IFRS SYLABUS (Copie de Hadrien Van Steenbergh en Conflit 2012-11-02) (Copie de Nicolas Demey en Conflit 2012-11-05) (Copie de Constance Berger en Conflit 2012-12-04)

8/13/2019 IFRS SYLABUS (Copie de Hadrien Van Steenbergh en Conflit 2012-11-02) (Copie de Nicolas Demey en Conflit 2012

1/54

International RegulationsInternational Financial Reporting Standards

Introduction & Presentation of IFRS Financial Statements

IASB Standards & Interpretations IFRS in Europe & Belgium

IASB Objectives

Develop, in the public interest, a single set of high quality, understandable and enforceableglobal accounting standards that require high quality, transparent, and comparable informationin financial statements and other financial reporting to help participants in the various capitalmarkets of the world and other users of the information to make economic decisions

!o promote the use and rigorous application of those standards" and !o work actively with national standard setters to bring about convergence of national

accounting standards and IFRSs to high quality solutions

IASB Structure

Standards and interpretations

#$%& to '((( International )ccounting Standards *I)S+ Interpretations Standing Interpretations -ommittee *SI-+

'((# onwards International Financial Reporting Standards *IFRS+ International Financial Reporting Interpretations -ommittee *IFRI-+

IFRS in Europe

.uropean Regulation #/(/0'((' dated 1uly #$, '((')ll .2 companies listed on a regulated market have to prepare their consolidated financialstatements in accordance with International Financial Reporting Standards as from '((3 at thelatest 4ossibility to e5tend the obligation or to permit the application of IFRS to6

7on8listed companies for consolidated financial statements

Individual financial statements 9ut :.ndorsement ;echanism< in order to pre8approve all I)S9 standards and interpretations to

be applied in the .2

Europe in Europe Endorsements

IFRS in Belgium Overvie

IFRS in Belgium

Royal Decree = December '((&

-onsolidated financial statements of listed entities )llowed before '((3

!


2/54

Required from '((3 onwards Individual financial statements >? not permitted .ntities with only interest bearing securities listed and entities that are listed in a third country

are e5empted from IFRS8application until '((%

Royal Decree 3 December '((=

7on8listed credit institutions shall apply IFRS for their consolidated financial from '((/ onwards

Royal Decree #@ 1anuary '((3 7on8listed entities are allowed to use IFRS for their consolidated financial statements Decision is irrevocable

Royal Decree '# 1une '((/ )ll 9elgian listed Real .state Investment !rusts *SI-)F ImmobiliAres 0 Bastgoed 9.B)C+ shall

apply IFRS also for the preparation of their individual financial statements as from '((%

Refres" of accounting concepts

#"e Balance S"eet $B%S

> a froen picture at one point in time

) > Resources needed to operate the business

E. > Sources of financing of the assets

. > Residual interest in the assets afterdeducting all the liabilities

> 7et worth07et assets0shareholders equity

!he fundamental balance sheet equation

Asset 'a resource controlled by the entity, as a result of past events, from which future economicbenefits are e5pected to flow

(iabilit) 'a present obligation of the entity, arising from past events, settlement of which ise5pected to result in an outflow of resources embodying economic benefits

E*uit) > the residual interest in the assets of the enterprise after deducting all its liabilities

+ ,e) aggregates

!he right financial balance depends on an adequatebalance of financing> the optimal financing structure *of the assets+ by a mi5 ofequity, S! and E! debts+

(in, it" detailed accounting records and terminolog)

-


3/54

!wo balance sheet transactions6 Incorporate the company, by funding the initial capital with #((((( 2SD 4urchase of inventories for resale from a supplier" his invoice is payable in =3 days" !otal cost6

#/((( 2SD

!ransactions in a balance sheet format6

Assets (iabilities and e*uit)

-ash6 #(((((

-apital6 #(((((

!hen6

Assets (iabilities and e*uit)

Inventories6 #/(((-ash6 #(((((

-apital6 #(((((!rade payable 6 #/(((

!ransaction nG#-ash asset 6 #((((( ??? Is a resource, financed by equity

.quity capital6 #((((( ??? Is a financing

)ccounting Hournal entry6

Debit6 -ash #((((( -redit6 -apital #(((((

!ransaction nG'Inventories asset6 #/((( ??? Increase of assets funded by the *still unpaid+ supplier!rade payable liability6 #/((( ??? ) liability financing the asset inventories


Debit6 Inventories #/((( -redit6 !rade payables #/(((

.onclusion for dail) accounting $/ accounting entries 01

)sset> debit

)sset > credit

Eiabilities or equity > credit

Eiabilities or equity > debit

!ransaction nG&6)fter =3 days, we pay the supplier6


Debit6 trade payable6 #/((( -redit6 cash6 #/(((

2


4/54

(ast step1 based on t"e accounting trial balance3 preparation of t"e financial statements

9alance sheet as of day =36

Assets E*uit)

Current Assets -apital #(((((

Inventories #/((( Eiabilities

-ash @=((( !rade payables (

!!)E #((((( !!)E #(((((

#"e income statement

Balance s"eet 'a froen picture at one point in time

Income statement 'the summary schedule of the flows of transactions increasing*a+ anddecreasing*b+ the equity over a period of time *the accounting period+

JJJ *a+ ther than capital increases or revaluations of assets *b+ ther than distribution of equity to the shareholders

Income> increases in economic benefits during the accounting period, in the form of inflows *or

enhancements+ of assets or decreases of liabilities, that result in increases in equity, other thanthose relating to contributions from equity participants

.5penses> decreases in economic benefits during the accounting period, in the form of outflows *or

depletions+ of assets or incurrence of liabilities, that result in decreases in equity, other thanthose relating to distributions to equity participants

#"e matc"ing principle 1

> the income elements have to be matched with the related e5penses *needed to generate theincome elements+

> within the same accounting period

>? !rue and fair view of the net result of the period

(in, it" t"e 4etailed Accounting RecordsEetKs start from the balance sheet at day =36

9etween day =3 and 336 !ransaction nG=6 the whole inventory is sold for a price of ''((( *invoiced but not collected+ !ransaction nG36 the shipping costs *#3((+ to the client are paid cash by the company

.ffect on the balance sheet as of day 336

5


5/54

Income statement for the #( days period ended on day 336

7et turnover *sales+ ''(((

-ost of goods sold *#/(((+

Lross profit /(((ther operating e5penses *#3((+

4rofit from operations =3((

7et profit =3((

> increase of equity between the two balance sheets )n income directly increases equity >? increases the sources of financing assets *or enables to

reduce liability+ -onclusion6 in the accounting records6

Income accounts have to be credited .5penses accounts have to be debited

)s a result of the Hournal entries, the trial balance has become6

Summar) of Relations"ip beteen B%S and P%(

)t all times, between assets, liabilities, income and charges, 4EBI# ' .RE4I#

Since6 6et result ' Inc7 E8p7Since6 E ' A (

Me can write6 9E ' 9 $ A ( ' 6et Result ' Inc7 E8p7

!hus6 9 A : E8p7 ' 9 ( : Inc7> the mathematical equation summariing the double entry accounting system

;


6/54

IAS ! Presentation of Financial Statements

Objective8 to prescribe basis for presentation of financial statements8 in order to ensure comparability

Scope8 all general purpose financial statements prepared under IFRS8 not condensed interim financial information *I)S &=+

.omponents of a complete set of FS8 9alance sheet8 Income statement8 Statement of changes in equity showing6

8 )ll changes in equity8 -hanges in equity other that those with equity holders *statement of recognised income ande5penses+

8 -ash flow statement *I)S %+8 7otes comprising

8 )ccounting policies8 .5planatory notes

Overall considerations8 Fair presentation8 achieved through application of IFRS8 disclose compliance with IFRS8 full compliance with all I)S, IFRS, SI- and IFRI- required8 application before effective date

disclose that fact8 true and fair override

only in e5tremely rare circumstances when compliance would be misleading

8 Loing concern8 7o intention to liquidate or to cease trading

8 )ccrual basis 8 transactions and events8 are recognised when they occur, and8 in the periods to which they relate

8 -onsistency8 presentation N classification be retained

8 ;ateriality N aggregation8 material ?? present separately8 immaterial ?? aggregate with other items

