IFRS - Deloitte

1/13/2015
InternationalFinancialReportingStandards
Thispagecontainslinkstooursummaries,analysis,historyandresourcesforInternationalFinancial
ReportingStandards(IFRS)issuedbytheInternationalAccountingStandardsBoard(IASB).
Title
Date
EffectiveDate
issued
IFRS1FirsttimeAdoptionofInternationalFinancialReporting
24Nov2008 01Jul2009
Standards
IFRS2SharebasedPayment
19Feb2004 01Jan2005
IFRS3BusinessCom
b i
n a
tions
10Jan2008 01Jul2009
IFRS4InsuranceContracts
31Mar2004 01Jan2005
IFRS5Noncur
rentAssetsHeldforSaleandDis
con
tin
u edOp
e r
a
tions 31Mar2004 01Jan2005
IFRS6Ex
p lo
rationforandEval
u
a
tionofMineralResources
09Dec2004 01Jan2006
IFRS7FinancialIn
stru
ments:Dis
clo
sures
18Aug2005 01Jan2007
IFRS8OperatingSegments
30Nov2006 01Jan2009
IFRS9FinancialIn
stru
ments
24Jul2014 01Jan2018
IFRS10Con
sol
i
d atedFinancialState
ments
12May2011 01Jan2013
IFRS11JointArrange
ments
12May2011 01Jan2013
IFRS12Dis
clo
sureofInterestsinOtherEntities
12May2011 01Jan2013
IFRS13FairValueMea
sure
ment
12May2011 01Jan2013
IFRS14Reg
u
la
toryDeferralAccounts
30Jan2014 01Jan2016
IFRS15RevenuefromContractswithCustomers
28May2014 01Jan2017
Note:Thetableaboveliststhemostrecentversion(s)ofeachpro
nounce
mentandthedateeachversionwasorig
i
nally
issued.Clickthroughtoourpageforeachpro
nounce
mentforafullhistory.
Like
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http://www.iasplus.com/en/standards/ifrs
1/2
1/13/2015
http://www.iasplus.com/en/standards/ifrs
2/2
1/13/2015
IFRS1FirsttimeAdoptionofInternationalFinancialReportingStandards
QuickArticleLinks
Overview
IFRS1FirsttimeAdoptionofInternationalFinancialReportingStandardssetsoutthepro
ce
d uresthatan
entitymustfollowwhenitadoptsIFRSsforthefirsttimeasthebasisforpreparingitsgeneralpurpose
financialstate
ments.TheIFRSgrantslimitedex
e mp
tionsfromthegeneralre
q uire
menttocomplywith
eachIFRSeffectiveattheendofitsfirstIFRSreportingperiod.
Are
struc
turedversionofIFRS1wasissuedinNovember2008andappliesifanentity'sfirstIFRS
financialstate
mentsareforaperiodbeginningonorafter1July2009.
HistoryofIFRS1
Date
De
v el
op
ment
Comments
September2001
ProjectaddedtoIASBagenda
Historyoftheproject
31July2002
ExposureDraftED1FirsttimeAp
p li
ca
tionofIFRSspublished
Commentdeadline31October2002
June2003
IFRS1FirsttimeAdoptionofIFRSs
issued
EffectiveforthefirstIFRSfinancial
state
mentsforaperiodbeginningon
orafter1January2004
30June2005
AmendedbyAmend
mentstoIFRS1
FirsttimeAdoptionofInternational
FinancialReportingStandardsandIFRS
6Ex
p lo
rationforandEval
u
a
tionof
MineralResources(morein
for
ma
tion)
Aminoramendmenttoclarifythatthe
exemptioninrelationtoIFRS6applies
totherecog
n i
tionandmea
sure
ment
re
q uire
mentsofIFRS6,aswellasthe
dis
clo
surere
q uire
ments.
22May2008
AmendedbyAmend
mentstoIFRS1
andIAS27CostofanIn
vest
mentin
aSub
sidiary,JointlyCon
trolledEntityor
Associate
Effectiveforannualperiodsbeginning
onorafter1January2009
24November2008
Re
struc
turedversionofIFRS1issued
Effectiveifanentity'sfirstIFRS
financialstate
mentsareforaperiod
beginningonorafter1July2009
23July2009
AmendedbyAd
d i
tionalEx
e mp
tionsfor
FirsttimeAdopters(Amend
mentsto
IFRS1)(oilandgasassets,leases).
