IAS 1 Presentation of Financial Statements Overview IAS 1 Presentation of Financial Statements sets out the overall requirements for

r financial statements, including how they should be structured, the minimum requirements for their content and overriding conce ts such as going concern, the accrual basis of accounting and the current!non"current distinction# $he standard requires a com lete set of financial statements to com rise a statement of financial osition, a statement of rofit or loss and other com rehensive income, a statement of changes in equity and a statement of cash flows# IAS 1 was reissued in Se tember %&&' and a lies to annual eriods beginning on or after 1 (anuary %&&)# Summary of IAS 1 Objective of IAS 1 $he ob*ective of IAS 1 +%&&', is to rescribe the basis for resentation of general ur ose financial statements, to ensure com arability both with the entity-s financial statements of revious eriods and with the financial statements of other entities# IAS 1 sets out the overall requirements for the resentation of financial statements, guidelines for their structure and minimum requirements for their content# .IAS 1#1/ Standards for recognising, measuring, and disclosing s ecific transactions are addressed in other Standards and Inter retations# .IAS 1#0/ Scope IAS 1 a lies to all general ur ose financial statements that are re ared and resented in accordance with International Financial 1e orting Standards +IF1Ss,# .IAS 1#%/ 2eneral ur ose financial statements are those intended to serve users who are not in a osition to require financial re orts tailored to their articular information needs# .IAS 1#'/ Objective of financial statements $he ob*ective of general ur ose financial statements is to rovide information about the financial osition, financial erformance, and cash flows of an entity that is useful to a wide range of users in ma3ing economic decisions# $o meet that ob*ective, financial statements rovide information about an entity-s4 .IAS 1#)/ o o o o o o assets liabilities equity income and e5 enses, including gains and losses contributions by and distributions to owners +in their ca acity as owners, cash flows# $hat information, along with other information in the notes, assists users of financial statements in redicting the entity-s future cash flows and, in articular, their timing and certainty# Components of financial statements A com lete set of financial statements includes4 .IAS 1#1&/ o o a statement of financial osition +balance sheet, at the end of the eriod a statement of rofit or loss and other com rehensive income for the eriod + resented as a single statement, or by resenting the rofit or loss section in a se arate statement of rofit or loss, immediately followed by a statement resenting com rehensive income beginning with rofit or loss, o o o o a statement of changes in equity for the eriod a statement of cash flows for the eriod notes, com rising a summary of significant accounting olicies and other e5 lanatory notes com arative information rescribed by the standard#

An entity may use titles for the statements other than those stated above# All financial statements are required to be resented with equal rominence# .IAS 1#1&/ 6hen an entity a lies an accounting olicy retros ectively or ma3es a retros ective restatement of items in its financial statements, or when it reclassifies items in its financial statements, it must also resent a statement of financial osition +balance sheet, as at the beginning of the earliest com arative eriod# 1e orts that are resented outside of the financial statements 7 including financial reviews by management, environmental re orts, and value added statements 7 are outside the sco e of IF1Ss# .IAS 1#18/ Fair presentation and compliance with IFRSs $he financial statements must 9 resent fairly9 the financial osition, financial erformance and cash flows of an entity# Fair resentation requires the faithful re resentation of the effects of transactions, other events, and conditions in accordance with the definitions and recognition criteria for assets, liabilities, income and e5 enses set out in the Framewor3# $he a lication of IF1Ss, with additional disclosure when necessary, is resumed to result in financial statements that achieve a fair resentation# .IAS 1#1:/ IAS 1 requires an entity whose financial statements com ly with IF1Ss to ma3e an e5 licit and unreserved statement of such com liance in the notes# Financial statements cannot be described as com lying with IF1Ss unless they com ly with all the requirements of IF1Ss +which includes International Financial 1e orting Standards, International Accounting Standards, IF1I; Inter retations and SI; Inter retations,# .IAS 1#1</ Ina ro riate accounting olicies are not rectified either by disclosure of the accounting olicies used or by notes or e5 lanatory material# .IAS 1#1=/ IAS 1 ac3nowledges that, in e5tremely rare circumstances, management may conclude that com liance with an IF1S requirement would be so misleading that it would conflict with the ob*ective of financial statements set out in the Framewor3# In such a case, the entity is required to de art from the IF1S requirement, with detailed disclosure of the nature, reasons, and im act of the de arture# .IAS 1#1)"%1/ Going concern $he ;once tual Framewor3 notes that financial statements are normally re ared assuming the entity is a going concern and will continue in o eration for the foreseeable future# .;once tual Framewor3, aragra h 8#1/ IAS 1 requires management to ma3e an assessment of an entity-s ability to continue as a going concern# If management has significant concerns about the entity-s ability to continue as a going concern, the uncertainties must be disclosed# If management concludes that the entity is not a going concern, the financial statements should not be re ared on a going concern basis, in which case IAS 1 requires a series of disclosures# .IAS 1#%:/ Accrual basis of accounting IAS 1 requires that an entity re are its financial statements, e5ce t for cash flow information, using the accrual basis of accounting# .IAS 1#%'/ Consistenc of presentation $he resentation and classification of items in the financial statements shall be retained from one eriod to the ne5t unless a change is *ustified either by a change in circumstances or a requirement of a new IF1S# .IAS 1#8:/ !aterialit and aggregation >ach material class of similar items must be resented se arately in the financial statements# ?issimilar items may be aggregated only if the are individually immaterial# .IAS 1#%)/ Offsetting Assets and liabilities, and income and e5 enses, may not be offset unless required or ermitted by an IF1S# .IAS 1#0%/ Comparative information IAS 1 requires that com arative information to be disclosed in res ect of the revious eriod for all amounts re orted in the financial statements, both on the face of the financial statements and in the notes, unless another Standard requires otherwise# ;om arative information is rovided for narrative and descri tive where it is relevant to understanding the financial statements of the current eriod# .IAS 1#0=/ An entity is required to resent at least two of each of the following rimary financial statements4 .IAS 1#0=A/ o o o statement of financial osition@ statement of rofit or loss and other com rehensive income se arate statements of rofit or loss +where resented,

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statement of cash flows statement of changes in equity related notes for each of the above items# @ A third statement of financial osition is required to be resented if the entity retros ectively a lies an accounting olicy, restates items, or reclassifies items, and those ad*ustments had a material effect on the information in the statement of financial osition at the beginning of the com arative eriod# .IAS 1#8&A/ 6here com arative amounts are changed or reclassified, various disclosures are required# .IAS 1#81/ Structure and content of financial statements in general IAS 1 requires an entity to clearly identify4 .IAS 1#8)":1/

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the financial statements, which must be distinguished from other information in a ublished document each financial statement and the notes to the financial statements# In addition, the following information must be dis layed rominently, and re eated as necessary4 .IAS 1#:1/

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the name of the re orting entity and any change in the name whether the financial statements are a grou of entities or an individual entity information about the re orting eriod the resentation currency +as defined by IAS %1 The Effects of Changes in Foreign Exchange Rates, the level of rounding used +e#g# thousands, millions,# Reporting period $here is a resum tion that financial statements will be re ared at least annually# If the annual re orting eriod changes and financial statements are re ared for a different eriod, the entity must disclose the reason for the change and state that amounts are not entirely com arable# .IAS 1#0</ Statement of financial position "balance sheet# Current and non-current classification An entity must normally resent a classified statement of financial osition, se arating current and non"current assets and liabilities, unless resentation based on liquidity rovides information that is reliable# .IAS 1#<&/ In either case, if an asset +liability, category combines amounts that will be received +settled, after 1% months with assets +liabilities, that will be received +settled, within 1% months, note disclosure is required that se arates the longer"term amounts from the 1%"month amounts# .IAS 1#<1/ ;urrent assets are assets that are4 .IAS 1#<</

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e5 ected to be realised in the entity-s normal o erating cycle held rimarily for the ur ose of trading e5 ected to be realised within 1% months after the re orting eriod cash and cash equivalents +unless restricted,# All other assets are non"current# .IAS 1#<</ ;urrent liabilities are those4 .IAS 1#<)/

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e5 ected to be settled within the entity-s normal o erating cycle held for ur ose of trading due to be settled within 1% months for which the entity does not have an unconditional right to defer settlement beyond 1% months +settlement by the issue of equity instruments does not im act classification,# Other liabilities are non"current# 6hen a long"term debt is e5 ected to be refinanced under an e5isting loan facility, and the entity has the discretion to do so, the debt is classified as non"current, even if the liability would otherwise be due within 1% months# .IAS 1#'0/

If a liability has become ayable on demand because an entity has breached an underta3ing under a long"term loan agreement on or before the re orting date, the liability is current, even if the lender has agreed, after the re orting date and before the authorisation of the financial statements for issue, not to demand ayment as a consequence of the breach# .IAS 1#'8/ Aowever, the liability is classified as non"current if the lender agreed by the re orting date to rovide a eriod of grace ending at least 1% months after the end of the re orting eriod, within which the entity can rectify the breach and during which the lender cannot demand immediate re ayment# .IAS 1#':/ Minimum line items $he minimum line items to be included on the face of the statement of financial osition are4 .IAS 1#:8/ +a, ro erty, lant and equi ment +b, investment ro erty +c, intangible assets +d, financial assets +e5cluding amounts shown under +e,, +h,, and +i,, +e, investments accounted for using the equity method +f, biological assets +g, inventories +h, trade and other receivables +i, cash and cash equivalents +*, assets held for sale +3, trade and other ayables +l, rovisions

+m , financial liabilities +e5cluding amounts shown under +3, and +l,, +n, current ta5 liabilities and current ta5 assets, as defined in IAS 1% +o, deferred ta5 liabilities and deferred ta5 assets, as defined in IAS 1% + , liabilities included in dis osal grou s +q, non"controlling interests, resented within equity +r, issued ca ital and reserves attributable to owners of the arent# Additional line items, headings and subtotals may be needed to fairly resent the entity-s financial osition# .IAS 1#::/ Further sub"classifications of line items resented are made in the statement or in the notes, for e5am le4 .IAS 1#''" '=/4 o o o o o classes of ro erty, lant and equi ment disaggregation of receivables disaggregation of inventories in accordance with IAS % Inventories disaggregation of rovisions into em loyee benefits and other items classes of equity and reserves# Format of statement IAS 1 does not rescribe the format of the statement of financial osition# Assets can be resented current then non" current, or vice versa, and liabilities and equity can be resented current then non"current then equity, or vice versa# A net asset resentation +assets minus liabilities, is allowed# $he long"term financing a roach used in BC and elsewhere 7 fi5ed assets D current assets " short term ayables E long"term debt lus equity 7 is also acce table#

Share capital and reserves 1egarding issued share ca ital and reserves, the following disclosures are required4 .IAS 1#')/ o o o o o o o numbers of shares authorised, issued and fully aid, and issued but not fully aid ar value +or that shares do not have a ar value, a reconciliation of the number of shares outstanding at the beginning and the end of the eriod descri tion of rights, references, and restrictions treasury shares, including shares held by subsidiaries and associates shares reserved for issuance under o tions and contracts a descri tion of the nature and ur ose of each reserve within equity# Additional disclosures are required in res ect of entities without share ca ital and where an entity has reclassified uttable financial instruments# .IAS 1#=&"=&A/ Statement of profit or loss and other comprehensive income Concepts of profit or loss and comprehensive income Profit or loss is defined as 9the total of income less e5 enses, e5cluding the com onents of other com rehensive income9# Other com rehensive income is defined as com rising 9items of income and e5 ense +including reclassification ad*ustments, that are not recognised in rofit or loss as required or ermitted by other IF1Ss9# $otal com rehensive income is defined as 9the change in equity during a eriod resulting from transactions and other events, other than those changes resulting from transactions with owners in their ca acity as owners9# .IAS 1#'/

;om rehensive income for the eriod

Profit or loss

Other com rehensive income

All items of income and e5 ense recognised in a eriod must be included in rofit or loss unless a Standard or an Inter retation requires otherwise# .IAS 1#==/ Some IF1Ss require or ermit that some com onents to be e5cluded from rofit or loss and instead to be included in other com rehensive income# $%amples of items recognised outside of profit or loss

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;hanges in revaluation sur lus where the revaluation method is used under IAS 1<Property, Plant and Equipment and IAS 0= Intangi le !ssets 1emeasurements of a net defined benefit liability or asset recognised in accordance withIAS 1) Employee "enefits +%&11, >5change differences from translating functional currencies into resentation currency in accordance with IAS %1 The Effects of Changes in Foreign Exchange Rates 2ains and losses on remeasuring available"for"sale financial assets in accordance withIAS 0) Financial Instruments# Recognition and $easurement $he effective ortion of gains and losses on hedging instruments in a cash flow hedge under IAS 0) or IF1S ) Financial Instruments 2ains and losses on remeasuring an investment in equity instruments where the entity has elected to resent them in other com rehensive income in accordance with IF1S )

$he effects of changes in the credit ris3 of a financial liability designated as at fair value through rofit and loss under IF1S )#

In addition, IAS = !ccounting Policies, Changes in !ccounting Estimates and Errors requires the correction of errors and the effect of changes in accounting olicies to be recognised outside rofit or loss for the current eriod# .IAS 1#=)/ Choice in presentation and basic requirements An entity has a choice of resenting4 o a single statement of rofit or loss and other com rehensive income, with rofit or loss and other com rehensive income resented in two sections, or o o o two statements4 a se arate statement of rofit or loss a statement of com rehensive income, immediately following the statement of rofit or loss and beginning with rofit or loss .IAS 1#1&A/ $he statement+s, must resent4 .IAS 1#=1A/ o o o o rofit or loss total other com rehensive income com rehensive income for the eriod an allocation of rofit or loss and com rehensive income for the eriod between non"controlling interests and owners of the arent# Profit or loss section or statement $he following minimum line items must be resented in the rofit or loss section +or se arate statement of rofit or loss, if resented,4 .IAS 1#=%"=%A/ o o o o o o o revenue gains and losses from the derecognition of financial assets measured at amortised cost finance costs share of the rofit or loss of associates and *oint ventures accounted for using the equity method certain gains or losses associated with the reclassification of financial assets ta5 e5 ense a single amount for the total of discontinued items >5 enses recognised in rofit or loss should be analysed either by nature +raw materials, staffing costs, de reciation, etc#, or by function +cost of sales, selling, administrative, etc,# .IAS 1#))/ If an entity categorises by function, then additional information on the nature of e5 enses 7 at a minimum de reciation, amortisation and em loyee benefits e5 ense 7 must be disclosed# .IAS 1#1&8/ Other comprehensive income section $he other com rehensive income section is required to resent line items which are classified by their nature, and grou ed between those items that will or will not be reclassified to rofit and loss in subsequent eriods# .IAS 1#=%A/ Other requirements Additional line items may be needed to fairly resent the entity-s results of o erations# .IAS 1#=:/ Items cannot be resented as -e5traordinary items- in the financial statements or in the notes# .IAS 1#='/ ;ertain items must be disclosed se arately either in the statement of com rehensive income or in the notes, if material, including4 .IAS 1#)=/ o write"downs of inventories to net realisable value or of ro erty, lant and equi ment to recoverable amount, as well as reversals of such write"downs o o o restructurings of the activities of an entity and reversals of any rovisions for the costs of restructuring dis osals of items of ro erty, lant and equi ment dis osals of investments