8 ffsetting8 -omparative information

8 incl narrative N descriptive information

Structure and content

9alance sheet

8 -urrent vs non8current distinction required >? liquidity presentation permitted if more relevantand reliable8 Disclosure required on face or in notes

relevant sub8classifications of items on the face information on share capital

8 -ompulsory line items on face of 90S

property, plant and equipment" investment property"

+


7/54

intangible assets" financial assets" investments accounted for using the equity method" biological assets" inventories" trade and other receivables"

cash and cash equivalents" trade and other payables" provisions" financial liabilities" liabilities and assets for current ta5" deferred ta5 liabilities and deferred ta5 assets" minority interest, presented within equity" and issued capital and reserves attributable to equity holders of the parent

8 O-urrent vs non8current8 9ased on the nature of operations8 -oncept of Poperating cycleK8 -urrent assets N liabilities

realised0settled in the normal course of operating cycle" held for trading purpose" realised0settled within #' months of the balance sheet date" or it is cash or cash equivalent not restricted in use for at least #' months

8 4ost8balance sheet events *refinancing, correction of defaults+ do not affect the classificationas current

Income statement

8 -ompulsory line items on face of I0S6 revenue" finance costs" share of the profit or loss of associates and Hoint ventures accounted for using the equity

method" ta5 e5pense" a single amount comprising the total of

- the post8ta5 profit or loss of discontinued operations and- the post8ta5 gain or loss recognised on the measurement to fair value less costs to sell

or on the disposal of the assets or disposal group*s+ constituting the discontinuedoperation" and

profit or loss

8 O.5penses analysed on basis of nature" or function * disclosure on the nature+

Statement of changes in equity

8 Separate component of financial statements8 Items of income and e5penses directly recognied in equity

8 )lso in statement or in the notes transactions with equity holders movements in retained earnings *ie accumulated profit or loss+


8/54

movements in capital and reserves

7otes to the financial statements

8 9asis of preparation of financial statements8 )ccounting policies selected

8 )dditional disclosure to present fairly8 Significant Hudgments in applying accounting policies8 Cey sources of estimation uncertainty that could cause material adHustments in the future8 .ntityKs obHectives, policies and processes for managing capital8 )mount of dividends proposed or declared8 ther sundry disclosures *eg domicile, entityKs operation, name of the parent,Q+

IAS ! revised -== tangible assets that68 )re held for use in the production or supply of goods or services, for rental to others, or for

administrative purposes" and

8 )re e5pected to be used during more than one period

>


9/54

.ost> !he amount of cash or cash equivalents paid and the fair value of the other considerationgiven to acquire an asset at the time of its acquisition or construction

4epreciation> !he systematic allocation of the depreciable amount of an asset over its useful life

?seful life '!he period over which an asset is e5pected to be available for use by an entity" orthe number of production or similar units e5pected to be obtained from the asset from the asset byan entity

4epreciable amount '!he cost of an asset, or other amount substituted for cost, less its residualvalue

Residual value of an asset '.stimated amount that an entity would currently obtain from thedisposal of the asset, after deducting the estimated costs of disposal, if the asset were already ofthe age and in the condition e5pected at the end of its useful life

Fair value '!he amount for which an asset could be e5changed between knowledgeable, willingparties in an armKs length transaction

Impairment loss '!he amount by which the carrying amount of an asset e5ceeds its recoverableamount

.arr)ing amount '!he amount at which an asset is recognied after deducting any accumulateddepreciation and accumulated impairment losses

Recoverable amount '!he higher of an assetKs net selling price and its value in use

Recognition

!he cost of an item of 44N. shall be recognied as an asset if, and only if68 It is probable that future economic benefits associated with the item will flow to the entity" and8 !he cost of the item can be measured reliably

Same recognition principle for68 -osts incurred initially to acquire or construct an item of 44.8 -osts incurred subsequently to add to, replace part of, or service an item

:-omponent accounting (,' V *#(( '(+Uear &

-arrying amount *opening year &+6 /@ > #(( &' Depreciable amount6 3@ > /@ #( Remaining useful life6 3 years Depreciation charge6 ##,/ > 3@ V (,'

Depreciation begins when the asset is available for use *ie capable of operating in the mannerintended by management+

Depreciation does not cease when the asset becomes idle or is retired from active use and heldfor disposal

Depreciation method

Reflect the pattern in which the assetKs future economic benefits are e5pected to be consumed straight8line method sum8of8the8units

Reviewed at least at each closing If revision ?? change in accounting estimate

!!


12/54

ImpairmentSee I)S &/ Impairment of assets

-ompensation for items of 44. that were impaired, lost or given up, Included in 4NE when thecompensation becomes receivable

4erecognition

44. eliminated from 90S when8 disposed of8 no future economic benefits are e5pected from the use or the disposal

Lains or losses on disposal8 proceeds less carrying amount8 recognied in the income statement

4isclosures

For each asset class

8 measurement basis used8 depreciation method used8 useful life 0 depreciation rate8 gross carrying amount N accumulated depreciation at beginning and end of period8 reconciliation of carrying amount, incl

additions and disposals acquisitions through business combinations revaluation increases or decreases impairment losses and reversals depreciation e5change differences

)lso

8 restrictions on title and items pledged as security, including amounts8 accounting policy for restoration costs8 e5penditure on 44N. under construction8 commitments for acquisition of 44N.

For revalued 44.8 basis of revaluation8 effective date of revaluation8 use of independent valuer8 carrying amount using benchmark treatment *ie cost less depreciation+8 amount of revaluation surplus

IAS 2> Intangible Assets

Objective

!o prescribe the accounting treatment for intangible assets not dealt with in another Standard

Scope

8 )pplies to intangible assets e5cept those covered by another standard financial assets mineral rights and certain e5penditure in e5tractive industry

8 )pplies to e5penditure on advertising, training, start8up research and development activities

!-


13/54

Source

8 I)S &@ Intangible )ssets8 SI- &' Meb Site -osts

An asset 'a resource controlled by the enterprise as a result of past events from which futureeconomic benefits are e5pected to flow to the entity

Intangible asset 'an identifiable non8monetary asset without physical substance

Researc" 'riginal and planned investigation undertaken with the prospect of gaining newscientific or technical knowledge and understanding

4evelopment ')pplication of research findings or other knowledge to a plan or design for theproduction of new or substantially improved materials, devices, products, processes, systems orservices before the start of commercial production or use

An asset ' identifiablewhen it68 is separable, ie capable of being separated or divided from the entity and sold, transferred,

licensed, rented or e5changed, either individually or together with a related contract, asset orliability" or

8 arises from contractual or other legal rights, regardless of whether those rights are transferableor separable from the entity or from other rights and obligations

An asset meets t"e control criterionwhen it has the power8 to obtain the future economic benefits flowing from the underlying resource" and8 to restrict the access of others to those benefits *7ot for internally skilled staff, training,

customer lists, portfolio of customers,Q+

Recognition and measurement

)n asset meeting the definition of an intangible asset should be recognied when8 it is probable that future economic benefits associated with asset will flow to the enterprise" and8 cost of asset can be measured reliably

Initial measurement at cost

# Separate acquisition

Recognition8 4robability criterion >? always satisfied8 Reliable measurement >? usually satisfied *particularly when payment is in monetary assets+

;easurement8 )t cost8 -ost components when purchased

purchase price, import duties and purchase ta5es, directly attributable e5penditure ofpreparing the asset for its use and less trade discounts N rebates

.5penditures that are not part of the cost of an intangible asset68 -osts of introducing a new product or service *incl advertising and promotional activities+"8 -osts of conducting business in a new location or with a new class of customers *including costs

of staff training+" and8 )dministration and other general overhead costs

' )cquisition in a business combination

!2


14/54

Recognition8 4robability criterion >? always satisfied8 Reliable measurement >? *rebuttable+ presumption when finite useful life

;easurement)t fair value based on

quoted market prices *active market+ if no active market, use techniques to estimate fair value

8 multiples0profitability8 discounted future cash flows

& .5changes of assets

= Internally generated goodwill ?? 7ot recognised as an asset *e5pense to 4NE+

3 Internally generated intangible assets

Internally generated brands, mastheads, publishing titles, customer lists and items similar in

substance ?? .5pense to 4NE

Research8 7o intangible asset arising form research *or research phase+ should be recognied8 )ll e5penditure on research should be e5pensed when incurred