Clickformorein
for
ma
tion.
http://www.iasplus.com/en/standards/ifrs/ifrs1
1/12
1/13/2015
29January2010
AmendedbyLimitedExemptionfrom
Com
p ar
a
tiveIFRS7Dis
clo
suresfor
FirsttimeAdopters(AmendmenttoIFRS
1).Clickformorein
for
ma
tion
Effectivefororannualperiods
6May2010
AmendedbyIm
p rove
mentstoIFRSs
(accountingpolicieschanges,reval
u
a
tionbasisasdeemedcost,ratereg
u
la
tion)
onorafter1July2011
20December2010
AmendedbySevereHy
p er
in
fla
tionand
RemovalofFixedDatesforFirsttime
Adopters(AmendmenttoIFRS1).Click
formorein
for
ma
tion
on
orafter1July2011
13March2012
AmendedbyGov
e rn
mentLoans
(Amend
mentstoIFRS1).Clickformore
in
for
ma
tion
17May2012
AmendedbyAnnualIm
p rove
ments
20092011Cycle(repeatap
p li
ca
tion,
borrowingcosts).Clickformorein
for
ma
tion
12December2013
AmendedbyAnnualIm
p rove
mentsto
IFRSs20112013Cycle(meaningof
effectiveIFRSs).Clickformorein
for
ma
tion
Amendmenttobasisforcon
clu
sions
only
Note:Theabovesummarydoesnotincludedetailsofcon
se
q uen
tialamend
mentsmadeastheresultof
otherprojects.
RelatedIn
ter
pre
ta
tions
IFRS1su
p er
sedesSIC8FirsttimeAp
p li
ca
tionofIASsasthePrimaryBasisofAccounting
Amend
mentsundercon
sid
er
a
tion
Nonenoted
DeloitteGuidetoIFRS1(November2009)
InNovember2009,Deloitte'sIFRSGlobalOfficepublishedarevisedGuidetoIFRS1Firsttime
AdoptionofInternationalFinancialReportingStandards.Theguidewasfirstpublishedin2004
withtheaimofprovidingfirsttimeadopterswithhelpfulinsightsfortheap
p li
ca
tionofIFRS1.This
secondeditionhasthesameobjective.Wehaveupdatedthecontenttoreflectthelessons
learnedfromthefirstmajorwaveofIFRSadoptionin2005,aswellasforthechangestoIFRS1
since2004.Wehavestruc
turedtheguidetoprovideuserswithanac
ces
si
b lereferencemanual:
2/12
1/13/2015
AnexecutivesummaryexplainsthemostimportantfeaturesofIFRS1
Section2providesanoverviewofthere
q uire
mentsoftheStandard
Sections3and4coverthespecificex
cep
tionsandex
e mp
tionsfromIFRS1'sgeneral
principleofret
ro
spec
tiveap
p li
ca
tionofIFRSs,focusingonkeyim
p le
men
ta
tionissues
Section5addressesothercom
p o
n entsoffinancialstate
mentswhereim
p le
men
ta
tion
issuesfre
q uentlyariseinpractice
Section6setsoutQ&Asdealingwithspecificfactpatternsthatusersmayencounterin
practiceand
Section7discussessomeofthepracticalim
p le
men
ta
tiondecisionsfacedbyfirsttime
adopters.
ClicktoDownloadDeloitte'sGuidetoIFRS1(PDF435k)
SummaryofIFRS1
Objective
IFRS1FirsttimeAdoptionofInternationalFinancialReportingStandardssetsoutthepro
ce
d uresthatan
entitymustfollowwhenitadoptsIFRSsforthefirsttimeasthebasisforpreparingitsgeneralpurpose
financialstate
ments.
Note:Anentitythatconductsratereg
u
latedac
tiv
i
tiesandhasrecog
n isedamountsinitspreviousGAAP
financialstate
mentsthatmeetthede
f
i
n
i
tionof'reg
u
la
torydeferralaccountbalances'(sometimesreferred
to'reg
u
la
toryassets'and'reg
u
la
toryli
a
b il
i
ties')canop
tion
a llyapplyIFRS14Reg
u
la
inadditiontoIFRS1.AnentitythatelectstoapplyIFRS14initsfirstIFRSfinancialstate
mentsmust
continuetoapplyitinsub
se
q uentfinancialstate
ments.
De
f
i
n
i
tionoffirsttimeadoption
Afirsttimeadopterisanentitythat,forthefirsttime,makesanexplicitandun
re
servedstatementthatits
generalpurposefinancialstate
mentscomplywithIFRSs.[IFRS1.3]
Anentitymaybeafirsttimeadopterif,intheprecedingyear,itpreparedIFRSfinancialstate
mentsfor
internalman
a ge
mentuse,aslongasthoseIFRSfinancialstate
mentswerenotmadeavailabletoowners
orexternalpartiessuchasinvestorsorcreditors.IfasetofIFRSfinancialstate
mentswas,foranyreason,
madeavailabletoownersorexternalpartiesintheprecedingyear,thentheentitywillalreadybecon
sid
eredtobeonIFRSs,andIFRS1doesnotapply.[IFRS1.3]
Anentitycanalsobeafirsttimeadopterif,intheprecedingyear,itsfinancialstate
ments:[IFRS1.3]
assertedcom
p li
a ncewithsomebutnotallIFRSs,or
includedonlyarec
o n
cil
i
a
tionofselectedfiguresfrompreviousGAAPtoIFRSs.(PreviousGAAP
meanstheGAAPthatanentityfollowedim
me
d i
a telybeforeadoptingtoIFRSs.)
