date. For cash-settled share-based payment transactions, the entity measures the goods or services acquired and the liability incurred at the fair value of the liability. Until the liability is settled, the entity remeasures the fair value of the liability, with any changes in fair value recognised in prot or loss for the period. For share-based transactions in which either the entity or the counterparty has the choice of whether settlement is in cash or equity instruments, the entity accounts for that transaction as a cash-settled share-based payment transaction if the entity has incurred a liability. The transaction is accounted for as an equity-settled share-based payment transaction if the entity has a past practice of settling in shares or the option to receive cash has no commercial substance.
The fair value of equity instruments issued in transactions with employees is measured at grant date. The standard differentiates between a market vesting condition and a non-market vesting condition for the purposes of measurement. Non-market vesting conditions are not taken into account to determine the fair value of the award. These conditions are used to determine the number of shares that are expected to vest. Market vesting conditions are used to determine the value of the award at grant date. For cash-settled share-based payment transactions, the entity measures the goods or services acquired and the liability incurred at the fair value of the liability. Until the liability is settled, the entity remeasures the fair value of the liability at the end of each reporting period and at the date of settlement, with any changes in fair value recognised in prot or loss for the period. For share-based transactions in which either the entity or the counterparty has the choice of whether settlement is in cash or equity instruments, the entity accounts for that transaction as a cash-settled share-based payment transaction if the entity has incurred a liability. The transaction is accounted for as an equity-settled share-based payment transaction if no such liability has been incurred.
Although both frameworks default for classication in these instances as being cash settled, the criteria for classifying a transaction as equity settled differ between the standards.
Section 26: Share-based payments
continued
IFRS for SMEs Section 26 Share-based Payment
IFRS IFRS 2 Share-based Payment
Impact assessment
An entity measures the fair value of equity instruments granted at the measurement date, based on market prices if available, taking into account the terms and conditions of the grant. If market prices are not available, an entity estimates the fair value of the equity instruments granted using a valuation technique to derive an estimate of the price of the equity instruments in an arm’s length transaction between knowledgeable, willing parties.
While both frameworks require measurement of the equity instruments at fair value, IFRS for SMEs allows the use of a directors’ valuation when the fair value is not observable. However, it is not clear under what circumstances determining an entity specic value will be deemed impracticable. Therefore in practice, the determination of an appropriate methodology may well result in a fair value similar to that under full IFRS.
An entity recognises, as a minimum, the services received measured at the grant date fair value of the equity instruments granted, unless those equity instruments do not vest because of failure to satisfy a vesting condition. The effects of any modications to the terms and conditions on which the equity instruments were granted, that increases the total fair value of the share-based payment arrangement or are otherwise benecial to the employee, are recognised by the entity.
The general principles of modication and cancellation are similar in both frameworks. No differences would be expected in the application of this section.
Fair value of equity instruments IFRS for SMEs uses a hierarchy to determine the fair value of
shares issued based on: • Observable market prices • If unobservable, entity specic observable market data, such as a recent transaction in the instruments or a recent independent valuation of the entity • If the fair value is not observable and obtaining entity specic market data is impracticable, the directors should use their judgment to apply the most appropriate valuation methodology. Modications and cancellations
If an entity modies the award to the employee, the modication is accounted for as follows: • If the modication results in an increase in fair value of the award at modication date, the incremental increase in fair value is included in the measurement of the amount recognised for services received over the period from the modication date to vesting date • If the modication does not result in an incremental increase in fair value at the date of the modication, the modication is ignored. The cancellation or settlement of an award is accounted for as an acceleration of the remaining vesting periods.
An entity accounts for a cancellation or settlement as an acceleration of the vesting period.
Section 21: Provisions and contingencies IFRS for SMEs Section 21 Provisions and Contingencies
IFRS IAS 37 Provisions, Contingent Liabilities and Contingent Assets
Impact assessment
The standard applies to all provisions contingent liabilities and contingent assets, other than those from executory contracts unless onerous, and those covered by another standard, such as construction contracts, income taxes, leases, employee benets and insurance contracts.
There are only minor explanatory differences between IFRS for SMEs and full IFRS.
A provision is a liability of uncertain timing or amount.
A provision is a liability of uncertain timing or amount.
There is no difference between IFRS for SMEs and IFRS.
A liability is a present obligation of the entity arising from past events, the settlement of which is expected to result in an outow from the entity of resources embodying economic benets.
A liability is a present obligation of the entity arising from past events, the settlement of which is expected to result in an outow from the entity of resources embodying economic benets.
Scope
This section applies to all provisions, contingent liabilities and contingent assets other than those relating to construction contracts, executory contracts unless they are onerous, employee benet obligations, income tax and leases.
Denitions
Recognition
An entity recognises a provision only when it has an obligation at the reporting date as a result of a past event; it is probable (i.e., more likely than not) that the entity will be required to transfer economic benets in settlement and the amount of the obligation can be estimated reliably.
An entity recognises a provision only when it has a present obligation (legal or constructive) as a result of a past event; it is probable that an outow of resources embodying economic benets will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
There are only minor explanatory differences between IFRS for SMEs and IFRS.
Initial measurement
An entity measures a provision at the best estimate of the amount required to settle the obligation at the reporting date, which is the amount it would rationally pay to settle the obligation at the end of the reporting period or to transfer it to a third party at that time.
The amount recognised as a provision is the best estimate of the There is no difference between IFRS for SMEs and IFRS. expenditure required to settle the present obligation at the end of the reporting period, which is the amount that it would rationally pay to settle the obligation at the end of the reporting period or to transfer it to a third party at that time.
When the effect of the time value of money is material, the amount of a provision is the present value of the amount expected to be required to settle the obligation at a pre-tax discount rate that reects current market assessments of time value of money.
Where the effect of the time value of money is material, the amount of provision is the present value of expenditures expected to be required to settle the obligation at a pre-tax discount rate that reects current market assessments of time value of money and risks specic to liability.
Section 21: Provisions and contingencies continued IFRS for SMEs Section 21 Provisions and Contingencies
IFRS IAS 37 Provisions, Contingent Liabilities and Contingent Assets
Impact assessment
An entity reviews provisions at each reporting date and adjusts to reect the current best estimate of the amount required to settle the obligation. The unwinding of the discount is recognised as nance cost in prot or loss in the period in which it arises.
