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  • IAS 26 — Accounting and Reporting by Retirement Benefit Plans
    Reporting by Retirement Benefit Plans outlines the requirements for the preparation of financial statements of retirement benefit plans It outlines the financial statements required and discusses the measurement of various line items particularly the actuarial present value of promised retirement benefits for defined benefit plans IAS 26 was issued in January 1987 and applies to annual periods beginning on or after 1 January 1988 History of IAS 26 July 1985 Exposure Draft E27 Accounting and Reporting by Retirement Benefit Plans January 1987 IAS 26 Accounting and Reporting by Retirement Benefit Plans 1 January 1988 Effective date of IAS 26 1987 1994 IAS 26 was reformatted Related Interpretations None Summary of IAS 26 Objective of IAS 26 The objective of IAS 26 is to specify measurement and disclosure principles for the reports of retirement benefit plans All plans should include in their reports a statement of changes in net assets available for benefits a summary of significant accounting policies and a description of the plan and the effect of any changes in the plan during the period Key definitions Retirement benefit plan An arrangement by which an entity provides benefits annual income or lump sum to employees after they terminate from service IAS 26 8 Defined contribution plan A retirement benefit plan by which benefits to employees are based on the amount of funds contributed to the plan plus investment earnings thereon IAS 26 8 Defined benefit plan A retirement benefit plan by which employees receive benefits based on a formula usually linked to employee earnings IAS 26 8 Defined contribution plans The report of a defined contribution plan should contain a statement of net assets available for benefits and a description of the funding policy IAS 26 13 Defined benefit plans The report of a defined benefit plan should contain either IAS 26 17 a statement that shows the net assets available for benefits the actuarial present value of promised retirement benefits distinguishing between vested benefits and non vested benefits and the resulting excess or deficit or a statement of net assets available for benefits including either a note disclosing the actuarial present value of promised retirement benefits distinguishing between vested benefits and non vested benefits or a reference to this information in an accompanying actuarial report If an actuarial valuation has not been prepared at the date of the report of a defined benefit plan the most recent valuation should be used as a base and the date of the valuation disclosed The actuarial present value of promised retirement benefits should be based on the benefits promised under the terms of the plan on service rendered to date using either current salary levels or projected salary levels with disclosure of the basis used The effect of any changes in actuarial assumptions that have had a significant effect on the actuarial present value of promised retirement benefits should also be disclosed IAS 26 18 The report should explain the relationship between the actuarial present value of promised retirement benefits and

    Original URL path: http://www.iasplus.com/en/standards/ias/ias26 (2016-02-10)
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  • IAS 27 — Separate Financial Statements (2011)
    apply the exception to consolidation for all of its subsidiaries in accordance with of IFRS 10 Consolidated Financial Statements presents separate financial statements as its only financial statements IAS 27 2011 8A Note The investment entity consolidation exemption was introduced into IFRS 10 by Investment Entities issued on 31 October 2012 and effective for annual periods beginning on or after 1 January 2014 Choice of accounting method When an entity prepares separate financial statements investments in subsidiaries associates and jointly controlled entities are accounted for either IAS 27 2011 10 at cost or in accordance with IFRS 9 Financial Instruments or IAS 39 Financial Instruments Recognition and Measurement for entities that have not yet adopted IFRS 9 or using the equity method as decribed in IAS 28 Investments in Associates and Joint Ventures See the amendment information below The entity applies the same accounting for each category of investments Investments that are accounted for at cost and classified as held for sale in accordance with IFRS 5 Non current Assets Held for Sale and Discontinued Operations are accounted for in accordance with that IFRS Investments carried at cost should be measured at the lower of their carrying amount and fair value less costs to sell The measurement of investments accounted for in accordance with IFRS 9 is not changed in such circumstances If an entity elects in accordance with IAS 28 as amended in 2011 to measure its investments in associates or joint ventures at fair value through profit or loss in accordance with IFRS 9 it shall also account for those investments in the same way in its separate financial statements IAS 27 2011 11 Investment entities Note The investment entity consolidation exemption was introduced into IFRS 10 by Investment Entities issued on 31 October 2012 and effective for annual periods beginning on or after 1 January 2014 If a parent investment entity is required in accordance with IFRS 10 to measure its investment in a subsidiary at fair value through profit or loss in accordance with IFRS 9 or IAS 39 it is required to also account for its investment in a subsidiary in the same way in its separate financial statements IAS 27 2011 11A When a parent ceases to be an investment entity the entity can account for an investment in a subsidiary at cost based on fair value at the date of change or status or in accordance with IFRS 9 When an entity becomes an investment entity it accounts for an investment in a subsidiary at fair value through profit or loss in accordance with IFRS 9 IAS 27 2011 11B Recognition of dividends An entity recognises a dividend from a subsidiary joint venture or associate in profit or loss in its separate financial statements when its right to receive the dividend in established IAS 27 2011 12 Accounting for dividends where the equity method is applied to investments in joint ventures and associates is specified in IAS 28 Investments in Associates and Joint