However,anentityisnotafirsttimeadopterif,intheprecedingyear,itsfinancialstate
mentsasserted:
Com
p li
a ncewithIFRSseveniftheauditor'sreportcontainedaqual
i
fi
ca
tionwithrespecttocon
for
mitywithIFRSs.
3/12
1/13/2015
Com
p li
a ncewithbothpreviousGAAPandIFRSs.
AnentitythatappliedIFRSsinapreviousreportingperiod,butwhosemostrecentpreviousannual
financialstate
mentsdidnotcontainanexplicitandun
re
servedstatementofcom
p li
a ncewithIFRSscan
chooseto:
applythere
q uire
mentsofIFRS1(includingthevariouspermittedex
e mp
tionstofullret
ro
spec
tive
ap
p li
ca
tion),or
ret
ro
spec
tivelyapplyIFRSsinac
cor
d ancewithIAS8AccountingPolicies,ChangesinAccounting
EstimatesandErrors,asifitneverstoppedapplyingIFRSs.[IFRS1.4A]
OverviewforanentitythatadoptsIFRSsforthefirsttimeinitsannualfinancialstate
mentsforthe
yearended31December2014
Accountingpolicies
SelectaccountingpoliciesbasedonIFRSseffectiveat31December2014.
IFRSreportingperiods
Prepareatleast2014and2013financialstate
mentsandtheopeningbalancesheet(asof1January
2012orbeginningofthefirstperiodforwhichfullcom
p ar
a
tivefinancialstate
mentsarepresented,if
earlier)byapplyingtheIFRSseffectiveat31December2014.[IFRS1.7]
SinceIAS1requiresthatatleastoneyearofcom
p ar
a
tivepriorperiodfinancialin
for
ma
tionbe
presented,theopeningbalancesheetwillbe1January2012ifnotearlier.Thiswouldmeanthat
anentity'sfirstfinancialstate
mentsshouldincludeatleast:[IFRS1.21]
threestate
mentsoffinancialposition
twostate
mentsofprofitorlossandothercom
p re
h en
siveincome
twoseparatestate
mentsofprofitorloss(ifpresented)
twostate
mentsofcashflows
twostate
mentsofchangesinequity,and
relatednotes,includingcom
p ar
a
tivein
for
ma
tion
Ifa31December2014adopterreportsselectedfinancialdata(butnotfullfinancialstate
ments)
onanIFRSbasisforperiodspriorto2013,inadditiontofullfinancialstate
mentsfor2014and
2013,thatdoesnotchangethefactthatitsopeningIFRSbalancesheetisasof1January2012.
Ad
just
mentsrequiredtomovefrompreviousGAAPtoIFRSsatthetimeoffirsttimeadoption
Dere
c og
ni
tionofsomepreviousGAAPassetsandli
a
bil
i
ties
Theentityshouldeliminatepre
vi
o usGAAPassetsandli
a
b il
i
tiesfromtheopeningbalancesheetiftheydo
notqualifyforrecog
n i
tionunderIFRSs.[IFRS1.10(b)]Forexample:
IAS38doesnotpermitrecog
n i
tionofex
p en
d i
tureonanyofthefollowingasanin
tan
g i
b leasset:
research
startup,preop
e r
a t
ing,andpreopen
ingcosts
training
ad
ver
tis
ingandpromotion
4/12
1/13/2015
movingandre
lo
ca
tion
Iftheentity'spreviousGAAPhadrecog
n isedtheseasassets,theyareelim
i
n atedintheopening
IFRSbalancesheet
Iftheentity'spreviousGAAPhadallowedaccrualofli
a
b il
i
tiesfor"generalreserves",re
struc
tur
ings,futureoperatinglosses,ormajoroverhaulsthatdonotmeetthecon
d i
tionsforrecog
n i
tionas
aprovisionunderIAS37,theseareelim
i
n atedintheopeningIFRSbalancesheet
Iftheentity'spreviousGAAPhadallowedrecog
n i
tionofcon
tin
g entassetsasdefinedinIAS
37.10,theseareelim
i
n atedintheopeningIFRSbalancesheet
Recog
ni
tionofsomeassetsandli
a
bil
i
tiesnotrecog
nisedunderpreviousGAAP
Con
versely,theentityshouldrecogniseallassetsandli
a
b il
i
tiesthatarerequiredtoberecog
n isedby
IFRSeveniftheywereneverrecog
n isedunderpreviousGAAP.[IFRS1.10(a)]Forexample:
IAS39requiresrecog
n i
tionofallde
riv
a
tivefinancialassetsandli
a
b il
i
ties,includingembeddedde
riv
a
tives.Thesewerenotrecog
n isedundermanylocalGAAPs.