Provisions shall be reviewed at the end of each reporting date and adjusted to reect the current best estimate of the provision. Where discounting is used, the increase in each period to reect the passage of time is recognised as borrowing cost.
There is no difference between IFRS for SMEs and IFRS.
A provision is only used for expenditures for which it was originally recognised.
A provision is only used for expenditures for which it was originally recognised.
Subsequent measurement
Contingent liabilities
A contingent liability is either a possible but uncertain obligation that is not recognised because it fails to meet either the probability that economic benets will transfer or the amount cannot be reliably estimated.
A contingent liability is either a possible but uncertain obligation that is not recognised because it fails to meet either the probability that economic benets will transfer, or the amount cannot reliably be estimated.
Contingent liabilities are not recognised except for those of the acquiree in a business combination. Contingent liabilities are disclosed unless the possibility of payment is remote.
Contingent liabilities are disclosed unless the possibility of outow of resources is remote.
There is no difference between IFRS for SMEs and IFRS in the denition of contingent liabilities. The treatment of contingent liabilities in a business combination is different under IFRS for SMEs compared to IFRS. This is explained in more detail in the section on Business Combinations.
Contingent assets
An entity does not recognise a contingent asset. However, when the inow of resources is virtually certain, an asset is recognised.
An entity does not recognise a contingent asset. However, when the inow of resources is vir tually certain, an asset is recognised.
There is no difference between IFRS for SMEs and IFRS.
Derecognition
A provision is derecognised when all obligations are settled.
A provision is derecognised when no more resources are required There are only minor explanatory differences between settling any obligations. IFRS for SMEs and IFRS.
Section 28: Employee benets IFRS for SMEs Section 28 Employee Benets
IFRS IAS 19 Employee Benets
Impact assessment
This standard is applied by an employer in accounting for all employee benets, except those to which IFRS 2 applies.
There is no difference in scope between IFRS for SMEs and IFRS.
An entity recognises the cost of all employee benets to which its employees have become entitled during the reporting period:
IAS 19 Employee Benefts considers the following types of employee benet separately:
The differences are considered in more detail below.
• As a liability, after deducting amounts that have been paid either directly to the employees or as a contribution to an employee benet fund. An entity recognises any asset to the extent that the pre-payment will lead to a reduction in future payments or a cash refund • As an expense, unless another section requires the cost to be recognised as part of an asset.
• • • •
Scope
Employee benets are all forms of consideration given by an entity in exchange for service rendered by employees, including directors and management. This section applies to all employee benets, except for share-based payment transactions. Recognition
Short-term employee benets Post-employment benets Other long-term employee benets Termination benets.
Short-term employee benets
When an employee has rendered service to an entity during the reporting period, the entity recognises these in terms of the general principle. These benets are measured at the undiscounted amount of the benets expected to be paid.
When an employee has rendered service to an entity during an accounting period, the entity recognises the undiscounted amount of short-term employee benets as a liability (accrued expense), after deducting any amount already paid. An asset is recognised to the extent that the prepayment will lead to a reduction in future payments or a cash refund. An expense is recognised, unless another standard requires or permits the cost as part of the cost of an asset.
No differences exist in the recognition and measurement of short-term benets. The examples of compensated absences and prot share bonuses are the same under both frameworks.
Section 28: Employee benets continued IFRS for SMEs Section 28 Employee Benets
IFRS IAS 19 Employee Benets
Impact assessment
Post-employment benet plans are classied as either dened contribution plans or dened benet plans, depending on the economic substance of the plan as derived from its principal terms and conditions.
There is no difference in the classication of post retirement plans under the two frameworks.
Post-employment benet plans
Post-employment benet plans are classied as either dened contribution plans or dened benet plans. Dened contribution plans are post-employment benet plans under which an entity pays xed contributions into a separate entity and has no obligation to pay further contributions. Dened benet plans are post-employment benet plans other than dened contribution plans. Multi-employer plans and state plans are classied as dened contribution plans or dened benet plans based on the terms of the plan. However, if sufcient information is not available to use dened benet accounting for a multi-employer plan that is a dened benet plan, an entity accounts for the plan as if it was a dened contribution plan.
Under dened contribution plans the entity’s obligation is limited to the amount that it agrees to contribute to the fund. Dened benet plans are post-employment benet plans other than dened contribution plans. An entity classies a multi-employer plan as a dened contribution plan or a dened benet plan under the terms of the plan. When sufcient information is not available to use dened benet accounting for a multi-employer plan that is a dened benet plan, an entity accounts for the plan as if it were a dened contribution plan.
Dened contribution plans
An entity recognises the contribution payable for a period:
An entity recognises the contribution payable for a period:
• As a liability, after deducting any amount already paid • As an expense, unless another section requires the cost to be part of the cost of an asset.
• As a liability, after deducting any amount already paid • As an expense, unless another section requires the cost to be part of the cost of an asset.
Other than the provisions for discounting under full IFRS, the requirements of both frameworks are the same.
Where contributions to a dened contribution plan do not fall due wholly within 12 months after the end of the period in which the employees render the related service, they are discounted. Dened benet plans
The amount recognised as a dened benet liability is:
An entity recognises:
• The present value of the dened benet obligation at the end of the reporting period less • Any actuarial gains/losses not recognised • Any past service cost not yet recognised • The fair value at the end of the reporting period of plan assets.
• A liability for its obligations under dened benet plans net of plan assets and • The net change in that liability during the period as the cost of its dened benet plans during the period.
Considerable differences exist in the recognition and the measurement of post-retirement dened benet plans. IFRS for SMEs allows the projected credit unit method to be
simplied if its application would result in undue cost or effort. This may be of considerable benet to reporters that use this standard.
Section 28: Employee benets continued IFRS for SMEs Section 28 Employee Benets
IFRS IAS 19 Employee Benets
Impact assessment
An entity measures a dened benet liability at the net total of the following amounts:
An asset is measured at the lower of:
The second major difference lies in the recognition of actuarial gains and losses. Under IFRS for SMEs all actuarial gains and losses must be recognised in full. However, entities have a choice of recognising them in prot or loss or in other comprehensive income.
