International GAAP® 2019: Generally Accepted Accounting Practice under International Financial Reporting Standards
Page 3
Internal Rate of Return
IRS Interest
Rate
Swap
JA Joint
Arrangement
JCA
Jointly Controlled Asset
JCE
Jointly Controlled Entity
JCO
Jointly Controlled Operation
JO Joint
Operation
JV
Joint Venture
LAT Liability
Adequacy
Test
LC
Local Currency
LIBOR
London Inter Bank Offered Rate
LIFO Last-In,
First-Out basis of valuation
NCI Non-controlling
Interest
NBV Net
Book
Value
NPV Net
Present
Value
NRV
Net Realisable Value
OCI Other
Comprehensive
Income
PP&E
Property, Plant and Equipment
R&D
Research and Development
SCA
Service Concession Arrangement
SE Structured
Entity
SFAC
Statement of Financial Accounting Concepts (issued by the FASB as part of
its conceptual framework project)
SFAS
Statement of Financial Accounting Standards (issued by the FASB).
Superseded by Accounting Standards Codification® (ASC)
SME
Small or medium-sized entity
Abbreviations
xvii
SPE Special
Purpose
Entity
SV Separate
Vehicle
TSR
Total Shareholder Return
VIU Value
In
Use
WACC
Weighted Average Cost of Capital
References to IFRSs, IASs, Interpretations and supporting documentation:
AG Application
Guidance
AV Alternative
View
BCZ
Basis for Conclusions on IASs
BC
Basis for Conclusions on IFRSs and IASs
DI Draft
Interpretation
DO Dissenting
Opinion
DP Discussion
Paper
ED Exposure
Draft
IE Illustrative
Examples on IFRSs and IASs
IG Implementation
Guidance
IN
Introduction to IFRSs and IASs
PIR Post-implementation Review
xviii Abbreviations
xix
Authoritative literature
The content of this book takes into account all accounting standards and other relevant
rules issued up to September 2018. Consequently, it covers the IASB’s Conceptual
Framework for Financial Reporting and authoritative literature listed below.
References in the main text of each chapter to the pronouncements below are generally
to the versions of those pronouncements as approved and expected to be included in
the Blue Book edition of the Bound Volume 2019 International Financial Reporting
Standards – IFRS – Consolidated without early application – Official pronouncements
applicable on 1 January 2019, to be published by the IASB.
References to those pronouncements below which have an effective date after
1 January 2019 (such as IFRS 17 – Insurance contracts) are to the versions of those
pronouncements as denoted by the ISBN references noted below. These are expected
to be included in the Red Book edition of the Bound Volume 2019 International
Financial Reporting Standards –
IFRS
–
Official pronouncements issued at
1 January 2019, to be published by the IASB.
US GAAP accounting standards are organised within a comprehensive FASB
Accounting Standards Codification®, which is now the single source of authoritative US
GAAP recognised by the FASB to be applied to non-governmental entities and has been
applied in this publication.
† The standards and interpretations marked with a dagger have been withdrawn or superseded.
IASB Framework
The Conceptual Framework for Financial Reporting
International Financial Reporting Standards (2019 Bound Volume)
IFRS 1
First-time Adoption of International Financial Reporting Standards
IFRS 2
Share-based Payment
IFRS 3
Business Combinations
† IFRS 4
Insurance Contracts
IFRS 5
Non-current Assets Held for Sale and Discontinued Operations
IFRS 6
Exploration for and Evaluation of Mineral Resources
IFRS 7
Financial Instruments: Disclosures
IFRS 8
Operating Segments
IFRS 9
Financial Instruments
IFRS 10
Consolidated Financial Statements
xx Authoritative
literature
IFRS 11
Joint Arrangements
IFRS 12
Disclosure of Interests in Other Entities
IFRS 13
Fair Value Measurement
IFRS 14
Regulatory Deferral Accounts
IFRS 15
Revenue from Contracts with Customers
IFRS
16
Leases
International Financial Reporting Standards (mandatory after 1 January 2019)
IFRS 17
Insurance Contracts
International Accounting Standards (2019 Bound Volume)
IAS 1
Presentation of Financial Statements
IAS
2
Inventories
IAS 7
Statement of Cash Flows
IAS 8
Accounting Policies, Changes in Accounting Estimates and Errors
IAS 10
Events after the Reporting Period
IAS 12
Income Taxes
IAS 16
Property, Plant and Equipment
† IAS
17
Leases
IAS 19
Employee Benefits
IAS 20
Accounting for Government Grants and Disclosure of Government Assistance
IAS 21
The Effects of Changes in Foreign Exchange Rates
IAS 23
Borrowing Costs
IAS
24
Related
Party Disclosures
IAS 26
Accounting and Reporting by Retirement Benefit Plans
IAS 27
Separate Financial Statements
IAS 28
Investments in Associates and Joint Ventures
IAS 29
Financial Reporting in Hyperinflationary Economies
IAS 32
Financial Instruments: Presentation
IAS 33
Earnings per Share
IAS 34
Interim Financial Reporting
IAS 36
Impairment of Assets
IAS 37
Provisions, Contingent Liabilities and Contingent Assets
IAS 38
Intangible Assets
IAS 39
Financial Instruments: Recognition and Measurement
IAS 40
Investment Property
Authoritative
literature
xxi
IAS
41
Agriculture
IFRS Interpretations Committee Interpretations
IFRIC 1
Changes in Existing Decommissioning, Restoration and Similar Liabilities
IFRIC 2
Members’ Shares in Co-operative Entities and Similar Instruments
† IFRIC 4
Determining whether an Arrangement contains a Lease
IFRIC 5
Rights to Interests arising from Decommissioning, Restoration and Environmental
Rehabilitation Funds
IFRIC 6
Liabilities arising from Participating in a Specific Market – Waste Electrical and
Electronic Equipment
IFRIC 7
Applying the Restatement Approach under IAS 29 Financial Reporting in
Hyperinflationary Economies
IFRIC 10
Interim Financial Reporting and Impairment
IFRIC 12
Service Concession Arrangements
IFRIC 14
IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements
and their Interaction
IFRIC 16
Hedges of a Net Investment in a Foreign Operation
IFRIC 17
Distributions of Non-cash Assets to Owners
IFRIC 19
Extinguishing Financial Liabilities with Equity Instruments
IFRIC 20
Stripping Costs in the Production Phase of a Surface Mine
IFRIC
21
Levies
IFRIC 22
Foreign Currency Transactions and Advance Consideration