IAS19requiresanemployertorecognisealiabilitywhenanemployeehasprovidedservicein
exchangeforbenefitstobepaidinthefuture.Thesearenotjustpostem
p loy
mentbenefits(e.g.,
pensionplans)butalsooblig
a
tionsformedicalandlifeinsurance,vacations,ter
mi
n a
tionbenefits,
anddeferredcom
p en
sa
tion.Inthecaseof'overfunded'definedbenefitplans,thiswouldbea
planasset.
IAS37requiresrecog
n i
tionofpro
vi
sionsasli
a
b il
i
ties.Examplescouldincludeanentity'soblig
a
tionsforre
struc
tur
ings,onerouscontracts,de
com
mis
sion
ing,re
me
d i
a
tion,siterestora
tion,war
ranties,guar
a n
tees,andlit
i
g a
tion.
Deferredtaxassetsandli
a
b il
i
tieswouldberecog
n isedincon
for
mitywithIAS12.
Re
c las
s i
fi
c a
tion
Theentityshouldre
clas
sifypre
vi
o usGAAPopeningbalancesheetitemsintotheap
p ro
p ri
a teIFRSclas
si
fi
ca
tion.[IFRS1.10(c)]Examples:
IAS10doesnotpermitclas
si
fy
ingdividendsdeclaredorproposedafterthebalancesheetdateas
aliabilityatthebalancesheetdate.Ifsuchliabilitywasrecog
n isedunderpreviousGAAPitwould
bereversedintheopeningIFRSbalancesheet.
Iftheentity'spreviousGAAPhadallowedtreasurystock(anentity'sownsharesthatithad
purchased)tobereportedasanasset,itwouldbere
clas
si
fiedasacomponentofequityunder
IFRS.
Itemsclas
si
fiedasiden
ti
fi
a blein
tan
g i
b leassetsinabusinesscom
b i
n a
tionaccountedforunder
thepreviousGAAPmayberequiredtobere
clas
si
fiedasgoodwillunderIFRS3becausetheydo
notmeetthede
f
i
n
i
tionofanin
tan
g i
b leassetunderIAS38.Theconversemayalsobetruein
somecases.
IAS32hasprin
ci
p lesforclas
si
fy
ingitemsasfinancialli
a
b il
i
tiesorequity.Thusmanda
to
rilyre
deemablepreferredsharesthatmayhavebeenclas
si
fiedasequityunderpreviousGAAPwould
bere
clas
si
fiedasli
a
b il
i
tiesintheopeningIFRSbalancesheet.
NotethatIFRS1makesanexceptionfromthe"splitaccounting"pro
vi
sionsofIAS32.Ifthe
liabilitycomponentofacompoundfinancialin
stru
mentisnolongerout
stand
ingatthedateofthe
5/12
1/13/2015
openingIFRSbalancesheet,theentityisnotrequiredtore
clas
sifyoutofretainedearningsand
intootherequitytheoriginalequitycomponentofthecompoundin
stru
ment.
There
clas
si
fi
ca
tionprinciplewouldapplyforthepurposeofdefiningre
p ortablesegmentsunder
IFRS8.
Someoff
set
ting(netting)ofassetsandli
a
b il
i
tiesorofincomeandexpenseitemsthathadbeen
ac
cept
a bleunderpreviousGAAPmaynolongerbeac
cept
a bleunderIFRS.
Mea
s ure
ment
Thegeneralmea
sure
mentprinciplethereareseveralsig
n if
i
cantex
cep
tionsnotedbelowistoapply
effectiveIFRSsinmeasuringallrecog
n isedassetsandli
a
b il
i
ties.[IFRS1.10(d)]
Howtorecognisead
just
mentsrequiredtomovefrompreviousGAAPtoIFRSs
Ad
just
mentsrequiredtomovefrompreviousGAAPtoIFRSsatthedateoftran
si
tionshouldberecog
n ised
directlyinretainedearningsor,ifap
p ro
p ri
a te,anothercategoryofequityatthedateoftran
si
tiontoIFRSs.