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discontinuing o erations litigation settlements other reversals of rovisions Statement of cash flows 1ather than setting out se arate requirements for resentation of the statement of cash flows, IAS 1#111 refers to IAS ' Statement of Cash Flo%s# Statement of changes in e&uit IAS 1 requires an entity to resent a se arate statement of changes in equity# $he statement must show4 .IAS 1#1&</

total com rehensive income for the eriod, showing se arately amounts attributable to owners of the arent and to non"controlling interests

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the effects of any retros ective a

lication of accounting olicies or restatements made in accordance

with IAS =, se arately for each com onent of other com rehensive income reconciliations between the carrying amounts at the beginning and the end of the eriod for each com onent of equity, se arately disclosing4 o o o rofit or loss other com rehensive income@ transactions with owners, showing se arately contributions by and distributions to owners and changes in ownershi interests in subsidiaries that do not result in a loss of control @ An analysis of other com rehensive income by item is required to be resented either in the statement or in the notes# .IAS 1#1&<A/ $he following amounts may also be resented on the face of the statement of changes in equity, or they may be resented in the notes4 .IAS 1#1&'/ o o amount of dividends recognised as distributions the related amount er share# 'otes to the financial statements $he notes must4 .IAS 1#11%/ o resent information about the basis of re aration of the financial statements and the s ecific accounting olicies used o o disclose any information required by IF1Ss that is not resented elsewhere in the financial statements and rovide additional information that is not resented elsewhere in the financial statements but is relevant to an understanding of any of them Fotes are resented in a systematic manner and cross"referenced from the face of the financial statements to the relevant note# .IAS 1#110/ IAS 1#118 suggests that the notes should normally be resented in the following order4 o o o o statements o su orting information for items resented on the face of the statement of financial osition +balance a statement of com liance with IF1Ss a summary of significant accounting olicies a lied, including4 .IAS 1#11'/

the measurement basis +or bases, used in re aring the financial statements the other accounting olicies used that are relevant to an understanding of the financial

sheet,, statement+s, of rofit or loss and other com rehensive income, statement of changes in equity and statement of cash flows, in the order in which each statement and each line item is resented

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other disclosures, including4 contingent liabilities +see IAS 0', and unrecognised contractual commitments non"financial disclosures, such as the entity-s financial ris3 management ob*ectives and olicies

+see IF1S ' Financial Instruments# &isclosures, Other disclosures Judgements and key assumptions An entity must disclose, in the summary of significant accounting olicies or other notes, the *udgements, a art from those involving estimations, that management has made in the rocess of a lying the entity-s accounting olicies that have the most significant effect on the amounts recognised in the financial statements# .IAS 1#1%%/ >5am les cited in IAS 1#1%0 include management-s *udgements in determining4 o when substantially all the significant ris3s and rewards of ownershi of financial assets and lease assets are transferred to other entities o whether, in substance, articular sales of goods are financing arrangements and therefore do not give rise to revenue# An entity must also disclose, in the notes, information about the 3ey assum tions concerning the future, and other 3ey sources of estimation uncertainty at the end of the re orting eriod, that have a significant ris3 of causing a material ad*ustment to the carrying amounts of assets and liabilities within the ne5t financial year# .IAS 1#1%:/ $hese disclosures do not involve disclosing budgets or forecasts# .IAS 1#10&/ ividends In addition to the distributions information in the statement of changes in equity +see above,, the following must be disclosed in the notes4 .IAS 1#10'/ o the amount of dividends ro osed or declared before the financial statements were authorised for issue but which were not recognised as a distribution to owners during the eriod, and the related amount er share o the amount of any cumulative reference dividends not recognised# Capital disclosures An entity discloses information about its ob*ectives, olicies and rocesses for managing ca ital# .IAS 1#108/ $o com ly with this, the disclosures include4 .IAS 1#10:/ o o o o o o o o qualitative information about the entity-s ob*ectives, olicies and rocesses for managing ca ital, includingG descri tion of ca ital it manages nature of e5ternal ca ital requirements, if any how it is meeting its ob*ectives quantitative data about what the entity regards as ca ital changes from one eriod to another whether the entity has com lied with any e5ternal ca ital requirements and if it has not com lied, the consequences of such non"com liance# Puttable financial instruments IAS 1#10<A requires the following additional disclosures if an entity has a uttable instrument that is classified as an equity instrument4 o o summary quantitative data about the amount classified as equity the entity-s ob*ectives, olicies and rocesses for managing its obligation to re urchase or redeem the instruments when required to do so by the instrument holders, including any changes from the revious eriod o o the e5 ected cash outflow on redem tion or re urchase of that class of financial instruments and information about how the e5 ected cash outflow on redem tion or re urchase was determined# Other information

$he following other note disclosures are required by IAS 1 if not disclosed elsewhere in information ublished with the financial statements4 .IAS 1#10=/ o o o o o o domicile and legal form of the entity country of incor oration address of registered office or rinci al lace of business descri tion of the entity-s o erations and rinci al activities if it is art of a grou , the name of its arent and the ultimate arent of the grou if it is a limited life entity, information regarding the length of the life (erminolog $he %&&' com rehensive revision to IAS 1 introduced some new terminology# ;onsequential amendments were made at that time to all of the other e5isting IF1Ss, and the new terminology has been used in subsequent IF1Ss including amendments# IAS 1#= states4 9Although this Standard uses the terms -other com rehensive income-, - rofit or loss- and -total com rehensive income-, an entity may use other terms to describe the totals as long as the meaning is clear# For e5am le, an entity may use the term -net income- to describe rofit or loss#9 Also, IAS 1#:'+b, states4 9$he descri tions used and the ordering of items or aggregation of similar items may be amended according to the nature of the entity and its transactions, to rovide information that is relevant to an understanding of the entity-s financial osition#9 (erm before )**+ revision of IAS 1 (erm as amended b IAS 1 ")**+# balance sheet cash flow statement income statement recognised in the income statement recognised ,directl - in e&uit "onl for OCI components# recognised ,directl - in e&uit "for recognition both in OCI and e&uit # removed from e&uit and recognised in profit or loss ".rec cling.# Standard or/and Interpretation on the face of e&uit holders balance sheet date reporting date after the balance sheet date statement of financial osition statement of cash flows statement of com rehensive income +income statement is retained in case of a two"statement a roach, recognised in rofit or loss recognised in other com rehensive income recognised outside rofit or loss +either in O;I or equity, reclassified from equity to rofit or loss as a reclassification ad*ustment IF1Ss in owners +e5ce tion for -ordinary equity holders-, end of the re orting eriod end of the re orting eriod after the re orting eriod

IAS % Inventories Overview IAS % Inventories contains the requirements on how to account for most ty es of inventory# $he standard requires inventories to be measured at the lower of cost and net realisable value +F1H, and outlines acce table methods of determining cost, including s ecific identification +in some cases,, first"in first"out +FIFO, and weighted average cost# A revised version of IAS % was issued in ?ecember %&&0 and a lies to annual eriods beginning on or after 1 (anuary %&&:#

Summary of IAS % Objective of IAS ) $he ob*ective of IAS % is to rescribe the accounting treatment for inventories# It rovides guidance for determining the cost of inventories and for subsequently recognising an e5 ense, including any write"down to net realisable value# It also rovides guidance on the cost formulas that are used to assign costs to inventories# Scope Inventories include assets held for sale in the ordinary course of business +finished goods,, assets in the roduction rocess for sale in the ordinary course of business +wor3 in rocess,, and materials and su lies that are consumed in roduction +raw materials,# .IAS %#</ Aowever, IAS % e5cludes certain inventories from its sco e4 .IAS %#%/ o o o wor3 in rocess arising under construction contracts +see IAS 11 Construction Contracts, financial instruments +see IAS 0) Financial Instruments# Recognition and $easurement , biological assets related to agricultural activity and agricultural roduce at the oint of harvest +see IAS 81 !griculture,# Also, while the following are within the sco e of the standard, IAS % does not a held by4 .IAS %#0/ o ly to the measurement of inventories

roducers of agricultural and forest roducts, agricultural roduce after harvest, and minerals and mineral roducts, to the e5tent that they are measured at net realisable value +above or below cost, in accordance with well"established ractices in those industries# 6hen such inventories are measured at net realisable value, changes in that value are recognised in rofit or loss in the eriod of the change#

commodity bro3ers and dealers who measure their inventories at fair value less costs to sell# 6hen such inventories are measured at fair value less costs to sell, changes in fair value less costs to sell are recognised in rofit or loss in the eriod of the change# Fundamental principle of IAS ) Inventories are required to be stated at the lower of cost and net realisable value +F1H,# .IAS %#)/ !easurement of inventories ;ost should include all4 .IAS %#1&/

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costs of urchase +including ta5es, trans ort, and handling, net of trade discounts received costs of conversion +including fi5ed and variable manufacturing overheads, and other costs incurred in bringing the inventories to their resent location and condition IAS %0 "orro%ing Costs identifies some limited circumstances where borrowing costs +interest, can be included in cost of inventories that meet the definition of a qualifying asset# .IAS %#1' and IAS %0#8/ Inventory cost should not include4 .IAS %#1< and %#1=/

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abnormal waste storage costs administrative overheads unrelated to roduction

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selling costs foreign e5change differences arising directly on the recent acquisition of inventories invoiced in a foreign currency

interest cost when inventories are urchased with deferred settlement terms# $he standard cost and retail methods may be used for the measurement of cost, rovided that the results a ro5imate actual cost# .IAS %#%1"%%/ For inventory items that are not interchangeable, s ecific costs are attributed to the s ecific individual items of inventory# .IAS %#%0/ For items that are interchangeable, IAS % allows the FIFO or weighted average cost formulas# .IAS %#%:/ $he IIFO formula, which had been allowed rior to the %&&0 revision of IAS %, is no longer allowed# $he same cost formula should be used for all inventories with similar characteristics as to their nature and use to the entity# For grou s of inventories that have different characteristics, different cost formulas may be *ustified# .IAS %#%:/ 0rite1down to net realisable value F1H is the estimated selling rice in the ordinary course of business, less the estimated cost of com letion and the estimated costs necessary to ma3e the sale# .IAS %#</ Any write"down to F1H should be recognised as an e5 ense in the eriod in which the write"down occurs# Any reversal should be recognised in the income statement in the eriod in which the reversal occurs# .IAS %#08/ $%pense recognition IAS 1= Revenue addresses revenue recognition for the sale of goods# 6hen inventories are sold and revenue is recognised, the carrying amount of those inventories is recognised as an e5 ense +often called cost"of"goods"sold,# Any write"down to F1H and any inventory losses are also recognised as an e5 ense when they occur# .IAS %#08/ 2isclosure 1equired disclosures4 .IAS %#0</

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accounting olicy for inventories carrying amount, generally classified as merchandise, su goods# $he classifications de end on what is a lies, materials, wor3 in rogress, and finished

ro riate for the entity

o o o o o

carrying amount of any inventories carried at fair value less costs to sell amount of any write"down of inventories recognised as an e5 ense in the eriod amount of any reversal of a write"down to F1H and the circumstances that led to such reversal carrying amount of inventories ledged as security for liabilities cost of inventories recognised as e5 ense +cost of goods sold,# IAS % ac3nowledges that some enter rises classify income statement e5 enses by nature +materials, labour, and so on, rather than by function +cost of goods sold, selling e5 ense, and so on,# Accordingly, as an alternative to disclosing cost of goods sold e5 ense, IAS % allows an entity to disclose o erating costs recognised during the eriod by nature of the cost +raw materials and consumables, labour costs, other o erating costs, and the amount of the net change in inventories for the eriod,# .IAS %#0)/ $his is consistent with IAS 1 Presentation of Financial Statements, which allows resentation of e5 enses by function or nature#

IAS ' Statement of ;ash Flows Overview IAS ' Statement of Cash Flo%s requires an entity to resent a statement of cash flows as an integral art of its rimary financial statements# ;ash flows are classified and resented into o erating activities +either using the -director -indirect- method,, investing activities or financing activities, with the latter two categories generally resented on a gross basis# IAS ' was reissued in ?ecember 1))%, retitled in Se tember %&&', and is o erative for financial statements covering eriods beginning on or after 1 (anuary 1))8# Summary of IAS ' Objective of IAS + $he ob*ective of IAS ' is to require the resentation of information about the historical changes in cash and cash equivalents of an entity by means of a statement of cash flows, which classifies cash flows during the eriod according to o erating, investing, and financing activities# Fundamental principle in IAS + All entities that re are financial statements in conformity with IF1Ss are required to resent a statement of cash flows# .IAS '#1/ $he statement of cash flows analyses changes in cash and cash equivalents during a eriod# ;ash and cash equivalents com rise cash on hand and demand de osits, together with short"term, highly liquid investments that are readily convertible to a 3nown amount of cash, and that are sub*ect to an insignificant ris3 of changes in value# 2uidance notes indicate that an investment normally meets the definition of a cash equivalent when it has a maturity of three months or less from the date of acquisition# >quity investments are normally e5cluded, unless they are in substance a cash equivalent +e#g# referred shares acquired within three months of their s ecified redem tion date,# Jan3 overdrafts which are re ayable on demand and which form an integral art of an entity-s cash management are also included as a com onent of cash and cash equivalents# .IAS '#'"=/ 3resentation of the Statement of Cash Flows ;ash flows must be analysed between o erating, investing and financing activities# .IAS '#1&/ Cey rinci les s ecified by IAS ' for the re aration of a statement of cash flows are as follows4 o operating activities are the main revenue" roducing activities of the entity that are not investing or financing activities, so o erating cash flows include cash received from customers and cash aid to su em loyees .IAS '#18/ o o o investing activities are the acquisition and dis osal of long"term assets and other investments that are not considered to be cash equivalents .IAS '#</ financing activities are activities that alter the equity ca ital and borrowing structure of the entity .IAS '#</ interest and dividends received and aid may be classified as o erating, investing, or financing cash flows, rovided that they are classified consistently from eriod to eriod .IAS '#01/ o cash flows arising from ta5es on income are normally classified as o erating, unless they can be s ecifically identified with financing or investing activities .IAS '#0:/ o for o erating cash flows, the direct method of resentation is encouraged, but the indirect method is acce table .IAS '#1=/ $he direct method shows each ma*or class of gross cash recei ts and gross cash ayments# $he o erating cash flows section of the statement of cash flows under the direct method would a ;ash recei ts from customers ;ash aid to su liers 55,555 55,555 ear something li3e this4 liers and

;ash aid to em loyees ;ash aid for other o erating e5 enses Interest aid Income ta5es aid 'et cash from operating activities o

