Placeholder Image

字幕表 動画を再生する

  • International Financial Reporting Standards are designed as a common global language for

  • business affairs so that company accounts are understandable and comparable across international

  • boundaries. They are a consequence of growing international shareholding and trade and are

  • particularly important for companies that have dealings in several countries. They are

  • progressively replacing the many different national accounting standards. The rules to

  • be followed by accountants to maintain books of accounts which is comparable, understandable,

  • reliable and relevant as per the users internal or external.

  • IFRS, with the exception of IAS 29 Financial Reporting in Hyperinflationary Economies and

  • IFRIC 7 Applying the Restatement Approach under IAS 29, are authorized in terms of the

  • historical cost paradigm. IAS 29 and IFRIC 7 are authorized in terms of the constant

  • purchasing power paradigm. IFRS began as an attempt to harmonize accounting

  • across the European Union but the value of harmonization quickly made the concept attractive

  • around the world. They are sometimes still called by the original name of International

  • Accounting Standards. IAS were issued between 1973 and 2001 by the Board of the International

  • Accounting Standards Committee. On 1 April 2001, the new International Accounting Standards

  • Board took over from the IASC the responsibility for setting International Accounting Standards.

  • During its first meeting the new Board adopted existing IAS and Standing Interpretations

  • Committee standards. The IASB has continued to develop standards calling the new standards

  • International Financial Reporting Standards.

  • In the absence of a Standard or an Interpretation that specifically applies to a transaction,

  • management must use its judgement in developing and applying an accounting policy that results

  • in information that is relevant and reliable. In making that judgement, IAS 8.11 requires

  • management to consider the definitions, recognition criteria, and measurement concepts for assets,

  • liabilities, income, and expenses in the Framework.

  • Criticisms of IFRS are that they are not being adopted in the US, a number of criticisms

  • from France and that IAS 29 Financial Reporting in Hyperinflationary Economies had no positive

  • effect at all during 6 years in Zimbabwe´s hyperinflationary economy. The IASB offered

  • responses to the first two criticisms, but has offered no response to the last criticism

  • while IAS 29 is currently being implemented in its original ineffective form in Venezuela

  • and Belarus.

  • Objective of financial statements Financial statements are a structured representation

  • of the financial position and financial performance of an entity. The objective of financial statements

  • is to provide information about the financial position, financial performance and cash flows

  • of an entity that is useful to a wide range of users in making economic decisions. Financial

  • statements also show the results of the management's stewardship of the resources entrusted to

  • it. To meet this objective, financial statements

  • provide information about an entity's: assets; liabilities; equity; income and expenses,

  • including gains and losses; contributions by and distributions to owners in their capacity

  • as owners; and cash flows. This information, along with other information in the notes,

  • assists users of financial statements in predicting the entity's future cash flows and, in particular,

  • their timing and certainty. The following are the general features in

  • IFRS: Fair presentation and compliance with IFRS:

  • Fair presentation requires the faithful representation of the effects of the transactions, other

  • events and conditions in accordance with the definitions and recognition criteria for assets,

  • liabilities, income and expenses set out in the Framework of IFRS.

  • Going concern: Financial statements are present on a going

  • concern basis unless management either intends to liquidate the entity or to cease trading,

  • or has no realistic alternative but to do so.

  • Accrual basis of accounting: An entity shall recognise items as assets,

  • liabilities, equity, income and expenses when they satisfy the definition and recognition

  • criteria for those elements in the Framework of IFRS.

  • Materiality and aggregation: Every material class of similar items has

  • to be presented separately. Items that are of a dissimilar nature or function shall be

  • presented separately unless they are immaterial. Offsetting

  • Offsetting is generally forbidden in IFRS. However certain standards require offsetting

  • when specific conditions are satisfied. Frequency of reporting:

  • IFRS requires that at least annually a complete set of financial statements is presented.

  • However listed companies generally also publish interim financial statementsfor which the

  • presentation is in accordance with IAS 34 Interim Financing Reporting.

  • Comparative information: IFRS requires entities to present comparative

  • information in respect of the preceding period for all amounts reported in the current period's

  • financial statements. In addition comparative information shall also be provided for narrative

  • and descriptive information if it is relevant to understanding the current period's financial

  • statements. The standard IAS 1 also requires an additional statement of financial position

  • 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.

  • This for example occurred with the adoption of the revised standard IAS 19 or when the

  • new consolidation standards IFRS 10-11-12 were adopted.

  • Consistency of presentation: IFRS requires that the presentation and classification

  • of items in the financial statements is retained from one period to the next unless: it is

  • apparent, following a significant change in the nature of the entity's operations or a

  • review of its financial statements, that another presentation or classification would be more

  • appropriate having regard to the criteria for the selection and application of accounting

  • policies in IAS 8; or an IFRS standard requires a change in presentation.