• The present value of its obligations under dened benet plans at the reporting date less • The fair value at the reporting date of plan assets An entity recognises a plan surplus as an asset only to the extent that it is able to recover the surplus either through reduced contributions in the future or through refunds from the plan. The present value of an entity’s obligations reects the discounted estimated amount of benet that employees have earned in return for their service in the current and prior periods. This requires the entity to determine how much benet is attributable to the current and prior periods based on the plan’s benet formula and to make actuarial assumptions about demographic and nancial variables. An entity is required to use the projected unit credit method unless this would require undue cost or effort, in which case, the entity makes the following simplications: • Ignore estimated future salary increases • Ignore future service of current employees • Ignore possible in-service mortality of current employees. If a dened benet plan has been introduced or changed in the current period, the entity increases or decreases its dened benet liability to reect the change and recognises the increase or decrease in measuring prot or loss. If a plan has been curtailed or settled the dened benet obligation is decreased or eliminated and the gain recognised in prot or loss. Entities must select an accounting policy for recognition of actuarial gains and losses. They are recognised in their entirety, either in prot or loss or in other comprehensive income. Gains or losses on curtailment or settlement are recognised when the curtailment or settlement occurs.
• The amount above or • The total of any cumulative unrecognised net actuarial losses and past service cost; and the present value of any economic benets available in the form of refunds from the plan or reductions in future contributions to the plan. An entity recognises the net total of the following amounts in prot or loss: • • • • • •
Current service cost Interest cost The expected return on any plan assets Actuarial gains and losses recognised in prot and loss Past service cost The effect of any curtailments or settlements and • The effect of the limit on the recognition of the asset. An entity determines the present value of its dened benet obligations and the related current service cost and, where applicable, past service cost using the projected unit credit method. Actuarial gains and losses are recognised: • In prot or loss using the corridor approach • In prot or loss on a systematic basis faster than the corridor approach or • In the period in which they occur in other comprehensive income. Past service costs are recognised as an expense on a straight-line basis over the average period until the benets become vested. Gains or losses on curtailment or settlement are recognised when the curtailment or settlement occurs.
Section 28: Employee benets continued IFRS for SMEs Section 28 Employee Benets
IFRS IAS 19 Employee Benets
Impact assessment
An entity recognises a liability for other long-term employee benets measured at:
An entity recognises a liability for other long-term employee benets at:
The requirements to recognise a liability are the same under both frameworks.
• The present value of the benet obligation at the reporting date less • The fair value at the reporting date of any plan assets.
• The present value of the benet obligation at the reporting date less • The fair value at the reporting date of any plan assets.
However, IFRS for SMEs does not specify how the dened benet obligation is measured. Therefore, it is assumed that a the projected credit unit method is not required, which leads to a difference between the two frameworks.
Other long-term employee benets
The present value of the dened benet obligation at the end of the reporting period is measured on the projected credit unit methodology. Termination benets
An entity recognises termination benets as a liability and an expense only when the entity is demonstrably committed either:
An entity recognises termination benets as a liability and an expense when the entity is demonstrably committed to either:
• To terminate the employment of an employee or group of employees before the normal retirement date or • To provide termination benets as a result of an offer made in order to encourage voluntary redundancy.
• Terminate the employment of an employee or group of employees before the normal retirement date or • Provide termination benets because of an offer made in order to encourage voluntary redundancy
An entity is demonstrably committed to a termination only when the entity has a detailed formal plan for the termination and is without realistic possibility of withdrawal from the plan.
An entity is demonstrably committed to a termination when, the entity has a detailed formal plan (without realistic possibility of withdrawal) for the termination. This would include: • The location, function and approximate number of employees whose services are to be terminated • The termination benets for each job classication or function and • The time at which the plan will be implemented.
The general principles of termination benets are similar under both frameworks, other than the greater guidance provided in determining demonstrable commitment.
Section 34: Specialised activities — agriculture IFRS for SMEs Section 34 Specialised Activities — Agriculture
IFRS IAS 41 Agriculture
Impact assessment
The standard applies to biological assets, agricultural produce at the point of harvest and related government grants. This standard does not apply to land related to agricultural activity and intangible assets related to agricultural activity.
Although not identical, the scoping paragraphs are sufciently similar that an entity will identify similar assets to which the sub-section and standard are applicable.
Agricultural activity is the management 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.
There is no difference between IFRS for SMEs and IFRS on the three basic denitions.
Scope
The subsection applies to agricultural activity undertaken by an entity. While the scope deals with biological assets, the recognition and measurement of agricultural produce at the point of harvest is also dealt with under recognition and measurement. Denitions
Agricultural activity is dened as the management by an entity of the biological transformation of biological assets for sale, into agricultural produce or into additional biological assets. Agricultural produce is dened as the harvested product of the entity’s biological assets. A biological asset is dened as a living animal or plant.
Agricultural produce is the harvested product of the entity’s biological assets. A biological asset is a living animal or plant.
Recognition
An entity may recognise a biological asset or agricultural produce when: • The entity controls the asset as a result of past events • It is probable that future economic benets associated with the asset will ow to the entity and • The fair value or cost of the asset can be measured reliably without undue cost or effort.
A biological asset or agricultural produce is recognised when: • The entity controls the asset as a result of past events • It is probable that future economic benets associated with the asset will ow to the entity and • The fair value or cost of the asset can be measured reliably.
The only difference between full IFRS and IFRS for SMEs is the exemption provided in the third criterion, i.e., undue cost or effort.
Section 34: Specialised activities — agriculture continued IFRS for SMEs Section 34 Specialised Activities — Agriculture
IFRS IAS 41 Agriculture
Impact assessment
An entity measures a biological asset on initial recognition and at each reporting date at its fair value less costs to sell unless fair value cannot be reliably measured without undue cost or effort. Changes in fair value less costs to sell are recognised in prot or loss.
A biological asset is measured on initial recognition and at the end of each reporting period at its fair value less costs to sell, except in cases where the presumption to establish fair value is rebutted. In such cases, biological assets are measured at cost less accumulated depreciation and impairments.