55,555 55,555 55,555 55,555 %%4%%%

$he indirect methodad*usts accrual basis net rofit or loss for the effects of non"cash transactions# $he o erating cash flows section of the statement of cash flows under the indirect method would a li3e this4 Profit before interest and income ta5es Add bac3 de reciation Add bac3 amortisation of goodwill Increase in receivables ?ecrease in inventories Increase in trade ayables Interest e5 ense Iess Interest accrued but not yet aid Interest aid Income ta5es aid 'et cash from operating activities 55,555 55,555 55,555 55,555 %%4%%% 55,555 55,555 55,555 55,555 55,555 55,555 ear something

the e5change rate used for translation of transactions denominated in a foreign currency should be the rate in effect at the date of the cash flows .IAS '#%:/

cash flows of foreign subsidiaries should be translated at the e5change rates revailing when the cash flows too3 lace .IAS '#%</

as regards the cash flows of associates and *oint ventures, where the equity method is used, the statement of cash flows should re ort only cash flows between the investor and the investeeK where ro ortionate consolidation is used, the cash flow statement should include the venturer-s share of the cash flows of the investee .IAS '#0'"0=/

aggregate cash flows relating to acquisitions and dis osals of subsidiaries and other business units should be resented se arately and classified as investing activities, with s ecified additional disclosures# .IAS '#0)/ $he aggregate cash aid or received as consideration should be re orted net of cash and cash equivalents acquired or dis osed of .IAS '#8%/

cash flows from investing and financing activities should be re orted gross by ma*or class of cash recei ts and ma*or class of cash ayments e5ce t for the following cases, which may be re orted on a net basis4 .IAS '#%%"%8/ o cash recei ts and ayments on behalf of customers +for e5am le, recei t and re ayment of demand de osits by ban3s, and recei ts collected on behalf of and aid over to the owner of a ro erty, o cash recei ts and ayments for items in which the turnover is quic3, the amounts are large, and the maturities are short, generally less than three months +for e5am le, charges and collections from credit card customers, and urchase and sale of investments, o o cash recei ts and ayments relating to de osits by financial institutions cash advances and loans made to customers and re ayments thereof investing and financing transactions which do not require the use of cash should be e5cluded from the statement of cash flows, but they should be se arately disclosed elsewhere in the financial statements .IAS '#80/

the com onents of cash and cash equivalents should be disclosed, and a reconciliation resented to amounts re orted in the statement of financial osition .IAS '#8:/

the amount of cash and cash equivalents held by the entity that is not available for use by the grou should be disclosed, together with a commentary by management .IAS '#8=/

IAS = Accounting Policies, ;hanges in Accounting >stimates and >rrors

Overview IAS = !ccounting Policies, Changes in !ccounting Estimates and Errors is a lied in selecting and a lying accounting olicies, accounting for changes in estimates and reflecting corrections of rior eriod errors# $he standard requires com liance with any s ecific IF1S a lying to a transaction, event or condition, and rovides guidance on develo ing accounting olicies for other items that result in relevant and reliable information# ;hanges in accounting olicies and corrections of errors are generally retros ectively accounted for, whereas changes in accounting estimates are generally accounted for on a ros ective basis# IAS = was reissued in ?ecember %&&: and a lies to annual eriods beginning on or after 1 (anuary %&&:# Summary of IAS = 5e definitions ,IAS 678o o Accounting policies are the s ecific rinci les, bases, conventions, rules and ractices a entity in re aring and resenting financial statements# A change in accounting estimate is an ad*ustment of the carrying amount of an asset or liability, or related e5 ense, resulting from reassessing the e5 ected future benefits and obligations associated with that asset or liability# o o o o International Financial Reporting Standardsare standards and inter retations ado ted by the International Accounting Standards Joard +IASJ,# $hey com rise4 International Financial 1e orting Standards +IF1Ss, International Accounting Standards +IASs, Inter retations develo ed by the International Financial 1e orting Inter retations ;ommittee +IF1I;, or the former Standing Inter retations ;ommittee +SI;, and a o roved by the IASJ# lied by an

!aterialit 7 Omissions or misstatements of items are material if they could, by their siLe or nature, individually or collectively, influence the economic decisions of users ta3en on the basis of the financial statements#

3rior period errors are omissions from, and misstatements in, an entity-s financial statements for one or more rior eriods arising from a failure to use, or misuse of, reliable information that was available and could reasonably be e5 ected to have been obtained and ta3en into account in re aring those statements# Such errors result from mathematical mista3es, mista3es in a facts, and fraud# Selection and application of accounting policies 6hen a Standard or an Inter retation s ecifically a lies to a transaction, other event or condition, the accounting olicy or olicies a lied to that item must be determined by a lying the Standard or Inter retation and considering any relevant Im lementation 2uidance issued by the IASJ for the Standard or Inter retation# .IAS =#'/ In the absence of a Standard or an Inter retation that s ecifically a lies to a transaction, other event or condition, management must use its *udgement in develo ing and a lying an accounting olicy that results in information that is relevant and reliable# .IAS =#1&/# In ma3ing that *udgement, management must refer to, and consider the a licability of, the following sources in descending order4 lying accounting olicies, oversights or misinter retations of

the requirements and guidance in IASJ standards and inter retations dealing with similar and related issuesK and

the definitions, recognition criteria and measurement conce ts for assets, liabilities, income and e5 enses in the Framewor3# .IAS =#11/ Management may also consider the most recent ronouncements of other standard"setting bodies that use a similar conce tual framewor3 to develo accounting standards, other accounting literature and acce ted industry ractices, to the e5tent that these do not conflict with the sources in aragra h 11# .IAS =#1%/

Consistenc of accounting policies An entity shall select and a ly its accounting olicies consistently for similar transactions, other events and conditions, unless a Standard or an Inter retation s ecifically requires or ermits categorisation of items for which different olicies may be a ro riate# If a Standard or an Inter retation requires or ermits such categorisation, an a ro riate accounting olicy shall be selected and a lied consistently to each category# .IAS =#10/ Changes in accounting policies An entity is ermitted to change an accounting olicy only if the change4 o o is required by a standard or inter retationK or results in the financial statements roviding reliable and more relevant information about the effects of transactions, other events or conditions on the entity-s financial osition, financial erformance, or cash flows# .IAS =#18/ Fote that changes in accounting olicies do not include a lying an accounting olicy to a 3ind of transaction or event that did not occur reviously or were immaterial# .IAS =#1</ If a change in accounting olicy is required by a new IASJ standard or inter retation, the change is accounted for as required by that new ronouncement or, if the new ronouncement does not include s ecific transition rovisions, then the change in accounting olicy is a lied retros ectively# .IAS =#1)/ 1etros ective a lication means ad*usting the o ening balance of each affected com onent of equity for the earliest rior eriod resented and the other com arative amounts disclosed for each rior eriod resented as if the new accounting olicy had always been a lied# .IAS =#%%/ o Aowever, if it is im racticable to determine either the eriod"s ecific effects or the cumulative effect of the change for one or more rior eriods resented, the entity shall a ly the new accounting olicy to the carrying lication is

amounts of assets and liabilities as at the beginning of the earliest eriod for which retros ective a of each affected com onent of equity for that eriod# .IAS =#%8/ o a

racticable, which may be the current eriod, and shall ma3e a corres onding ad*ustment to the o ening balance

Also, if it is im racticable to determine the cumulative effect, at the beginning of the current eriod, of lying a new accounting olicy to all rior eriods, the entity shall ad*ust the com arative information to a ly

the new accounting olicy ros ectively from the earliest date racticable# .IAS =#%:/ 2isclosures relating to changes in accounting policies ?isclosures relating to changes in accounting olicy caused by a new standard or inter retation include4 .IAS =#%=/ o o o o the title of the standard or inter retation causing the change the nature of the change in accounting olicy a descri tion of the transitional rovisions, including those that might have an effect on future eriods for the current eriod and each rior eriod resented, to the e5tent racticable, the amount of the ad*ustment4 o o o o for each financial statement line item affected, and for basic and diluted earnings er share +only if the entity is a lying IAS 00,

the amount of the ad*ustment relating to eriods before those resented, to the e5tent racticable if retros ective a olicy was a lied# lication is im racticable, an e5 lanation and descri tion of how the change in accounting

Financial statements of subsequent eriods need not re eat these disclosures# ?isclosures relating to voluntary changes in accounting olicy include4 .IAS =#%)/ o o the nature of the change in accounting olicy the reasons why a lying the new accounting olicy rovides reliable and more relevant information

for the current eriod and each rior eriod resented, to the e5tent racticable, the amount of the ad*ustment4 o o for each financial statement line item affected, and for basic and diluted earnings er share +only if the entity is a lying IAS 00,

o o

the amount of the ad*ustment relating to eriods before those resented, to the e5tent racticable if retros ective a olicy was a lied# lication is im racticable, an e5 lanation and descri tion of how the change in accounting

Financial statements of subsequent eriods need not re eat these disclosures# If an entity has not a lied a new standard or inter retation that has been issued but is not yet effective, the entity must disclose that fact and any and 3nown or reasonably estimable information relevant to assessing the ossible im act that the new ronouncement will have in the year it is a lied# .IAS =#0&/ Changes in accounting estimates $he effect of a change in an accounting estimate shall be recognised ros ectively by including it in rofit or loss in4 .IAS =#0</ o o the eriod of the change, if the change affects that eriod only, or the eriod of the change and future eriods, if the change affects both# Aowever, to the e5tent that a change in an accounting estimate gives rise to changes in assets and liabilities, or relates to an item of equity, it is recognised by ad*usting the carrying amount of the related asset, liability, or equity item in the eriod of the change# .IAS =#0'/ 2isclosures relating to changes in accounting estimates ?isclose4 o the nature and amount of a change in an accounting estimate that has an effect in the current eriod or is e5 ected to have an effect in future eriods o if the amount of the effect in future eriods is not disclosed because estimating it is im racticable, an entity shall disclose that fact# .IAS =#0)"8&/ $rrors $he general rinci le in IAS = is that an entity must correct all material rior eriod errors retros ectively in the first set of financial statements authorised for issue after their discovery by4 .IAS =#8%/ o o restating the com arative amounts for the rior eriod+s, resented in which the error occurredK or if the error occurred before the earliest rior eriod resented, restating the o ening balances of assets, liabilities and equity for the earliest rior eriod resented# Aowever, if it is im racticable to determine the eriod"s ecific effects of an error on com arative information for one or more rior eriods resented, the entity must restate the o ening balances of assets, liabilities, and equity for the earliest eriod for which retros ective restatement is racticable +which may be the current eriod,# .IAS =#88/ Further, if it is im racticable to determine the cumulative effect, at the beginning of the current eriod, of an error on all rior eriods, the entity must restate the com arative information to correct the error ros ectively from the earliest date racticable# .IAS =#8:/ 2isclosures relating to prior period errors ?isclosures relating to rior eriod errors include4 .IAS =#8)/ o o o o o the nature of the rior eriod error for each rior eriod resented, to the e5tent racticable, the amount of the correction4 for each financial statement line item affected, and for basic and diluted earnings er share +only if the entity is a lying IAS 00,

the amount of the correction at the beginning of the earliest rior eriod resented

if retros ective restatement is im racticable, an e5 lanation and descri tion of how the error has been corrected# Financial statements of subsequent eriods need not re eat these disclosures# IAS 1& >vents After the 1e orting Period Overview IAS 1& Events !fter The Reporting Period contains requirements for when events after the end of the end of the re orting eriod should be ad*usted in the financial statements# Ad*usting events are those roviding evidence of conditions e5isting at the end of the re orting eriod, whereas non"ad*usting events are indicative of conditions arising after the re orting eriod +the latter being disclosed where material,# IAS 1& was reissued in ?ecember %&&0 and a lies to annual eriods beginning on or after 1 (anuary %&&:# Summary of IAS 1& 5e definitions $vent after the reporting period9 An event, which could be favourable or unfavourable, that occurs between the end of the re orting eriod and the date that the financial statements are authorised for issue# .IAS 1&#0/ Adjusting event9 An event after the re orting eriod that rovides further evidence of conditions that e5isted at the end of the re orting eriod, including an event that indicates that the going concern assum tion in relation to the whole or art of the enter rise is not a ro riate# .IAS 1&#0/ 'on1adjusting event9 An event after the re orting eriod that is indicative of a condition that arose after the end of the re orting eriod# .IAS 1&#0/ Accounting

Ad*ust financial statements for ad*usting events " events after the balance sheet date that rovide further evidence of conditions that e5isted at the end of the re orting eriod, including events that indicate that the going concern assum tion in relation to the whole or art of the enter rise is not a ro riate# .IAS 1&#=/

?o not ad*ust for non"ad*usting events " events or conditions that arose after the end of the re orting eriod# .IAS 1&#1&/

If an entity declares dividends after the re orting eriod, the entity shall not recognise those dividends as a liability at the end of the re orting eriod# $hat is a non"ad*usting event# .IAS 1&#1%/ Going concern issues arising after end of the reporting period An entity shall not re are its financial statements on a going concern basis if management determines after the end of the re orting eriod either that it intends to liquidate the entity or to cease trading, or that it has no realistic alternative but to do so# .IAS 1&#18/ 2isclosure Fon"ad*usting events should be disclosed if they are of such im ortance that non"disclosure would affect the ability of users to ma3e ro er evaluations and decisions# $he required disclosure is +a, the nature of the event and +b, an estimate of its financial effect or a statement that a reasonable estimate of the effect cannot be made# .IAS 1&#%1/ A com any should u date disclosures that relate to conditions that e5isted at the end of the re orting eriod to reflect any new information that it receives after the re orting eriod about those conditions# .IAS 1&#1)/ ;om anies must disclose the date when the financial statements were authorised for issue and who gave that authorisation# If the enter rise-s owners or others have the ower to amend the financial statements after issuance, the enter rise must disclose that fact# .IAS 1&#1'/

IAS 11 ;onstruction ;ontracts Overview IAS 11 Construction Contracts rovides requirements on the allocation of contract revenue and contract costs to accounting eriods in which construction wor3 is erformed# ;ontract revenues and e5 enses are recognised by reference to the stage of com letion of contract activity where the outcome of the construction contract can be estimated reliably, otherwise revenue is recognised only to the e5tent of recoverable contract costs incurred# IAS 11 was reissued in ?ecember 1))0 and is a licable for eriods beginning on or after 1 (anuary 1)):# Summary of IAS 11 Objective of IAS 11 $he ob*ective of IAS 11 is to rescribe the accounting treatment of revenue and costs associated with construction contracts# 0hat is a construction contract: A construction contract is a contract s ecifically negotiated for the construction of an asset or a grou of interrelated assets# .IAS 11#0/ Bnder IAS 11, if a contract covers two or more assets, the construction of each asset should be accounted for se arately if +a, se arate ro osals were submitted for each asset, +b, ortions of the contract relating to each asset were negotiated se arately, and +c, costs and revenues of each asset can be measured# Otherwise, the contract should be accounted for in its entirety# .IAS 11#=/ $wo or more contracts should be accounted for as a single contract if they were negotiated together and the wor3 is interrelated# .IAS 11#)/ If a contract gives the customer an o tion to order one or more additional assets, construction of each additional asset should be accounted for as a se arate contract if either +a, the additional asset differs significantly from the original asset+s, or +b, the rice of the additional asset is se arately negotiated# .IAS 11#1&/ 0hat is included in contract revenue and costs: ;ontract revenue should include the amount agreed in the initial contract, lus revenue from alternations in the original contract wor3, lus claims and incentive ayments that +a, are e5 ected to be collected and +b, that can be measured reliably# .IAS 11#11/ ;ontract costs should include costs that relate directly to the s ecific contract, lus costs that are attributable to the contractor-s general contracting activity to the e5tent that they can be reasonably allocated to the contract, lus such other costs that can be s ecifically charged to the customer under the terms of the contract# .IAS 11#1</ Accounting If the outcome of a construction contract can be estimated reliably, revenue and costs should be recognised in ro ortion to the stage of com letion of contract activity# $his is 3nown as the ercentage of com letion method of accounting# .IAS 11#%%/ $o be able to estimate the outcome of a contract reliably, the entity must be able to ma3e a reliable estimate of total contract revenue, the stage of com letion, and the costs to com lete the contract# .IAS 11#%0"%8/ If the outcome cannot be estimated reliably, no rofit should be recognised# Instead, contract revenue should be recognised only to the e5tent that contract costs incurred are e5 ected to be recoverable and contract costs should be e5 ensed as incurred# .IAS 11#0%/ $he stage of com letion of a contract can be determined in a variety of ways " including the ro ortion that contract costs incurred for wor3 erformed to date bear to the estimated total contract costs, surveys of wor3 erformed, or com letion of a hysical ro ortion of the contract wor3# .IAS 11#0&/ An e5 ected loss on a construction contract should be recognised as an e5 ense as soon as such loss is robable# .IAS 11#%% and 11#0</ 2isclosure o amount of contract revenue recognisedK .IAS 11#0)+a,/

o o o o o o

method used to determine revenueK .IAS 11#0)+b,/ method used to determine stage of com letionK .IAS 11#0)+c,/ and for contracts in rogress at balance sheet date4 .IAS 11#8&/ aggregate costs incurred and recognised rofit amount of advances received amount of retentions

