FAR Flashcards
(23 cards)
Requirements to recognise an intangible asset under IAS 38
identifiable
controlled by the entity
economic benefits are expected to flow
cost can be measured reliably
Double entries for Revaluation downwards
Not prev reval up:
Dr SPL
Dr Acc Depn
Cr Cost
Prev reval up:
Dr Reval reserve
Dr SPL
Dr Acc Depn
Cr Cost
IAS 16
PPE
Asset held for sale conditions
- Ready for sale in present condition
- Sale highly probable
- Committed management plan to sell
- Active search for buyer
- Marketed at FV
- Sale expected in 12 months
IAS 23
IAS 36
23 - Borrowing Costs
36 - Impairment of assets
PPE UK GAAP differences
PPE - Proceeds from sale of item produced in bringing PPE to condition are deducted fro CA
Borrowing Cost - Entities choose to capitalise of expense in SLP
Asset held for sale - No held for sale category
Redeemable vs Irredeemable shares
Redeemable - Liability (Divs are finance costs)
Irredeemable - Equity (Divs are from RE) unless mandatory dividend
Reserves transfer
Revaluation surplus to Retained Earnings
Disposal or The increase in depreciation charge each year as a result of revaluation
Dr Revaluation Reserve
Cr Retained earnings
Impairment Review
Carrying amount - Recoverable amount
Recoverable amount is higher of
- Value in use (PV of future cash flows)
- Fair value less cost to sell
Initial treatment of Provisions and contingencies
IAS 37
Provision - Record if measure reliably and probable transfer based on present obligation or past event
Contingent liability - If possible then disclose
Contingent Asset - If probable then disclose
Asset - Recognise if virtually certain
Counter claims
- provisions
Recognise only if virtually certain
Capped at amount of provision
Shown separate on SFP but net off in SPL
Event after reporting period
IAS 10
Event which occurs after the year end but before the FS are approved
Adjusting - evidence of condition that existed at reporting date or if impacts going concern assumption going forward
Non-adjusting - Disclose if material
Inventories
IAS 2
Measure at lower of
- Cost (FIFO and AVCO)
- NRV (Selling price less cost to complete/sell)
Fixed overheads - Normal budgeted levels of activity
Variable costs - Actual levels of activity
Compound intruments
Initially
- Liability Measure as PV of future cash flows.
- Equity is balancing figure
IAS 8 Accounting Policies
Change in Accounting Policy/Adjustment of a material error:
Change in Accounting Policy/Adjustment of a material error:
- Restate comparatives
- Restate opening balances (Disclose in SOCE)
- Apply the new accounting Policy to this year’s FS
IAS 8 Accounting Policies
Change in Accounting Estimate
Change in Accounting Estimate:
Any revisions to the estimate should be recorded in this year’s FS
Only adjust going forward
Discontinued Operations NCA held for sale
IFRS 5
Clearly distinguishable cash generating unit
Sale highly probable
Disclosures
- SPL
- SFP: Separate line “assets held for sale”
- SCF: on face or notes
Government Grants - Netting off method
IAS 20
Net off grant against cost of asset
Depreciate reduced cost of asset over its UL
Government Grands - Deferred Income method
IAS 20
Defer grant into SFP
Release income to SPL over UL of asset to match against depreciation
Distributable profits
Net assets
Less Called-up share capital
Less Undistributable profits (unrealised profits, Share premium)
Foreign Currency types
IAS 21
Functional Currency - Currency entity operates in
Presentational Currency - Financial statements
Foreign Currency differences
IAS 21
Exchange differences recognised in SPL
