IAS 1 Presentation of Financial Statements

Overview The objective of financial statements is to provide information that is useful in making economic decisions. IAS 1’s objective is to ensure comparability of presentation of that information with the entity’s financial statements of previous periods and with the financial statements of other entities.The objective of financial statements is to provide information that is … Continue reading IAS 1 Presentation of Financial Statements

IAS 8 Accounting policies, estimates, and errors

Overview An entity follows the accounting policies required by IFRS that are relevant to the transactions, other events and conditions of the entity. Sometimes, standards offer a policy choice; there are other situations where no guidance is given by IFRSs. In these situations, management should develop and apply appropriate accounting policies. Management uses judgement in … Continue reading IAS 8 Accounting policies, estimates, and errors

IAS 10 Events After the Reporting Period

  Overview IAS 10 Events After The Reporting Period contains requirements for when events after the end of the reporting period should be adjusted in the financial statements. Adjusting events are those providing evidence of conditions existing at the end of the reporting period, whereas non-adjusting events are indicative of conditions arising after the reporting period (the … Continue reading IAS 10 Events After the Reporting Period

IAS 11 Construction contracts

Overview of IAS 11 A construction contract (contract costs) is a contract specifically negotiated for the construction of an asset, or combination of assets, including contracts for the rendering of services directly related to the construction of the asset (such as project managers’ and architects’ services). Such contracts are typically fixed-price or cost-plus contracts. Revenue … Continue reading IAS 11 Construction contracts

IAS 12 Taxation

Overview of IAS 12 IAS 12 deals with taxes on income, comprising current tax and deferred tax. Current tax expense for a period is based on the taxable and deductible amounts that will be shown on the tax return for the current year. An entity recognises a liability in the balance sheet in respect of … Continue reading IAS 12 Taxation

IAS 17 Leases

Overview IAS 17 sets out the required accounting treatments and disclosures for finance and operating leases by both lessors and lessees, except where IAS 40 is applied to investment property held by a lessee. Definitions A finance lease – a lease that transfers substantially all the risks and reward of ownership. An operating lease – … Continue reading IAS 17 Leases

IAS 18 Revenue contracts

Overview of IAS 18 Revenue contracts Revenue arising from the sale of goods is recognised when: an entity transfers the significant risks and rewards of ownership and gives up managerial involvement usually associated with ownership or control; it is probable that economic benefits will flow to the entity; and the amount of revenue and costs … Continue reading IAS 18 Revenue contracts

IAS 19 Employee Benefits

Overview The accounting for employee benefits, and for pensions in particular, is complex. The liabilities in defined benefit pension plans are frequently material. They are long-term and difficult to measure, and this gives rise to difficulty in measuring the cost attributable to each year. Employee benefits are all forms of consideration given or promised by … Continue reading IAS 19 Employee Benefits

IAS 21 Changes in foreign exchange rates

Overview Many entities do business with overseas suppliers or customers, or have overseas operations. This gives rise to two main accounting issues: Some transactions (for example, those with overseas suppliers or customers) might be denominated in foreign currencies. These transactions are expressed in the entity’s own currency (‘functional currency’) for financial reporting purposes. A parent … Continue reading IAS 21 Changes in foreign exchange rates

IAS 22 Earnings per share

Overview of IAS 22 The objective of IAS 33 is to prescribe principles for determining and presenting earnings per share (EPS) amounts to improve performance comparisons between different entities in the same reporting period and between different reporting periods for the same entity. [IAS 33.1] IAS 33 applies to entities whose securities are publicly traded … Continue reading IAS 22 Earnings per share

IAS 23 Borrowing Costs

Overview IAS 23 Borrowing Costs requires that borrowing costs directly attributable to the acquisition, construction or production of a 'qualifying asset' (one that necessarily takes a substantial period of time to get ready for its intended use or sale) are included in the cost of the asset. Other borrowing costs are recognized as an expense. IAS 23 … Continue reading IAS 23 Borrowing Costs

IAS 24 Related Party Disclosures

Overview IAS 24 Related Party Disclosures requires disclosures about transactions and outstanding balances with an entity's related parties. The standard defines various classes of entities and people as related parties and sets out the disclosures required in respect of those parties, including the compensation of key management personnel. IAS 24 was reissued in November 2009 and applies … Continue reading IAS 24 Related Party Disclosures

IAS 26 Retirement Benefit Plans

Overview IAS 26 Accounting and Reporting by Retirement Benefit Plans outlines the requirements for the preparation of financial statements of retirement benefit plans. It outlines the financial statements required and discusses the measurement of various line items, particularly the actuarial present value of promised retirement benefits for defined benefit plans. IAS 26 was issued in January 1987 … Continue reading IAS 26 Retirement Benefit Plans

IAS 29 Reporting in hyperinflationary economies

Overview of IAS 29 Conventional financial reporting is distorted by inflation. This is especially the case with hyper-inflation, where the measuring unit (the currency unit) is not stable. Adjustments to stabilise the unit of measurement – to measure items in units of constant purchasing power – make the financial statements more relevant and reliable. IAS … Continue reading IAS 29 Reporting in hyperinflationary economies

IAS 30 Banks & Financial Institutions

Overview The objective of IAS 30 is to prescribe appropriate presentation and disclosure standards for banks and similar financial institutions (hereafter called 'banks'), which supplement the requirements of other Standards. The intention is to provide users with appropriate information to assist them in evaluating the financial position and performance of banks, and to enable them … Continue reading IAS 30 Banks & Financial Institutions

IAS 31 Investments in Joint Ventures

Overview IAS 31 Interests in Joint Ventures sets out the accounting for an entity's interests in various forms of joint ventures: jointly controlled operations, jointly controlled assets, and jointly controlled entities. The standard permits jointly controlled entities to be accounted for using either the equity method or by proportionate consolidation. IAS 31 was reissued in December 2003, … Continue reading IAS 31 Investments in Joint Ventures