  • Qualitative characteristics of financial statements Qualitative characteristics of financial statements

  • include: Relevance

  • Faithful representation Enhancing qualitative characteristics include:

  • Comparability Verifiability

  • Timeliness Understandability

  • Elements of financial statements The elements directly related to the measurement

  • of the statement of financial position include: Asset: An asset is a resource controlled by

  • the entity as a result of past events and from which future economic benefits are expected

  • to flow to the entity. Liability: A liability is a present obligation

  • of the entity arising from the past events, the settlement of which is expected to result

  • in an outflow from the entity of resources embodying economic benefits, i.e. assets.

  • Equity: Nominal equity is the nominal residual interest in the nominal assets of the entity

  • after deducting all its liabilities in nominal value.

  • The financial performance of an entity is presented in the statement of comprehensive

  • income, which consists of the income statement and the statement of other comprehensive income

  • . Financial performance includes the following elements:

  • Revenues: increases in economic benefit during an accounting period in the form of inflows

  • or enhancements of assets, or decrease of liabilities that result in increases in equity.

  • However, it does not include the contributions made by the equity participants.

  • Expenses: decreases in economic benefits during an accounting period in the form of outflows,

  • or depletions of assets or incurrences of liabilities that result in decreases in equity.

  • However, these don't include the distributions made to the equity participants.

  • Results recognised in other comprehensive income are limited to the following specific

  • circumstances: Remeasurements of defined benefit assets or

  • liabilities Increases or decreases in the fair value of

  • financial assets classified as available for sale(as defined in the standard IAS 39)

  • Increases or decreases resulting from the application of a revaluation of property,

  • plant and equipment or intangible assets Exchange differences resulting from the translation

  • of foreign operations according to the standard IAS 21

  • the portion of the gain or loss on the hedging instrument in a cash flow hedge that is determined

  • to be an effective hedge The statement of changes in equity consists

  • of a reconciliation of the changes in equity in which the following information is provided:

  • total comprehensive income for the period, showing separately the total amounts attributable

  • to owners of the parent and to non-controlling interests;

  • for each component of equity, the effects of retrospective application or retrospective

  • restatement recognised in accordance with IAS 8; and

  • for each component of equity, a reconciliation between the carrying amount at the beginning

  • and the end of the period, separately disclosing changes resulting from:

  • profit or loss; other comprehensive income; and

  • transactions with owners in their capacity as owners, showing separately contributions

  • by and distributions to owners and changes in ownership interests in subsidiaries that

  • do not result in a loss of control.

  • Statement of Cash Flows Operating cash flows: the principal revenue-producing

  • activities of the entity and are generally calculated by applying the indirect method,

  • whereby profit or loss is adjusted for the effects of transaction of a non-cash nature,

  • any deferrals or accruals of past or future cash receipts or payments, and items of income

  • or expense associated with investing or financing cash flows.

  • Investing cash flows: the acquisition and disposal of long-term assets and other investments

  • not included in cash equivalents. These represent the extent to which expenditures have been

  • made for resources intended to generate future income and cash flows. Only expenditures that

  • result in a recognised asset in the statement of financial position are eligible for classification

  • as investing activities. Financing cash flows: activities that result

  • in changes in the size and composition of the contributed equity and borrowings of the

  • entity. These are important because they are useful in predicting claims on future cash

  • flows by providers of capital to the entity. Notes to the Financial Statements: These shall

  • present information about the basis of preparation of the financial statements and the specific

  • accounting policies used;(b) disclose the information required by IFRSs that is not

  • presented elsewhere in the financial statements; and provide information that is not presented

  • elsewhere in the financial statements, but is relevant to an understanding of any of

  • them. Recognition of elements of financial statements

  • An item is recognized in the financial statements when:

  • it is probable future economic benefit will flow to or from an entity.

  • the resource can be reliably measured In some cases specific standards add additional

  • conditions before recognition is possible or prohibit recognition all together.

  • An example is the recognition of internally generated brands, mastheads, publishing titles,

  • customer lists and items similar in substance, for which recognition is prohibited by IAS

  • 38. In addition research and development expenses can only be recognised as an intangible asset

  • if they cross the threshold of being classified as 'development cost'.

  • Whilst the standard on provisions, IAS 37, prohibits the recognition of a provision for

  • contingent liabilities, this prohibition is not applicable to the accounting for contingent

  • liabilities in a business combination. In that case the acquirer shall recognise a contingent

  • liability even if it is not probable that an outflow of reseources embodying economic

  • benefits will be required. Measurement of the elements of financial statements

  • Par. 99. Measurement is the process of determining the monetary amounts at which the elements

  • of the financial statements are to be recognized and carried in the balance sheet and income

  • statement. This involves the selection of the particular basis of measurement.

  • Par. 100. A number of different measurement bases are employed to different degrees and

  • in varying combinations in financial statements. They include the following:

  • (a) Historical cost. Assets are recorded at the amount of cash or cash equivalents paid

  • or the fair value of the consideration given to acquire them at the time of their acquisition.

  • Liabilities are recorded at the amount of proceeds received in exchange for the obligation,

  • or in some circumstances, at the amounts of cash or cash equivalents expected to be paid

  • to satisfy the liability in the normal course of business.

