Professional Documents
Culture Documents
Agenda
Background and overview
Scope and definition
Maintenance
Considerations prior to adopting the
IFRS for SMEs
SEC Guidelines
Topics by section
References
IFRS Baseline 2013 IFRS/PFRS for SMEs 2
SME
No public accountability
Individual jurisdictions decide who is permitted or required to use the IFRS for
SMEs
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Public accountability
or
An entity with public accountability cannot claim compliance with the IFRS for
SMEs (even if jurisdiction permits its use)
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Question:
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Source:
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Maintenance
Maintenance:
Thorough implementation review after two years
Thereafter, omnibus exposure draft approximately every three years
Second half of 2013 The IASB deliberates amendments to proposals
in the exposure draft and agrees final revisions to IFRS for SMEs.
Second half of 2013 or first half of 2014 The IASB publishes final
revisions to the IFRS for SMEs.
Target date in 2015 Effective date of revisions
Until the IFRS for SMEs is amended any changes made to full IFRSs
will not apply to the IFRS for SMEs
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FULL IFRSs
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Understandability
Relevance
Reliability
Materiality
Substance over form
Prudence
Completeness
Comparability
Timeliness
Balance between benefit and cost
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FULL IFRSs
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FULL IFRSs
management
includes
a
statement of financial position as
at the beginning of the earliest
comparative period when an
entity applies an accounting
policy retrospectively or makes a
retrospective restatement of items
in its financial statements, or
when it reclassifies items in its
financial statements.
entity that prepares its financial
statements in compliance with full
IFRS must prepare segment
information in accordance with
IFRS 8 Operating Segments.
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FULL IFRSs
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FULL IFRSs
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FULL IFRSs
have
more
items
of
comprehensive
income
(e.g.
cumulative changes in the fair
value of available-for-sale financial
assets
and
gains
on
the
revaluation of property, plant and
equipment and intangible assets).
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does
not
explicitly
require
additional disclosures of expenses
by nature.
FULL IFRSs
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FULL IFRSs
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of such indicators
compels the entity to perform an
impairment test on the asset (i.e.
compute its recoverable amount)
(see paragraph 27.7). Paragraph
4.14
specifies
disclosure
requirements when, at the reporting
date, an entity has a binding sale
agreement for a major disposal of
assets or a group of assets and
liabilities.
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FULL IFRSs
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FULL IFRSs
disclosure requirements are extensive.
reduced.
The reasons for the reductions are of four
principal types:
(a) Some disclosures are not included
because they relate to topics covered in
full IFRSs that are omitted from the IFRS
for SMEs.
(b) Some disclosures are not included
because they relate to recognition and
measurement principles in full IFRSs that
have been replaced by simplifications in
the IFRS for SMEs.
(c) Some disclosures are not included
because they relate to options in full
IFRSs that are not included in the IFRS
for SMEs.
(d) Some disclosures are not included on
the basis of users needs or cost-benefit
considerations.