Both standards have similar measurement requirements, albeit that the cost model may be initiated at possibly a lower threshold in IFRS for SMEs.
When the fair value is not readily determinable without undue cost or effort, the entity applies the cost model and measures the asset at cost less any accumulated depreciation and impairments.
Agricultural produce harvested from an entity’s biological assets are measured at its fair value less costs to sell at the point of harvest (thereafter they are treated as inventories or under other applicable standards).
Measurement
Agricultural produce harvested from an entity’s biological assets are measured at their fair value less costs to sell at the point of harvest under both models (thereafter they are treated as inventory).
IFRS for SMEs considers various possible sources of information
that could be used to establish fair value. This is similar to the guidance provided in IAS 41, although not in as much detail. Further IFRS for SMEs provides no guidance on costs to sell for such assets. Although unlikely, this may result in different carrying values being assigned to assets by the two standards.
Gains and losses on initial recognition (and subsequent remeasurement) of biological assets and agricultural produce are recognised in prot and loss.
Grants
Grants that do not impose future performance conditions are recognised in income when they are receivable.
Unconditional grants are recognised when they become receivable.
Grants that do impose future performance conditions are recognised when the conditions are met.
Conditional grants are recognised when the conditions are met.
All grants are measured at the fair value of the asset receivable.
The grants are measured at the fair value less costs to sell of the asset receivable.
The recognition of government grants is the same under each standard. However, there will be differences in measurement if the costs to sell are signicant as these costs are deducted under full IFRS.
Section 34: Specialised activities — extractive industries IFRS for SMEs Section 34 Specialised Activities — Extractive Industries
IFRS IFRS 6 Exploration for and Evaluation of Mineral Resources
Impact assessment
An entity that is engaged in the exploration for, evaluation or extraction of mineral resources accounts for expenditure on the acquisition or development of tangible or intangible assets by applying Section 17 Property, Plant and Equipment and Section 18 Intangible Assets other than Goodwill , respectively.
IFRS 6 species the accounting for exploration and evaluation of mineral resources. It allows entities to develop an accounting policy for these costs without specically considering IAS 8
Under IFRS for SMEs, any expenditure that does not meet the recognition criteria of Section 17 and Section 18 would not be recognised as an asset. This may cause signicant differences to full IFRS as costs such as exploration and evaluation expenditures that may not be recognised as assets under these sections will have to be expensed by SMEs but may be capitalised under full IFRS.
When an entity has an obligation to dismantle or remove an item, or to restore the site, such obligations and costs are accounted for in accordance with Section 17 Property, Plant and Equipment and Section 21 Provisions and Contingencies.
Accounting Policies, Changes in Accounting Estimates and Errors,
which may allow entities to continue recognising assets on adoption of IFRS that would not otherwise be permitted.
Section 34: Specialised activities — service concession arrangements IFRS for SMEs IFRS Section 34 Specialised Activities — Service Concession IFRIC 12 Service Concession Arrangements Arrangements
Impact assessment
Scope
A service concession arrangement is an arrangement whereby a government or other public sector body contracts with a private operator to develop, operate and maintain the grantor’s infrastructure assets. In service concession arrangements the grantor controls or regulates what services the operator must provide using the assets, to whom, and at what price and also controls any signicant residual interest in the assets at the end of the term of the arrangement.
IFRIC 12 applies to public-to-private service concession arrangements if:
Both frameworks have a similar scope.
a) The grantor controls or regulates what services the operator must provide with the infrastructure, to whom it must provide them and at what price and b) The grantor controls — through ownership, benecial entitlement or otherwise — any signicant residual interest in the infrastructure at the end of the term of the arrangement.
Concession arrangements
The two categories of service concession arrangements are: • The operator receives a nancial asset — an unconditional contractual right to receive a specied or determinable amount of cash from the government • The operator receives an intangible asset — a right to charge for use of a public sector asset.
Infrastructure within the scope of IFRIC 12 is not recognised as property, plant and equipment of the operator.
The principle categories of service concession assets are the same under both frameworks.
The operator recognises a nancial asset to the extent that it has an unconditional contractual right to receive cash or another nancial asset from or at the direction of the grantor. The operator recognises an intangible asset to the extent that it receives a right (a licence) to charge users of the public service.
Financial asset model
The operator initially measures the nancial asset at its fair value. Thereafter, it follows Section 11 Basic Financial Instruments and Section 12 Other Financial Instruments Issues in accounting for the nancial asset.
The amount due from or at the direction of the grantor is accounted for in accordance with IAS 39 Financial Instruments: Recognition and Measurement as a loan or receivable, an available-for-sale nancial asset, or if so designated upon initial recognition, a nancial asset at fair value through prot or loss.
The considerable differences exist between Sections 11 and 12 and IAS 39. These are dealt with specically under nancial instruments.
The consideration is recognised at fair value.
No differences in measurement would be expected in the intangible asset model, as the requirements of section 18 for such assets are similar to the requirements of IAS 38.
Intangible asset model
The operator shall initially measure the intangible asset at fair value. Thereafter, it shall follow Section 18 Intangible Assets other than Goodwill in accounting for the intangible asset, measuring it at cost less amortisation and impairment losses.
IAS 38 Intangible Assets applies to the measurement of any intangible asset recognised and it is measured at cost less amortisation and impairment losses.
Elements of the statement of comprehensive income
Executive summary In this chapter, we consider the elements that make up the income statement and statement of comprehensive income and compare the following sections of the IFRS for SMEs with the relevant standard under full IFRS: IFRS for SMEs
IFRS
Section 23 Revenue
IAS 18 Revenue IAS 11 Construction Contracts
Section 30 Foreign Currency Translation
IAS 21 The Effects of Changes in Foreign Exchange Rates
Section 25 Borrowing Costs
IAS 23 Borrowing Costs
Section 24 Government Grants
IAS 20 Accounting for Government Grants and Disclosure of Government Assistance
The principles of revenue recognition and foreign currency translation are the same under IFRS for SMEs. However, there i s generally signicantly less guidance in IFRS for SMEs, which may result in different entities taking different interpretations of the requirements in some cases. The requirements for borrowing costs are signicantly different to full IFRS, as IFRS for SMEs requires all borrowing costs to be expensed as they are incurred. For some entities, particularly in the construction industry this may result in signicant expenses being recognised in prot or loss. IFRS for SMEs does not give a choice of accounting policy for government grants, all grants are
measured at fair value and recognised in prot or loss.
