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In April 2001, the International Accounting Standards Board (IASB) an- nounced that future accounting standards would be called “International Fi- nancial Reporting Standards” (IFRSs). Standards issued previously by the International Accounting Standards Committee (IASC) were called “Interna- tional Accounting Standards” (IASs).
The IASB has adopted all of the standards and interpretations issued by the IASC that are still in force. The term IFRS, as now used by the IASB, includes standards and interpretations issued by the IASB, as well as pronouncements from its predecessor, the International Accounting Standards Committee (IASC).
For the purposes of this book, the terms international standardor accounting standardwill be used generally unless reference is being made to a specific stan- dard. The term entityis also used, as in the standards, to describe a body corpo- rate, partnership, or unincorporated association that is profit-oriented. IAS 1 notes that entities whose share capital is not equity or have not-for-profit activi- ties may need to amend some of the descriptions given in the standards.
Those who are not familiar with the pronouncements issued by the IASB are likely to be surprised by the comprehensiveness and complexity of each standard. For example, IAS 20, one of the less exciting standards for many, since it deals with government grants, is contained within 12 pages. On the other hand, IAS 39 Financial Instruments: Recognition and Measurement covers approximately 80 pages. Of course, it needs to be studied in conjunc- tion with IAS 32 Financial Instruments: Disclosure and Presentation that just manages to fit into less than 50 pages.
We have substantially reduced this great volume of material to provide a succinct review of the main points of the standards that were in force as at 1 January 2005. The background to each standard is explained. The main re- quirements of the standard and the main disclosures required by organiza- tions are highlighted. Where appropriate, illustrative examples and references to related national standards are given.
The Guide presents an easily accessible summary to the key features but it is not intended to replace the full standard. The official pronouncements of the IASB still remain the only authoritative documents.
INTERNATIONAL FINANCIAL REPORTING STANDARDS (January 1, 2005)
Issued or
Number Title last revised
IASB Framework for the Preparation and
Presentation of Financial Statements 1989
IAS 1 Presentation of Financial Statements December 2003
IAS 2 Inventories December 2003
IAS 3 Consolidated Financial Statements Superseded by IASs 27 and 28
IAS 4 Depreciation Accounting Replaced by
IASs 16, 22, and 38 IAS 5 Information to be Disclosed in Financial Superseded by
Statements IAS 1
IAS 6 Accounting Responses to Changing Prices Superseded by IAS 15
IAS 7 Cash Flow Statements December 1992
IAS 8 Accounting Policies, Changes in Accounting December 2003 Estimates and Errors
IAS 9 Accounting for Research and Development Superseded by
Activities IAS 38
IAS 10 Events after the Balance Sheet Date December 2003
IAS 11 Construction Contracts 1993
IAS 12 Income Taxes 2000
IAS 13 Presentation of Current Assets and Superseded by
Current Liabilities IAS 1
IAS 14 Segment Reporting 1997
IAS 15 Information Reflecting the Effects of Withdrawn
Changing Prices December 2003
IAS 16 Property, Plant and Equipment December 2003
IAS 17 Leases December 2003
IAS 18 Revenue 1993
IAS 19 Employee Benefits 1998 and amended
December 2004 IAS 20 Accounting for Government Grants and April 1983
Disclosure of Government Assistance
IAS 21 The Effects of Changes in Foreign December 2003 Exchange Rates
IAS 22 Business Combinations Superseded by
IFRS 3
IAS 23 Borrowing Costs December 1993
IAS 24 Related Party Disclosures December 2003
IAS 25 Accounting for Investments Superseded by IAS 39 and IAS 40 IAS 26 Accounting and Reporting by Retirement January 1987
Benefit Plans
IAS 27 Consolidated and Separate Financial December 2003 Statements
IAS 28 Investments in Associates December 2003
IAS 29 Financial Reporting in Hyperinflationary July 1989 Economies
IAS 30 Disclosures in the Financial Statements of 1990 Banks and Similar Financial Institutions