    Original URL path: http://www.iasplus.com/en/standards/ias/ias27-2011 (2016-02-10)
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  • IAS 27 — Consolidated and Separate Financial Statements (2008)
    parent is itself a wholly owned subsidiary or is a partially owned subsidiary of another entity and its other owners including those not otherwise entitled to vote have been informed about and do not object to the parent not presenting consolidated financial statements the parent s debt or equity instruments are not traded in a public market the parent did not file nor is it in the process of filing its financial statements with a securities commission or other regulatory organisation for the purpose of issuing any class of instruments in a public market and the ultimate or any intermediate parent of the parent produces consolidated financial statements available for public use that comply with International Financial Reporting Standards The consolidated accounts should include all of the parent s subsidiaries both domestic and foreign IAS 27 12 There is no exemption for a subsidiary whose business is of a different nature from the parent s There is no exemption for a subsidiary that operates under severe long term restrictions impairing the subsidiary s ability to transfer funds to the parent Such an exemption was included in earlier versions of IAS 27 but in revising IAS 27 in December 2003 the IASB concluded that these restrictions in themselves do not preclude control There is no exemption for a subsidiary that had previously been consolidated and that is now being held for sale However a subsidiary that meets the IFRS 5 criteria as an asset held for sale shall be accounted for under that Standard Special purpose entities SPEs should be consolidated where the substance of the relationship indicates that the SPE is controlled by the reporting entity This may arise even where the activities of the SPE are predetermined or where the majority of voting or equity are not held by the reporting entity SIC 12 Once an investment ceases to fall within the definition of a subsidiary it should be accounted for as an associate under IAS 28 as a joint venture under IAS 31 or as an investment under IAS 39 as appropriate IAS 27 31 Consolidation procedures Intragroup balances transactions income and expenses should be eliminated in full Intragroup losses may indicate that an impairment loss on the related asset should be recognised IAS 27 24 25 The financial statements of the parent and its subsidiaries used in preparing the consolidated financial statements should all be prepared as of the same reporting date unless it is impracticable to do so IAS 27 26 If it is impracticable a particular subsidiary to prepare its financial statements as of the same date as its parent adjustments must be made for the effects of significant transactions or events that occur between the dates of the subsidiary s and the parent s financial statements And in no case may the difference be more than three months IAS 27 27 Consolidated financial statements must be prepared using uniform accounting policies for like transactions and other events in similar circumstances IAS 27 28 Minority

    Original URL path: http://www.iasplus.com/en/standards/ias/ias27 (2016-02-10)
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  • IAS 28 — Investments in Associates and Joint Ventures (2011)
    e g to account for changes arising from revaluations of property plant and equipment and foreign currency translations IAS 28 2011 10 Potential voting rights An entity s interest in an associate or a joint venture is determined solely on the basis of existing ownership interests and generally does not reflect the possible exercise or conversion of potential voting rights and other derivative instruments IAS 28 2011 12 Interaction with IFRS 9 IFRS 9 Financial Instruments does not apply to interests in associates and joint ventures that are accounted for using the equity method Instruments containing potential voting rights in an associate or a joint venture are accounted for in accordance with IFRS 9 unless they currently give access to the returns associated with an ownership interest in an associate or a joint venture IAS 28 2011 14 Classification as non current asset An investment in an associate or a joint venture is generally classified as non current asset unless it is classified as held for sale in accordance with IFRS 5 Non current Assets Held for Sale and Discontinued Operations IAS 28 2011 15 Application of the equity method of accounting Basic principle In its consolidated financial statements an investor uses the equity method of accounting for investments in associates and joint ventures IAS 28 2011 16 Many of the procedures that are appropriate for the application of the equity method are similar to the consolidation procedures described in IFRS 10 Furthermore the concepts underlying the procedures used in accounting for the acquisition of a subsidiary are also adopted in accounting for the acquisition of an investment in an associate or a joint venture IAS 28 2011 26 Exemptions from applying the equity method An entity is exempt from applying the