Development-apitalisation of development costs if, and only if definition and recognition criteria are met a list of other criteria are met

8 technical feasibility8 intention to complete8 ability to use or sell the asset

8 probability of future economic benefits8 availability of resources

.5amples of development activities Design, construction and testing of pre8production or pre8use prototypes and models Design of tools, Higs, moulds and dies involving new technology Design, construction and operation of a pilot plant Design, construction and testing of a chosen alternative for new or improved materials, devices,

products, processes, systems or services

;easurement of Development .5penditure incurred from the date when the intangible asset first meets the recognition criteria 4rohibition of reinstatement of e5penditure previously recognied as an e5pense

-ost comprises all directly attributable costs necessary to create, produce, and prepare theasset to be capable of operating in the manner intended by management

.5amples68 ;aterials and services used or consumed8 .mployee benefits8 Fees to register a legal right8 )mortisation of patents and licences used to generate the intangible assets

Recognition of an e8pense

8 If definition and recognition criteria are not met ?? e5pense8 Specific e5amples8 start8up costs

8 training and advertising costs8 relocation costs

!5


15/54

@easurement after recognition8 -ost model8 -ost less accumulated amortisation and impairment losses8 Revaluation model8 Revalued amount less accumulated amortisation and impairment losses

8 fair value should be determined by reference to an active market8 if no active market ?? no revaluation

?seful life

Indefinite useful life ?? 7o amortisation, but annual test of impairment according to I)S &/ Impairment of )ssets

Finite useful life ?? )llocation of the depreciable amount *> cost residual value+ on a systematicbasis over the useful life

Review at the end of each financial year8end ?? -hange in accounting estimate accounted forprospectively

Factors to be considered when determining the useful life68 !he e5pected usage of the asset by the entity and whether the asset could be managed

efficiently by another management team8 !ypical product life cycles for the asset and public information on estimates of useful lives of

similar assets that are used in a similar way8 !echnical, technological, commercial or other types of obsolescence8 !he stability of the industry in which the asset operates and changes in the market demand for

the products or services output from the asset8 .5pected actions by competitors or potential competitors8 !he level of maintenance e5penditure required to obtain the e5pected future economic benefits

from the asset and the entityKs ability and intention to reach such a level8 !he period of control over the asset and legal or similar limits on the use of the asset

8 Mhether the useful life of the asset

Residual value

)ssumed to be ero, unless8 -ommitment by a third party to purchase" or8 )ctive market and

Residual value can be determined by reference to that market It is probable that such a market will e5ist at the end of the useful life


Amortisation met"od

!he method shall reflect the pattern in which the assetKseconomic benefits are e5pected to beconsumed

JJJ Straight8line method, unless another pattern can be determined reliably

-onsistent and permanent application from one year to another


)mortisation charge recognised in 4NE

?? 2nless included in the carrying amount of another asset

!;


16/54

)mortisation begins when the asset is available for use

)mortisation ceases when8 !he asset is classified as held for sale in accordance with IFRS 3 7oncurrent )ssets held for

Sale and Discontinued perations" or8 !he asset is derecognised

Impairment See I)S &/ Impairment of )ssets

Retirements and disposals

.limination from balance sheet when8 disposed of8 7o future economic benefits are e5pected from its use or disposal *ieno sale+

Lains or losses on disposal8 proceeds less carrying amount8 recognied in the 4NE

4isclosures

For each class of intangible assets *Distinguishing between internally generated intangible assetsand other intangible assets+8 useful life 0 amortisation rate8 amortisation method8 gross carrying amount N accumulated amortisation at beginning and end of period8 line item*s+ where in the I0S amortisation is included8 reconciliation of carrying amount, incl

additions *internally and through business combinations+ -lassification as held for sale or included in disposal group revaluation increases or decreases impairment losses and reversals

amortisation net e5change differences other

8 )lso Intangibles with indefinite useful life6 carrying amount and reasons description of individually material items information on intangible assets granted that have been recognised at fair value restrictions

on title and items pledged as security0commitments for acquisition research and development e5penditure recognised as an e5pense

For revalued intangible assets8 by class of intangible assets

effective date of revaluation carrying amount of revalued assets carrying amount using benchmark treatment *ie cost+

8 amount of revaluation surplus, indicating changes and restrictions8 methods and significant assumptions made in estimating the assetKs fair values

IAS !< (eases

Objective

4rescribe, for lessees and lessors, the appropriate accounting policies and disclosure to apply inrelation to finance and operating leases

Scope >? )pplicable to all leases

!+


17/54

.5cept8 Eeases to e5plore for or use minerals, oil, natural gas and similar no regenerative resources8 Eicensing agreements for such items as motion picture films, video recordings, plays,

manuscripts, patents and copyrights8 ;easurement of some leased investment property and leased biological assets

Including agreements that do not take the legal form of a lease but substantially conveys a right touse an asset *IFRI- =+

Sources

8 I)S #% Eeases8 SI- #3 perating Eeases Incentives8 SI- '% 8 .valuating the Substance of !ransactions Involving the Eegal Form of a Eease8 IFRI- = Determining whether an )rrangement contains a Eease

(ease ')greement whereby the lessor conveys to the lessee in return for a payment or series ofpayments the right to use an asset for an agreed period of time

Finance lease 'Eease that transfers substantially all the risks and rewards incidental toownership of an asset !itle may or may not eventually be transferred

Operating lease 'Eease other than a finance lease

.lassification of leases

Impact of the classification *situation of the lessee+8 n the balance sheet

perating lease ?? no item recognied Finance lease ?? asset and corresponding liability recognied

8 n the income statement perating lease ?? entire rent recognied as an operating e5pense Finance lease

?? Rent split between a finance e5pense and the reduction of the lease liability ?? )sset depreciated over its useful life *in principle+ operating e5pense

.5ample9efore accounting for the lease described below, the financial statements of )9- are following atclosing W#6 Fi5ed assets6 #3( -ash6 3( .quity6 @( Eiabilities6 #'( 4rofit of the year W#6 =3 *operating+n #0#0W#, )9- concluded the following lease contract6 )sset leased6 44N. with a fair value of 3( and a useful life of 3 years )nnual rent6 #% *paid at the end of the year+ )ppropriate interest rate6 #( XDetermine the 9S position at #'0W#, the result and the .9I!D) of W# If the lease is classified as a finance lease If the lease is classified as an operating lease

.5ample6 operating lease

!


18/54

.5ample6 finance lease

-lassification is based on the e5tent to which risks and rewards incidental to ownership of aleased asset lie with the lessor or the lessee>? finance lease if substantially all risks and rewards are transferred to the lessee

JJJ Risks include the possibilities of losses from idle capacity or technological obsolescence and ofvariations in return because of changing economic conditionsJJJ Rewards may be represented by the e5pectation of profitable operation over the assetKseconomic life and of gain from appreciation in value or realiation of a residual value

!>


19/54

-lassification depends on the substance of the transaction rather than the legal form of thecontract ?? Substance over form principle ?? !ransactions and other events should be accountedfor and presented in accordance with theirs substance and economic reality and not merely theirlegal form

.5amples of situations that individually or in combination would normally lead to a lease being

classified as a finance lease6#!he lease transfers oners"ipof the asset at the end of the lease term'!he lessee has the optionto purchase the asset at price that is e5pected to be sufficientl)

loerthan the fair value when the option becomes e5ercisable for it to be reasonabl) certain,at inception of the lease, that the option will be e5ercised

&Eease term is for the major part of t"e economic lifeof the asset even if title is not transferred=)t inception of the lease, the present value of t"e minimum lease pa)mentsamounts to at

least substantially all of the fair valueof the leased asset3!he leased assets are of a such specialised naturethat only the lessee can use them without

maHor modifications

ther indicators of situations that individually or in combination could also lead to a lease beingclassified as a finance lease6

#If the lessee can cancel the lease, the lessorKs losses associated with the cancellation are borneby the lessee

'Lains or losses from the fluctuation in the fair value of the residual accrue to the lessee *fore5ample, in the form of a rent rebate equaling most of the sales proceeds at the end of thelease+

!he lessee has the ability to continue the lease for a secondary period at a rent that issubstantially lower than market rent

Eease term is for the maHor part of the economic life of the asset even if title is not transferredEease term > non8cancelable period for which the lessee has contracted to lease the asset,

together with> any further terms for which the lessee has the option to continue to lease the asset,with or without further payment, when at the inception of the lease it is reasonably

certain that the lessee will e5ercise the option

Economic life 'the period over which an asset is e5pected to be economically usable by one ormore users

:@ajor partC 'benchmark is %3X *but substance over form+

)t inception of the lease, the present value of the minimum lease payments amounts to at leastsubstantially all of the fair value of the leased asset;inimum lease payments ?? 4ayments over the lease term that the lessee is or can be requiredto make .5cluding6

8 -ontingent rent6 that portion of the lease payments that is not fi5ed in amount but is based onthe future amount of a factor that changes other than with the passage of time *egpercentage of future sales, amount of future use, future price indices, future market rates ofinterest+

8 -osts for services and ta5es to be paid by and reimbursed to the lessor Including6

8 For a lessee, any amounts guaranteed by the lessee or by a party related to the lessee Y For alessor, any residual value guaranteed to the lessor

8 !he e5ercise price of a bargain purchase option Discount rate

Interest rate implicit in the lease ?? discount rate that, at the inception of the lease, causes theaggregate present value of the minimum lease payments" and the unguaranteed residual valueto be equal to the sum of the fair value of the leased asset and any initial direct costs of the

lessor8 2nguaranteed residual value

!