3resentation $he gross amount due from customers for contract wor3 should be shown as an asset# .IAS 11#8%/ $he gross amount due to customers for contract wor3 should be shown as a liability# .IAS 11#8%/

IAS 1% Income $a5es Overview IAS 1% Income Taxes im lements a so"called -com rehensive balance sheet method- of accounting for income ta5es which recognises both the current ta5 consequences of transactions and events and the future ta5 consequences of the future recovery or settlement of the carrying amount of an entity-s assets and liabilities# ?ifferences between the carrying amount and ta5 base of assets and liabilities, and carried forward ta5 losses and credits, are recognised, with limited e5ce tions, as deferred ta5 liabilities or deferred ta5 assets, with the latter also being sub*ect to a - robable rofits- test# IAS 1% was reissued in October 1))< and is a licable to annual eriods beginning on or after 1 (anuary 1))=# Summary of IAS 1% Objective of IAS 1) $he ob*ective of IAS 1% +1))<, is to rescribe the accounting treatment for income ta5es# In meeting this ob*ective, IAS 1% notes the following4 o It is inherent in the recognition of an asset or liability that that asset or liability will be recovered or settled, and this recovery or settlement may give rise to future ta5 consequences which should be recognised at the same time as the asset or liability o An entity should account for the ta5 consequences of transactions and other events in the same way it accounts for the transactions or other events themselves# 5e definitions .IAS 1%#:/ (a% base $he ta5 base of an asset or liability is the amount attributed to that asset or liability for ta5 ur oses

(emporar differences

?ifferences between the carrying amount of an asset or liability in the statement of financial osition and its ta5 bases

(a%able temporar differences

$em orary differences that will result in ta5able amounts in determining ta5able rofit +ta5 loss, of future eriods when the carrying amount of the asset or liability is recovered or settled

2eductible temporar differences

$em orary differences that will result in amounts that are deductible in determining ta5able rofit +ta5 loss, of future eriods when the carrying amount of the asset or liability is recovered or settled

2eferred ta% liabilities

$he amounts of income ta5es ayable in future eriods in res ect of ta5able tem orary differences

2eferred ta% assets

$he amounts of income ta5es recoverable in future eriods in res ect of4

a# b#

deductible tem orary differences the carryforward of unused ta5 losses, and

c#

the carryforward of unused ta5 credits

Current ta% ;urrent ta5 for the current and rior eriods is recognised as a liability to the e5tent that it has not yet been settled, and as an asset to the e5tent that the amounts already aid e5ceed the amount due# .IAS 1%#1%/ $he benefit of a ta5 loss which can be carried bac3 to recover current ta5 of a rior eriod is recognised as an asset# .IAS 1%#10/ ;urrent ta5 assets and liabilities are measured at the amount e5 ected to be aid to +recovered from, ta5ation authorities, using the rates!laws that have been enacted or substantively enacted by the balance sheet date# .IAS 1%#8</ Calculation of deferred ta%es Formulae ?eferred ta5 assets and deferred ta5 liabilities can be calculated using the following formulae4

$em orary difference ?eferred ta5 asset or liability

E E

;arrying amount $em orary difference

" 5

$a5 base $a5 rate

$he following formula can be used in the calculation of deferred ta5es arising from unused ta5 losses or unused ta5 credits4

?eferred ta5 asset

Bnused ta5 loss or unused ta5 credits

$a5 rate

!a" bases $he ta5 base of an item is crucial in determining the amount of any tem orary difference, and effectively re resents the amount at which the asset or liability would be recorded in a ta5"based balance sheet# IAS 1% rovides the following guidance on determining ta5 bases4 o Assets# $he ta5 base of an asset is the amount that will be deductible against ta5able economic benefits from recovering the carrying amount of the asset# 6here recovery of an asset will have no ta5 consequences, the ta5 base is equal to the carrying amount# .IAS 1%#'/ o o o o Revenue received in advance# $he ta5 base of the recognised liability is its carrying amount, less revenue that will not be ta5able in future eriods .IAS 1%#=/ Other liabilities# $he ta5 base of a liability is its carrying amount, less any amount that will be deductible for ta5 ur oses in res ect of that liability in future eriods .IAS 1%#=/ ;nrecognised items# If items have a ta5 base but are not recognised in the statement of financial osition, the carrying amount is nil .IAS 1%#)/ (a% bases not immediatel apparent# If the ta5 base of an item is not immediately a arent, the ta5 base should effectively be determined in such as manner to ensure the future ta5 consequences of recovery or settlement of the item is recognised as a deferred ta5 amount .IAS 1%#1&/ o Consolidated financial statements# In consolidated financial statements, the carrying amounts in the consolidated financial statements are used, and the ta5 bases determined by reference to any consolidated ta5 return +or otherwise from the ta5 returns of each entity in the grou ,# .IAS 1%#11/

$%amples $he determination of the ta5 base will de end on the a licable ta5 laws and the entity-s e5 ectations as to recovery and settlement of its assets and liabilities# $he following are some basic e5am les4 o 3ropert 4 plant and e&uipment7 $he ta5 base of ro erty, lant and equi ment that is de reciable for ta5 ur oses that is used in the entity-s o erations is the unclaimed ta5 de reciation ermitted as deduction in future eriods o o o Receivables# If receiving ayment of the receivable has no ta5 consequences, its ta5 base is equal to its carrying amount Goodwill# If goodwill is not recognised for ta5 ur oses, its ta5 base is nil +no deductions are available, Revenue in advance# If the revenue is ta5ed on recei t but deferred for accounting ur oses, the ta5 base of the liability is equal to its carrying amount +as there are no future ta5able amounts,# ;onversely, if the revenue is recognised for ta5 ur oses when the goods or services are received, the ta5 base will be equal to nil o <oans# If there are no ta5 consequences from re ayment of the loan, the ta5 base of the loan is equal to its carrying amount# If the re ayment has ta5 consequences +e#g# ta5able amounts or deductions on re ayments of foreign currency loans recognised for ta5 ur oses at the e5change rate on the date the loan was drawn down,, the ta5 consequence of re ayment at carrying amount is ad*usted against the carrying amount to determine the ta5 base +which in the case of the aforementioned foreign currency loan would result in the ta5 base of the loan being determined by reference to the e5change rate on the draw down date,# Recognition and measurement of deferred ta%es #ecognition of deferred ta" liabilities $he general rinci le in IAS 1% is that a deferred ta5 liability is recognised for all ta5able tem orary differences# $here are three e5ce tions to the requirement to recognise a deferred ta5 liability, as follows4 o o liabilities arising from initial recognition of goodwill .IAS 1%#1:+a,/ liabilities arising from the initial recognition of an asset!liability other than in a business combination which, at the time of the transaction, does not affect either the accounting or the ta5able rofit .IAS 1%#1:+b,/ o liabilities arising from tem orary differences associated with investments in subsidiaries, branches, and associates, and interests in *oint arrangements, but only to the e5tent that the entity is able to control the timing of the reversal of the differences and it is robable that the reversal will not occur in the foreseeable future# .IAS 1%#0)/ $%ample An entity underta3en a business combination which results in the recognition of goodwill in accordance with IF1S 0 "usiness Com inations# $he goodwill is not ta5 de reciable or otherwise recognised for ta5 ur oses# As no future ta5 deductions are available in res ect of the goodwill, the ta5 base is nil# Accordingly, a ta5able tem orary difference arises in res ect of the entire carrying amount of the goodwill# Aowever, the ta5able tem orary difference does not result in the recognition of a deferred ta5 liability because of the recognition e5ce tion for deferred ta5 liabilities arising from goodwill# #ecognition of deferred ta" assets A deferred ta5 asset is recognised for deductible tem orary differences, unused ta5 losses and unused ta5 credits to the e5tent that it is robable that ta5able rofit will be available against which the deductible tem orary differences can be utilised, unless the deferred ta5 asset arises from4 .IAS 1%#%8/ o the initial recognition of an asset or liability other than in a business combination which, at the time of the transaction, does not affect accounting rofit or ta5able rofit#

?eferred ta5 assets for deductible tem orary differences arising from investments in subsidiaries, branches and associates, and interests in *oint arrangements, are only recognised to the e5tent that it is robable that the tem orary difference will reverse in the foreseeable future and that ta5able rofit will be available against which the tem orary difference will be utilised# .IAS 1%#88/ $he carrying amount of deferred ta5 assets are reviewed at the end of each re orting eriod and reduced to the e5tent that it is no longer robable that sufficient ta5able rofit will be available to allow the benefit of art or all of that deferred ta5 asset to be utilised# Any such reduction is subsequently reversed to the e5tent that it becomes robable that sufficient ta5able rofit will be available# .IAS 1%#0'/ A deferred ta5 asset is recognised for an unused ta5 loss carryforward or unused ta5 credit if, and only if, it is considered robable that there will be sufficient future ta5able rofit against which the loss or credit carryforward can be utilised# .IAS 1%#08/ Measurement of deferred ta" ?eferred ta5 assets and liabilities are measured at the ta5 rates that are e5 ected to a ly to the eriod when the asset is realised or the liability is settled, based on ta5 rates!laws that have been enacted or substantively enacted by the end of the re orting eriod# .IAS 1%#8'/ $he measurement reflects the entity-s e5 ectations, at the end of the re orting eriod, as to the manner in which the carrying amount of its assets and liabilities will be recovered or settled# .IAS 1%#:1/ IAS 1% rovides the following guidance on measuring deferred ta5es4 o 6here the ta5 rate or ta5 base is im acted by the manner in which the entity recovers its assets or settles its liabilities +e#g# whether an asset is sold or used,, the measurement of deferred ta5es is consistent with the way in which an asset is recovered or liability settled .IAS 1%#:1A/ o 6here deferred ta5es arise from revalued non"de reciable assets +e#g# revalued land,, deferred ta5es reflect the ta5 consequences of selling the asset .IAS 1%#:1J/ o ?eferred ta5es arising from investment ro erty measured at fair value under IAS 8&Investment Property reflect the rebuttable resum tion that the investment ro erty will be recovered through sale .IAS 1%#:1;":1?/ o If dividends are aid to shareholders, and this causes income ta5es to be ayable at a higher or lower rate, or the entity ays additional ta5es or receives a refund, deferred ta5es are measured using the ta5 rate a to undistributed rofits .IAS 1%#:%A/ ?eferred ta5 assets and liabilities cannot be discounted# .IAS 1%#:0/ Recognition of ta% amounts for the period $mount of income ta" to recognise $he following formula summarises the amount of ta5 to be recognised in an accounting eriod4 licable

$a5 to recognise for the eriod

;urrent ta5 for the eriod

Movement in deferred ta5 balances for the eriod

%here to recognise income ta" for the period ;onsistent with the rinci les underlying IAS 1%, the ta5 consequences of transactions and other events are recognised in the same way as the items giving rise to those ta5 consequences# Accordingly, current and deferred ta5 is recognised as income or e5 ense and included in rofit or loss for the eriod, e5ce t to the e5tent that the ta5 arises from4 .IAS 1%#:=/ o transactions or events that are recognised outside of rofit or loss +other com rehensive income or equity, " in which case the related ta5 amount is also recognised outside of rofit or loss .IAS 1%#<1A/

o a

a business combination " in which case the ta5 amounts are recognised as identifiable assets or liabilities at the acquisition date, and accordingly effectively ta3en into account in the determination of goodwill when lying IF1S 0 "usiness Com inations# .IAS 1%#<</

$%ample An entity underta3es a ca ital raising and incurs incremental costs directly attributable to the equity transaction, including regulatory fees, legal costs and stam duties# In accordance with the requirements of IAS 0% Financial Instruments# Presentation, the costs are accounted for as a deduction from equity# Assume that the costs incurred are immediately deductible for ta5 ur oses, reducing the amount of current ta5 ayable for the eriod# 6hen the ta5 benefit of the deductions is recognised, the current ta5 amount associated with the costs of the equity transaction is recognised directly in equity, consistent with the treatment of the costs themselves# IAS 1% rovides the following additional guidance on the recognition of income ta5 for the eriod4 o 6here it is difficult to determine the amount of current and deferred ta5 relating to items recognised outside of rofit or loss +e#g# where there are graduated rates or ta5,, the amount of income ta5 recognised outside of rofit or loss is determined on a reasonable ro"rata allocation, or using another more a 1%#<0/ o In the circumstances where the ayment of dividends im acts the ta5 rate or results in ta5able amounts or refunds, the income ta5 consequences of dividends are considered to be more directly lin3ed to ast transactions or events and so are recognised in rofit or loss unless the ast transactions or events were recognised outside of rofit or loss .IAS 1%#:%J/ o $he im act of business combinations on the recognition of re"combination deferred ta5 assets are not included in the determination of goodwill as art of the business combination, but are se arately recognised .IAS 1%#<=/ o $he recognition of acquired deferred ta5 benefits subsequent to a business combination are treated as -measurement eriod- ad*ustments +see IF1S 0 "usiness Com inations, if they qualify for that treatment, or otherwise are recognised in rofit or loss .IAS 1%#<=/ o $a5 benefits of equity settled share based ayment transactions that e5ceed the ta5 effected cumulative remuneration e5 ense are considered to relate to an equity item and are recognised directly in equity# .IAS 1%#<=;/ 3resentation ;urrent ta5 assets and current ta5 liabilities can only be offset in the statement of financial osition if the entity has the legal right and the intention to settle on a net basis# .IAS 1%#'1/ ?eferred ta5 assets and deferred ta5 liabilities can only be offset in the statement of financial osition if the entity has the legal right to settle current ta5 amounts on a net basis and the deferred ta5 amounts are levied by the same ta5ing authority on the same entity or different entities that intend to realise the asset and settle the liability at the same time# .IAS 1%#'8/ $he amount of ta5 e5 ense +or income, related to rofit or loss is required to be resented in the statement+s, of rofit or loss and other com rehensive income# .IAS 1%#''/ $he ta5 effects of items included in other com rehensive income can either be shown net for each item, or the items can be shown before ta5 effects with an aggregate amount of income ta5 for grou s of items +allocated between items that will and will not be reclassified to rofit or loss in subsequent eriods,# .IAS 1#)1/ 2isclosure IAS 1%#=& requires the following disclosures4 o o o ma*or com onents of ta5 e5 ense +ta5 income, .IAS 1%#')/ >5am les include4 current ta5 e5 ense +income, any ad*ustments of ta5es of rior eriods ro riate method .IAS

o differences o new ta5es o

amount of deferred ta5 e5 ense +income, relating to the origination and reversal of tem orary

amount of deferred ta5 e5 ense +income, relating to changes in ta5 rates or the im osition of

amount of the benefit arising from a reviously unrecognised ta5 loss, ta5 credit or tem orary difference of a rior eriod

o o errors#

write down, or reversal of a revious write down, of a deferred ta5 asset amount of ta5 e5 ense +income, relating to changes in accounting olicies and corrections of