equity method if the investment meets one of the following conditions The entity is a parent that is exempt from preparing consolidated financial statements under IFRS 10 Consolidated Financial Statements or or if all of the following four conditions are met in which case the entity need not apply the equity method IAS 28 2011 17 the entity is a wholly owned subsidiary or is a partially owned subsidiary of another entity and its other owners including those not otherwise entitled to vote have been informed about and do not object to the investor not applying the equity method the investor or joint venturer s debt or equity instruments are not traded in a public market the entity did not file nor is it in the process of filing its financial statements with a securities commission or other regulatory organisation for the purpose of issuing any class of instruments in a public market and the ultimate or any intermediate parent of the parent produces financial statements available for public use that comply with IFRSs in which subsidiaries are consolidated or are measured at fair value through profit or loss in accordance with IFRS 10 Fair value measurement clause added by Investment Entities Applying the Consolidation Exception Amendments to IFRS 10 IFRS 12 and IAS 28 amendments effective 1 January 2016 When an investment in an associate or a joint venture is held by or is held indirectly through an entity that is a venture capital organisation or a mutual fund unit trust and similar entities including investment linked insurance funds the entity may elect to measure investments in those associates and joint ventures at fair value through profit or loss in accordance with IFRS 9 IAS 28 2011 18 When an entity has an investment in an associate a portion of which is held indirectly through a venture capital organisation or a mutual fund unit trust and similar entities including investment linked insurance funds the entity may elect to measure that portion of the investment in the associate at fair value through profit or loss in accordance with IFRS 9 regardless of whether the venture capital organisation or the mutual fund unit trust and similar entities including investment linked insurance funds has significant influence over that portion of the investment If the entity makes that election the entity shall apply the equity method to any remaining portion of its investment in an associate that is not held through a venture capital organisation or a mutual fund unit trust and similar entities including investment linked insurance funds IAS 28 2011 19 Classification as held for sale When the investment or portion of an investment meets the criteria to be classified as held for sale the portion so classified is accounted for in accordance with IFRS 5 Any remaining portion is accounted for using the equity method until the time of disposal at which time the retained investment is accounted under IFRS 9 unless the retained interest continues to be an associate or joint venture IAS 28 2011 20 Discontinuing the equity method Use of the equity method should cease from the date that significant influence or joint control ceases IAS 28 2011 22 If the investment becomes a subsidiary the entity accounts for its investment in accordance with IFRS 3 Business Combinations and IFRS 10 If the retained interest is a financial asset it is measured at fair value and subsequently accounted for under IFRS 9 Any amounts recognised in other comprehensive income in relation to the investment in the associate or joint venture are accounted for on the same basis as if the investee had directly disposed of the related assets or liabilities which may require reclassification to profit or loss If an investment in an associate becomes an investment in a joint venture or vice versa the entity continues to apply the equity method and does not remeasure the retained interest IAS 28 2011 24 Changes in ownership interests If an entity s interest in an associate or joint venture is reduced but the equity method is continued to be applied the entity reclassifies to profit or loss the proportion of the gain or loss previously recognised in other comprehensive income relative to that reduction in ownership

    Original URL path: http://www.iasplus.com/en/standards/ias/ias28-2011 (2016-02-10)
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  • IAS 28 — Investments in Associates (2003)
    the investor not applying the equity method the investor s debt or equity instruments are not traded in a public market the investor did not file nor is it in the process of filing its financial statements with a securities commission or other regulatory organisation for the purpose of issuing any class of instruments in a public market and the ultimate or any intermediate parent of the investor produces consolidated financial statements available for public use that comply with International Financial Reporting Standards Applying the equity method of accounting Basic principle Under the equity method of accounting an equity investment is initially recorded at cost and is subsequently adjusted to reflect the investor s share of the net profit or loss of the associate IAS 28 11 Distributions and other adjustments to carrying amount Distributions received from the investee reduce the carrying amount of the investment Adjustments to the carrying amount may also be required arising from changes in the investee s other comprehensive income that have not been included in profit or loss for example revaluations IAS 28 11 Potential voting rights Although potential voting rights are considered in deciding whether significant influence exists the investor s share of profit or loss of the investee and of changes in the investee s equity is determined on the basis of present ownership