IFRS Part A (2010) - International Financial Reporting...

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Unformatted text preview: International Financial Reporting Standards® as issued at 1 January 2010 This edition published in two parts PART A International Financial Reporting Standards® as issued at 1 January 2010 This edition published in two parts PART A The consolidated text of International Financial Reporting Standards (IFRSs®) including International Accounting Standards (IASs®) and Interpretations, and the Preface to IFRSs as issued at 1 January 2010 For the accompanying documents published with IFRSs, and other relevant material, see Part B of this edition International Accounting Standards Board® 30 Cannon Street London EC4M 6XH United Kingdom Telephone: +44 (0)20 7246 6410 Fax: +44 (0)20 7246 6411 Email: [email protected] Publications Telephone: +44 (0)20 7332 2730 Publications Fax: +44 (0)20 7332 2749 Publications Email: publica[email protected] Web: IFRSs together with their accompanying documents are issued by the International Accounting Standards Board (IASB), 30 Cannon Street, London EC4M 6XH, United Kingdom. Tel: +44 (0)20 7246 6410 Fax: +44 (0)20 7246 6411 Email: [email protected] Web: ISBN for this part: 978-1-907026-61-4 ISBN for complete publication (two parts): 978-1-907026-60-7 Copyright © 2010 International Accounting Standards Committee Foundation (IASCF). International Financial Reporting Standards, International Accounting Standards, Interpretations, Exposure Drafts, and other IASB publications are copyright of the IASCF. The approved text of International Financial Reporting Standards, including International Accounting Standards and Interpretations, is that issued by the IASB in the English language. Copies may be obtained from the IASCF Publications Department. Please address publication and copyright matters to: IASC Foundation Publications Department 30 Cannon Street, London EC4M 6XH, United Kingdom. Telephone: +44 (0)20 7332 2730 Fax: +44 (0)20 7332 2749 Email: [email protected] Web: All rights reserved. No part of this publication may be translated, reprinted or reproduced or utilised in any form either in whole or in part or by any electronic, mechanical or other means, now known or hereafter invented, including photocopying and recording, or in any information storage and retrieval system, without prior permission in writing from the IASCF. The IASB, the IASCF, the authors and the publishers do not accept responsibility for loss caused to any person who acts or refrains from acting in reliance on the material in this publication, whether such loss is caused by negligence or otherwise. The IASB logo/the IASCF logo/‘Hexagon Device’, the IASC Foundation Education logo, ‘IASC Foundation’, ‘eIFRS’, ‘IAS’, ‘IASB’, ‘IASC’, ‘IASCF’, ‘IASs’, ‘IFRIC’, ‘IFRS’, ‘IFRSs’, ‘International Accounting Standards’, ‘International Financial Reporting Standards’ and ‘SIC’ are Trade Marks of the IASCF. Contents Changes in this edition A1 Introduction to this edition A5 Preface to International Financial Reporting Standards A15 International Financial Reporting Standards (IFRSs) IFRS 1 First-time Adoption of International Financial Reporting Standards A21 IFRS 2 Share-based Payment A51 IFRS 3 Business Combinations A93 IFRS 4 Insurance Contracts A141 IFRS 5 Non-current Assets Held for Sale and Discontinued Operations A171 IFRS 6 Exploration for and Evaluation of Mineral Resources A191 IFRS 7 Financial Instruments: Disclosures A203 IFRS 8 Operating Segments A237 IFRS 9 Financial Instruments A255 International Accounting Standards (IASs) IAS 1 Presentation of Financial Statements A283 IAS 2 Inventories A321 IAS 7 Statement of Cash Flows A337 IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors A351 IAS 10 Events after the Reporting Period A371 IAS 11 Construction Contracts A383 IAS 12 Income Taxes A395 IAS 16 Property, Plant and Equipment A431 IAS 17 Leases A455 IAS 18 Revenue A475 IAS 19 Employee Benefits A487 IAS 20 Accounting for Government Grants and Disclosure of Government Assistance A541 IAS 21 The Effects of Changes in Foreign Exchange Rates A551 IAS 23 Borrowing Costs A573 IAS 24 Related Party Disclosures A583 IAS 26 Accounting and Reporting by Retirement Benefit Plans A595 © IASCF v IAS 27 Consolidated and Separate Financial Statements A607 IAS 28 Investments in Associates A625 IAS 29 Financial Reporting in Hyperinflationary Economies A641 IAS 31 Interests in Joint Ventures A651 IAS 32 Financial Instruments: Presentation A669 IAS 33 Earnings per Share A711 IAS 34 Interim Financial Reporting A737 IAS 36 Impairment of Assets A753 IAS 37 Provisions, Contingent Liabilities and Contingent Assets A803 IAS 38 Intangible Assets A827 IAS 39 Financial Instruments: Recognition and Measurement A863 IAS 40 Investment Property A949 IAS 41 Agriculture A973 Interpretations IFRIC 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities A989 IFRIC 2 Members’ Shares in Co-operative Entities and