[IFRS1.11]
Estimates
InpreparingIFRSestimatesatthedateoftran
si
tiontoIFRSsret
ro
spec
tively,theentitymustusethe
inputsandas
sump
tionsthathadbeenusedtodeterminepreviousGAAPestimatesasofthatdate(after
ad
just
mentstoreflectanydif
fer
e ncesinaccountingpolicies).Theentityisnotpermittedtousein
for
ma
tion
thatbecameavailableonlyafterthepreviousGAAPestimatesweremadeexcepttocorrectanerror.[IFRS
1.14]
Changestodis
c lo
s ures
Formanyentities,newareasofdis
clo
surewillbeaddedthatwerenotre
q uire
mentsundertheprevious
GAAP(perhapssegmentin
for
ma
tion,earningspershare,dis
con
tin
u
ingop
e r
a
tions,con
tin
g en
ciesandfair
valuesofallfinancialin
stru
ments)anddis
clo
suresthathadbeenrequiredunderpreviousGAAPwillbe
broadened(perhapsrelatedpartydis
clo
sures).
Dis
c lo
s ureofselectedfinancialdataforperiodsbeforethefirstIFRSstatementoffinancialposition
(balancesheet)
Ifafirsttimeadopterwantstodiscloseselectedfinancialin
for
ma
tionforperiodsbeforethedateofthe
openingIFRSbalancesheet,itisnotrequiredtoconformthatin
for
ma
tiontoIFRS.Con
form
ingthatearlier
selectedfinancialin
for
ma
tiontoIFRSsisoptional.[IFRS1.22]
Iftheentityelectstopresenttheearlierselectedfinancialin
for
ma
tionbasedonitspreviousGAAPrather
thanIFRS,itmustpromi
n entlylabelthatearlierin
for
ma
tionasnotcomplyingwithIFRSand,further,it
mustdisclosethenatureofthemainad
just
mentsthatwouldmakethatin
for
ma
tioncomplywithIFRS.This
latterdis
clo
sureisnarrativeandnotnec
e s
sar
ilyquan
ti
fied.[IFRS1.22]
Dis
c lo
s uresinthefinancialstate
mentsofafirsttimeadopter
IFRS1requiresdis
clo
suresthatexplainhowthetran
si
tionfrompreviousGAAPtoIFRSaffectedthe
entity'sreportedfinancialposition,financialper
for
manceandcashflows.[IFRS1.23]Thisincludes:
1. rec
o n
cil
i
a
tionsofequityreportedunderpreviousGAAPtoequityunderIFRSboth(a)atthedateof
tran
si
tiontoIFRSsand(b)theendofthelastannualperiodreportedunderthepreviousGAAP.[IFRS
1.24(a)](ForanentityadoptingIFRSsforthefirsttimeinits31December2014financialstate
ments,
6/12
1/13/2015
therec
o n
cil
i
a
tionswouldbeasof1January2012and31December2013.)
2. rec
o n
cil
i
a
tionsoftotalcom
p re
h en
siveincomeforthelastannualperiodreportedundertheprevious
GAAPtototalcom
p re
h en
siveincomeunderIFRSsforthesameperiod[IFRS1.24(b)]
3. ex
p la
n a
tionofmaterialad
just
mentsthatweremade,inadoptingIFRSsforthefirsttime,tothe
statementoffinancialposition,statementofcom
p re
h en
siveincomeandstatementofcashflows(the
latterifpresentedunderpreviousGAAP)[IFRS1.25]
4. iferrorsinpreviousGAAPfinancialstate
mentsweredis
cov
e redinthecourseoftran
si
tiontoIFRSs,
thosemustbesep
a
ratelydisclosed[IFRS1.26]
5. iftheentityrecog
n isedorreversedanyim
p air
mentlossesinpreparingitsopeningIFRSbalance
sheet,thesemustbedisclosed[IFRS1.24(c)]
6. ap
p ro
p ri
a teex
p la
n a
tionsiftheentityhaselectedtoapplyanyofthespecificrecog
n i
tionandmea
sure
mentex
e mp
tionspermittedunderIFRS1forinstance,ifitusedfairvaluesasdeemedcost
Dis
c lo
s uresininterimfinancialreports
IfanentityisgoingtoadoptIFRSsforthefirsttimeinitsannualfinancialstate
mentsfortheyearended
31December2014,certaindis
clo
surearerequiredinitsinterimfinancialstate
mentspriortothe31
December2014state
ments,butonlyifthoseinterimfinancialstate
mentspurporttocomplywithIAS34
InterimFinancialReporting.Ex
p lana
toryin
for
ma
tionandarec
o n
cil
i
a
tionarerequiredintheinterimreport
thatim
me
d i
a telyprecedesthefirstsetofIFRSannualfinancialstate
ments.Thein
for
ma
tionincludesrec
on
cil
i
a
tionsbetweenIFRSandpreviousGAAP.[IFRS1.32]
Ex
c ep
tionstotheret
ro
s pec
tiveap
pli
c a
tionofotherIFRSs
Priorto1January2010,therewerethreeex
cep
tionstothegeneralprincipleofret
ro
spec
tiveap
p li
ca
tion.