interests It should not reflect the possible exercise or conversion of potential voting rights IAS 28 12 Implicit goodwill and fair value adjustments On acquisition of the investment in an associate any difference whether positive or negative between the cost of acquisition and the investor s share of the fair values of the net identifiable assets of the associate is accounted for like goodwill in accordance with IFRS 3 Business Combinations Appropriate adjustments to the investor s share of the profits or losses after acquisition are made to account for additional depreciation or amortisation of the associate s depreciable or amortisable assets based on the excess of their fair values over their carrying amounts at the time the investment was acquired IAS 28 23 Impairment The impairment indicators in IAS 39 Financial Instruments Recognition and Measurement apply to investments in associates IAS 28 31 If impairment is indicated the amount is calculated by reference to IAS 36 Impairment of Assets The entire carrying amount of the investment is tested for impairment as a single asset that is goodwill is not tested separately IAS 28 33 The recoverable amount of an investment in an associate is assessed for each individual associate unless the associate does not generate cash flows independently IAS 28 34 Discontinuing the equity method Use of the equity method should cease from the date that significant influence ceases The carrying amount of the investment at that date should be regarded as a new cost basis IAS 28 18 19 Transactions with associates If an associate is accounted for using the equity method unrealised profits and losses resulting from upstream associate to investor and downstream investor to

    Original URL path: http://www.iasplus.com/en/standards/ias/ias28 (2016-02-10)
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  • IAS 29 — Financial Reporting in Hyperinflationary Economies
    IAS 29 The objective of IAS 29 is to establish specific standards for entities reporting in the currency of a hyperinflationary economy so that the financial information provided is meaningful Restatement of financial statements The basic principle in IAS 29 is that the financial statements of an entity that reports in the currency of a hyperinflationary economy should be stated in terms of the measuring unit current at the balance sheet date Comparative figures for prior period s should be restated into the same current measuring unit IAS 29 8 Restatements are made by applying a general price index Items such as monetary items that are already stated at the measuring unit at the balance sheet date are not restated Other items are restated based on the change in the general price index between the date those items were acquired or incurred and the balance sheet date A gain or loss on the net monetary position is included in net income It should be disclosed separately IAS 29 9 The restated amount of a non monetary item is reduced in accordance with appropriate IFRSs when it exceeds its the recoverable amount IAS 29 19 The Standard does not establish an absolute rate at which hyperinflation is deemed to arise but allows judgement as to when restatement of financial statements becomes necessary Characteristics of the economic environment of a country which indicate the existence of hyperinflation include IAS 29 3 the general population prefers to keep its wealth in non monetary assets or in a relatively stable foreign currency Amounts of local currency held are immediately invested to maintain purchasing power the general population regards monetary amounts not in terms of the local currency but in terms of a relatively stable foreign currency Prices may be quoted in that currency sales and purchases on credit take place at prices that compensate for the expected loss of purchasing power during the credit period even if the period is short interest rates wages and prices are linked to a price index and the cumulative inflation rate over three years approaches or exceeds 100 IAS 29 describes characteristics that may indicate that an economy is hyperinflationary However it concludes that it is a matter of judgement when restatement of financial statements becomes necessary When an economy ceases to be hyperinflationary and an entity discontinues the preparation and presentation of financial statements in accordance with IAS 29 it should treat the amounts expressed in the measuring unit current at the end of the previous reporting period as the basis for the carrying amounts in its subsequent financial statements IAS 29 38 Disclosure Gain or loss on monetary items IAS 29 9 The fact that financial statements and other prior period data have been restated for changes in the general purchasing power of the reporting currency IAS 29 39 Whether the financial statements are based on an historical cost or current cost approach IAS 29 39 Identity and level of the price index at the balance

    Original URL path: http://www.iasplus.com/en/standards/ias/ias29 (2016-02-10)
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  • IAS 30 — Disclosures in the Financial Statements of Banks and Similar Financial Institutions