IAS 1%#=1 requires the following disclosures4 o o o a aggregate current and deferred ta5 relating to items recognised directly in equity ta5 relating to each com onent of other com rehensive income e5 lanation of the relationshi between ta5 e5 ense +income, and the ta5 that would be e5 ected by lying the current ta5 rate to accounting rofit or loss +this can be resented as a reconciliation of amounts of

ta5 or a reconciliation of the rate of ta5, o o o changes in ta5 rates amounts and other details of deductible tem orary differences, unused ta5 losses, and unused ta5 credits tem orary differences associated with investments in subsidiaries, branches and associates, and interests in *oint arrangements o for each ty e of tem orary difference and unused ta5 loss and credit, the amount of deferred ta5 assets or liabilities recognised in the statement of financial osition and the amount of deferred ta5 income or e5 ense recognised in rofit or loss o o o o o o ta5 relating to discontinued o erations ta5 consequences of dividends declared after the end of the re orting eriod information about the im acts of business combinations on an acquirer-s deferred ta5 assets recognition of deferred ta5 assets of an acquiree after the acquisition date# Other required disclosures4 details of deferred ta5 assets .IAS 1%#=%/ ta5 consequences of future dividend ayments# .IAS 1%#=%A/ In addition to the disclosures required by IAS 1%, some disclosures relating to income ta5es are required by IAS 1 Presentation of Financial Statements, as follows4 o ?isclosure on the face of the statement of financial osition about current ta5 assets, current ta5 liabilities, deferred ta5 assets, and deferred ta5 liabilities .IAS 1#:8+n, and +o,/ o ?isclosure of ta5 e5 ense +ta5 income, in the rofit or loss section of the statement of rofit or loss and other com rehensive income +or se arate statement if resented,# .IAS 1#=%+d,/

IAS 18 Segment 1e orting +Su erseded, Overview IAS 18 Segment Reporting requires re orting of financial information by business or geogra hical area# It requires disclosures for - rimary- and -secondary- segment re orting formats, with the rimary format based on whether the entity-s ris3s and returns are affected redominantly by the roducts and services it roduces or by the fact that it o erates in different geogra hical areas# IAS 18 was issued in August 1))', was a licable to annual eriods beginning on or after 1 (uly 1))=, and was su erseded by IF1S = 'perating Segments with effect from annual eriods beginning on or after 1 (anuary %&&)# Summary of IAS 18 Objective of IAS 1= $he ob*ective of IAS 18 +1evised 1))', is to establish rinci les for re orting financial information by line of business and by geogra hical area# It a lies to entities whose equity or debt securities are ublicly traded and to entities in the rocess of issuing securities to the ublic# In addition, any entity voluntarily roviding segment information should com ly with the requirements of the Standard# Applicabilit IAS 18 must be a lied by entities whose debt or equity securities are ublicly traded and those in the rocess of issuing such securities in ublic securities mar3ets# .IAS 18#0/ If an entity that is not ublicly traded chooses to re ort segment information and claims that its financial statements conform to IF1Ss, then it must follow IAS 18 in full# .IAS 18#:/ Segment information need not be resented in the se arate financial statements of a +a, arent, +b, subsidiary, +c, equity method associate, or +d, equity method *oint venture that are resented in the same re ort as the consolidated statements# .IAS 18#<"'/ 5e definitions >usiness segment9 a com onent of an entity that +a, rovides a single roduct or service or a grou of related roducts and services and +b, that is sub*ect to ris3s and returns that are different from those of other business segments# .IAS 18#)/ Geographical segment9 a com onent of an entity that +a, rovides roducts and services within a articular economic environment and +b, that is sub*ect to ris3s and returns that are different from those of com onents o erating in other economic environments# .IAS 18#)/ Reportable segment9 a business segment or geogra hical segment for which IAS 18 requires segment information to be re orted# .IAS 18#)/ Segment revenue9 revenue, including intersegment revenue, that is directly attributable or reasonably allocable to a segment# Includes interest and dividend income and related securities gains only if the segment is a financial segment +ban3, insurance com any, etc#,# .IAS 18#1</ Segment e%penses9 e5 enses, including e5 enses relating to intersegment transactions, that +a, result from o erating activities and +b, are directly attributable or reasonably allocable to a segment# Includes interest e5 ense and related securities losses only if the segment is a financial segment +ban3, insurance com any, etc#,# Segment e5 enses do not include4 o o o o o interest losses on sales of investments or debt e5tinguishments losses on investments accounted for by the equity method income ta5es general cor orate administrative and head"office e5 enses that relate to the entity as a whole .IAS 18#1</

Segment result4 segment revenue minus segment e5 enses, before deducting minority interest# .IAS 18#1</ Segment assets and segment liabilities4 those o erating assets +liabilities, that are directly attributable or reasonably allocable to a segment# .IAS 18#1</ Identif ing business and geographical segments An entity must loo3 to its organisational structure and internal re orting system to identify re ortable segments# In articular, IAS 18 resumes that segmentation in internal financial re orts re ared for the board of directors and chief e5ecutive officer should normally determine segments for e5ternal financial re orting ur oses# Only if internal segments are not along either roduct!service or geogra hical lines is further disaggregation a ro riate# .IAS 18#%</ 2eogra hical segments may be based either on where the entity-s assets are located or on where its customers are located# .IAS 18#18/ 6hichever basis is used, several items of data must be resented on the other basis if significantly different# .IAS 18#'1"'%/ 3rimar and secondar segments For most entities one basis of segmentation is rimary and the other is secondary, with considerably less disclosure required for secondary segments# $he entity should determine whether business or geogra hical segments are to be used for its rimary segment re orting format based on whether the entity-s ris3s and returns are affected redominantly by the roducts and services it roduces or by the fact that it o erates in different geogra hical areas# $he basis for identification of the redominant source and nature of ris3s and differing rates of return facing the entity will usually be the entity-s internal organisational and management structure and its system of internal financial re orting to senior management# .IAS 18#%<"%'/ 0hich segments are reportable: $he entity-s re ortable segments are its business and geogra hical segments for which a ma*ority of their revenue is earned from sales to e5ternal customers and for which4 .IAS 18#0:/ o revenue from sales to e5ternal customers and from transactions with other segments is 1&N or more of the total revenue, e5ternal and internal, of all segmentsK or o segment result, whether rofit or loss, is 1&N or more the combined result of all segments in rofit or the combined result of all segments in loss, whichever is greater in absolute amountK or o assets are 1&N or more of the total assets of all segments# Segments deemed too small for se arate re orting may be combined with each other, if related, but they may not be combined with other significant segments for which information is re orted internally# Alternatively, they may be se arately re orted# If neither combined nor se arately re orted, they must be included as an unallocated reconciling item# .IAS 18#0</ If total e5ternal revenue attributable to re ortable segments identified using the 1&N thresholds outlined above is less than ':N of the total consolidated or entity revenue, additional segments should be identified as re ortable segments until at least ':N of total consolidated or entity revenue is included in re ortable segments# .IAS 18#0'/ Hertically integrated segments +those that earn a ma*ority of their revenue from intersegment transactions, may be, but need not be, re ortable segments# .IAS 18#0)/ If not se arately re orted, the selling segment is combined with the buying segment# .IAS 18#81/ IAS 18#8%"80 contain s ecial rules for identifying re ortable segments in the years in which a segment reaches or loses 1&N significance# 0hat accounting policies should a segment follow: Segment accounting olicies must be the same as those used in the consolidated financial statements# .IAS 18#88/ If assets used *ointly by two or more segments are allocated to segments, the related revenue and e5 enses must also be allocated# .IAS 18#8'/ 0hat must be disclosed: IAS 18 has detailed guidance as to which items of revenue and e5 ense are included in segment revenue and segment e5 ense# All com anies will re ort a standardised measure of segment result 7 basically o erating rofit before interest, ta5es, and head office e5 enses# For an entity-s rimary segments, revised IAS 18 requires disclosure of4 .IAS 18#:1"<'/ o o sales revenue +distinguishing between e5ternal and intersegment, result

o o o o o o o o

assets the basis of intersegment ricing liabilities ca ital additions de reciation and amortisation significant unusual items non"cash e5 enses other than de reciation equity method income Segment revenue includes 9sales9 from one segment to another# Bnder IAS 18, these intersegment transfers must be measured on the basis that the entity actually used to rice the transfers# .IAS 18#':/ For secondary segments, disclose4 .IAS 18#<)"'%/

o o o o

revenue assets ca ital additions Other disclosure matters addressed in IAS 184 ?isclosure is required of e5ternal revenue for a segment that is not deemed a re ortable segment because a ma*ority of its sales are intersegment sales but nonetheless its e5ternal sales are 1&N or more of consolidated revenue# .IAS 18#'8/

o o

S ecial disclosures are required for changes in segment accounting olicies# .IAS 18#'</ 6here there has been a change in the identification of segments, rior year information should be restated# If this is not racticable, segment data should be re orted for both the old and new bases of segmentation in the year of change# .IAS 18#'</

?isclosure is required of the ty es of roducts and services included in each re orted business segment and of the com osition of each re orted geogra hical segment, both rimary and secondary# .IAS 18#=1/ An entity must resent a reconciliation between information re orted for segments and consolidated information# At a minimum4 .IAS 18#<'/

o o

segment revenue should be reconciled to consolidated revenue segment result should be reconciled to a com arable measure of consolidated o erating rofit or loss and consolidated net rofit or loss

o o

segment assets should be reconciled to entity assets segment liabilities should be reconciled to entity liabilities#

IAS 1: Information 1eflecting the >ffects of ;hanging Prices +6ithdrawn, Summary of IAS 1: In October 1?6? IAS 18 0as !ade Optional In October 1)=), the IAS; issued a Joard Statement ma3ing IAS 1: o tional, not mandatory# IAS; granted that e5em tion because of the failure to reach an international consensus on the disclosure of information reflecting the effects of changing rices# Aowever, enter rises are encouraged to disclose information reflecting the effects of changing rices and, where they do so, to disclose the items required by IAS 1:# In 2ecember )**@4 the IAS> withdrew IAS 18 as part of its Im rovements Pro*ect4 effective 1 Aanuar )**87 Objective of IAS 18 $he ob*ective of IAS 1: is to s ecify disclosures reflecting the effects of changing rices on the measurements used in the determination of an enter rise-s results of o erations and its financial osition# Applicabilit IAS 1: a lies to enter rises whose levels of revenue, rofit, assets or em loyment are significant in the economic environment in which they o erate# 6hen both arent and consolidated financial statements are resented, the information s ecified by IAS 1: need be resented only on a consolidated basis# .IAS 1:#0/ !ethod for reflecting changing prices $he enter rise must select one of two broad accounting methods for reflecting the effects of changing rices4 .IAS 1:#=/ o o General purchasing power approach7 1estate financial statements for changes in the general rice level# Current cost approach7 Measure balance sheet items at re lacement cost# IAS 1: allows a variety of methods of ad*usting income under the current cost a roach#

0hat should be disclosed $he following items should be disclosed, at a minimum, based on the chosen method for reflecting the effects of changing rices4 .IAS 1:#%1"%0/ o o o o o o Ad*ustment to de reciation Ad*ustment to cost of sales Ad*ustments relating to monetary items $he overall effect on net income of the above three items ;urrent cost of ro erty, lant and equi ment and of inventories, if the current cost a ?escri tion of the methods used to com ute the above ad*ustments $he disclosures can be made on a su lementary basis or in the rimary financial statements# .IAS 1:#%8/ roach is used

IAS 1< Pro erty, Plant and >qui ment Overview IAS 1< Property, Plant and Equipment outlines the accounting treatment for most ty es of ro erty, lant and equi ment# Pro erty, lant and equi ment is initially measured at its cost, subsequently measured either using a cost or revaluation model, and de reciated so that its de reciable amount is allocated on a systematic basis over its useful life# IAS 1< was reissued in ?ecember %&&0 and a lies to annual eriods beginning on or after 1 (anuary %&&:# Summary of IAS 1< Objective of IAS 1B $he ob*ective of IAS 1< is to rescribe the accounting treatment for ro erty, lant, and equi ment# $he rinci al issues are the recognition of assets, the determination of their carrying amounts, and the de reciation charges and im airment losses to be recognised in relation to them# Scope IAS 1< a lies to the accounting for ro erty, lant and equi ment, e5ce t where another standards requires or ermits differing accounting treatments, for e5am le4 o o o o assets classified as held for sale in accordance with IF1S : (on)current !ssets *eld for Sale and &iscontinued 'perations biological assets related to agricultural activity accounting for under IAS 81 !griculture e5 loration and evaluation assets recognised in accordance with IF1S < Exploration for and Evaluation of $ineral Resources mineral rights and mineral reserves such as oil, natural gas and similar non"regenerative resources# $he standard does a ly to ro erty, lant, and equi ment used to develo or maintain the last three categories of assets# .IAS 1<#0/ $he cost model in IAS 1< also a lies to investment ro erty accounted for using the cost model under IAS 8& Investment Property# .IAS 1<#:/ Recognition Items of ro erty, lant, and equi ment should be recognised as assets when it is robable that4 .IAS 1<#'/ o o it is robable that the future economic benefits associated with the asset will flow to the entity, and the cost of the asset can be measured reliably# $his recognition rinci le is a lied to all ro erty, lant, and equi ment costs at the time they are incurred# $hese costs include costs incurred initially to acquire or construct an item of ro erty, lant and equi ment and costs incurred subsequently to add to, re lace art of, or service it# IAS 1< does not rescribe the unit of measure for recognition 7 what constitutes an item of ro erty, lant, and equi ment# .IAS 1<#)/ Fote, however, that if the cost model is used +see below, each art of an item of ro erty, lant, and equi ment with a cost that is significant in relation to the total cost of the item must be de reciated se arately# .IAS 1<#80/ IAS 1< recognises that arts of some items of ro erty, lant, and equi ment may require re lacement at regular intervals# $he carrying amount of an item of ro erty, lant, and equi ment will include the cost of re lacing the art of such an item when that cost is incurred if the recognition criteria +future benefits and measurement reliability, are met# $he carrying amount of those arts that are re laced is derecognised in accordance with the derecognition rovisions of IAS 1<#<'"'%# .IAS 1<#10/ Also, continued o eration of an item of ro erty, lant, and equi ment +for e5am le, an aircraft, may require regular ma*or ins ections for faults regardless of whether arts of the item are re laced# 6hen each ma*or ins ection is erformed, its cost is recognised in the carrying amount of the item of ro erty, lant, and equi ment as a re lacement if the recognition criteria are satisfied# If necessary, the estimated cost of a future similar ins ection may