IAS 31 Interests in Joint Ventures December 2003 IAS 32 Financial Instruments: Disclosures and December 2003
Presentation
IAS 33 Earnings per Share December 2003
IAS 34 Interim Financial Reporting June 1998
IAS 35 Discontinuing Operations Superseded by
IFRS 5
IAS 36 Impairment of Assets March 2004
IAS 37 Provisions, Contingent Liabilities and July 1998 Contingent Assets
IAS 38 Intangible Assets March 2004
IAS 39 Financial Instruments: Recognition and December 2004 Measurement
Introduction to the Guide • 61
IAS 40 Investment Property December 2003
IAS 41 Agriculture December 2000
Preface to International Financial May 2002 Reporting Standards
IFRS 1 First-time Adoption of International June 2003 Financial Reporting Standards
IFRS 2 Share-based Payment February 2004
IFRS 3 Business Combinations March 2004
IFRS 4 Insurance Contracts March 2004
IFRS 5 Non-current Assets Held for Sale and March 2004 Discontinued Operations
IFRS 6 Exploration for and Evaluation of December 2004 Mineral Resources
INTERPRETATIONS OF INTERNATIONAL FINANCIAL REPORTING STANDARDS
SIC 1 Consistency—Different Cost Formulas for Inventory SIC 2 Consistency—Capitalization of Borrowing Costs
SIC 3 Elimination of Unrealized Profits and Losses on Transactions with Associates
SIC 4 Not Issued
SIC 5 Classification of Financial Instruments—Contingent Settlement Provisions
SIC 6 Costs of Modifying Existing Software SIC 7 Introduction of the Euro
SIC 8 First-time Application of IASs as the Primary Basis of Accounting SIC 9 Business Combinations—Classification either as Acquisitions or
Uniting of Interests
SIC 10 Government Assistance—No Specific Relation to Operating Activities
SIC 11 Foreign Exchange—Capitalization of Losses Resulting from Severe Currency Devaluation
SIC 12 Consolidation—Special Purpose Entities
SIC 13 Jointly Controlled Entities—Non-Monetary Contributions by Venturers
SIC 14 Property, Plant and Equipment—Compensation for the Impairment or Loss of Items
SIC 15 Operating Leases—Incentives
SIC 16 Share Capital—Reacquired Own Equity Instruments (Treasury Shares)
SIC 17 Equity—Costs of an Equity Transaction SIC 18 Consistency—Alternative Methods
SIC 19 Reporting Currency—Measurement and Presentation of Financial Statements under IAS 21 and IAS 29
SIC 20 Equity Accounting Method—Recognition of Losses
SIC 21 Income Taxes—Recovery of Revalued Non-Depreciable Assets SIC 22 Business Combinations—Subsequent Adjustment of Fair Values
and Goodwill Initially Reported
SIC 23 Property, Plant and Equipment—Major Inspection or Overhaul Costs
SIC 24 Earnings per Share—Financial Instruments and Other Contracts that May be Settled in Shares
SIC 25 Income Taxes—Changes in the Tax Status of an Enterprise or its Shareholders
SIC 26 Not Issued
SIC 27 Evaluating the Substance of Transactions in the Legal Form of a Lease
SIC 28 Business Combinations—“Date of Exchange” and Fair Value of Equity Instruments
SIC 29 Disclosure—Service Concession Arrangements
SIC 30 Reporting Currency—Translation from Measurement Currency to Presentation Currency
SIC 31 Revenue—Barter Transactions Involving Advertising Services SIC 32 Intangible Assets—Website Costs
SIC 33 Consolidation and Equity Method—Potential Voting Rights and Allocation of Ownership Interests
IFRIC 1 Changes in Existing Decommissioning, Restoration, and Similar Liabilities
IFRIC 2 Members’ Shares in Co-operative Entities and Similar Instruments IFRIC 3 Emission Rights
IFRIC 4 Determining whether an Arrangement Contains a Lease
Introduction to the Guide • 63
CURRENT ACTIVITIES
ED 7 Financial Instruments: Disclosures
Project Accounting Standards for Small and Medium-Sized Entities Project Projects Relating to Financial Instruments
Project Issues Relating to IFRS 3 Business Combinations
Project Business Combinations—Phase 2 Application of the Purchase Method
Project Consolidation (including SPEs)
Project Convergence—Convergence Project General Information Project Convergence—Post-employment Benefits
Project Extractive Activities
Project Insurance Contracts—Phase II
Project Performance Reporting/Reporting Comprehensive Income Project Liabilities and Revenue Recognition
Project Convergence—Joint Ventures
Project Convergence—IAS 20 Government Grants and Disclosure of Government Assistance
Project Conceptual Framework Research Leases
Research Extractive Activities Research Joint Ventures Research Measurement