Similar Instruments A997 IFRIC 4 Determining whether an Arrangement contains a Lease A1009 IFRIC 5 Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds A1019 IFRIC 6 Liabilities arising from Participating in a Specific Market— Waste Electrical and Electronic Equipment A1027 IFRIC 7 Applying the Restatement Approach under IAS 29 Financial Reporting in Hyperinflationary Economies A1033 IFRIC 9 Reassessment of Embedded Derivatives A1039 IFRIC 10 Interim Financial Reporting and Impairment A1045 IFRIC 12 Service Concession Arrangements A1051 IFRIC 13 Customer Loyalty Programmes A1063 IFRIC 14 IAS 19—The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction A1071 IFRIC 15 Agreements for the Construction of Real Estate A1081 IFRIC 16 Hedges of a Net Investment in a Foreign Operation A1089 IFRIC 17 Distributions of Non-cash Assets to Owners A1103 IFRIC 18 Transfers of Assets from Customers A1111 IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments A1119 vi © IASCF SIC-7 Introduction of the Euro A1127 SIC-10 Government Assistance—No Specific Relation to Operating Activities A1131 SIC-12 Consolidation—Special Purpose Entities A1135 SIC-13 Jointly Controlled Entities—Non-Monetary Contributions by Venturers A1141 SIC-15 Operating Leases—Incentives A1145 SIC-21 Income Taxes—Recovery of Revalued Non-Depreciable Assets A1149 SIC-25 Income Taxes—Changes in the Tax Status of an Entity or its Shareholders A1153 SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease A1157 SIC-29 Service Concession Arrangements: Disclosures A1163 SIC-31 Revenue—Barter Transactions Involving Advertising Services A1169 SIC-32 Intangible Assets—Web Site Costs A1173 © IASCF vii Changes in this edition Changes in this edition This section is a brief guide to the changes since the 2009 edition that are incorporated in this edition of the Bound Volume of International Financial Reporting Standards. Introduction The main changes in this collection are the inclusion of: • one new standard—IFRS 9 • one revised standard—IAS 24 • amendments to IFRSs that were issued as separate documents • amendments to IFRSs issued in the second annual improvements project • amendments to other IFRSs resulting from those revised or amended standards • two new Interpretations—IFRICs 18 and 19. The version of IAS 24 that has been superseded by the new version has been omitted. New pronouncements Details of the new, revised and amended standards, new Interpretations and amendments to IFRSs included in this edition are as follows. IFRS 9 IFRS 9 Financial Instruments was issued in November 2009. It is the first phase of the project to replace IAS 39 Financial Instruments: Recognition and Measurement in its entirety by the end of 2010. IFRS 9 is required to be applied from 1 January 2013. Earlier application is permitted. IAS 24 A revised version of IAS 24 Related Party Disclosures was issued in November 2009. It superseded IAS 24 Related Party Disclosures (as issued in 2003). The revised IAS 24 is required to be applied from 1 January 2011. Earlier application, in whole or in part, is permitted. IFRICs 18 and 19 The two new Interpretations developed by the International Financial Reporting Interpretations Committee (IFRIC) and included in this edition are: • IFRIC 18 Transfers of Assets from Customers • IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments. IFRIC 18 is required to be applied for annual periods beginning on or after 1 July 2009. IFRIC 19 is required to be applied for annual periods beginning on or after 1 July 2010. In each case, earlier application is permitted. © IASCF A1 Changes in this edition Amendments to IFRSs issued as separate documents Amendments to IFRS 7 Improving Disclosures about Financial Instruments (Amendments to IFRS 7) was issued in March 2009. The amendments are required to be applied for annual periods beginning on or after 1 January 2009. Earlier application is permitted. Amendments to IFRIC 9 and IAS 39 Embedded Derivatives (Amendments to IFRIC 9 and IAS 39) was issued in March 2009. The amendments are required to be applied for periods ending on or after 30 June 2009. Annual improvements The annual improvements project provides a vehicle for making non-urgent but necessary amendments to IFRSs. The second product from this project was issued in April 2009 as Improvements to IFRSs. Most of the miscellaneous amendments are required to be applied from 1 January 2010, but some have other effective dates. In most cases earlier application is permitted. Amendments to IFRS 2 Group Cash-settled Share-based Payment Transactions (Amendments to IFRS 2) was issued in June 2009. The amendments are required to be applied for annual periods beginning on or after 1 January 2010. Earlier application is permitted. The amendments also incorporate the guidance contained in IFRIC 8 and IFRIC 11, which are therefore withdrawn. Those Interpretations have accordingly been omitted from this edition. Amendments to IFRS 1 Additional Exemptions for