IFRIC 23
Uncertainty over Income Tax Treatments
Standing Interpretations Committee Interpretations
SIC-7
Introduction of the Euro
SIC-10
Government Assistance – No Specific Relation to Operating Activities
† SIC-15
Operating Leases – Incentives
SIC-25
Income Taxes – Changes in the Tax Status of an Entity or its Shareholders
† SIC-27
Evaluating the Substance of Transactions Involving the Legal Form of a Lease
SIC-29
Service
Concession
Arrangements: Disclosures
SIC-32
Intangible Assets – Web Site Costs
IASB Exposure Drafts
ED/2015/1
Classification of Liabilities (Proposed amendments to IAS 1)
ED/2015/5
Remeasurement on a Plan Amendment, Curtailment or Settlement/Availability of a
Refund from a Defined Benefit Plan (Proposed amendments to IAS 19 and IFRIC 14)
ED/2017/1
Annual
Improvements
to IFRS Standards 2015––2017 Cycle
xxii Authoritative
literature
ED/2017/2
Improvements to IFRS 8 Operating Segments (Proposed amendments to IFRS 8
and IAS 34)
ED/2017/3
Prepayment Features with Negative Compensation (Proposed amendments to IFRS 9)
ED/2017/4
Property, Plant and Equipment—Proceeds before Intended Use (Proposed
amendments to IAS 16)
ED/2017/5
Accounting Policies and Accounting Estimates (Proposed amendments to IAS 8)
ED/2017/6
Definition of Material (Proposed amendments to IAS 1 and IAS 8)
ED/2018/1
Accounting Policy Changes (Proposed amendments to IAS 8)
IASB Discussion Papers
DP/2014/1
Accounting for Dynamic Risk Management: a Portfolio Revaluation Approach to
Macro Hedging
DP/2014/2
Reporting the Financial Effects of Rate Regulation
DP/2017/1
Disclosure
Initiative—Principles of Disclosure
DP/2018/1
Financial Instruments with Characteristics of Equity
Other IASB publications
IFRS for SMEs
International Financial Reporting Standard (IFRS) for Small and Medium-sized
Entities (SMEs)
Practice
Management Commentary
Statement 1
Practice
Making Materiality Judgements
Statement 2
PTU/2018/1 IFRS
Taxonomy 2018 – Common Practice (IFRS 13 Fair Value Measurement)
1
Chapter 1
International GAAP
1 WHY INTERNATIONAL FINANCIAL REPORTING STANDARDS
MATTER .............................................................................................................. 3
2 THE IFRS FOUNDATION AND THE IASB ....................................................... 4
2.1
The standard-setting structure ............................................................................... 4
2.2
The IFRS Foundation .............................................................................................. 4
2.3
The Monitoring Board ............................................................................................. 6
2.4
The International Accounting Standards Board (IASB) .................................... 8
2.5
The IFRS Interpretations Committee (the Interpretations
Committee) ................................................................................................................ 9
2.6
The IASB’s and IFRS Interpretations Committee’s Due Process
Handbook ................................................................................................................. 10
2.7
The IFRS Advisory Council (the Advisory Council) ........................................ 11
2.8
Accounting Standards Advisory Forum (ASAF) ............................................... 12
2.9
Other advisory bodies ............................................................................................ 13
3 THE IASB’S TECHNICAL AGENDA AND CONVERGENCE WITH US
GAAP ............................................................................................................... 14
3.1
The IASB’s current priorities and future agenda .............................................. 14
3.2 IFRS/US
GAAP
convergence ............................................................................... 14
4 THE ADOPTION OF IFRS AROUND THE WORLD ........................................... 15
4.1
Worldwide adoption .............................................................................................. 15
4.2 Europe
....................................................................................................................... 18
4.2.1
EU .............................................................................................................. 18
4.2.2 Russia
........................................................................................................
22
4.3
Americas ................................................................................................................... 23
4.3.1
US ............................................................................................................... 23
4.3.2 Canada
......................................................................................................
23
4.3.3 Brazil
..................
.......................................................................................
24
2 Chapter
1
4.4
Asia ............................................................................................................................ 24
4.4.1
China ......................................................................................................... 24
4.4.1.A
Mainland China .................................................................. 24
4.4.1.B Hong
Kong
..........................................................................
25
4.4.2
Japan .......................................................................................................... 26
4.4.3 India
...........................................................................................................
27
4.5
Australia .................................................................................................................... 28
4.6 South
Africa
.............................................................................................................
29
5 CONSISTENCY IN APPLICATION OF IFRS ..................................................... 29
6 SUMMARY ........................................................................................................ 31
3
Chapter 1
International GAAP