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Applying IFRS Standards, 4th Edition

Applying IFRS Standards, 4th Edition

Ruth Picker, Kerry Clark, John Dunn, David Kolitz, Gilad Livne, Janice Loftus, Leo van der Tas

ISBN: 978-1-119-25077-7

Jun 2016

904 pages

Select type: E-Book

$82.50

Related Resources

Preface

About the authors

Acknowledgements

List of Acronyms

PART 1 CONCEPTUAL FRAMEWORK

1 The IASB and its Conceptual Framework

1.1 The International Accounting Standards Board (IASB®)

1.2 The purpose of a conceptual framework

1.3 Qualitative characteristics of useful financial information

1.4 Going concern assumption

1.5 Definition of elements in financial statements

1.6 Recognition of elements of financial statements

1.7 Measurement of the elements of financial statements

1.8 Concepts of capital

1.9 Future developments

Summary

Discussion questions

References

Exercises

Academic perspective

PART 2 ELEMENTS

2 Owners’ equity: share capital and reserves

2.1 Equity

2.2 For-profit companies

2.3 Key features of the corporate structure

2.4 Different forms of share capital

2.5 Contributed equity: issue of share capital

2.6 Contributed equity: subsequent movements in share capital

2.7 Share capital: subsequent decreases in share capital

2.8 Reserves

2.9 Disclosure

Summary

Discussion questions

References

Exercises

Academic perspective

3 Fair value measurement

3.1 Introduction

3.2 The definition of fair value

3.3 The fair value framework

3.4 Application to non-financial assets

3.5 Application to liabilities

3.6 Application to measurement of an entity’s own equity

3.7 Application to financial instruments with offsetting positions

3.8 Disclosure

Summary

Discussion questions

References

Exercises

Academic perspective

4 Revenue from contracts with customers

4.1 Introduction

4.2 Scope

4.3 Identify the contract with the customer

4.4 Identify the performance obligations

4.5 Determine the transaction price

4.6 Allocate the transaction price

4.7 Satisfaction of performance obligations

4.8 Contract costs

4.9 Other application issues

4.10 Presentation and disclosures

Summary

Discussion questions

References

Exercises

Academic perspective

5 Provisions, contingent liabilities and contingent assets

5.1 Introduction to IAS 37

5.2 Scope

5.3 Definition of a provision

5.4 Distinguishing provisions from other liabilities

5.5 Definition of a contingent liability

5.6 Distinguishing a contingent liability from a provision

5.7 The recognition criteria for provisions

5.8 Measurement of provisions

5.9 Application of the definitions, recognition and measurement rules

5.10 Contingent assets

5.11 Disclosure

5.12 Comparison between IFRS 3 and IAS 37 in respect of contingent liabilities

5.13 Expected future developments

Summary

Discussion questions

References

Exercises

Academic perspective

6 Income taxes

6.1 The nature of income tax

6.2 Differences between accounting profit and taxable profit

6.3 Accounting for income taxes

6.4 Calculation of current tax

6.5 Recognition of current tax

6.6 Payment of tax

6.7 Tax losses

6.8 Calculation of deferred tax

6.9 Recognition of deferred tax liabilities and deferred tax assets

6.10 Change of tax rates

6.11 Other issues

6.12 Presentation in the financial statements

6.13 Disclosures

Summary

Discussion questions

References

Exercises

Academic perspective

7 Financial instruments

7.1 Introduction

7.2 What is a financial instrument?

7.3 Financial assets and financial liabilities

7.4 Distinguishing financial liabilities from equity instruments

7.5 Compound financial instruments

7.6 Interest, dividends, gains and losses

7.7 Financial assets and financial liabilities: scope

7.8 Derivatives and embedded derivatives

7.9 Financial assets and financial liabilities: categories of financial instruments

7.10 Financial assets and financial liabilities: recognition criteria

7.11 Financial assets and financial liabilities: measurement

7.12 Financial assets and financial liabilities: offsetting

7.13 Hedge accounting

7.14 Disclosures

Summary

Discussion questions

References

Exercises

Academic perspective