First-time Adopters (Amendments to IFRS 1) was issued in July 2009. The amendments are required to be applied for annual periods beginning on or after 1 January 2010. Earlier application is permitted. Amendments to IAS 32 Classification of Rights Issues (Amendment to IAS 32) was issued in October 2009. The amendment is required to be applied for annual periods beginning on or after 1 February 2010. Earlier application is permitted. Amendments to IFRIC 14 Prepayments of a Minimum Funding Requirement (Amendments to IFRIC 14) was issued in November 2009. The amendments are required to be applied for annual periods beginning on or after 1 January 2011. Earlier application is permitted. A2 © IASCF Changes in this edition Other material that has changed The arrangement of the contents in this edition differs from that in previous editions. In recognition of the growing size of the contents this edition of the Bound Volume is published in two parts. Part A presents the unaccompanied IFRSs and their introductions and explanatory rubrics. Part B contains the accompanying documents, such as bases for conclusions, implementation guidance and illustrative examples. This partition therefore distinguishes the requirements of IFRSs (in Part A) from the non-mandatory accompanying material (in Part B), and enables them to be read side by side. The IASB stated in paragraph BC15 of the Basis for Conclusions on IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors that in IFRSs the term ‘Appendix’ is retained only for material that is part of the IFRS. However, some IASs and SIC Interpretations have until now been accompanied by appendices that were not part of the IFRS. For consistency throughout IFRSs, such non-mandatory appendices contained in Part B have been renamed illustrative examples or implementation guidance, as appropriate, and cross-references to them have been changed as necessary. The IFRSs involved are: • International Accounting Standards 7, 11, 12, 18, 19, 34, 37 and 41 • SIC Interpretations 12, 15, 27 and 32. The Glossary of Terms has been revised. Minor editorial corrections to IFRSs (including necessary updating) have been made: a list of these is available on the website. Up-to-date text of documents The text of IFRSs (including IASs and Interpretations) given in this collection is the latest consolidated version as at 1 January 2010. In some cases the effective date of the consolidated text is later than 1 January 2010. The title page preceding each IFRS indicates the effective date of recent amendments. This collection does not include versions of IFRSs (or parts of IFRSs) that are being superseded. © IASCF A3 Introduction Introduction to this edition Overview The International Accounting Standards Board (IASB), based in London, began operations in 2001. The IASB is committed to developing, in the public interest, a single set of high quality, global accounting standards that require transparent and comparable information in general purpose financial statements. In pursuit of this objective, the IASB co-operates with national accounting standard-setters to achieve convergence in accounting standards around the world. The IASB members have a broad range of professional backgrounds and have liaison responsibilities throughout the world. The IASB is selected, overseen and funded by the International Accounting Standards Committee (IASC) Foundation. The IASC Foundation is financed through a number of national financing regimes, which include levies and payments from regulatory and standard-setting bodies, international organisations and other accounting bodies. Trustees Twenty-two Trustees provide oversight of the operations of the IASC Foundation and the IASB. The responsibilities of the Trustees include the appointment of members of the IASB, the Standards Advisory Council and the International Financial Reporting Interpretations Committee; overseeing and monitoring the IASB’s effectiveness and adherence to its due process and consultation procedures; establishing and maintaining appropriate financing arrangements; approval of the budget for the IASC Foundation; and responsibility for constitutional changes. The Trustees have established a public accountability link to a Monitoring Board comprising public capital market authorities. The Trustees comprise individuals that as a group provide an appropriate balance of professional backgrounds, including auditors, preparers, users, academics, and other officials serving the public interest. Under the Constitution of the IASC Foundation as revised in 2005 (see below), the Trustees are appointed so that there are six from the Asia/Oceania region, six from Europe, six from North America, and four others from any area, as long as geographical balance is maintained. IASC Foundation’s Constitution The IASC Foundation’s Constitution requires the Trustees to review the constitutional arrangements every five years. The Trustees completed a full review and revision of the