On23July2009,IFRS1wasamended,effective1January2010,toaddtwoad
d i
tionalex
cep
tionswith
thegoaloffurthersim
p li
fy
ingthetran
si
tiontoIFRSsforfirsttimeadopters.Thefiveex
cep
tionsare:[IFRS
1.
AppendixB]
IAS39Dere
c og
ni
tionoffinancialin
s tru
ments
Afirsttimeadoptershallapplythedere
cog
n i
tionre
q uire
mentsinIAS39prospec
tivelyfortrans
a c
tions
occurringonorafter1January2004.However,theentitymayapplythedere
cog
n i
tionre
q uire
mentsret
ro
spec
tivelyprovidedthattheneededin
for
ma
tionwasobtainedatthetimeofinitiallyaccountingforthose
trans
a c
tions.[IFRS1.B23]
IAS39Hedgeaccounting
ThegeneralruleisthattheentityshallnotreflectinitsopeningIFRSbalancesheet(statementoffinancial
position)ahedgingre
la
tion
shipofatypethatdoesnotqualifyforhedgeaccountinginac
cor
d ancewith
IAS39.However,ifanentitydes
ig
n atedanetpositionasahedgediteminac
cor
d ancewithprevious
GAAP,itmaydesignateanin
d i
vid
u alitemwithinthatnetpositionasahedgediteminac
cor
d ancewith
IFRS,providedthatitdoessonolaterthanthedateoftran
si
tiontoIFRSs.[IFRS1.B5]
Note:Modifiedre
q uire
mentsapplywhenanentityappliesIFRS9FinancialIn
stru
ments(2013).
IAS27Noncon
trol
linginterest
IFRS1.B7listsspecificre
q uire
mentsofIFRS10Con
sol
i
mentsthatshallbeapplied
7/12
1/13/2015
prospec
tively.
Fullcostoilandgasassets
Entitiesusingthefullcostmethodmayelectexemptionfromret
ro
spec
tiveap
p li
ca
tionofIFRSsforoiland
gasassets.EntitieselectingthisexemptionwillusethecarryingamountunderitsoldGAAPasthe
deemedcostofitsoilandgasassetsatthedateoffirsttimeadoptionofIFRSs.
De
ter
min
ingwhetheranarrange
mentcontainsalease
Ifafirsttimeadopterwithaleasingcontractmadethesametypeofde
ter
mi
n a
tionofwhetheranarrange
mentcontainedaleaseinac
cor
d ancewithpreviousGAAPasthatrequiredbyIFRIC4De
ter
min
ing
whetheranArrange
mentContainsaLease,butatadateotherthanthatrequiredbyIFRIC4,theamend
mentsexempttheentityfromhavingtoapplyIFRIC4whenitadoptsIFRSs.
Optionalex
e mp
tionsfromthebasicmea
s ure
mentprincipleinIFRS1
Therearesomefurtheroptionalex
e mp
tionstothegeneralre
state
mentandmea
sure
mentprin
ci
p lesset
outabove.Thefollowingex
cep
tionsarein
d i
vid
u
a llyoptional.Theyrelateto:
businesscom
b i
n a
tions[IFRS1.
AppendixC]
andanumberofothers[IFRS1.
AppendixD]:
sharebasedpaymenttrans
a c
tions
insurancecontracts
fairvalue,previouscarryingamount,orreval
u
a
tionasdeemedcost
leases
cu
mu
la
tivetrans
la
tiondif
fer
e nces
in
vest
mentsinsub
sidiaries,jointlycon
trolledentities,as
so
ci
a tesandjointventures
assetsandli
a
b il
i
tiesofsub
sidiaries,as
so
ci
a tedandjointventures
compoundfinancialin
stru
ments
des
ig
n a
tionofpre
vi
o uslyrecog
n isedfinancialin
stru
ments
fairvaluemea
sure
mentoffinancialassetsorfinancialli
a
b il
i
tiesatinitialrecog
n i
tion
de
com
mis
sion
ingli
a
b il
i
tiesincludedinthecostofproperty,plantandequipment
financialassetsorin
tan
g i
b leassetsaccountedforinac
cor
d ancewithIFRIC12Service
Con
ces
sionArrange
ments
borrowingcosts
transfersofassetsfromcustomers
ex
tin
g uish
ingfinancialli
a
b il
i
tieswithequityin
stru
ments
severehy
p er
in
fla
tion
jointarrange
ments
strippingcostsinthepro
d uc
tionphaseofasurfacemine
Some,butnotall,ofthemaredescribedbelow.
Businesscom
bi
na
tionsthatoccurredbeforeopeningbalancesheetdate
8/12
1/13/2015
IFRS1includesAppendixCex
p lain
inghowafirsttimeadoptershouldaccountforbusinesscom
b i
n a
tions
thatoccurredpriortotran
si
tiontoIFRS.