20/54

Z Determined by reference to the current value >? possible effect of future inflation shallnot be considered

Z 2se of an independent valuer recommended 8 Fair value

Z ;arket price reflecting any volume or trade discountsZ 7ormal selling price *reflecting any volume or trade discounts+ when the lessor is also

the manufacturer or dealer8 EesseeKs incremental borrowing rate

Z -an only be used by the lessee when the interest rate implicit in the lease is notpracticable to determine

Z Defined as the rate of interest the lessee would have to pay on a similar lease or, if thatis not determinable, the rate that, at the inception of the lease, the lessee would incur toborrow over a similar term, and with a similar security, the funds necessary to purchasethe asset

8 :)t least substantially all< > benchmark is $(X *but substance over form+ 4rocess

# Determine the minimum lease payments and the unguaranteed residual value *independentvaluer+

' -ompute the interest rate implicit in the lease *lessor approach+

& Determine the present value of the minimum lease payments *lessee approach+= -ompare the present value of the minimum lease payments with the fair value of the leased

asset3 -onsider the other indicators 0 risks and rewards factors

-lassification is determined at the inception of the lease *ie date of the lease agreement+ [recognition at the commencement of the lease *ie start of right to use+

If changes in the provisions of the lease result in a different classification, the modified agreementis considered as a new lease

-hanges in estimates *eg estimate of the economic life or residual value+ or changes incircumstances *eg default by the lessee+ do not alter the classification

) lease might be classified differently for the lessee and the lessor

Accounting b) lessees

Finance lease8 Recognise both an asset and a liability8 )mount recognised is the lower of Fair value of the leased asset 4resent value of the minimum lease payments8 Discount rate is the interest rate implicit in the lease If it is not practicable to determine, the

lesseeKs incremental borrowing rate shall be used8 !he asset should be depreciated using a policy consistent with that for owned assets *under I)S

#/ 4roperty, 4lant and .quipment+8 over the shorter of the lease term and its useful life8 Eease payments apportioned between Finance charge Y allocated to produce a constant periodic rate of interest Reduction of the outstanding liability

perating leases8 Eease payments are e5pensed8 Straight line basis over the lease term unless another systematic basis is more representative of the time pattern of the userKs

benefits

Sale and leasebac, transactions

Sale of an asset by the vendor and leasing of the same asset back to the vendor

-=


21/54

-lassification criteria6 same as those for leases8 Finance lease Y amortise any e5cess of sales proceeds over the carrying amount over lease

term8 perating lease and if transaction

at or below fair value Y recognise gain or loss

above fair value Y amortise e5cess over fair value over the period for which the asset ise5pected to be used

IFRI. 5 4etermining "et"er an Arrangement .ontains a (ease

Bac,ground ?? )rrangements may not take the legal form of a lease but convey theright to use an asset in return for a payment or a series of payments

E8amples utsourcing arrangements )rrangements in the !elecom industry *right to network capacity+ !ake8or8pay and similar contracts *power generator+

.onsensus Arrangement is or contains a lease8 Fulfilment of the arrangement is dependent on the use of a specific asset or assets8 !he arrangement conveys a right to use the asset8 !he arrangement conveys a right to use the asset

>? !he arrangement conveys to the purchaser *lessee+ the right to control the use of theunderlying asset, which is the case if6

!he purchaser has the ability0right to operate the asset or direct others to operate the asset ina manner it determines while obtaining or controlling more than an insignificant amount of theoutput or other utility of the asset" R

!he purchaser has the ability0right to control physical access to the underlying asset whileobtaining or controlling more than an insignificant amount of the output or other utility of theasset" R

Facts and circumstances indicate that it is remote that one or more parties other than the

purchaser will take more than an insignificant amount of the output or other utility that will beproduced or generated by the asset during the term of the arrangement, and the price that thepurchaser will pay for the output is neither contractually fi5ed per unit of output nor equal tothe current market price per unit of output as of the time of delivery of the output

4isclosures

.5tensive disclosure requirements *I)S &' I)S #%+

I)S #% provides for significantly enhanced disclosures8 lessees with finance leases *I)S #%'&+8 lessees with operating leases *I)S #%'%+8 lessors with finance leases *I)S #%&$+

8 lessors with operating leases *I)S #%=@+

Selected disclosures in F0S of lessees

Finance leases8 net carrying amount by class of assets8 reconciliation of total minimum lease payments and their present value *\# year" #83 years" ?3

years+

perating leases?? total minimum lease payments *\# year" #83 years" ?3 years+

Selected disclosures in F0S of lessors

Finance leases

-!


22/54

8 reconciliation of total gross investment in the lease and present value of minimum leasepayments receivable *\# y0#83 y0?3 y+

8 unearned finance income8 unguaranteed residual values of leased assets

perating leases

8 information by class of assets8 future min lease payments *\# y0#83 y0?3 y+

Provisions

IAS 2< Provisions3 .ontingent (iabilities and .ontingent Assets

Objective

!o ensure that68 appropriate recognition criteria and measurement bases are being applied8 there is sufficient disclosure to understand the nature, timing and amount of provisions,

contingent liabilities and contingent assets

Scope

I)S &% scopes out financial instruments at fair value non8onerous e5ecutory contracts policy8holdersK contracts in insurance entities items covered by another I)SJJJ Interaction with I)S #$

Provision 'liability of uncertain timing or amount

(iabilit)> present obligation as a result of past events> settlement of which is e5pected to result in an outflow of resources

.onstructive obligation> an obligation that derives from an entityKs actions where6 by an established pattern of past practice, published policies or a sufficiently specific current

statement, the entity has indicated to other parties that it will accept certain responsibilities" and as a result, the entity has created a valid e5pectation on the part of those other parties that it will

discharge those responsibilities

.ontingent liabilit)> 4ossible obligation depending on the occurrence0non8occurrence of uncertain future events, or

> 4resent obligation but no probable outflow of economic benefits or amount canKt be reliablymeasured

.ontingent asset> 4ossible asset that arises from past events and whose e5istence will be confirmed only by the

occurrence or nonoccurrence of one or more uncertain future events not wholly within thecontrol of the entity

--


23/54

Provision or contingent liabilit)D

Recognition of a provision

Recognie a provision if, and only if8 present obligation *legal or constructive+8 as a result of past event *obligating event+8 probable *Pmore likely than notK+ transfer of economic benefits8 reliable estimate can be made

)n obligating event is an event that

8 creates a legal *by law or contract+ or constructive obligation8 results in an enterprise having no realistic alternative but to settle the obligation

4ecision tree

.ontingent liabilit)8 )n enterprise should not recognie a contingent liability8 Disclosure is required unless a cash outflow is remote

.ontingent assets ' a possible asset depending on the occurrence0non8occurrence of uncertainfuture events JJJ Do not recognise contingent assets, disclosure is required if a cash inflowis probable

@easurement principles

9est estimate

!he amount recognied as a provision shall be the best estimate of the e5penditure required tosettle the present obligation at the balance sheet date

> the amount an enterprise would rationally pay to settle or transfer the obligation to a third party> fair value

JJJ use reports of independent e5perts where necessary *ie lawyers, environmental e5perts,Q+