Constitution in June 2005, and the revised Constitution came into effect on 1 July 2005. In 2008 the Trustees began the next review, with the first part focusing on the creation of a formal link to public authorities to enhance public accountability and considering the size and composition of the IASB. The Trustees concluded the first part of the review in January and issued a revised Constitution for effect from 1 February 2009. The changes included the expansion of the IASB from 14 to 16 members, selected by geographical origins, by 1 July 2012, with an option to include up to three part-time members. The revised Constitution establishes the link to the new Monitoring Board to ensure public accountability. © IASCF A5 Introduction IASB At 1 January 2010 the IASB consisted of fifteen members (all full-time). The IASB has full discretion in developing and pursuing the technical agenda for setting accounting standards. The main qualifications for membership of the IASB are professional competence and practical experience. The Trustees are required to select members so that the IASB, as a group, will comprise the best available combination of technical expertise and international business and market experience. The IASB is also expected to provide an appropriate mix of recent practical experience among auditors, preparers, users and academics. The IASB, in consultation with the Trustees, is expected to establish and maintain liaison with national standard-setters and other official bodies concerned with standard-setting in order to promote the convergence of national standards and the IASB’s International Financial Reporting Standards (IFRSs). The publication of a standard, exposure draft, or final IFRIC Interpretation requires approval by nine of the IASB’s fifteen members. At 1 January 2010 the IASB members were: Sir David Tweedie, Chairman Stephen Cooper Philippe Danjou Jan Engström Patrick Finnegan Robert P Garnett Gilbert Gélard Amaro Luiz de Oliveira Gomes Prabhakar Kalavacherla James J Leisenring Patricia McConnell Warren J McGregor John T Smith Tatsumi Yamada Wei-Guo Zhang The IASB issues a summary of its decisions promptly after each IASB meeting. This IASB Update is published in electronic format on the website . Standards Advisory Council The Standards Advisory Council (SAC) provides a forum for participation by organisations and individuals with an interest in international financial reporting, and diverse geographical and functional backgrounds. The objective of the SAC is to give the IASB advice on agenda decisions and priorities in its work, inform the IASB of the views of SAC members on major standard-setting projects, and give other advice to the IASB or the Trustees. The SAC comprises about fifty members, representing stakeholder organisations internationally. The SAC normally meets at least three times a year. Its meetings are open to the public. The chairman of the SAC is appointed by the Trustees, and cannot be a member of the IASB or its staff. The chairman of the SAC is invited to attend and participate in the Trustees’ meetings. Details of the members of the SAC are available on the website . A6 © IASCF Introduction International Financial Reporting Interpretations Committee The International Financial Reporting Interpretations Committee (IFRIC) is appointed by the Trustees to assist the IASB in establishing and improving standards of financial accounting and reporting for the benefit of users, preparers and auditors of financial statements. The Trustees established the IFRIC in March 2002, when it replaced the previous interpretations committee, the Standing Interpretations Committee (SIC). The role of the IFRIC is to provide timely guidance on newly identified financial reporting issues not specifically addressed in IFRSs or issues where unsatisfactory or conflicting interpretations have developed, or seem likely to develop. It thus promotes the rigorous and uniform application of IFRSs. The IFRIC assists the IASB in achieving international convergence of accounting standards by working with similar groups sponsored by national standard-setters to reach similar conclusions on issues where underlying standards are substantially similar. The IFRIC has fourteen voting members in addition to a non-voting Chair, currently IASB member Robert Garnett. The Chair has the right to speak to the technical issues being considered but not to vote. The Trustees, as they deem necessary, may appoint as non-voting observers regulatory organisations, whose representatives have the right to attend and speak at meetings. Currently, the International Organization of Securities Commissions (IOSCO) and the European Commission are non-voting observers. The IFRIC publishes a summary of its decisions promptly after each meeting. This IFRIC Update is published in electronic format on the website . Details of the members of the IFRIC are available on the website . IASB te...
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