Section 23: Revenue IFRS for SMEs Section 23 Revenue
IFRS IAS 18 Revenue IAS 11 Construction Contracts
Impact assessment
Scope
The section applies in accounting for revenue arising from the following: • • • •
The sale of goods The rendering of services Construction contracts in which the entity is the contractor The use by others of entity assets yielding interest, royalties or dividends.
IAS 18 Revenue applies to accounting for revenue arising from The IFRS for SMEs combines rules on revenue recognition and the sale of goods, the rendering of services and the use by others construction contracts as well as on customer loyalty of entity’s assets that yield interest, royalties and dividends. programmes and the construction of real estate in one section. IAS 11 Construction Contracts applies in accounting for construction contracts in the nancial statements of contractors.
Denition of revenue
Revenue is the gross inow of economic benets during the period arising in the course of the ordinary activities of an entity when those inows result in increases in equity, other than increases relating to contributions from equity participants.
Revenue is the gross inow of economic benets during the period arising in the course of the ordinary activities of an entity when those inows result in increases in equity, other than increases relating to contributions from equity participants.
There is no difference between IFRS for SMEs and IFRS.
A construction contract is a contract specically negotiated for the construction of an asset or a combination of assets that are closely interrelated or interdependent in terms of their design, technology and function or their ultimate purpose or use.
There is no difference between IFRS for SMEs and IFRS.
It must be probable that the economic benets associated with the transaction will ow to the entity and that the revenue and costs can be measured reliably. Additional recognition criteria to the different categories as presented below.
There is no difference between IFRS for SMEs and IFRS.
Revenue must be measured at the fair value of the consideration received or receivable. The amount of revenue arising on a transaction is usually determined by agreement between the entity and the buyer or user of the asset. It is measured at the fair value of the consideration received or receivable taking into account the amount of any trade discounts and volume rebates allowed by the entity.
There is no difference between IFRS for SMEs and IFRS.
Denition of a construction contract
A construction contract is a contract specically negotiated for the construction of an asset or a combination of assets that are closely interrelated or interdependent in terms of their design, technology and function or their ultimate purpose or use. Recognition
It must be probable that the economic benets associated with the transaction will ow to the entity and that the revenue and costs can be measured reliably. Additional recognition criteria apply to the different categories as presented below. Measurement
Revenue must be measured at the fair value of the consideration received or receivable. The fair value of the consideration received or receivable takes into account the amount of any trade discounts, prompt settlement discounts and volume rebates allowed by the entity.
Section 23: Revenue continued IFRS for SMEs Section 23 Revenue
IFRS IAS 18 Revenue IAS 11 Construction Contracts
Impact assessment
In addition to the general recognition criteria, an entity must recognise revenue from the sale of goods when:
In addition to the general recognition criteria, an entity must recognise revenue from the sale of goods when:
There is no difference between IFRS for SMEs and IFRS.
• The entity has transferred to the buyer the signicant risks and rewards of ownership of the goods • The entity retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold • The costs incurred or to be incurred in respect of the transaction can be measured reliably.
• The entity has transferred to the buyer the signicant risks and rewards of ownership of the goods • The entity retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold • The costs incurred or to be incurred in respect of the transaction can be measured reliably.
Sale of goods
Rendering of services
When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue must be recognised by reference to the stage of completion of the transaction at the end of the reporting period.
When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue must be recognised by reference to the stage of completion of the transaction at the end of the reporting period.
If the services are performed by an indeterminate number of acts over a specied period of time, revenue may be recognised on a straight-line basis.
If the services are performed by an indeterminate number of acts over a specied period of time, revenue may be recognised on a straight-line basis.
When the outcome of the transaction involving the rendering of services cannot be estimated reliably, an entity must recognise revenue only to the extent of the expenses recognised that are recoverable.
When the outcome of the transaction involving the rendering of services cannot be estimated reliably, an entity must recognise revenue only to the extent of the expenses recognised that are recoverable.
There is no difference between IFRS for SMEs and IFRS.
Interest, royalties and dividends
Interest — recognised using the effective interest rate method.
Interest — recognised using the effective interest rate method.
Royalties — recognised on an accrual basis in accordance with the substance of the relevant agreement.
Royalties — recognised on an accrual basis in accordance with the substance of the relevant agreement.
Dividends — recognised when the shareholder’s right to receive payment is established.
Dividends — recognised when the shareholder’s right to receive payment is established.
There is no difference between IFRS for SMEs and IFRS.
Section 23: Revenue continued IFRS for SMEs Section 23 Revenue
IFRS IAS 18 Revenue IAS 11 Construction Contracts
Impact assessment
When the outcome of a construction contract can be estimated reliably, contract revenue and contract costs associated with the construction contract must be recognised as revenue and expenses respectively by reference to the stage of completion of the contract activity at the end of the reporting period (percentage of completion method).
When the outcome of a construction contract can be estimated reliably, contract revenue and contract costs associated with the construction contract must be recognised as revenue and expenses respectively by reference to the stage of completion of the contract activity at the end of the reporting period (percentage of completion method).
There is no difference between IFRS for SMEs and IFRS. However, IAS 11 ConstructionContracts provides additional detailed guidance on xed price and cost-plus contracts.
Reliable estimation of the outcome requires reliable estimates of the stage of completion, future costs and collectability of billings.
Reliable estimation of the outcome requires reliable estimates of contract revenue, the stage of completion, future costs and collectability of billings.
Construction contracts
Percentage of completion method
The stage of completion of a transaction or contract is determined using the method that measures most reliably the work performed. Possible methods include: • The proportion of costs incurred for work performed to date, but not including costs relating to future activity, such as materials or prepayments • Surveys of work performed • Completion of physical proportion of the service transaction or contract work
The stage of completion of a contract may be determined in a variety of ways. The entity uses the method that measures reliably the work performed. Depending on the nature of the contract, the methods may include: • The proportion of contract costs incurred for work performed to date compared to the estimated total contract costs • Survey of work performed • Completion of a physical proportion of contract work.