Discounted value

-2


24/54

Mhere the effect of the time value of money is material, the amount of a provision shall be thepresent value of the e5penditures e5pected to be required to settle the obligation 4re8ta5 discount rate that reflects current market assessments of time value and risks specific to

the liability *Risk free rate is in practice often used+ -ash flows0discount rate Y be consistentJ avoid double counting of risk

inflation

Future events

Future events that may affect the amount required to settle an obligation shall be reflected in theamount of a provision where there is sufficient obHective evidence that they will occur

-onsider future cost reductions if increased e5perience in8 applying e5isting technology8 the e5pected costs of applying e5isting technology to more comple5 clean8up operation than

previously carried out

-onsider changes in legislation ?? when virtually certain to be enacted

Reduction of obligation

Lains from the e5pected disposal of assets should not be taken into account

Reimbursements should be recognised when, and only when, it is virtually certain thatreimbursement will be received if the enterprise settles the obligation

."anges and use of provisions

Review and adHust provisions at each balance sheet date ??? if outflow no longer probable ?? reverse provision

) provision should be used only for e5penditures for which the provision was originally recognied

Future operating losses

4rovisions should not be recognied for future operating losses8 general prohibition6 no present obligation Y no liability8 specific prohibition6 future operating losses up to the date of a restructuring

Onerous contracts ' a contract in which the unavoidable costs of meeting the obligations underthe contract e5ceed the economic benefits e5pected to be received under it

.5ample6 building under lease contract but not occupied by the company

Recognie the present obligation under an onerous contract as a provision > unavoidable costs ofe5iting the contract

Restructuring provisions

Restructuring> ) program that is planned N controlled by management that materially changes either68 the scope of a business undertaken, or8 the manner in which that business is conducted

.5amples8 sale or termination of a line of business

8 closure of business locations8 changes in management structure

-5


25/54

8 fundamental reorganiations

Requirements for recognition6 ) constructive obligation to restructure arises only when there is6) detailed formal plan identifying at least6 business and locations affected employees who will be compensated

e5penditure undertaken timeframe for implementation) valid e5pectation of implementation of the plan actually start to implement plan announce main features of the plan to those affected by it management or board decision will not, by itself, constitute a constructive obligation to

restructure

Restructuring provisions should include only direct e5penditures necessarily entailed by therestructuring not associated with the ongoing activities of the enterprise

Provisions not recognied via P%(

2nder I)S #/, the cost of an item of property, plant and equipment includes the initial estimate ofthe costs of dismantling and removing the item and restoring the site on which it is located

!his part of the cost of the asset is recognied via the set up of a provision of the same amountIt is measured based on the prescription of I)S &%

.5ample6 nuclear plant decommissioning obligation!otal cost *e5cluding cost of decommissioning+6 #((( ;aHor part )6 #3( useful life of #( years ;aHor inspection6 #(( every ' years 2seful life of the remainder6 =( years-ost of decommissioning6 =((First maHor inspection performed every ' years 0 cost of ##(

-;


26/54

@ain disclosures $eac" class of provision

Reconciliation pening balance )dditions 2sed Released 2nwinding

-losing balance

9rief description of 7ature !iming 2ncertainties )ssumptions Reimbursement

7o prior year comparatives

.5amples of disclosures

IAS 5= Investment Propert)

Objective

!o prescribe the accounting treatment for investment property

Scope

-+


27/54

I)S =( also applies to investment property held under a finance lease *in lessee]s F0S+ investment property leased out under an operating lease *in lessor]s F0S+

Sources

I)S =( Investment 4roperty

4efinitions

An investment propert) 'property, held to earn rentals or for capital appreciation or both, ratherthan for use" or sale in the ordinary course of business

An oneroccupied propert) 'a property held for use in the production or supply of goods orservices or for administrative purposes

Recognition

)n investment property should be recognised as an asset when8 future economic benefits to flow from the asset are probable" and8 cost can be measured reliably

Same criteria are applicable to initial costs and subsequent costs relevant to investment property

@easurement at recognition

)n investment property should be initially measured at its cost

-ost components8 purchase price8 directly attributable e5penditure

property transfer ta5es professional fees

-osts not included

Start8up costs *unless necessary to bring the property to the condition necessary to be capableof operating as intended by management+

perating losses incurred before the investment property achieves the planned level ofoccupancy

)bnormal amounts of wasted material, labour or other resources incurred in constructing ordeveloping the property

@easurement after recognition

)n enterprise should choose between6

# Fair value model8 Investment properties are measured at their fair value at each closing

8 )pplicable to all investment properties *no cherry picking+8 -hange in fair value is recorded in the income statement8 Determination of fair value

-


28/54

4rice at which the property could be e5changed between knowledgeable, willing parties inan armKs length transaction

Reflection of market conditions at the balance sheet date Mithout any deduction for

8 transaction costs it may incur on sale or other disposal8 future capital e5penditure that will improve or enhance the property

Determination of fair value

' -ost model

.ost Accumulated depreciation and impairment losses

JJJ Same treatment as cost model in accordance with I)S #/JJJ Disclosure of fair value required

?? Fair value should always be determined, either for measurement or disclosure

4isclosures

Leneral8 criteria to distinguish investment property from other property8 the methods and significant assumptions applied in determining fair value

8 use of an independent valuer8 the amounts included in the I0S for rental income direct operating e5penses arising from investment property that

8 generated rental income8 did not generated rental income

8 !he e5istence of restrictions on the realisability of investment property or the remittance ofincome and proceeds of disposal

8 ;aterial contractual obligations

Fair value model8 Reconciliation of carrying amount8 If fair value cannot be determined

description of investment property, e5planation why fair value cannot be determined and rangeof values carrying amount and gain or loss recognised of assets disposed

-ost model8 Depreciation methods used and useful lives or rates used8 Reconciliation of carrying amount8 Fair values

if not possible, a description of investment property, e5planation why fair value cannot bedetermined and range of values

IFRS ; 6oncurrent Assets Geld for Sale and 4iscontinued Operations

Objective

->


29/54

Specify the accounting for assets and disposal groups held for sale, and the presentation anddisclosure of discontinued operations

Scope

)pplication to all recognised non8current assets, e5cept

Deferred ta5 assets *I)S #'+ )ssets arising from employee benefits *I)S #$+ Financial assets within the scope of I)S &$ 7on8current assets under the Fair value model of I)S =( 7on8current assets measured at fair value less estimated point of sale costs under I)S =# -ontractual rights under insurance contracts *IFRS =+

4iscontinued operation

4isposal group ') group of assets to be disposed of, by sale or otherwise, together as a groupin a single transaction, and liabilities directly associated with those assets that will be transferredin the transaction Disposal groups also include a group of cash8generating units, a single cash8generating unit, or part of a cash8generating unit

Firm purc"ase commitment 'an agreement with an unrelated party, binding on both parties andusually legally enforceable, that specifies all significant terms, including the price and timing of the transactions, and includes a disincentive for non performance that is sufficiently large to make performance highly

probable

.lassification as "eld for sale

)n entity shall classify a non8current asset *or disposal group+ as held for sale if its carryingamount will be recovered principally through a sale transaction rather than through continuing use

:eld for sale< criteria

If non current assets *disposal group+ are acquired e5clusively with a view to disposal they areclassified as held for sale if8 SubHect to certain e5emptions, sale is e5pected \ #' months8 highly probable that the full criteria *previous slide+ will be met within a short period after

acquisition *usually & months+

7on current assets that are to be abandoned are not classified as held for sale may be classifiedas discontinued operations when eventually abandoned

-


30/54

)t the lower of carrying amount and fair value less costs to sell8 Impairment losses for write downs 8 profit or loss8 Subsequent increases in fair value 8 recognised if not in e5cess of the cumulative impairment

loss *under IFRS 3 or I)S &/+

JJJ 7o depreciation

Presentation and disclosure

)ssets *disposal groups+ held for sale 7on8current assets *or the assets of a disposal group+ are shown separately from other assets !he liabilities of a disposal group classified as held for sale shall be presented separately from

other liabilities )ssets and liabilities shall not be offset 4rior periods are not reclassified Lains and losses on fair value adHustments on assets classified as held for sale *and are not

discontinued operations+ recognied in profit or loss as a part of continuing operations