  • (b) Current cost. Assets are carried at the amount of cash or cash equivalents that would

  • have to be paid if the same or an equivalent asset was acquired currently. Liabilities

  • are carried at the undiscounted amount of cash or cash equivalents that would be required

  • to settle the obligation currently. (c) Realisable value. Assets are carried at

  • the amount of cash or cash equivalents that could currently be obtained by selling the

  • asset in an orderly disposal. Assets are carried at the present discounted value of the future

  • net cash inflows that the item is expected to generate in the normal course of business.

  • Liabilities are carried at the present discounted value of the future net cash outflows that

  • are expected to be required to settle the liabilities in the normal course of business.

  • Par. 101. The measurement basis most commonly adopted by entities in preparing their financial

  • statements is historical cost. This is usually combined with other measurement bases. For

  • example, inventories are usually carried at the lower of cost and net realisable value,

  • marketable securities may be carried at market value and pension liabilities are carried

  • at their present value. Furthermore, some entities use the current cost basis as a response

  • to the inability of the historical cost accounting model to deal with the effects of changing

  • prices of non-monetary assets. Concepts of capital and capital maintenance

  • Concepts of capital Par. 102. A financial concept of capital is

  • adopted by most entities in preparing their financial statements. Under a financial concept

  • of capital, such as invested money or invested purchasing power, capital is synonymous with

  • the net assets or equity of the entity. Under a physical concept of capital, such as operating

  • capability, capital is regarded as the productive capacity of the entity based on, for example,

  • units of output per day. Par. 103. The selection of the appropriate

  • concept of capital by an entity should be based on the needs of the users of its financial

  • statements. Thus, a financial concept of capital should be adopted if the users of financial

  • statements are primarily concerned with the maintenance of nominal invested capital or

  • the purchasing power of invested capital. If, however, the main concern of users is

  • with the operating capability of the entity, a physical concept of capital should be used.

  • The concept chosen indicates the goal to be attained in determining profit, even though

  • there may be some measurement difficulties in making the concept operational.

  • Concepts of capital maintenance and the determination of profit

  • Par. 104. The concepts of capital in paragraph 102 give rise to the following two concepts

  • of capital maintenance: (a) Financial capital maintenance. Under this

  • concept a profit is earned only if the financial amount of the net assets at the end of the

  • period exceeds the financial amount of net assets at the beginning of the period, after

  • excluding any distributions to, and contributions from, owners during the period. Financial

  • capital maintenance can be measured in either nominal monetary units or units of constant

  • purchasing power. (b) Physical capital maintenance. Under this

  • concept a profit is earned only if the physical productive capacity of the entity at the end

  • of the period exceeds the physical productive capacity at the beginning of the period, after

  • excluding any distributions to, and contributions from, owners during the period.

  • The concepts of capital in paragraph 102 give rise to the following three concepts of capital

  • during low inflation and deflation: (A) Physical capital. See paragraph 102&103

  • (B) Nominal financial capital. See paragraph 104.

  • (C) Constant item purchasing power financial capital. See paragraph 104.

  • The concepts of capital in paragraph 102 give rise to the following three concepts of capital

  • maintenance during low inflation and deflation: (1) Physical capital maintenance: optional

  • during low inflation and deflation. Current Cost Accounting model prescribed by IFRS.

  • See Par 106. (2) Financial capital maintenance in nominal

  • monetary units: authorized by IFRS but not prescribedoptional during low inflation

  • and deflation. See Par 104 Historical cost accounting. Financial capital maintenance

  • in nominal monetary units per se during inflation and deflation is a fallacy: it is impossible

  • to maintain the real value of financial capital constant with measurement in nominal monetary

  • units per se during inflation and deflation. (3) Financial capital maintenance in units

  • of constant purchasing power: authorized by IFRS but not prescribedoptional during

  • low inflation and deflation. See Par 104(a). Capital Maintenance in Units of Constant Purchasing

  • Power is prescribed during hyperinflation in IAS 29: i.e. the restatement of Historical

  • Cost or Current Cost period-end financial statements in terms of the period-end monthly

  • published Consumer Price Index. Only financial capital maintenance in units of constant purchasing

  • power in terms of a daily index per se can automatically maintain the real value of financial

  • capital constant at all levels of inflation and deflation in all entities that at least

  • break even in real valueceteris paribusfor an indefinite period of time. This would happen

  • whether these entities own revaluable fixed assets or not and without the requirement

  • of more capital or additional retained profits to simply maintain the existing constant real

  • value of existing shareholders´ equity constant. Financial capital maintenance in units of

  • constant purchasing power requires the calculation and accounting of net monetary losses and

  • gains from holding monetary items during low inflation and deflation. The calculation and

  • accounting of net monetary losses and gains during low inflation and deflation have thus

  • been authorized in IFRS since 1989. Par. 105. The concept of capital maintenance

  • is concerned with how an entity defines the capital that it seeks to maintain. It provides

  • the linkage between the concepts of capital and the concepts of profit because it provides

  • the point of reference by which profit is measured; it is a prerequisite for distinguishing

  • between an entity's return on capital and its return of capital; only inflows