Any costs for which recovery is not probable are recognised as an An expected loss on the construction contract must be expense immediately. recognised as an expense immediately. When the outcome of a construction contract cannot be estimated reliably:
When the outcome of a construction contract cannot be estimated reliably:
• Revenue is recognised only to the extent of contract costs • Revenue is recognised only to the extent of contract costs incurred that it is probable will be recoverable incurred that it is probable will be recoverable and and • Contract costs must be recognised as an expense in the period • Contract costs must be recognised as an expense in the period in which they are incurred. in which they are incurred.
There is no difference between IFRS for SMEs and IFRS.
Section 23: Revenue continued IFRS for SMEs Section 23 Revenue
IFRS IAS 18 Revenue IAS 11 Construction Contracts
Impact assessment
An exchange of dissimilar goods or services is regarded as a transaction that generates revenue. The revenue is measured at the fair value of the goods or services received, adjusted by the amount of any cash or cash equivalents transferred. When the fair value of the goods or services received cannot be measured reliably, the revenue is measured at the fair value of the goods or services given up, adjusted by the amount of cash or cash equivalentstransferred.
There is no difference between IFRS for SMEs and IFRS.
Barter transactions
When goods are sold or services are exchanged for dissimilar goods or services in a transaction that has commercial substance, the transaction must be measured at: • The fair value of the goods or services received adjusted by the amount of any cash or cash equivalents transferred • If the fair value of the goods or services received cannot be measured reliably, then it is measured at the fair value of the goods and services given up adjusted by the amount of any cash or cash equivalents transferred or • If the fair value of neither the asset received nor the asset given up can be measured reliably, then at the carrying amount of the asset given up adjusted by the amount of any cash or cash equivalents transferred.
An exchange of similar goods or services is not regarded as a transaction that generates revenue.
No revenue is recognised for an exchange of goods and services that are of a similar nature and value or for an exchange of dissimilar goods where the transaction lacks commercial substance. Discounting of revenues
Discounting of revenues to present value is required in instances where the inow of cash or cash equivalents is deferred. In such instances, an imputed interest rate is used for determining the amount of revenue to be recognised, as well as the separate interest income component to be recorded over time. The imputed rate of interest is the more clearly determinable of either: • The prevailing rate for a similar instrument of an issuer with a similar credit rating or • A rate of interest that discounts the nominal amount of the instrument to the current cash sales price of the goods or services.
When the inow of cash or cash equivalents is deferred, the fair value of the consideration may be less than the nominal amount of cash received or receivable. If an arrangement effectively constitutes a nancing transaction, the fair value of the consideration is determined by discounting all future receipts using an imputed rate of interest. The imputed rate of interest is the more clearly determinable of either: • The prevailing rate for a similar instrument of an issuer with a similar credit rating or • A rate of interest that discounts the nominal amount of the instrument to the current cash sales price of the goods or services. The difference between the fair value and the nominal amount of the consideration is recognised as interest revenue.
There is no difference between IFRS for SMEs and IFRS.
Section 23: Revenue continued IFRS for SMEs Section 23 Revenue
IFRS IAS 18 Revenue IAS 11 Construction Contracts
Impact assessment
Agreements for the construction of real estate are dealt with in IFRIC 15 Agreements for the Construction of Real Estate. An entity that undertakes the construction of real estate and enters into an agreement with one or more buyers accounts for the agreement as a sale of services using the percentage-ofcompletion method if:
There is no difference between IFRS for SMEs and IFRIC 15.
Agreements for the construction of real estate
An entity that undertakes the construction of real estate and that enters into an agreement with one or more buyers accounts for the agreement as a sale of services using the percentage-ofcompletion method if: • The buyer is able to specify the major structural elements of the design of the real estate before construction begins and/or specify major structural changes once construction is in progress or • The buyer acquires and supplies construction materials and the entity provides only construction services. If the entity is required to provide services together with construction materials in order to perform its contractual obligation to deliver real estate to the buyer, the agreement must be accounted for as the sale of goods. In this case, the buyer does not obtain control or the signicant risks and rewards of ownership of the work in progress in its current state as construction progresses. Rather, the transaction occurs only on delivery of the completed real estate to the buyer.
• The buyer is able to specify the major structural elements of the design of the real estate before construction begins and/or specify major structural changes once construction is in progress or • The buyer acquires and supplies construction materials and the entity provides only construction services. If the entity is required to provide services together with construction materials in order to perform its contractual obligation to deliver real estate to the buyer, the agreement must be accounted for as the sale of goods. In this case, the buyer does not obtain control or the signicant risks and rewards of ownership of the work in progress in its current state as construction progresses. Rather, the transaction occurs only on delivery of the completed real estate to the buyer.
Customer loyalty programmes
If an entity grants, as part of a sales transaction, its customer a loyalty award that the customer may redeem in the future for free or discounted goods or services, the entity must account for the award credits as separately identiable component of the initial sales transaction. The entity must allocate the fair value of the consideration received or receivable in respect of the initial sale between the award credits and the other components of the sale. The consideration allocated to the award credits must be measured by reference to their fair value, i.e., the amount for which the award credits could be sold separately.
Customer loyalty programmes are dealt with in IFRIC 13 Customer Loyalty Programmes. If an entity grants, as part of a sales transaction, its customer a loyalty award that the customer may redeem in the future for free or discounted goods or services, the entity must account for the award credits as separately identiable component of the initial sales transaction. The entity must allocate the fair value of the consideration received or receivable in respect of the initial sale between the award credits and the other components of the sale. The consideration allocated to the award credits must be measured by reference to their fair value, i.e., the amount for which the award credits could be sold separately.
There is no difference between IFRS for SMEs and IFRIC 13.
Section 30: Foreign currency translation IFRS for SMEs Section 30 Foreign Currency Translation
IFRS IAS 21 The Effect of Changes in Foreign Exchange Rates
Impact assessment
Functional currency — the currency of the primary economic environment in which the entity operates.