be used as an indication of what the cost of the e5isting ins ection com onent was when the item was acquired or constructed# .IAS 1<#18/ Initial measurement An item of ro erty, lant and equi ment should initially be recorded at cost# .IAS 1<#1:/ ;ost includes all costs necessary to bring the asset to wor3ing condition for its intended use# $his would include not only its original urchase rice but also costs of site re aration, delivery and handling, installation, related rofessional fees for architects and engineers, and the estimated cost of dismantling and removing the asset and restoring the site +see IAS 0' Provisions, Contingent +ia ilities and Contingent !ssets,# .IAS 1<#1<"1'/ If ayment for an item of ro erty, lant, and equi ment is deferred, interest at a mar3et rate must be recognised or im uted# .IAS 1<#%0/ If an asset is acquired in e5change for another asset +whether similar or dissimilar in nature,, the cost will be measured at the fair value unless +a, the e5change transaction lac3s commercial substance or +b, the fair value of neither the asset received nor the asset given u is reliably measurable# If the acquired item is not measured at fair value, its cost is measured at the carrying amount of the asset given u # .IAS 1<#%8/ !easurement subse&uent to initial recognition IAS 1< ermits two accounting models4 o o Cost model7 $he asset is carried at cost less accumulated de reciation and im airment# .IAS 1<#0&/ Revaluation model7 $he asset is carried at a revalued amount, being its fair value at the date of revaluation less subsequent de reciation and im airment, rovided that fair value can be measured reliably# .IAS 1<#01/ (he revaluation model Bnder the revaluation model, revaluations should be carried out regularly, so that the carrying amount of an asset does not differ materially from its fair value at the balance sheet date# .IAS 1<#01/ If an item is revalued, the entire class of assets to which that asset belongs should be revalued# .IAS 1<#0</ 1evalued assets are de reciated in the same way as under the cost model +see below,# If a revaluation results in an increase in value, it should be credited to other com rehensive income and accumulated in equity under the heading 9revaluation sur lus9 unless it re resents the reversal of a revaluation decrease of the same asset reviously recognised as an e5 ense, in which case it should be recognised in rofit or loss# .IAS 1<#0)/ A decrease arising as a result of a revaluation should be recognised as an e5 ense to the e5tent that it e5ceeds any amount reviously credited to the revaluation sur lus relating to the same asset# .IAS 1<#8&/ 6hen a revalued asset is dis osed of, any revaluation sur lus may be transferred directly to retained earnings, or it may be left in equity under the heading revaluation sur lus# $he transfer to retained earnings should not be made through rofit or loss# .IAS 1<#81/ 2epreciation "cost and revaluation models# For all de reciable assets4 $he de reciable amount +cost less residual value, should be allocated on a systematic basis over the asset-s useful life .IAS 1<#:&/# $he residual value and the useful life of an asset should be reviewed at least at each financial year"end and, if e5 ectations differ from revious estimates, any change is accounted for ros ectively as a change in estimate under IAS =# .IAS 1<#:1/ $he de reciation method used should reflect the attern in which the asset-s economic benefits are consumed by the entity .IAS 1<#<&/K $he de reciation method should be reviewed at least annually and, if the attern of consum tion of benefits has changed, the de reciation method should be changed ros ectively as a change in estimate under IAS =# .IAS 1<#<1/ ?e reciation should be charged to rofit or loss, unless it is included in the carrying amount of another asset .IAS 1<#8=/# ?e reciation begins when the asset is available for use and continues until the asset is derecognised, even if it is idle# .IAS 1<#::/ Recoverabilit of the carr ing amount IAS 1< Property, Plant and Equipment requires im airment testing and, if necessary, recognition for ro erty, lant, and equi ment# An item of ro erty, lant, or equi ment shall not be carried at more than recoverable amount# 1ecoverable amount is the higher of an asset-s fair value less costs to sell and its value in use#

Any claim for com ensation from third arties for im airment is included in rofit or loss when the claim becomes receivable# .IAS 1<#<:/ 2erecognition "retirements and disposals# An asset should be removed from the statement of financial osition on dis osal or when it is withdrawn from use and no future economic benefits are e5 ected from its dis osal# $he gain or loss on dis osal is the difference between the roceeds and the carrying amount and should be recognised in rofit and loss# .IAS 1<#<'"'1/ If an entity rents some assets and then ceases to rent them, the assets should be transferred to inventories at their carrying amounts as they become held for sale in the ordinary course of business# .IAS 1<#<=A/ 2isclosure &nformation about each class of property' plant and equipment For each class of ro erty, lant, and equi ment, disclose4 .IAS 1<#'0/ o o o o o o o o o o o o o o basis for measuring carrying amount de reciation method+s, used useful lives or de reciation rates gross carrying amount and accumulated de reciation and im airment losses reconciliation of the carrying amount at the beginning and the end of the eriod, showing4 additions dis osals acquisitions through business combinations revaluation increases or decreases im airment losses reversals of im airment losses de reciation net foreign e5change differences on translation other movements

$dditional disclosures $he following disclosures are also required4 .IAS 1<#'8/ o o o o restrictions on title and items ledged as security for liabilities e5 enditures to construct ro erty, lant, and equi ment during the eriod contractual commitments to acquire ro erty, lant, and equi ment com ensation from third arties for items of ro erty, lant, and equi ment that were im aired, lost or given u that is included in rofit or loss# IAS 1< also encourages, but does not require, a number of additional disclosures# .IAS 1<#')/ #evalued property' plant and equipment If ro erty, lant, and equi ment is stated at revalued amounts, certain additional disclosures are required4 .IAS 1<#''/ o o o the effective date of the revaluation whether an inde endent valuer was involved for each revalued class of ro erty, the carrying amount that would have been recognised had the assets been carried under the cost model o the revaluation sur lus, including changes during the eriod and any restrictions on the distribution of the balance to shareholders#

>ntities with ro erty, lant and equi ment stated at revalued amounts are also required to ma3e disclosures under IF1S 10 Fair ,alue $easurement#

IAS 1' Ieases Overview IAS 1' +eases rescribes the accounting olicies and disclosures a licable to leases, both for lessees and lessors# Ieases are required to be classified as either finance leases +which transfer substantially all the ris3s and rewards of ownershi , and give rise to asset and liability recognition by the lessee and a receivable by the lessor, and o erating leases +which result in e5 ense recognition by the lessee, with the asset remaining recognised by the lessor,# IAS 1' was reissued in ?ecember %&&0 and a lies to annual eriods beginning on or after 1 (anuary %&&:# Summary of IAS 1' Objective of IAS 1+ $he ob*ective of IAS 1' +1))', is to rescribe, for lessees and lessors, the a disclosures to a ly in relation to finance and o erating leases# ro riate accounting olicies and

Scope IAS 1' a lies to all leases other than lease agreements for minerals, oil, natural gas, and similar regenerative resources and licensing agreements for films, videos, lays, manuscri ts, atents, co yrights, and similar items# .IAS 1'#%/ Aowever, IAS 1' does not a ly as the basis of measurement for the following leased assets4 .IAS 1'#%/ o ro erty held by lessees that is accounted for as investment ro erty for which the lessee uses the fair value model set out in IAS 8& o o o investment ro erty rovided by lessors under o erating leases +see IAS 8&, biological assets held by lessees under finance leases +see IAS 81, biological assets rovided by lessors under o erating leases +see IAS 81, Classification of leases A lease is classified as a finance lease if it transfers substantially all the ris3s and rewards incident to ownershi # All other leases are classified as o erating leases# ;lassification is made at the ince tion of the lease# .IAS 1'#8/ 6hether a lease is a finance lease or an o erating lease de ends on the substance of the transaction rather than the form# Situations that would normally lead to a lease being classified as a finance lease include the following4 .IAS 1'#1&/ o o the lease transfers ownershi of the asset to the lessee by the end of the lease term the lessee has the o tion to urchase the asset at a rice which is e5 ected to be sufficiently lower than fair value at the date the o tion becomes e5ercisable that, at the ince tion of the lease, it is reasonably certain that the o tion will be e5ercised o o the lease term is for the ma*or art of the economic life of the asset, even if title is not transferred at the ince tion of the lease, the resent value of the minimum lease ayments amounts to at least substantially all of the fair value of the leased asset o the lease assets are of a s ecialised nature such that only the lessee can use them without ma*or modifications being made Other situations that might also lead to classification as a finance lease are4 .IAS 1'#11/ o if the lessee is entitled to cancel the lease, the lessor-s losses associated with the cancellation are borne by the lessee

gains or losses from fluctuations in the fair value of the residual fall to the lessee +for e5am le, by means of a rebate of lease ayments,

the lessee has the ability to continue to lease for a secondary eriod at a rent that is substantially lower than mar3et rent 6hen a lease includes both land and buildings elements, an entity assesses the classification of each element as a finance or an o erating lease se arately# In determining whether the land element is an o erating or a finance lease, an im ortant consideration is that land normally has an indefinite economic life .IAS 1'#1:A/# 6henever necessary in order to classify and account for a lease of land and buildings, the minimum lease ayments +including any lum "sum u front ayments, are allocated between the land and the buildings elements in ro ortion to the relative fair values of the leasehold interests in the land element and buildings element of the lease at the ince tion of the lease# .IAS 1'#1</ For a lease of land and buildings in which the amount that would initially be recognised for the land element is immaterial, the land and buildings may be treated as a single unit for the ur ose of lease classification and classified as a finance or o erating lease# .IAS 1'#1'/ Aowever, se arate measurement of the land and buildings elements is not required if the lessee-s interest in both land and buildings is classified as an investment ro erty in accordance with IAS 8& and the fair value model is ado ted# .IAS 1'#1=/ Accounting b lessees $he following rinci les should be a lied in the financial statements of lessees4

at commencement of the lease term, finance leases should be recorded as an asset and a liability at the lower of the fair value of the asset and the resent value of the minimum lease ayments +discounted at the interest rate im licit in the lease, if racticable, or else at the entity-s incremental borrowing rate, .IAS 1'#%&/

finance lease ayments should be a

ortioned between the finance charge and the reduction of the

outstanding liability +the finance charge to be allocated so as to roduce a constant eriodic rate of interest on the remaining balance of the liability, .IAS 1'#%:/ o the de reciation olicy for assets held under finance leases should be consistent with that for owned assets# If there is no reasonable certainty that the lessee will obtain ownershi at the end of the lease 7 the asset should be de reciated over the shorter of the lease term or the life of the asset .IAS 1'#%'/ o for o erating leases, the lease ayments should be recognised as an e5 ense in the income statement over the lease term on a straight"line basis, unless another systematic basis is more re resentative of the time attern of the user-s benefit .IAS 1'#00/ Incentives for the agreement of a new or renewed o erating lease should be recognised by the lessee as a reduction of the rental e5 ense over the lease term, irres ective of the incentive-s nature or form, or the timing of ayments# .SI;"1:/ Accounting b lessors $he following rinci les should be a o lied in the financial statements of lessors4

at commencement of the lease term, the lessor should record a finance lease in the balance sheet as a receivable, at an amount equal to the net investment in the lease .IAS 1'#0</

the lessor should recognise finance income based on a attern reflecting a constant eriodic rate of return on the lessor-s net investment outstanding in res ect of the finance lease .IAS 1'#0)/

assets held for o erating leases should be resented in the balance sheet of the lessor according to the nature of the asset# .IAS 1'#8)/ Iease income should be recognised over the lease term on a straight"line basis, unless another systematic basis is more re resentative of the time attern in which use benefit is derived from the leased asset is diminished .IAS 1'#:&/ Incentives for the agreement of a new or renewed o erating lease should be recognised by the lessor as a reduction of the rental income over the lease term, irres ective of the incentive-s nature or form, or the timing of ayments# .SI;" 1:/

Manufacturers or dealer lessors should include selling rofit or loss in the same eriod as they would for an outright sale# If artificially low rates of interest are charged, selling rofit should be restricted to that which would a ly if a commercial rate of interest were charged# .IAS 1'#8%/ Bnder the %&&0 revisions to IAS 1', initial direct and incremental costs incurred by lessors in negotiating leases must be recognised over the lease term# $hey may no longer be charged to e5 ense when incurred# $his treatment does not a ly to manufacturer or dealer lessors where such cost recognition is as an e5 ense when the selling rofit is recognised# Sale and leasebacC transactions For a sale and leasebac3 transaction that results in a finance lease, any e5cess of roceeds over the carrying amount is deferred and amortised over the lease term# .IAS 1'#:)/ For a transaction that results in an o erating lease4 .IAS 1'#<1/ o o if the transaction is clearly carried out at fair value " the rofit or loss should be recognised immediately if the sale rice is below fair value " rofit or loss should be recognised immediately, e5ce t if a loss is com ensated for by future rentals at below mar3et rice, the loss it should be amortised over the eriod of use o if the sale rice is above fair value " the e5cess over fair value should be deferred and amortised over the eriod of use o if the fair value at the time of the transaction is less than the carrying amount 7 a loss equal to the difference should be recognised immediately .IAS 1'#<0/ 2isclosure9 lessees D finance leases ,IAS 1+7@1o o o o o o o o o carrying amount of asset reconciliation between total minimum lease ayments and their resent value amounts of minimum lease ayments at balance sheet date and the resent value thereof, for4 the ne5t year years % through : combined beyond five years contingent rent recognised as an e5 ense total future minimum sublease income under noncancellable subleases general descri tion of significant leasing arrangements, including contingent rent rovisions, renewal or urchase o tions, and restrictions im osed on dividends, borrowings, or further leasing 2isclosure9 lessees D operating leases ,IAS 1+7@8o o o o o o o o amounts of minimum lease ayments at balance sheet date under noncancellable o erating leases for4 the ne5t year years % through : combined beyond five years total future minimum sublease income under noncancellable subleases lease and sublease ayments recognised in income for the eriod contingent rent recognised as an e5 ense general descri tion of significant leasing arrangements, including contingent rent rovisions, renewal or urchase o tions, and restrictions im osed on dividends, borrowings, or further leasing 2isclosure9 lessors D finance leases ,IAS 1+7=+o reconciliation between gross investment in the lease and the resent value of minimum lease aymentsK

o o o o o o o o o

gross investment and resent value of minimum lease ayments receivable for4 the ne5t year years % through : combined beyond five years unearned finance income unguaranteed residual values accumulated allowance for uncollectible lease ayments receivable contingent rent recognised in income general descri tion of significant leasing arrangements 2isclosure9 lessors D operating leases ,IAS 1+78B-

amounts of minimum lease ayments at balance sheet date under noncancellable o erating leases in the aggregate and for4 o o o the ne5t year years % through : combined beyond five years contingent rent recognised as in income general descri tion of significant leasing arrangements