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Financial instruments
(Sections 11 and 12)
Accounting policy choice for all financial instruments to
apply either:
Financial instruments sections of IFRS for SMEs (Section
11 and 12); or
IAS 39 plus disclosure requirements of IFRS for SMEs
Financial instruments dealt with in two sections:
Section 11 basic financial instruments
Section 12 other financial instruments
Two classification categories:
Amortized cost
Fair value through profit or loss
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Classification of financial
instruments
Amortized cost
Full IFRS
FVTPL
Initial recognition
Initial recognition
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Derecognition
Simpler derecognition principles
applied to financial asset (all or
nothing with recognition of
retained or newly created rights
or obligations in certain cases)
Disclosures
Significance disclosures of
IFRS 7 is retained but risk
disclosures are not explicitly
included
Full IFRS
Derecognition
Complex derecognition
principles applied to part of a
financial asset or a financial
asset
Disclosures
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FULL IFRSs
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FULL IFRSs
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Investment property
(Section 16)
Measurement:
Fair value through profit or loss, if fair value can be
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Investment property
(Section 16)
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Useful lives
All intangible assets are considered to have finite useful
lives
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Goodwill
Calculation of goodwill consistent with IFRS 3 (2004)
Considered to have a finite useful life
Subsequent measurement consistent with intangible
assets, i.e., cost less accumulated amortization and
impairment losses
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Equity
(Section 22)
Government grants
(Section 24)
Measurement
Fair value of the assets received
Recognition
If no specified performance conditions recognize in
income when proceeds receivable
If specified performance conditions recognize in income
when conditions met
Recognize as liability before recognition criteria satisfied
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Share-based payment
(Section 26)
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Employee benefits
(Section 28)
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Employee benefits
(Section 28)
Actuarial valuations:
Not required annually
Roll-forward procedures
Introduction, change, curtailment, settlement
Any gain or loss recognized in profit or loss in current period
Group plans
Permitted to recognize charge based on reasonable
allocation of group charge (if parent presents consolidated
financial statements under full IFRSs or IFRS for SMEs)
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Employee benefits
(Section 28)
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FULL IFRSs
requires an entity to recognize unvested past
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FULL IFRSs
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FULL IFRSs
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FULL IFRSs
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Income tax
(Section 29)
Current and deferred tax
Current Tax
Recognition
on taxable profit
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Income tax
(Section 29)
Deferred Tax
Recognition
An entity shall recognize a deferred tax liability for all temporary differences
that are expected to increase taxable profit in the future.
An entity shall recognize a deferred tax asset for all temporary differences
that are expected to reduce taxable profit in the future.
An entity shall recognize a deferred tax asset for the carryforward of unused
tax losses and unused tax credits
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Income tax
(Section 29)
Deferred Tax
Exceptions from recognition of deferred tax asset or liability
An entity shall not recognize a deferred tax asset or liability for temporary
differences associated with unremitted earnings from foreign subsidiaries,
branches, associates and joint ventures to the extent that the investment is
essentially permanent in duration, unless it is apparent that the temporary
difference will reverse in a forseeable future.
An entity shall not recognize a deferred tax liability for a temporary difference
associated with the initial recognition of goodwill.
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Income tax
(Section 29)
Deferred Tax
Measurement
An entity shall measure a deferred tax liability (asset) using the tax rates and
laws that have been enacted or substantively enacted by the reporting date.
The measurement of deferred tax liabilities and deferred tax assets shall
reflect the tax consequences that would follow from the manner in which the
entity expects, at the reporting date to recover or settle the carrying amount
of the related assets and liabilities.
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Income tax
(Section 29)
Deferred Tax
Valuation Allowance
An entity shall recognize a valuation allowance against deferred tax assets
so that the net carrying amount equals the highest amount that is more likely
than not to be recovered based on current or future taxable profit.
Offsetting
An entity shall offset current tax assets and current tax liabilities, or offset
deferred tax assets or deferred tax liabilities, only when it has a legally
enforceable right to set off the amounts and it intends either to settle on a
net basis or to realize the asset and settle the liability simultaneously.
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Income tax
(Section 29)
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Specialized industries
(Section 34)
Extractive activities
No specific guidance
Apply relevant sections of IFRS for SMEs
Agriculture
Measure biological assets at cost less accumulated
depreciation and impairment losses if fair value is not
reliably determinable without undue cost or effort
Service concessions
Accounting treatment like that in full IFRSs
Discontinued operations
Measuring NCI
Voluntary exemptions:
Business combinations
Share-based payments
Fair value as deemed cost
differences
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IFR
arrangements
Extractive activities
Compound financial
instruments
Arrangements containing a
lease
Decommissioning liabilities
Separate financial statements
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IFR
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References
Standards
Basis for Conclusions
Illustrative Financial Statements
Case studies
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