Functional currency — the currency of the primary economic environment in which the entity operates.
There is no difference between IFRS for SMEs and IFRS.
Presentation currency — the currency in which the nancial statements are presented.
Presentation currency — the currency in which the nancial statements are presented.
Denitions
Functional currency
All components of the nancial statements are measured in the functional currency. All transactions entered into in currencies other than the functional currency are treated as transactions in a foreign currency.
All components of the nancial statements are measured in the functional currency. All transactions entered into in currencies other than the functional currency are treated as transactions in a foreign currency.
There is no difference between IFRS for SMEs and IFRS.
A foreign currency transaction must be recorded, on initial recognition in the functional currency, by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transition. For practical reasons, a rate that approximates the actual rate at the date of the transaction might be used if it does not uctuate signicantly.
There is no difference between IFRS for SMEs and IFRS.
Foreign currency transactions
A foreign currency transaction must be recorded on initial recognition in the functional currency using the spot exchange rate at the date of transaction. For practical reasons, average rates may be used if they do not uctuate signicantly. At the end of each reporting period: • Foreign currency monetary balances must be translated using the exchange rate at the closing rate • Non-monetary balances that are measured in terms of historical cost in a foreign currency must be translated using the exchange rate at the date of the transaction • Non-monetary items that are measured at fair value in a foreign currency must be translated using the exchange rates at the date when the fair value was determined.
At the end of each reporting period: • Foreign currency monetary items must be translated using the closing rate • Non-monetary items that are measured in terms of historical cost in a foreign currency must be translated using the exchange rate at the date of the transaction • Non-monetary items that are measured at fair value in a foreign currency must be translated using the exchange rates at the date when the fair value was determined.
Section 30: Foreign currency translation continued IFRS for SMEs Section 30 Foreign Currency Translation
IFRS IAS 21 The Effect of Changes in Foreign Exchange Rates
Impact assessment
Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous nancial statements are recognised in prot or loss in the period in which they arise.
There is no difference between IFRS and IFRS for SMEs in relation to the recognition of exchange differences. However, under IAS 21, exchange differences on a monetary item that forms part of a net investment in a foreign operation are reclassied from equity to prot or loss on disposal of the foreign operation. Therefore, an SME will recognise a different gain or loss on disposal of a foreign operation.
Recognition of exchange differences
Exchange differences on monetary items are recognised in prot or loss for the period except for those differences arising on a monetary investment in a foreign entity (subject to strict criteria of what qualies as net investment). In the consolidated nancial statements, such exchange differences are recognised in other comprehensive income and reported as a component of equity. Recycling through prot or loss of any cumulative exchange differences that were previously recognised in equity on disposal of a foreign operation is not permitted.
Exchange differences on a monetary item that forms part of a net investment in a foreign operation are reclassied from equity to prot or loss on disposal of the foreign operation.
Change in functional currency
A change in functional currency is justied only if there are changes in underlying transactions, events and conditions that are relevant to the entity.
A change in functional currency is justied only if there are changes in underlying transactions, events and conditions that are relevant to the entity.
The effect of a change in functional currency must be accounted for prospectively from the date of the change.
The effect of a change in functional currency must be accounted for prospectively from the date of the change.
There is no difference between IFRS for SMEs and IFRS.
Presentation currency
An entity may choose to present its nancial statements in any currency. If the presentation currency differs from the functional currency, an entity translates its items of income and expense and nancial position into the presentation currency.
An entity may choose to present its nancial statements in any currency. If the presentation currency differs from the functional currency, an entity translates its items of income and expense and nancial position into the presentation currency.
There is no difference between IFRS for SMEs and IFRS.
Section 25: Borrowing costs IFRS for SMEs Section 25 Borrowing Costs
IFRS IAS 23 Borrowing Costs
Impact assessment
Borrowing costs are interest and other costs that an entity incurs in connection with the borrowing of funds and include:
Borrowing costs are interest and other costs that an entity incurs in connection with the borrowing of funds and may include:
There is no difference between IFRS for SMEs and IFRS.
• Interest expense calculated using the effective interest method • Finance charges in respect of nance leases • Exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs.
• Interest expense calculated using the effective interest method • Finance charges in respect of nance leases • Exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs.
because of the required accounting treatment explained below.
Scope
IFRS for SMEs does not include a similar scope exemption
IAS 23 does not apply to borrowing costs relating to the acquisition, construction or production of: • A qualifying asset measured at fair value, e.g., a biological asset or • Inventories that are manufactured or otherwise produced, in large quantities on a repetitive basis. Recognition
All borrowing costs are expensed in prot or loss in the period in which they are incurred.
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of that asset are capitalised. All other borrowing costs are expensed.
Expensing borrowing costs is a major difference between IFRS for SMEs and full IFRS. For many entities this will be simpler to apply as SMEs will not need to calculate the borrowing costs to be capitalised. However, in some industries, such as the real estate industry, expensing borrowing costs may be disadvantageous as the costs will be recognised in prot or loss in the period in which they are incurred, which may lead to greater volatility in earnings. Therefore, entities will need to consider whether this is a signicant factor for their business before deciding to adopt IFRS for SMEs.
Section 24: Government grants IFRS for SMEs Section 24 Government Grants
IFRS IAS 20 Accounting for Government Grants and Disclosure of Government Assistance
Impact assessment
This standard applies to accounting for government grants and the disclosure of government assistance.
There are no differences between IFRS for SMEs and full IFRS in terms of the denition of government grants. The main difference in scope is that IFRS for SMEs applies to government grants related to agriculture, which are dealt with in a separate standard under full IFRS.
Scope
This section applies to all government grants. Government grants are assistance by the government in the form of transfers of resources to an entity in return for past or future compliance with certain conditions relating to the operation activities of the entity. Government grants exclude those forms of government assistance that cannot reasonably have a value placed upon them and transactions with government that cannot be distinguished from the normal trading transactions of the entity. The section on government grants does not cover government assistance that is provided for an entity in the form of benets that are available in determining taxable prot or tax loss, or are determined or limited on the basis of income tax liability. Examples of such benets are income tax holidays, investment tax credits, accelerated depreciation allowances and reduced income tax rates.