8 Share-based payment

Introduction

8.1 Application and scope

8.2 Cash-settled and equity-settled share-based payment transactions

8.3 Recognition

8.4 Equity-settled share-based payment transactions

8.5 Vesting

8.6 Treatment of a reload feature

8.7 Modifications to terms and conditions on which equity instruments were granted

8.8 Cash-settled share-based payment transactions

8.9 Disclosure

Summary

Discussion questions

References

Exercises

Academic perspective

9 Inventories

9.1 The nature of inventories

9.2 Measurement of inventory upon initial recognition

9.3 Determination of cost

9.4 Accounting for inventory

9.5 End-of-period accounting

9.6 Assigning costs to inventory on sale

9.7 Net realisable value

9.8 Recognition as an expense

9.9 Disclosure

Summary

Discussion questions

References

Exercises

Academic perspective

10 Employee benefits

10.1 Introduction to accounting for employee benefits

10.2 Scope and purpose of IAS 19

10.3 Defining employee benefits

10.4 Short-term employee benefits

10.5 Post-employment benefits

10.6 Accounting for defined contribution post-employment plans

10.7 Accounting for defined benefit post-employment plans

10.8 Other long-term employee benefits

10.9 Termination benefits

Summary

Discussion questions

References

Exercises

Academic perspective

11 Property, plant and equipment

11.1 The nature of property, plant and equipment

11.2 Initial recognition of property, plant and equipment

11.3 Initial measurement of property, plant and equipment

11.4 Measurement subsequent to initial recognition

11.5 The cost model

11.6 The revaluation model

11.7 Choosing between the cost model and the revaluation model

11.8 Derecognition

11.9 Disclosure

11.10 Investment properties

Summary

Discussion questions

References

Exercises

Academic perspective

12 Leases

Introduction

12.1 What is a lease?

12.2 Classification of leases

12.3 Classification guidance

12.4 Accounting for finance leases by lessees

12.5 Accounting for finance leases by lessors

12.6 Accounting for finance leases by manufacturer or dealer lessors

12.7 Accounting for operating leases

12.8 Accounting for sale and leaseback transactions

12.9 Changes to the leasing standards

Summary

Discussion questions

Exercises

Academic perspective

13 Intangible assets

Introduction

13.1 The nature of intangible assets

13.2 Recognition and initial measurement

13.3 Measurement subsequent to initial recognition

13.4 Retirements and disposals

13.5 Disclosure

Summary

Discussion questions

References

Exercises

Academic perspective

14 Business combinations

14.1 The nature of a business combination

14.2 Accounting for a business combination — basic principles

14.3 Accounting in the records of the acquirer

14.4 Recognition and measurement of assets acquired and liabilities assumed

14.5 Goodwill and gain on bargain purchase

14.6 Shares acquired in the acquiree

14.7 Accounting in the records of the acquiree

14.8 Subsequent adjustments to the initial accounting for a business combination

14.9 Disclosure — business combinations

Summary

Discussion questions

References

Exercises

Academic perspective

15 Impairment of assets

15.1 Introduction to IAS 36

15.2 When to undertake an impairment test

15.3 Impairment test for an individual asset

15.4 Cash-generating units — excluding goodwill

15.5 Cash-generating units and goodwill

15.6 Reversal of an impairment loss

15.7 Disclosure

Summary

Discussion questions

References

Exercises

Academic perspective

Online chapter A Exploration for and evaluation of mineral resources

Online chapter B Agriculture

PART 3 PRESENTATION AND DISCLOSURES

16 Financial statement presentation

Introduction

16.1 Components of financial statements

16.2 General principles of financial statements

16.3 Statement of financial position

16.4 Statement of profit or loss and other comprehensive income

16.5 Statement of changes in equity

16.6 Notes

16.7 Accounting policies, changes in accounting estimates and errors

16.8 Events after the reporting period

Summary

Discussion questions

References

Exercises

Academic perspective