    2011 IAS 19 Employee Benefits 1998 superseded IAS 20 Accounting for Government Grants and Disclosure of Government Assistance IAS 21 The Effects of Changes in Foreign Exchange Rates IAS 22 Business Combinations Superseded IAS 23 Borrowing Costs IAS 24 Related Party Disclosures IAS 26 Accounting and Reporting by Retirement Benefit Plans IAS 27 Separate Financial Statements 2011 IAS 27 Consolidated and Separate Financial Statements 2008 IAS 28 Investments in Associates and Joint Ventures 2011 IAS 28 Investments in Associates 2003 IAS 29 Financial Reporting in Hyperinflationary Economies IAS 30 Disclosures in the Financial Statements of Banks and Similar Financial Institutions IAS 31 Interests In Joint Ventures IAS 32 Financial Instruments Presentation IAS 33 Earnings Per Share IAS 34 Interim Financial Reporting IAS 35 Discontinuing Operations Superseded 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 IAS 41 Agriculture Info IAS 30 Disclosures in the Financial Statements of Banks and Similar Financial Institutions Quick Article Links History of IAS 30 April 1987 Exposure Draft E29 Disclosures in Financial Statements of Banks July 1989 Exposure Draft E29 was modified and re exposed as Exposure Draft E34 Disclosures in Financial Statements of Banks and Similar Financial Institutions August 1990 IAS 30 Disclosures in Financial Statements of Banks and Similar Financial Institutions 1 January 1991 Effective date of IAS 30 1990 1994 IAS 30 was reformatted December 1998 IAS 30 was amended by IAS 39 Financial Instruments Recognition and Measurement effective 1 January 2001 18 August 2005 IAS 30 is superseded by IFRS 7 Financial Instruments Disclosures effective 1 January 2007 Related Interpretations None Amendments under consideration by the IASB None Summary of IAS 30 Objective of IAS 30 The objective of IAS 30 is to prescribe appropriate presentation and disclosure standards for banks and similar financial institutions hereafter called banks which supplement the requirements of other Standards The intention is to provide users with appropriate information to assist them in evaluating the financial position and performance of banks and to enable them to obtain a better understanding of the special characteristics of the operations of banks Presentation and disclosure A bank s income statement should group income and expenses by nature IAS 30 9 A bank s income statement or notes should report the following specific amounts IAS 30 10 interest income interest expense dividend income fee and commission income fee and commission expense net gains losses from securities dealing net gains losses from investment securities net gains losses from foreign currency dealing other operating income loan losses general administrative expenses other operating expenses A bank s balance sheet should group assets and liabilities by nature and list them in liquidity sequence IAS 30 18 IAS 30 19 sets out the specific line items requiring disclosure IAS 30 13 and IAS 30 23 include guidelines for the limited circumstances in which income and expense items or asset and liability items are offset A bank

    Original URL path: http://www.iasplus.com/en/standards/ias/ias30 (2016-02-10)
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  • IAS 31 — Interests In Joint Ventures
    it incurs the expenses that it incurs and its share of the income from the sale of goods or services by the joint venture IAS 31 15 Jointly controlled assets Jointly controlled assets involve the joint control and often the joint ownership of assets dedicated to the joint venture Each venturer may take a share of the output from the assets and each bears a share of the expenses incurred IAS 31 18 IAS 31 requires that the venturer should recognise in its financial statements its share of the joint assets any liabilities that it has incurred directly and its share of any liabilities incurred jointly with the other venturers income from the sale or use of its share of the output of the joint venture its share of expenses incurred by the joint venture and expenses incurred directly in respect of its interest in the joint venture IAS 31 21 Jointly controlled entities A jointly controlled entity is a corporation partnership or other entity in which two or more venturers have an interest under a contractual arrangement that establishes joint control over the entity IAS 31 24 Each venturer usually contributes cash or other resources to the jointly controlled entity Those contributions are included in the accounting records of the venturer and recognised in the venturer s financial statements as an investment in the jointly controlled entity IAS 31 29 IAS 31 allows two treatments of accounting for an investment in jointly controlled entities except as noted below proportionate consolidation IAS 31 30 equity method of accounting IAS 31 38 Proportionate consolidation or equity method are not required in the following exceptional circumstances IAS 31 1 2 An investment in a jointly controlled entity that is held by a venture capital organisation or mutual fund or similar entity and that upon initial recognition is designated as held for trading under IAS 39 Under IAS 39 those investments are measured at fair value with fair value changes recognised in profit or loss The interest is classified as held for sale in accordance with IFRS 5 A parent that is exempted from preparing consolidated financial statements by paragraph 10 of IAS 27 may prepare separate financial statements as its primary financial statements In those separate statements the investment in the jointly controlled entity may be accounted for by the cost method or under IAS 39 An investor in a jointly controlled entity need not use proportionate consolidation or the equity method if all of the following four conditions are met the venturer is itself a wholly owned subsidiary or is a partially owned subsidiary of another entity and its other owners including those not otherwise entitled to vote have been informed about and do not object to the venturer not applying proportionate consolidation or the equity method the venturer s debt or equity instruments are not traded in a public market the venturer did not file nor is it in the process of filing its financial statements with a securities commission

    Original URL path: http://www.iasplus.com/en/standards/ias/ias31 (2016-02-10)
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