Government grants are assistance by government in the form of transfers of resources to an entity in return for past or future compliance with certain conditions relating to the operation activities of the entity. IAS 20 does not apply to: • Government assistance that is provided for an entity in the form of benets that are available in determining taxable prot or tax loss, or are determined or limited on the basis of income tax liability. Examples of such benets are income tax holidays, investment tax credits, accelerated depreciation allowances and reduced income tax rates • Government participation in the ownership of the entity • Government grants covered by IAS 41 Agriculture.
Generally the disclosure requirements of IFRS for SMEs are less than under full IFRS and therefore disclosure of government assistance is not dealt with in IFRS for SMEs.
Section 24: Government grants continued IFRS for SMEs Section 24 Government Grants
IFRS IAS 20 Accounting for Government Grants and Disclosure of Government Assistance
Impact assessment
An entity shall recognise government grants according to the nature of the grant as follows:
Government grants, including non-monetary grants, shall not be recognised until there is a reasonable assurance that:
• A grant that does not impose specied future performance conditions on the recipient is recognised in income when the grant proceeds are receivable • A grant that is imposes specied future performance conditions on the recipient is recognised in income only when the performance conditions are met • Grants received before the income recognition criteria are satised are recognised as a liability and released to income when all attached conditions have been complied with.
• The entity will comply with the conditions attached to the grants and • The grants will be received.
The IFRS for SMEs approach to account for government grants simplies the rules of IAS 20. The most signicant difference is that under IFRS for SMEs, grants of non-monetary assets must be measured at the fair value of the asset receivable.
Grants are measured at the fair value of the asset received or receivable.
A government grant that becomes receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate nancial support to the entity with no future related costs shall be recognised in prot or loss of the period in which it becomes receivable.
Recognition and measurement
Government grants are recognised in prot or loss on a systematic basis over the periods in which the entity recognises as expenses the related costs for which the grants are intended to compensate.
Grants in the form of the transfer of a non-monetary asset can be measured either at the fair value of the asset received or at nominal amount.
Transition to the IFRS for SMEs
Executive summary In this chapter, we consider the transition requirements for the rst-time adoption of IFRS for SMEs. The transition rules apply equally to all entities whether they have previously applied IFRS or another GAAP. The rules are based on the requirements of IFRS 1 First-time Adoption of International Financial Reporting Standards but in some cases the section has been altered to make the transition requirements easier to apply. Under the transition rules, restatements of the opening statement of nancial position do not need to be made if it is impractical to do so. In some cases this may relieve the need for restatement, although the ability to meet the impracticability hurdle may prove difcult.
Section 35: Transition to the IFRS for SMEs IFRS for SMEs Section 35 Transition to the IFRS for SMEs Scope
The section applies to a rst-time adopter of IFRS for SMEs, whether its previous accounting framework was full IFRS or another set of GAAP. An entity’s rst nancial statements that conform to IFRS for SMEs are the rst annual nancial statements in which the entity makes an explicit and unreserved statement in those nancial statements of compliance with the IFRS for SMEs. Recognition
An entity’s date of transition to the IFRS for SMEs is the beginning of the earliest period for which the entity presents full comparative information in accordance with this IFRS in its rst nancial statements that conform to this IFRS. Accounting policies in the opening statement of nancial position
In the opening statement of nancial position, entities must: a) Recognise all assets and liabilities whose recognition is required by the IFRS for SMEs b) Not recognise items as assets or liabilities if this IFRS does not permit such recognition c) Reclassify items recognised under a previous nancial reporting framework as one type of asset, liability or component of equity, but are a different type of asset, liability or component of equity under this IFRS d) Apply this IFRS in measuring all recognised assets and liabilities. Recognition of adjustments
Adjustments, resulting from different accounting policies in the previous GAAP, are recognised directly in retained earnings (or, if appropriate, another category of equity) at the date of transition to this IFRS.
Section 35: Transition to the IFRS for SMEs continued IFRS for SMEs Section 35 Transition to the IFRS for SMEs Exceptions to retrospective application
Entities must not retrospectively change the previous accounting for any of the following: • • • • •
Derecognition of nancial instruments Hedge accounting Accounting estimates Discontinued operations Measuring non-controlling interests.
Voluntary exemptions from retrospective application
• • • • • • • • • • • •
Business combinations Share-based payment transactions Fair value as deemed cost Revaluation as deemed cost Cumulative translation differences Separate nancial statements Compound nancial instruments Deferred income tax Service concession arrangements Extractive activities Arrangements containing a lease Decommissioning liabilities included in the cost of property, plant and equipment.
Exemptions from retrospective application
If it is impracticable for an entity to restate the opening statement of nancial position at the date of transition for one or more of the adjustments, the entity must apply the requirements for such adjustments in the earliest period for which it is practicable to do so, and must identify the data presented for prior periods that are not comparable with data for the period in which it prepares its rst nancial statements that conform to this IFRS. If it is impracticable for an entity to provide any disclosures required by this IFRS for any period before the period in which it prepares its rst nancial statements that conform with this IFRS, the omission must be disclosed.
Contents by section Section
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
Small and medium-sized entities Concepts and pervasive principles Financial statement presentation Statement of nancial position Statement of comprehensive income and income statement Statement of changes in equity and statement of income and retained earnings Statement of cash ows Notes to the nancial statements Consolidated and separate nancial statements Accounting policies, estimates and errors Basic nancial instruments Other nancial instruments issues Inventories Investments in associates Investments in joint ventures Investment property Property, plant and equipment Intangible assets other than goodwill
6 7 9 12 13 14 15 17 36 18 79 79 67 47 42 57 54 59
19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35
Business combinations and goodwill Leases Provisions and contingencies Liabilities and equity Revenue Government grants Borrowing costs Share-based payment Impairment of assets Employee benets Income tax Foreign currency translation Hyperination Events after the end of the reporting period Related party disclosures Specialised activities Transition to the IFRS for SMEs
28 61 92 74 104 112 111 88 64 94 69 109 24 20 21 98 116