AnentitymaykeeptheoriginalpreviousGAAPaccounting,thatis,notrestate:
previousmergersorgoodwillwrit
tenofffromreserves
thecarryingamountsofassetsandli
a
b il
i
tiesrecog
n isedatthedateofac
q ui
si
tionormerger,or
howgoodwillwasinitiallyde
ter
mined(donotadjustthepurchasepriceal
lo
ca
tiononac
q ui
si
tion)
However,shoulditwishtodoso,anentitycanelecttorestateallbusinesscom
b i
n a
tionsstartingfroma
dateitselectspriortotheopeningbalancesheetdate.
Inallcases,theentitymustmakeaninitialIAS36im
p air
menttestofanyremaininggoodwillinthe
openingIFRSbalancesheet,afterre
clas
si
fy
ing,asap
p ro
p ri
a te,previousGAAPin
tan
g i
b lestogoodwill.
Theexemptionforbusinesscom
b i
n a
tionsalsoappliestoac
q ui
si
tionsofin
vest
mentsinas
so
ci
a tes,
interestsinjointventuresandinterestsinajointoperationwhentheoperationcon
sti
tutesabusiness.
Deemedcost
Assetscarriedatcost(e.g.property,plantandequipment)maybemeasuredattheirfairvalueatthedate
oftran
si
tiontoIFRSs.Fairvaluebecomesthe'deemedcost'goingforwardundertheIFRScostmodel.
Deemedcostisanamountusedasasurrogateforcostorde
p re
ci
a tedcostatagivendate.[IFRS1.D6]
If,beforethedateofitsfirstIFRSbalancesheet,theentityhadrevaluedanyoftheseassetsunderits
previousGAAPeithertofairvalueortoapricein
d exad
justedcost,thatpreviousGAAPrevaluedamount
atthedateofthereval
u
a
tioncanbecomethedeemedcostoftheassetunderIFRS.[IFRS1.D6]
If,beforethedateofitsfirstIFRSbalancesheet,theentityhadmadeaonetimereval
u
a
tionofassetsor
li
a
b il
i
tiestofairvaluebecauseofapri
vati
sa
tionorinitialpublicoffering,andtherevaluedamountbecame
deemedcostunderthepreviousGAAP,thatamountwouldcontinuetobedeemedcostaftertheinitial
adoptionofIFRS.[IFRS1.D8]
Thisoptionappliestoin
tan
g i
b leassetsonlyifanactivemarketexists.[IFRS1.D7]
Ifthecarryingamountofproperty,plantandequipmentorin
tan
g i
b leassetsthatareusedinratereg
u
lated
ac
tiv
i
tiesincludesamountsunderpreviousGAAPthatdonotqualifyforcap
i
tal
i
sa
tioninac
cor
d ancewith
IFRSs,afirsttimeadoptermayelecttousethepreviousGAAPcarryingamountofsuchitemsasdeemed
costontheinitialadoptionofIFRSs.[IFRS1.D8B]
Eligibleentitiessubjecttoratereg
u
la
tionmayalsoop
tion
a llyapplyIFRS14Reg
u
la
ontran
si
tiontoIFRSs,andinsub
se
ments.
IAS19Employeebenefits:actuarialgainsandlosses
Anentitymayelecttorecogniseallcu
mu
la
tiveactuarialgainsandlossesforalldefinedbenefitplansat
theopeningIFRSbalancesheetdate(thatis,resetanycorridorrecog
n isedunderpreviousGAAPto
zero),evenifitelectstousetheIAS19corridorapproachforactuarialgainsandlossesthatariseafter
9/12
1/13/2015
firsttimeadoptionofIFRS.Ifafirsttimeadopterusesthisexemption,itshallapplyittoallplans.[IFRS
1.D10]
Note:ThisexemptionisnotavailablewhereIAS19EmployeeBenefits(2011)isapplied.IAS19(2011)is
effectiveforannualreportingperiodsbeginningonorafter1January2013.