Discontinued operations

8 ) single amount on the face of the income statement comprising the sum of the post8ta5 profit or loss of the discontinued operation and the post8ta5 gain or loss recognised on the measurement to fair value less costs to sell or on

disposal8 )n analysis of that amount on the face or in the notes8 7et cash flows attributable to operating, investing, and financing activities presented separately

on the face of the cash flow statement or in the notes8 !he disclosures are all represented for prior periods

Impairment of Assets

IAS 2+ Impairment of Assets

Objective

!o prescribe procedures that an enterprise applies to ensure that its assets are not carried at animpaired value and to harmonie how recoverable amount is calculated

Scope

I)S &/ applies to all assets other than6 inventories *I)S '+

assets arising from construction contracts *I)S ##+ deferred ta5 assets *I)S #'+

2=


31/54

assets arising from employee benefits *I)S #$+ financial assets *I)S &'+ investment property *I)S =(+

)n asset is impairedwhen the carrying amount of an asset e5ceeds its recoverable amount

.arr)ing amount 'the amount at which an asset is recognied in the balance sheet afterdeducting any accumulated depreciation *amortiation+ and accumulated impairment lossesthereon

Recoverable amount 'the higher of an assetKs fair value less costs to sell and its value in use

Identif)ing t"at an asset ma) be impaired

)t each balance sheet date, a review should be performed to assess whether there is anyindication that an asset may be impaired ?? e5ternal N internal indicators

If there is an indication that an asset may be impaired ?? perform an impairment test

Irrespective of whether there is any indication of impairment, an entity shall also test annually forimpairment6 Intangible assets with an indefinite useful life" Intangible assets not yet available for use" and Loodwill

Indications of impairment

.5ternal sources market value changes in environment *technological, legal, market, economical+ market interest rates and rates of return market capitalisation

Internal sources obsolescence or physical damage changes in the use *restructuring, disposals etc+ lower economic performance than e5pected

JJJ 7ot an e5haustive list

)n indication that an asset may be impaired, may indicate that the assetKs useful life depreciation method residual valueJJJ may need to be reviewed and adHusted

Fair value less costs to sell

Fair Halue '!he amount obtainable from the sale of an asset in an armKs length transactionbetween knowledgeable, willing parties less the costs of disposal

6et Selling Price $6SPIf active market ?? 7S4 > market price less costs of disposalIf no active market ?? 7S4 > best estimate of the assetKs selling price *based on recenttransactions in the sector+ less costs of disposal

JJJ -osts of disposal > direct incremental costs only *eg legal costs, stamp duty ta5es, costs of

removing the asset,Q+

2!


32/54

Halue in use

Halue in use '!he present value of estimated future cash flows e5pected to arise from thecontinuing use of an asset and from its disposal at the end of its useful life

Steps to take6

a .stimate the future -F from continuing use and ultimate disposalb )pply appropriate discount rate

-ash flow proHections should be based6

n best estimate of economic conditions over the remaining useful life of the asset reasonable and supportable assumptions greater weight to e5ternal evidence

n the most recent financial budgets 0 forecasts \ 3 years 9eyond the period covered by thebudgets 0 forecasts, cash flow proHections should be e5trapolated using a steady or declininggrowth rate *growing rate allowed if Hustified+

.stimates of future cash flows include

proHections of cash inflows and outflows from the continuing use of the asset net cash flows to be received *or to be paid+ for the disposal of the asset allocation of overheads attributable to the asset in the outflows proHections effects of inflation

.stimates of future cash flows e5clude

cash flows from financing activities income ta5 receipts or payments outflows related to obligations that have already been recognied as liabilities inflows generated by other assets, if those inflows are largely independent from those generated

by the asset

Future cash flows should be estimated for the asset in its current condition e5clude outflows from6

future restructuring to which an enterprise is not yet committed future capital e5penditure that will improve or enhance the asset

!he discount rate should be6

pre8ta5 rate *or rates+ that reflects current market assumptions

of the time value of money"

of the risks specific to the asset" of the considered money

4iscount rate 'return that investors would require if they were to choose an investment thatwould generate cash flows of amounts, timing and risk profile equivalent to those e5pected fromthe asset *> market discount rate+

If no discount rate available from the market

2se as a starting point6 M)-- incremental borrowing rate other market borrowing rate

)dHust these rates6

2-


33/54

to reflect the risks specific to the asset to e5clude risks not relevant to the cash flows

.5ample6 -arrying amount of a 44N.6 #(3 Sales price6 ##(

-osts of disposal6 #3 .stimated future cash flows6

Uear #6 33 Uear '6 /(,3 *disposal+

Discount rate6 #(X?? -arrying amount6 #(3?? Fair value less costs to sell6 ##( #3> $3?? Balue in use6 #(( *> 330*#(,#+/(,30*#(,#+^+?? Recoverable amount > #((?? Impairment loss > 3

22


34/54

Special cases

If net selling price or value in use ? carrying amount??? no need to determine the other amount

If net selling price cannot be determined

??? recoverable amount > value in use

)ssets to be disposed of??? recoverable amount > net selling price

Recognition of an impairment loss

)n impairment loss should be recognied whenever recoverable amount \ carrying amount

If net selling price or value in use ? carrying amount??? no need to determine the other amount

JJJ Impairment loss recognition > e5pense

.as"generating units

Recoverable amount should be determined for the individual asset

If not possible to determine the recoverable amount for the individual asset??? determine recoverable amount for the assetKs cash8generating unit *-L2+

.? ' smallest identifiable group of assets that includes the asset that generates cash inflowsfrom continuing use that are largely independent of the cash inflows from other assets orgroups of assets

2nderstand how management monitors the enterpriseKs operations

??? sie of -L2 will often be large

If an active market e5ists for the output produced by an asset *group of assets+??? this asset *group of assets+ is a -L2

-L2 should be identified consistently from period to period

-L2Ks carrying amount should be determined consistently with the way the -L2Ks recoverableamount is determined6 Include all assets that contribute to cash inflows *eg goodwill and corporate assets+ .5clude already recognied liabilities

)llocating goodwill to -L2Ks

oodillshall from the acquisition date be allocated to -L2Ks that are e5pected to benefit fromthe synergies of the 9-, irrespective of whether other assets or liabilities of the acquisition areassigned to those units or groups of units

) -L2 to which LM is allocated shall be tested for impairment annually

.orporate assets ')ssets other than LM that contribute to the future -4Ks of both the -L2under review and other -L2Ks Lroup of divisional assets such as headquarters, .D4 equipment,research centresQ

25


35/54

)n impairment loss for a -L2 shall be allocated to reduce the carrying amount of the assets ofthe client *group of units+ in the following order6 First to reduce the carrying amount of any LM allocated to the -L2 *Lroup of -L2Ks+ !hen, to the other assets of the unit *group of units+ pro rata the carrying amount of each asset

> the unit *group of units+

!he carrying amount of an asset should not be reduced below the higher of its net selling price its value in use ero

Reversal of an impairment loss

Same approach as for the identification of impaired assets ?? assess at each balance sheet datewhether there is an indication that an impairment loss may have decreased *same indicators+ ifso, calculate recoverable amount

)n impairment loss should be reversed if, and only if, there has been a change in the estimatesused to calculate the recoverable amount since the last impairment loss was recognied

JJJ no reversal recognied for6 the PunwindingK of the discount only minor change in the discount rate

Increased carrying amount due to reversal should be less than depreciated historical cost

Reversal of an impairment loss??? if asset is revalued ?? revaluation increase??? otherwise6 income in the income statement

JJJ )dHust depreciation for future periods)n impairment loss recognied for Loodwill shall not be reversed in a subsequent period

4isclosures

Impairment losses recognied in the income statement directly in equity

Impairment losses reversed in the income statement directly in equity

Eine item*s+ of the income statement

4isclosures b) segment

Impairment losses recognied in income statement in equity

Impairment losses reversed in income statement in equity

Ot"er disclosures

If an impairment loss *reversal+ is material to the financial statements as a whole events and circumstances, amount individual asset6 nature N segment -L26 description, amount of impairment loss *reversal+ by class of assets N segment if recoverable amount > 7S4 ?? basis for determining 7S4 if recoverable amount > BI2 ?? discount rate

If impairment losses recognied *reversed+ are material in aggregate to the financial statementsas a whole

main classes of assets affected main events and circumstances

2;