17 Statement of cash flows

Introduction and scope

17.1 Purpose of a statement of cash flows

17.2 Defining cash and cash equivalents

17.3 Classifying cash flow activities

17.4 Format of the statement of cash flows

17.5 Preparing a statement of cash flows

17.6 Other disclosures

Summary

Discussion questions

References

Exercises

Academic perspective

18 Operating segments

18.1 Objectives of financial reporting by segments

18.2 Scope

18.3 A controversial standard

18.4 Identifying operating segments

18.5 Identifying reportable segments

18.6 Applying the definition of reportable segments

18.7 Disclosure

18.8 Applying the disclosures in practice

18.9 Results of the post-implementation review of IFRS 8

Summary

Discussion questions

References

Exercises

Academic perspective

19 Other key notes disclosures

Introduction

19.1 Related party disclosures

19.2 Earnings per share

Summary

Discussion questions

References

Exercises

Academic perspective

PART 4 ECONOMIC ENTITIES

20 Consolidation: controlled entities

Introduction

20.1 Consolidated financial statements

20.2 Control as the criterion for consolidation

20.3 Preparation of consolidated financial statements

20.4 Business combinations and consolidation

20.5 Disclosure

Summary

Discussion questions

Exercises

21 Consolidation: wholly owned subsidiaries

21.1 The consolidation process

21.2 Consolidation worksheets

21.3 The acquisition analysis: determining goodwill or bargain purchase

21.4 Worksheet entries at the acquisition date

21.5 Worksheet entries subsequent to the acquisition date

21.6 Revaluations in the records of the subsidiary at acquisition date

21.7 Disclosure

Summary

Discussion questions

Exercises

22 Consolidation: intragroup transactions

Introduction

22.1 Rationale for adjusting for intragroup transactions

22.2 Transfers of inventory

22.3 Intragroup services

22.4 Intragroup dividends

22.5 Intragroup borrowings

Summary

Discussion questions

Exercises

23 Consolidation: non-controlling interest

23.1 Non-controlling interest explained

23.2 Effects of an NCI on the consolidation process

23.3 Calculating the NCI share of equity

23.4 Adjusting for the effects of intragroup transactions

23.5 Gain on bargain purchase

Summary

Discussion questions

Exercises

24 Translation of the financial statements of foreign entities

24.1 Translation of a foreign subsidiary’s statements

24.2 Functional and presentation currencies

24.3 The rationale underlying the functional currency choice

24.4 Identifying the functional currency

24.5 Translation into the functional currency

24.6 Changing the functional currency

24.7 Translation into the presentation currency

24.8 Consolidating foreign subsidiaries — where local currency is the functional currency

24.9 Consolidating foreign subsidiaries — where functional currency is that of the parent entity

24.10 Net investment in a foreign operation

24.11 Disclosure

Summary

Discussion questions

References

Exercises

Online chapter C Associates and joint ventures

Online chapter D Joint arrangements

Glossary

Index

  • Fully updated incorporating major changes to IFRSs.
  • A new section called ‘Academic Perspectives’ has been added to each chapter outlining the academic relevance of the applications of standards and providing references to research and journal publications.
  • Less technical language used in the description of standards.
  • The extent of the book is reduced from 1,200 to 900 pages by: moving chapters 16, 17 and 22 and placing them online; removing 50% of the end of chapter exercises and moving them to a BCS; and using shorter examples in the text.
  • Each chapter contains numerous illustrative examples that present and explain concepts to ensure that users gain a deep understanding of the reporting requirements and meet the knowledge expectations of the accounting profession
  • Brings together the expert knowledge and authoritative explanations of the author team
  • Provides insightful and informed analysis of financial reporting procedures
  • Focuses on the interpretation, analysis and illustration of the financial reporting requirements under IFRSs.