o o

IAS 1= 1evenue Overview IAS 1= Revenue outlines the accounting requirements for when to recognise revenue from the sale of goods, rendering of services, and for interest, royalties and dividends# 1evenue is measured at the fair value of the consideration received or receivable and recognised when rescribed conditions are met, which de end on the nature of the revenue# IAS 1= was reissued in ?ecember 1))0 and is o erative for eriods beginning on or after 1 (anuary 1)):# Summary of IAS 1= Objective of IAS 16 $he ob*ective of IAS 1= is to rescribe the accounting treatment for revenue arising from certain ty es of transactions and events# 5e definition Revenue9 the gross inflow of economic benefits +cash, receivables, other assets, arising from the ordinary o erating activities of an entity +such as sales of goods, sales of services, interest, royalties, and dividends,# .IAS 1=#'/ !easurement of revenue 1evenue should be measured at the fair value of the consideration received or receivable# .IAS 1=#)/ An e5change for goods or services of a similar nature and value is not regarded as a transaction that generates revenue# Aowever, e5changes for dissimilar items are regarded as generating revenue# .IAS 1=#1%/ If the inflow of cash or cash equivalents is deferred, the fair value of the consideration receivable is less than the nominal amount of cash and cash equivalents to be received, and discounting is a ro riate# $his would occur, for instance, if the seller is roviding interest"free credit to the buyer or is charging a below"mar3et rate of interest# Interest must be im uted based on mar3et rates# .IAS 1=#11/ Recognition of revenue 1ecognition, as defined in the IASJ Frame%or-, means incor orating an item that meets the definition of revenue +above, in the income statement when it meets the following criteria4 o o it is robable that any future economic benefit associated with the item of revenue will flow to the entity, and the amount of revenue can be measured with reliability IAS 1= rovides guidance for recognising the following s ecific categories of revenue4 Sale of goods 1evenue arising from the sale of goods should be recognised when all of the following criteria have been satisfied4 .IAS 1=#18/ o o the seller has transferred to the buyer the significant ris3s and rewards of ownershi the seller retains neither continuing managerial involvement to the degree usually associated with ownershi nor effective control over the goods sold o o o the amount of revenue can be measured reliably it is robable that the economic benefits associated with the transaction will flow to the seller, and the costs incurred or to be incurred in res ect of the transaction can be measured reliably Rendering of services For revenue arising from the rendering of services, rovided that all of the following criteria are met, revenue should be recognised by reference to the stage of com letion of the transaction at the balance sheet date +the ercentage"of" com letion method,4 .IAS 1=#%&/ o the amount of revenue can be measured reliablyK

o o o

it is robable that the economic benefits will flow to the sellerK the stage of com letion at the balance sheet date can be measured reliablyK and the costs incurred, or to be incurred, in res ect of the transaction can be measured reliably# 6hen the above criteria are not met, revenue arising from the rendering of services should be recognised only to the e5tent of the e5 enses recognised that are recoverable +a 9cost"recovery a roach9# .IAS 1=#%</ Interest4 ro alties4 and dividends For interest, royalties and dividends, rovided that it is robable that the economic benefits will flow to the enter rise and the amount of revenue can be measured reliably, revenue should be recognised as follows4 .IAS 1=#%)"0&/

o o o

interest4 using the effective interest method as set out in IAS 0) royalties4 on an accruals basis in accordance with the substance of the relevant agreement dividends4 when the shareholder-s right to receive ayment is established 2isclosure ,IAS 167@8-

o o o o o o o o

accounting olicy for recognising revenue amount of each of the following ty es of revenue4 sale of goods rendering of services interest royalties dividends within each of the above categories, the amount of revenue from e5changes of goods or services ly to certain transactions#

Implementation guidance A endi5 A to IAS 1= rovides illustrative e5am les of how the above rinci les a

AS 1) >m loyee Jenefits +%&11, Overview IAS 1) Employee "enefits +amended %&11, outlines the accounting requirements for em loyee benefits, including short"term benefits +e#g# wages and salaries, annual leave,, ost"em loyment benefits such as retirement benefits, other long"term benefits +e#g# long service leave, and termination benefits# $he standard establishes the rinci le that the cost of roviding em loyee benefits should be recognised in the eriod in which the benefit is earned by the em loyee, rather than when it is aid or ayable, and outlines how each category of em loyee benefits are measured, roviding detailed guidance in articular about ost"em loyment benefits# IAS 1) +%&11, was issued in %&11, su ersedes IAS 1) Employee "enefits +1))=,, and is a licable to annual eriods beginning on or after 1 (anuary %&10# Summary of IAS 1) +%&11, Amended version of IAS 1? issued in )*11 IAS 1) Employee "enefits +%&11, is an amended version of, and su ersedes, IAS 1) Employee "enefits +1))=,, effective for annual eriods beginning on or after 1 (anuary %&10# $he summary that follows refers to IAS 1) +%&11,# 1eaders interested in the requirements of IAS 1) Employee "enefits +1))=, should refer to our summary of IAS 1) +1))=,# ;hanges introduced by IAS 1) +%&11, as com ared to IAS 1) +1))=, include4 o Introducing a requirement to fully recognise changes in the net defined benefit liability +asset, including immediate recognition of defined benefit costs, and require disaggregation of the overall defined benefit cost into com onents and requiring the recognition of remeasurements in other com rehensive income +eliminating the -corridor- a o o roach,

Introducing enhanced disclosures about defined benefit lans Modifications to the accounting for termination benefits, including distinguishing between benefits rovided in e5change for service and benefits rovided in e5change for the termination of em loyment, and changing the recognition and measurement of termination benefits

;larification of miscellaneous issues, including the classification of em loyee benefits, current estimates of mortality rates, ta5 and administration costs and ris3"sharing and conditional inde5ation features

Incor orating other matters submitted to the IF1S Inter retations ;ommittee# Objective of IAS 1? ")*11# $he ob*ective of IAS 1) is to rescribe the accounting and disclosure for em loyee benefits, requiring an entity to recognise a liability where an em loyee has rovided service and an e5 ense when the entity consumes the economic benefits of em loyee service# .IAS 1)+%&11,#%/ Scope IAS 1) a lies to +among other 3inds of em loyee benefits,4

o o o o o

wages and salaries com ensated absences + aid vacation and sic3 leave, rofit sharing and bonuses medical and life insurance benefits during em loyment non"monetary benefits such as houses, cars, and free or subsidised goods or services

o o o o o o

retirement benefits, including ensions and lum sum ayments ost"em loyment medical and life insurance benefits long"service or sabbatical leave -*ubilee- benefits deferred com ensation rogrammes termination benefits# IAS 1) +%&11, does not a ly to em loyee benefits within the sco e of IF1S % Share) ased Paymentor the re orting by em loyee benefit lans +see IAS %< !ccounting and Reporting y Retirement "enefit Plans,# Short1term emplo ee benefits Short"term em loyee benefits are those e5 ected to be settled wholly before twelve months after the end of the annual re orting eriod during which em loyee services are rendered, but do not include termination benefits# .IAS 1)+%&11,#=/ >5am les include wages, salaries, rofit"sharing and bonuses and non"monetary benefits aid to current em loyees# $he undiscounted amount of the benefits e5 ected to be aid in res ect of service rendered by em loyees in an accounting eriod is recognised in that eriod# .IAS 1)+%&11,#11/ $he e5 ected cost of short"term com ensated absences is recognised as the em loyees render service that increases their entitlement or, in the case of non" accumulating absences, when the absences occur, and includes any additional amounts an entity e5 ects to ay as a result of unused entitlements at the end of the eriod# .IAS 1)+%&11,#10"1</ 3rofit1sharing and bonus pa ments An entity recognises the e5 ected cost of rofit"sharing and bonus ayments when, and only when, it has a legal or constructive obligation to ma3e such ayments as a result of ast events and a reliable estimate of the e5 ected obligation can be made# .IAS 1)#1)/ ( pes of post1emplo ment benefit plans Post"em loyment benefit lans are informal or formal arrangements where an entity rovides ost"em loyment benefits to one or more em loyees, e#g# retirement benefits + ensions or lum sum ayments,, life insurance and medical care# $he accounting treatment for a ost"em loyment benefit lan de ends on the economic substance of the lan and results in the lan being classified as either a defined contribution lan or a defined benefit lan4

2efined contribution plans# Bnder a defined contribution lan, the entity ays fi5ed contributions into a fund but has no legal or constructive obligation to ma3e further ayments if the fund does not have sufficient assets to ay all of the em loyees- entitlements to ost"em loyment benefits# $he entity-s obligation is therefore effectively limited to the amount it agrees to contribute to the fund and effectively lace actuarial and investment ris3 on the em loyee

2efined benefit plans $hese are ost"em loyment benefit lans other than a defined contribution lans# $hese lans create an obligation on the entity to rovide agreed benefits to current and ast em loyees and effectively laces actuarial and investment ris3 on the entity# 2efined contribution plans For defined contribution lans, the amount recognised in the eriod is the contribution ayable in e5change for service rendered by em loyees during the eriod# .IAS 1)+%&11,#:1/ ;ontributions to a defined contribution lan which are not e5 ected to be wholly settled within 1% months after the end of the annual re orting eriod in which the em loyee renders the related service are discounted to their resent value# .IAS 1)#:%/ 2efined benefit plans "asic requirements An entity is required to recognise the net defined benefit liability or asset in its statement of financial erformance# .IAS 1)+%&11,#<0/ Aowever, the measurement of a net defined benefit asset is the lower of any sur lus in the fund and the -asset ceiling- +i#e# the resent value of any economic benefits available in the form of refunds from the lan or reductions in future contributions to the lan,# .IAS 1)+%&11,#<8/

$easurement $he measurement of a net defined benefit liability or assets requires the a lication of an actuarial valuation method, the attribution of benefits to eriods of service, and the use of actuarial assum tions# .IAS 1)+%&11,#<</ $he fair value of any lan assets is deducted from the resent value of the defined benefit obligation in determining the net deficit or sur lus# .IAS 1)+%&11,#110/ $he determination of the net defined benefit liability +or asset, is carried out with sufficient regularity such that the amounts recognised in the financial statements do not differ materially from those that would be determined at end of the re orting eriod# .IAS 1)+%&11,#:=/ $he resent value of an entity-s defined benefit obligations and related service costs is determined using the - ro*ected unit credit method-, which sees each eriod of service as giving rise to an additional unit of benefit entitlement and measures each unit se arately in building u the final obligation# .IAS 1)+%&11,#<'"<=/ $his requires an entity to attribute benefit to the current eriod +to determine current service cost, and the current and rior eriods +to determine the resent value of defined benefit obligations,# Jenefit is attributed to eriods of service using the lan-s benefit formula, unless an em loyee-s service in later years will lead to a materially higher of benefit than in earlier years, in which case a straight"line basis is used .IAS 1)+%&11,#'&/ !ctuarial assumptions used in measurement $he overall actuarial assum tions used must be unbiased and mutually com atible, and re resent the best estimate of the variables determining the ultimate ost"em loyment benefit cost# .IAS 1)+%&11,#':"'</4 o Financial assum tions must be based on mar3et e5 ectations at the end of the re orting eriod .IAS 1)+%&11,#=&/ o Mortality assum tions are determined by reference to the best estimate of the mortality of lan members during and after em loyment .IAS 1)+%&11,#=1/ o $he discount rate used is determined by reference to mar3et yields at the end of the re orting eriod on high quality cor orate bonds, or where there is no dee mar3et in such bonds, by reference to mar3et yields on government bonds# ;urrencies and terms of bond yields used must be consistent with the currency and estimated term of the obligation being discounted .IAS 1)+%&11,#=0/ o Assum tions about e5 ected salaries and benefits reflect the terms of the lan, future salary increases, any limits on the em loyer-s share of cost, contributions from em loyees or third arties@, and estimated future changes in state benefits that im act benefits ayable .IAS 1)+%&11,#='/ o Medical cost assum tions incor orate future changes resulting from inflation and s ecific changes in medical costs .IAS 1)+%&11,#)</ @ &efined "enefit Plans# Employee Contri utions .!mendments to I!S /0 Employee "enefits1 amends IAS 1)+%&11, to clarify the requirements that relate to how contributions from em loyees or third arties that are lin3ed to service should be attributed to eriods of service# In addition, it ermits a ractical e5 edient if the amount of the contributions is inde endent of the number of years of service, in that contributions, can, but are not required, to be recognised as a reduction in the service cost in the eriod in which the related service is rendered# $hese amendments are effective for annual eriods beginning on or after 1 (uly %&18# Past service costs Past service cost is the term used to describe the change in a defined benefit obligation for em loyee service in rior eriods, arising as a result of changes to lan arrangements in the current eriod +i#e# lan amendments introducing or changing benefits ayable, or curtailments which significantly reduce the number of covered em loyees, # Past service cost may be either ositive +where benefits are introduced or im roved, or negative +where e5isting benefits are reduced,# Past service cost is recognised as an e5 ense at the earlier of the date when a lan amendment or curtailment occurs and the date when an entity recognises any termination benefits, or related restructuring costs under IAS 0' Provisions, Contingent +ia ilities and Contingent !ssets# .IAS 1)+%&11,#1&0/ 2ains or losses on the settlement of a defined benefit lan are recognised when the settlement occurs# .IAS 1)+%&11,#11&/ Jefore ast service costs are determined, or a gain or loss on settlement is recognised, the net defined benefit liability or asset is required to be remeasured, however an entity is not required to distinguish between ast service costs

resulting from curtailments and gains and losses on settlement where these transactions occur together# .IAS 1)+%&11,#))"1&&/ Recognition of defined enefit costs $he com onents of defined benefit cost is recognised as follows4 .IAS 1)+%&11,#1%&"10&/ Component Recognition Service cost attributable to the current and past periods 'et interest on the net defined benefit liabilit or asset4 determined using the discount rate at the beginning of the period Remeasurements of the net defined benefit liabilit or asset4 comprising9 o o o actuarial gains and losses return on plan assets some changes in the effect of the asset ceiling 'ther guidance IAS 1) also rovides guidance in relation to4 o when an entity should recognise a reimbursement of e5 enditure to settle a defined benefit obligation .IAS 1)+%&11,#11<"11)/ o when it is a ro riate to offset an asset relating to one lan against a liability relating to another lan Profit or loss Profit or loss Other com rehensive income +Fot reclassified to rofit or loss in a subsequent eriod,