36/54

.as" flo statements

IAS < .as" Flo Statements

#"e need for cas" flo statements

_uestions related to entities that are not covered by the balance sheet and income statement Mhat have been sources of cashT ow has the money been spentT Mhy are bank balances decreasing although our entity is profitableT

Objective

Information on historical changes in cash and cash equivalents

-lassification of cash flows from operational activities investing activities financing activities

Scope

Integral part of IFRS financial statements no e5emptions on grounds like sie or activity

4repare cash flow statements at balance sheet date for interim financial reporting *I)S &=+

.as" '?? cash on hand?? demand deposits

.as" e*uivalents '?? short term, highly liquid investments ?? 4resumption6 less than & months?? readily convertible to known amounts

?? insignificant risk of change in value

.lassification of cas"flos

Operating activities 'principal revenue8producing activities?? -ash receipts from sale of goods 0 rendering services

Investing activities 'acquisition 0 disposal of long8term assets and other investments?? 4ayments to acquire 44., intangibles" equity or debt instruments of other entities and interests

in Hoint ventures

Financing activities 'changes in sie 0 composition of equity and borrowings?? -ash proceeds from issuing shares 0 equity instruments

Reporting cas" flos from operating activities

2+


37/54

Indirect method

.5ample6

Direct method

.ach maHor class of gross cash receipts and gross cash payments disclosed separately

2se entityKs accounting records, or adHust sales and cost of sales for changes in working capital *Inventories, operating receivables and payables+ non8cash items items under investing or financing activity

.5ample6

Special reporting items J interest3 dividends3 ta8

Interest and dividends .ach disclosed separately *no netting of received and paid amounts+ -onsistent classification as financing or operating Interests paid to be reported as such even if capitalied under I)S '&

!a5es on income !a5es paid Separate disclosure Relate normally to operating activities, unless specifically identified with financing or investing

activities

2


38/54

Special reporting items J investments

Special reporting items J ac*uisitions

)cquisition *disposal+ of subsidiaries or other business units 4resented separately and classified as investing activities cash paid or received, net of cash equivalents in subsidiary or business unit at the date of

acquisition *disposal+

;ain disclosures !otal purchase *disposal+ consideration and portion discharged in cash0cash equivalents )cquired *disposed+ cash0cash equivalents ther assets and liabilities acquired *disposed+ by maHor categoriesSpecial reporting items J foreign currenc)

-F from transaction in a foreign currency

Recorded in the entityKs functional currency using the e5change rate at the date of the -F *or anaverage e5change rate+

Foreign subsidiary

Foreign subsidiaryKs -F statement translated at the e5change rates at the date of the -F *or anaverage e5change rate+ in line with the income statement *see I)S '#+

?nrealied e8c"ange gains and losses 'not -F but gains and losses on cash and cashequivalents in a foreign currency are reported in -F statement in order to reconcilebalance of cash and cash equivalents at the start and end of period >? !o bepresented separately from each category of -F

Additional disclosures

-ash and cash equivalents restricted in use

pen lines of borrowing facilities

Segment information cash flow statement for each reported segment

.onsolidated F%S and Business .ombinations

.lassification

2>


39/54

IAS -< .onsolidated and Separate Financial Statements

Scope

4reparation and presentation of consolidated financial statements

)ccounting for investments in subsidiaries, Hointly controlled entities and associates in separatefinancial statements

Related Standards I)S '@ Investments in )ssociates I)S Interests in 1oint Bentures IFRS & 9usiness -ombinations

Scope of consolidated F%S

)ll subsidiaries, e5cept if a subsidiary meets the criteria to be classified as held for sale onacquisition >? accounted for under IFRS 3

Subsidiary not e5cluded simply because its business activities are dissimilar from those of theLroup

Presentation of consolidated F%S

) parent should present consolidated financial statements, unless all the following conditions aremet6 Mholly owned or partially8owned subsidiary that received permission from owners other than the

parent" 4arentKs debt or equity instruments are not publicly traded" 4arent is not in the process of a public filing" and 2ltimate or intermediate parent produces IFRS consolidated financial statements

.ontrol '4ower to govern the financial and operating policies of an entity so as to obtain benefitsfrom its activities

4resumed when the parent owns more than 3(X of the voting power, unless it can be clearlydemonstrated that such ownership does not constitute control

If \> 3(X, control also e5ists when6 4ower over more than 3(X by virtue of an agreement 4ower to govern the financial and operating policies of the enterprise under a statute or an

agreement 4ower to appoint or remove the maHority of the members of the board of directors *or equivalent

governing body+ 4ower to cast the maHority of votes at meetings of the board of directors or equivalent governing

body

.onsolidated financial statements 'the financial statements of a group presented as those of asingle economic entity

2


40/54

@inorit) interest 'that part of the profit or loss and net asset of a subsidiary attributable to equityinterests that are not owned, directly or indirectly through subsidiaries, by the parent

A group 'a parent and all its subsidiaries

A parent 'an entity that has one or more subsidiaries

A subsidiar) 'an entity, including an unincorporated entity such as a partnership, that iscontrolled by another entity *known as the parent+

.onsolidation procedures

Eine8by8line basis

.limination parent]s investment and portion of equity intragroup balances, transactions N resulting unrealied profits should be eliminated in full

2se of uniform accounting policies ?? adHust if policies are not uniform *no e5emption+

;inority interests 4resented within equity separately from the parent shareholdersK equity 4resented separately the profit or loss of the group

-ase study

)ssumptions6 9 has been founded by ) ) owns %3X of the voting rights of 9 ) has sold goods to 9 for 3( !he invoice remains unpaid at year8end and therefore ) has a receivable of 3( against 9 which

in turn has a payable of 3( against )

5=


41/54

IAS 2! Interests in Koint Hentures

Scope

)ccounting for interest in Hoint ventures and the reporting of 1B assets, liabilities, income ande5penses

.5clusions BenturersK interest in Hointly controlled entities held by6

venture capital organisations mutual funds, unit trusts and similar entities including investment8linked insurance funds and

classified as held for trading under I)S &$ Interest is classified as held for sale under IFRS 3 >? accounted for under that standard !he venturer need not present consolidated financial statements under I)S '%

Koint Henture $KH ') contractual arrangement whereby two or more parties undertake aneconomic activity that is subHect to Hoint control

Henturer ') party to a 1B and has Hoint control over that 1B

Investor in a KH ') party to a 1B and does not have Hoint control over that 1B

Koint control '!he contractually agreed sharing of control over an economic activity, and e5istsonly when the strategic financial and operating decisions relating to the activity require theunanimous consent of the parties sharing control *the venturers+

.ontractual arrangement

Includes matters such as activity, duration N reporting obligations of 1B appointment of the board of directors of the 1B and the voting rights of the venturers capital contributions by the venturers

the sharing by the venturers of the output, income, e5penses or results of the 1B

.nsure that no single venturer is in a position to control the activity unilaterally;ay identify one venturer as the operator or manager of the 1B

E*uit) met"od

4rinciples used are similar to those of I)S '@ fair value adHustments N goodwill adHustments to uniform accounting policy proportionate eliminations

Proportionate consolidation

Include share *pro rata X investment held+ of assets, liabilities, income N e5penses

5!


42/54

4rinciples used similar to those of I)S '% line8by8line basis adHustments to uniform accounting policy proportionate eliminations

JJJ 7o minority interest

Draft standard issued on 1oint )rrangements will supersede I)S *final standard e5pected in'((@+ and removes the option to use proportionate consolidation

- ase

)ssumptions 9 has been founded by ) ) owns %3X of the voting rights -ontrol is e5ercised Hointly with a partner

4isclosure

!he aggregate amount of contingencies and commitments

current assets, long8term assets, current liabilities, long8term liabilities income and e5penses

5-


43/54

) listing and description of interests in significant Hoint ventures including proportion of ownershipinterest held

IAS -> Investments in Associates

Scope

)ccounting for investments in associates, e5cept when it isheld by6 venture capital organisations mutual Funds, unit trusts and similar entities including investment8linked insurance funds and

classified as held for trading under I)S &$

Related Standards I)S '% -onsolidated and Separate Financial Statements I)S Interests in 1oint Bentures IFRS & 9usiness -ombinations

Significant influence '4ower to participate in the financial N operating policy decisions of the

investee but is not control *or Hoint control+ over those policiesJJJ 4resumption6 direct or indirect ownership of '(X or more of the voting power of the investee.5ception6 if clearly demonstrated that significant influence is not obtained !he e5istence ofsignificant influence is usually evidenced by one of the following ways6 Representation on the board of directors 4articipation in policy making processes *including decisions about dividends+ ;aterial transactions between the investor and investee Interchange of management personnel 4rovision of essential technical information

E*uit) met"od?? balance sheet initially recorded at cost and adHusted thereafter for the post acquisition change in the investor]s share of net assets?? income statement investor]s share of the results of operations

-ase

)ssumptions6) owns %3X of the voting rights but, due to contractual arrangements with the other shareholders,only e5ercises a significant influenceData from 9 are the same as in the consolidation e5ample6 Share capital '(( Retained earnings #(( 4rofit for the year =(

52


44/54

4isclosure

)n appropriate listing and description of significant associates including proportion of ownership interest if different, proportion of voting power held accounting methods used

ther important disclosures classification as long8term assets disclosure as separate items *90S N I0S+ unrecognised share of losses

IFRS 2 Business .ombinations

Draft standard issued will supersede IFRS *final standard still e5pected in '((%+ and will beapplicable starting in '(($

Objective

!o specify the financial reporting by an entity when it undertakes a business combination6 9usiness should be accounted for by applying the purchase method !he acquirer recognises the acquireeKs

ID.7!IFI)9E. )SS.!S ID.7!IFI)9E. EI)9IEI!I.S ID.7!IFI)9E. -7!I7L.7! EI)9IEI!I.S

55


45/54

at their fair values at the acquisition date )7D recognies goodwill, which is subsequentlytested for impairment rather than amortied

)ll business combinations

!he bringing together of separate entities or businesses into one reporting entity

9usiness Integrated set of activities and assets conducted and managed for the purposes of providing6

) return to investors or Eower costs or other economic benefits directly and proportionately to policyholders and

participants Lenerally consists of6

Inputs processes applied to those inputs and Resulting outputs that are, or will be, used to generate revenues

If goodwill is present in a transferred set of activities and assets, the transferred set shall bepresumed to be a business

Scope e5emptions

# 9usiness combinations in which separate entities or businesses are brought together to form aHoint venture

' 9usiness combinations involving entities or businesses under common control& 9usiness combinations involving two or more mutual entities= 9usiness combinations in which separate entities or businesses are brought together by

contract alone without the obtaining of an ownership interest

Purc"ase accounting Overvie

Identif) an Ac*uirer

-ombining entity that obtains control over the combining entities or businesses

In addition to the concept of control, consider6 Fair value of the combining entities ;ovement of cash or other assets Selection of the management team of the combined entity

)cquirer for accounting may be different than legal acquirer *a Preverse acquisitionK+

Mhere a new entity is formed, one of the pre8e5isting entities must be identified as the acquirer

.ost of t"e business combination

5;


46/54

Included Fair values, at the date of e5change, of6

)ssets given Eiabilities incurred or assumed .quity instruments issued by the acquirer

-osts directly attributable to the combination such as professional fees paid to accountants,legal advisers, valuers and other consultants to effect the 9-

)dHustment contingent on future events to the e5tend that6 It is probable and It can be measured reliably

.5cluded Leneral administrative costs -osts of arranging and issuing financial liabilities to effect a business combination >? treated

with the liability under I)S &$ -osts of issuing equity instruments to effect a business combination >? reduce the proceeds

from the equity issue under I)S &'

Allocate t"e .ost of t"e .ombination

)t the date of acquisition

Recognise on the consolidated balance sheet the fair values of the acquireeKs identifiable6 )ssets Eiabilities and contingent liabilities

if6 It is probable that future economic benefits will flow to *asset+ 0 from *liability+ the acquirer" and !he fair value can be measured reliably

Special case6 an intangible asset has to be recognised separately if It is identifiable >? separable R arises from contractual 0 legal rights Its fair value can be measured reliably

-ontingent liabilities Defined in I)S &%

4ossible obligation confirmed by the *non+ occurrence of uncertain future events notcontrolled by the entity" R

4resent obligation but outflow of resources not probable R obligation cannot be measuredwith sufficient reliability

Separately recognied if reliable measurement ?? !he fair value is the amount that a third partywould charge to assume the liability >? reflect all e5pectations of possible cash flows

;easurement after initial recognition >? higher of6

!he amount that would be recognised under I)S &%" and !he amount initially recognised *less cumulative amortisation if appropriate+

oodill computation

Recognise as an asset at acquisition date Do not amortise

!est for impairment at least annually according to I)S &/

5+


47/54

L6egative goodillC computation

Reassess the identification and the measurement of the acquireeKs identifiable assets, liabilities and

contingent liabilities the measurement of the cost

)ny remaining e5cess *>negative goodwill+ is recognied in profit and loss immediately

-ase

-ost of the 9usiness -ombination paid in cash6 ` #(((

Fair value of )ssets acquired and liabilities assumed6 44N.6 '(( Inventory6 #(( -ash6 #3( Debt6 8#(( )ccounts payable6 83( 7et asset acquired &((Loodwill6 #((( &(( > %((

)ccounting entry6

DR 44N. '((

DR Inventory #((DR -ash #3(DR Loodwill %((

-R Debt #((-R )ccounts payable 3(-R -ash #(((

Initial accounting determined provisionall)

If initial accounting for a business combination can only be determined on a provisional basis !hat fact shall be disclosed together with the reasons )ny subsequent adHustment should be recognied6

Mithin #' months of the acquisition date

From the acquisition date >? adHust carrying amounts *including goodwill+ and restatecomparative information

)dHustments after initial accounting is complete Shall be recognied only to correct an error in accordance with I)S @, e5cept for6

!he adHustments to the cost contingent on future events !he recognition of a deferred ta5 asset not recognied at initial accounting but subsequently

realied -arrying amount of goodwill to be reduced via 40E for the e5tend of therecognition Such adHustment does not create :negative goodwill Revenue

Scope

Recognition of revenue from sale of goods, rendering of services and use by others of enterpriseassets *> interest, royalties and dividends+

.5cluded from scope

-onstruction contracts, leases, insurance, agriculture N other industry specific

Revenue 'Lross inflow of economic benefits, arising in the ordinary course of activities, resultingin increases in equity, but not contributions from shareholders

@easurement at fair value

Revenue should be measured at the fair value of consideration received ;ost cases6 nominal value of cash received or receivable *net of rebates+ For deferred consideration >? discounting may be necessary

Identification of t"e transaction

Due to the economic substance, some transactions should be split into component parts >? .5ample6 service element in product sale price combined into one transaction >? .5ample6 sale and repurchase transaction

Sale of goods

Recognition

Significant risks and rewards of ownership transferred ;anagerial involvement and control ceased Revenue can be measured reliably

It is probable that economic benefits will flow to the enterprise -osts can be measured reliably

!ransfer of Risks and Rewards

In most cases, the transfer of risks and rewards of ownership coincides with the transfer of thelegal title or the passing of possession to the buyer

In other cases, the transfer of risks and rewards of ownership occurs at a different time.5ample6 when the goods are shipped subHect to installation and the installation is a significant part of the

contract which has not yet been completed by the enterprise" and when the buyer has the right to rescind the purchase for a reason specified in the sales contract

and the enterprise is uncertain about the probability of return

5>


49/54

If insignificant risks retained >? revenue recognied For e5ample6 a seller may retain the legal title to the goods solely to protect the collectability of the amount

due retail sale when a refund is offered if the customer is not satisfied *liability for returns is

recognied based on previous e5perience and other relevant factors+

Rendering of services

If the outcome can be estimated reliably, ie revenue can be measured reliably probable economic benefits stage of completion N costs incurred and costs to complete can be measured reliably>? revenue recognied based on stage of completion

2nder this method, revenue is recognied in the accounting periods in which the services arerendered

!he stage of completion of a transaction may be determined by a variety of methods6 surveys of work performed"

services performed to date as a percentage of total services to be performed" or the proportion that costs incurred to date bear to the estimated total costs of the transaction

4rogress payments and advances re

Documents

IFRS SYLABUS (Copie de Hadrien Van Steenbergh en Conflit 2012-11-02) (Copie de Nicolas Demey en Conflit 2012-11-05) (Copie de Constance Berger en Conflit 2012-12-04)