.IAS 1)+%&11,#101"10%/ o o o o accounting for multi"em loyer lans by individual em loyers .IAS 1)+%&11,#0%"0)/ defined benefit lans sharing ris3s between entities under common control .IAS 1)#8&"8%/ entities artici ating in state lans .IAS 1)+%&11,#80"8:/ insurance remiums aid to fund ost"em loyment benefit lans .IAS 1)+%&11,#8<"8)/ &isclosures a out defined enefit plans IAS 1)+%&11, sets the following disclosure ob*ectives in relation to defined benefit lans .IAS 1)+%&11,#10:/4 o o o an e5 lanation of the characteristics of an entity-s defined benefit lans, and the associated ris3s identification and e5 lanation of the amounts arising in the financial statements from defined benefit lans a descri tion of how defined benefit lans may affect the amount, timing and uncertainty of the entity-s future cash flows# >5tensive s ecific disclosures in relation to meeting each the above ob*ectives are s ecified, e#g# a reconciliation from the o ening balance to the closing balance of the net defined benefit liability or asset, disaggregation of the fair value of lan assets into classes, and sensitivity analysis of each significant actuarial assum tion# .IAS 1)+%&11,#10<"18'/ Additional disclosures are required in relation to multi"em loyer lans and defined benefit lans sharing ris3 between entities under common control# .IAS 1)+%&11,#18="1:&/# Other long1term benefits IAS 1) +%&11, rescribes a modified a lication of the ost"em loyment benefit model described above for other long" term em loyee benefits4 .IAS 1)+%&11,#1:0"1:8/ o the recognition and measurement of a sur lus or deficit in an other long"term em loyee benefit lan is consistent with the requirements outlined above o service cost, net interest and remeasurements are all recognised in rofit or loss +unless recognised in the cost of an asset under another IF1S,, i#e# when com ared to accounting for defined benefit lans, the effects of remeasurements are not recognised in other com rehensive income# (ermination benefits A termination benefit liability is recognised at the earlier of the following dates4 .IAS 1)#1<:"1<=/

when the entity can no longer withdraw the offer of those benefits " additional guidance is rovided on when this date occurs in relation to an em loyee-s decision to acce t an offer of benefits on termination, and as a result of an entity-s decision to terminate an em loyee-s em loyment

when the entity recognises costs for a restructuring under IAS 0' Provisions, Contingent +ia ilities and Contingent !ssets which involves the ayment of termination benefits# $ermination benefits are measured in accordance with the nature of em loyee benefit, i#e# as an enhancement of other ost"em loyment benefits, or otherwise as a short"term em loyee benefit or other long"term em loyee benefit# .IAS 1)+%&11,#1<)/

IAS %& Accounting for 2overnment 2rants and ?isclosure of 2overnment Assistance Overview IAS %& !ccounting for 2overnment 2rants and &isclosure of 2overnment !ssistance outlines how to account for government grants and other assistance# 2overnment grants are recognised in rofit or loss on a systematic basis over the eriods in which the entity recognises e5 enses for the related costs for which the grants are intended to com ensate, which in the case of grants related to assets requires setting u the grant as deferred income or deducting it from the carrying amount of the asset# IAS %& was issued in A ril 1)=0 and is a licable to annual eriods beginning on or after 1 (anuary 1)=8# Summary of IAS %& Objective of IAS )* $he ob*ective of IAS %& is to rescribe the accounting for, and disclosure of, government grants and other forms of government assistance# Scope IAS %& a lies to all government grants and other forms of government assistance# .IAS %&#1/ Aowever, it does not cover government assistance that is rovided in the form of benefits in determining ta5able income# It does not cover government grants covered by IAS 81 !griculture, either# .IAS %&#%/ $he benefit of a government loan at a below" mar3et rate of interest is treated as a government grant# .IAS %&#1&A/ Accounting for grants A government grant is recognised only when there is reasonable assurance that +a, the entity will com ly with any conditions attached to the grant and +b, the grant will be received# .IAS %&#'/ $he grant is recognised as income over the eriod necessary to match them with the related costs, for which they are intended to com ensate, on a systematic basis# .IAS %&#1%/ Fon"monetary grants, such as land or other resources, are usually accounted for at fair value, although recording both the asset and the grant at a nominal amount is also ermitted# .IAS %&#%0/ >ven if there are no conditions attached to the assistance s ecifically relating to the o erating activities of the entity +other than the requirement to o erate in certain regions or industry sectors,, such grants should not be credited to equity# .SI;"1&/ A grant receivable as com ensation for costs already incurred or for immediate financial su ort, with no future related costs, should be recognised as income in the eriod in which it is receivable# .IAS %&#%&/ A grant relating to assets may be resented in one of two ways4 .IAS %&#%8/ o o as deferred income, or by deducting the grant from the asset-s carrying amount# A grant relating to income may be re orted se arately as -other income- or deducted from the related e5 ense# .IAS %&#%)/ If a grant becomes re ayable, it should be treated as a change in estimate# 6here the original grant related to income, the re ayment should be a lied first against any related unamortised deferred credit, and any e5cess should be dealt with as an e5 ense# 6here the original grant related to an asset, the re ayment should be treated as increasing the carrying amount of the asset or reducing the deferred income balance# $he cumulative de reciation which would have been charged had the grant not been received should be charged as an e5 ense# .IAS %&#0%/ 2isclosure of government grants $he following must be disclosed4 .IAS %&#0)/ o accounting olicy ado ted for grants, including method of balance sheet resentation

o o

nature and e5tent of grants recognised in the financial statements unfulfilled conditions and contingencies attaching to recognised grants Government assistance 2overnment grants do not include government assistance whose value cannot be reasonably measured, such as technical or mar3eting advice# .IAS %&#08/ ?isclosure of the benefits is required# .IAS %&#0)+b,/

IAS %1 $he >ffects of ;hanges in Foreign >5change 1ates Overview IAS %1 The Effects of Changes in Foreign Exchange Rates outlines how to account for foreign currency transactions and o erations in financial statements, and also how to translate financial statements into a resentation currency# An entity is required to determine a functional currency +for each of its o erations if necessary, based on the rimary economic environment in which it o erates and generally records foreign currency transactions using the s ot conversion rate to that functional currency on the date of the transaction# IAS %1 was reissued in ?ecember %&&0 and a lies to annual eriods beginning on or after 1 (anuary %&&:# Summary of IAS %1 Objective of IAS )1 $he ob*ective of IAS %1 is to rescribe how to include foreign currency transactions and foreign o erations in the financial statements of an entity and how to translate financial statements into a resentation currency# .IAS %1#1/ $he rinci al issues are which e5change rate+s, to use and how to re ort the effects of changes in e5change rates in the financial statements# .IAS %1#%/ 5e definitions ,IAS )176Functional currenc 9 the currency of the rimary economic environment in which the entity o erates# +$he term -functional currency- was used in the %&&0 revision of IAS %1 in lace of -measurement currency- but with essentially the same meaning#, 3resentation currenc 9 the currency in which financial statements are resented# $%change difference9 the difference resulting from translating a given number of units of one currency into another currency at different e5change rates# Foreign operation9 a subsidiary, associate, *oint venture, or branch whose activities are based in a country or currency other than that of the re orting entity# >asic steps for translating foreign currenc amounts into the functional currenc Ste s a ly to a stand"alone entity, an entity with foreign o erations +such as a arent with foreign subsidiaries,, or a foreign o eration +such as a foreign subsidiary or branch,# 1# the re orting entity determines its functional currency %# the entity translates all foreign currency items into its functional currency 0# the entity re orts the effects of such translation in accordance with aragra hs %&"0' .re orting foreign currency transactions in the functional currency/ and :& .re orting the ta5 effects of e5change differences/# Foreign currenc transactions A foreign currency transaction should be recorded initially at the rate of e5change at the date of the transaction +use of averages is ermitted if they are a reasonable a ro5imation of actual,# .IAS %1#%1"%%/ At each subsequent balance sheet date4 .IAS %1#%0/ o o foreign currency monetary amounts should be re orted using the closing rate non"monetary items carried at historical cost should be re orted using the e5change rate at the date of the transaction o non"monetary items carried at fair value should be re orted at the rate that e5isted when the fair values were determined >5change differences arising when monetary items are settled or when monetary items are translated at rates different from those at which they were translated when initially recognised or in revious financial statements are

re orted in rofit or loss in the eriod, with one e5ce tion# .IAS %1#%=/ $he e5ce tion is that e5change differences arising on monetary items that form art of the re orting entity-s net investment in a foreign o eration are recognised, in the consolidated financial statements that include the foreign o eration, in other com rehensive incomeK they will be recognised in rofit or loss on dis osal of the net investment# .IAS %1#0%/ As regards a monetary item that forms art of an entity-s investment in a foreign o eration, the accounting treatment in consolidated financial statements should not be de endent on the currency of the monetary item# .IAS %1#00/ Also, the accounting should not de end on which entity within the grou conducts a transaction with the foreign o eration# .IAS %1#1:A/ If a gain or loss on a non"monetary item is recognised in other com rehensive income +for e5am le, a ro erty revaluation under IAS 1<,, any foreign e5change com onent of that gain or loss is also recognised in other com rehensive income# .IAS %1#0&/ (ranslation from the functional currenc to the presentation currenc $he results and financial osition of an entity whose functional currency is not the currency of a hy erinflationary economy are translated into a different resentation currency using the following rocedures4 .IAS %1#0)/ o assets and liabilities for each balance sheet resented +including com aratives, are translated at the closing rate at the date of that balance sheet# $his would include any goodwill arising on the acquisition of a foreign o eration and any fair value ad*ustments to the carrying amounts of assets and liabilities arising on the acquisition of that foreign o eration are treated as art of the assets and liabilities of the foreign o eration .IAS %1#8'/K o income and e5 enses for each income statement +including com aratives, are translated at e5change rates at the dates of the transactionsK and o all resulting e5change differences are recognised in other com rehensive income# S ecial rules a ly for translating the results and financial osition of an entity whose functional currency is the currency of a hy erinflationary economy into a different resentation currency# .IAS %1#8%"80/ 6here the foreign entity re orts in the currency of a hy erinflationary economy, the financial statements of the foreign entity should be restated as required by IAS %) Financial Reporting in *yperinflationary Economies , before translation into the re orting currency# .IAS %1#0</ $he requirements of IAS %1 regarding transactions and translation of financial statements should be strictly a lied in the changeover of the national currencies of artici ating Member States of the >uro ean Bnion to the >uro 7 monetary assets and liabilities should continue to be translated the closing rate, cumulative e5change differences should remain in equity and e5change differences resulting from the translation of liabilities denominated in artici ating currencies should not be included in the carrying amount of related assets# .SI;"'/ 2isposal of a foreign operation 6hen a foreign o eration is dis osed of, the cumulative amount of the e5change differences recognised in other com rehensive income and accumulated in the se arate com onent of equity relating to that foreign o eration shall be recognised in rofit or loss when the gain or loss on dis osal is recognised# .IAS %1#8=/ (a% effects of e%change differences $hese must be accounted for using IAS 1% Income Taxes# 2isclosure o $he amount of e5change differences recognised in rofit or loss +e5cluding differences arising on financial instruments measured at fair value through rofit or loss in accordance with IAS 0), .IAS %1#:%+a,/ o Fet e5change differences recognised in other com rehensive income and accumulated in a se arate com onent of equity, and a reconciliation of the amount of such e5change differences at the beginning and end of the eriod .IAS %1#:%+b,/ o 6hen the resentation currency is different from the functional currency, disclose that fact together with the functional currency and the reason for using a different resentation currency .IAS %1#:0/ o A change in the functional currency of either the re orting entity or a significant foreign o eration and the reason therefor .IAS %1#:8/

6hen an entity resents its financial statements in a currency that is different from its functional currency, it may describe those financial statements as com lying with IF1S only if they com ly with all the requirements of each a licable Standard +including IAS %1, and each a licable Inter retation# .IAS %1#::/ Convenience translations Sometimes, an entity dis lays its financial statements or other financial information in a currency that is different from either its functional currency or its resentation currency sim ly by translating all amounts at end"of" eriod e5change rates# $his is sometimes called a convenience translation# A result of ma3ing a convenience translation is that the resulting financial information does not com ly with all IF1S, articularly IAS %1# In this case, the following disclosures are required4 .IAS %1#:'/ o ;learly identify the information as su com lies with IF1S o o ?isclose the currency in which the su lementary information is dis layed lementary lementary information to distinguish it from the information that

?isclose the entity-s functional currency and the method of translation used to determine the su information

IAS %0 Jorrowing ;osts IAS %0 "orro%ing Costs requires that borrowing costs directly attributable to the acquisition, construction or roduction of a -qualifying asset- +one that necessarily ta3es a substantial eriod of time to get ready for its intended use or sale, are included in the cost of the asset# Other borrowing costs are recognised as an e5 ense# IAS %0 was reissued in March %&&' and a lies to annual eriods beginning on or after 1 (anuary %&&)# Summar of IAS )@ Objective of IAS )@ $he ob*ective of IAS %0 is to rescribe the accounting treatment for borrowing costs# Jorrowing costs include interest on ban3 overdrafts and borrowings, amortisation of discounts or remiums on borrowings, finance charges on finance leases and e5change differences on foreign currency borrowings where they are regarded as an ad*ustment to interest costs# 5e definitions >orrowing cost may include4 .IAS %0#</ o o o interest e5 ense calculated by the effective interest method under IAS 0), finance charges in res ect of finance leases recognised in accordance with IAS 1' Ieases, and e5change differences arising from foreign currency borrowings to the e5tent that they are regarded as an ad*ustment to interest costs $his standard does not deal with the actual or im uted cost of equity, including any referred ca ital not classified as a liability ursuant to IAS 0%# .IAS %0#0/ A &ualif ing asset is an asset that ta3es a substantial eriod of time to get ready for its intended use or sale# .IAS %0#:/ $hat could be ro erty, lant, and equi ment and investment ro erty during the construction eriod, intangible assets during the develo ment eriod, or 9made"to"order9 inventories# .IAS %0#</ Scope of IAS )@ $wo ty es of assets that would otherwise be qualifying assets are e5cluded from the sco e of IAS %04 o o qualifying assets measured at fair value, such as biological assets accounted for under IAS 81 Agriculture inventories that are manufactured, or otherwise roduced, in large quantities on a re etitive basis and that ta3e a substantial eriod to get ready for sale +for e5am le, maturing whis3y, Accounting treatment Recognition Jorrowing costs that are directly attributable to the acquisition, construction or roduction of a qualifying asset form art of the cost of that asset and, therefore, should be ca italised# Other borrowing costs are recognised as an e5 ense# .IAS %0#=/ !easurement 6here funds are borrowed s ecifically, costs eligible for ca italisation are the actual costs incurred less any income earned on the tem orary investment of such borrowings# .IAS %0#1%/ 6here funds are art of a general ool, the eligible amount is determined by a lying a ca italisation rate to the e5 enditure on that asset# $he ca italisation rate will be the weighted average of the borrowing costs a licable to the general ool# .IAS %0#18/ ;a italisation should commence when e5 enditures are being incurred, borrowing costs are being incurred and activities that are necessary to re are the asset for its intended use or sale are in rogress +may include some activities rior to commencement of hysical roduction,# .IAS %0#1'"1=/ ;a italisation should be sus ended during eriods in which active develo ment is interru ted# .IAS %0#%&/ ;a italisation should cease when substantially all of

the activities necessary to re are the asset for its intended use or sale are com lete# .IAS %0#%%/ If only minor modifications are outstanding, this indicates that substantially all of the activities are com lete# .IAS %0#%0/ 6here construction is com leted in stages, which can be used while construction of the other arts continues, ca italisation of attributable borrowing costs should cease when substantially all of the activities necessary to re are that art for its intended use or sale are com lete# .IAS %0#%8/ 2isclosure ,IAS )@7)Bo o amount of borrowing cost ca italised during the eriod ca italisation rate used