IAS21Ac
c u
mu
latedtrans
la
tionreserves
Anentitymayelecttorecognisealltrans
la
tionad
just
mentsarisingonthetrans
la
tionofthefinancialstate
mentsofforeignentitiesinac
cu
mu
latedprofitsorlossesattheopeningIFRSbalancesheetdate(thatis,
resetthetrans
la
tionreserveincludedinequityunderpreviousGAAPtozero).Iftheentityelectsthis
exemption,thegainorlossonsub
se
q uentdisposaloftheforeignentitywillbeadjustedonlybythoseac
cu
mu
latedtrans
la
tionad
just
mentsarisingaftertheopeningIFRSbalancesheetdate.[IFRS1.D13]
IAS27In
v est
mentsinseparatefinancialstate
ments
InMay2008,theIASBamendedthestandardtochangethewaythecostofanin
vest
mentinthe
separatefinancialstate
mentsismeasuredonfirsttimeadoptionofIFRSs.Theamend
mentstoIFRS1:
allowfirsttimeadopterstousea'deemedcost'ofeitherfairvalueorthecarryingamountunder
previousaccountingpracticetomeasuretheinitialcostofin
vest
mentsinsub
sidiaries,jointlycon
trolledentitiesandas
so
ci
a tesintheseparatefinancialstate
ments
removethede
f
i
n
i
tionofthecostmethodfromIAS27andaddare
q uire
menttopresentdividends
asincomeintheseparatefinancialstate
mentsoftheinvestor
requirethat,whenanewparentisformedinare
o r
g an
i
sa
tion,thenewparentmustmeasurethe
costofitsin
vest
mentinthepreviousparentatthecarryingamountofitsshareoftheequityitems
ofthepreviousparentatthedateofthere
o r
g an
i
sa
tion
Assetsandli
a
bil
i
tiesofsub
s idiaries,as
s o
c i
a tesandjointventures:differentIFRSadoptiondatesof
investorandinvestee
Ifasub
sidiarybecomesafirsttimeadopterlaterthanitsparent,IFRS1permitsachoicebetweentwo
mea
sure
mentbasesinthesub
sidiary'sseparatefinancialstate
ments.Inthiscase,asub
sidiaryshould
measureitsassetsandli
a
b il
i
tiesaseither:[IFRS1.D16]
thecarryingamountthatwouldbeincludedintheparent'scon
sol
i
d atedfinancialstate
ments,
basedontheparent'sdateoftran
si
tiontoIFRSs,ifnoad
just
mentsweremadeforcon
sol
i
d a
tion
pro
ce
d uresandfortheeffectsofthebusinesscom
b i
n a
tioninwhichtheparentacquiredthesub
sidiaryor
thecarryingamountsrequiredbyIFRS1basedonthesub
sidiary'sdateoftran
si
tiontoIFRSs
Asimilarelectionisavailabletoanassociateorjointventurethatbecomesafirsttimeadopterlaterthan
anentitythathassig
n if
i
cantinfluenceorjointcontroloverit.[IFRS1.D16]
Ifaparentbecomesafirsttimeadopterlaterthanitssub
sidiary,theparentshouldinitscon
sol
i
d ated
financialstate
ments,measuretheassetsandli
a
b il
i
tiesofthesub
sidiaryatthesamecarryingamountas
intheseparatefinancialstate
mentsofthesub
sidiary,afteradjustingforcon
sol
i
d a
tionad
just
mentsandfor
theeffectsofthebusinesscom
b i
n a
tioninwhichtheparentacquiredthesub
sidiary.Thesameapproach
appliesinthecaseofas
so
ci
a tesandjointventures.[IFRS1.D17]
10/12
1/13/2015
July2009:TwoAmend
mentstoIFRS1
On23July2009,theIASBamendedIFRS1to:
exemptentitiesusingthefullcostmethodfromret
ro
spec
tiveap
p li
ca
tionofIFRSsforoilandgas
assets.
exemptentitieswithexistingleasingcontractsfromre
a ssess
ingtheclas
si
fi
ca
tionofthose
contractsinac
cor
d ancewithIFRIC4De
ter
min
ingwhetheranArrange
mentcontainsaLease
whentheap
p li
ca
tionoftheirnationalaccountingre
q uire
mentsproducedthesameresult.
ClickforIASBPressRelease(PDF104k).
November2009:ProposedLimitedScopeExemptionforIFRS7Dis
c lo
s ures
On26November2009,theIASBissuedanexposuredraft(ED)proposingtoamendIFRS1tostatethat
anentityneednotprovidethecom
p ar
a
tivepriorpe
riodin
for
ma
tionrequiredbytheMarch2009amend
mentstoIFRS7ImprovingDis
clo
suresaboutFinancialIn
stru
mentsforfirsttimeadoptersadoptingbefore
1January2010.Asaresult,IFRS1,AppendixE,paragraphE1willbeamendedasfollows:
E1Afirsttimeadoptermayapplythetran
si
tionalpro
vi
sionsinparagraph44GofIFRS7totheextentthat
theentity'sfirstIFRSreportingperiodstartsearlierthan1January2010.
Theproposedlimitedexemptionfromcom
p ar
a
tiveIFRS7dis
clo
suresforfirsttimeadoptersiscon
sis
tent
withtheexemptionpermittedforearlyadoptersoftheMarch2009amend
mentstoIFRS7.Deadlinefor
commentsontheEDis29December2009.ClickforIASBPressRelease(PDF101k).
January2010:IASBamendsIFRS1toprovideIFRS7dis
c lo
s ureexemption
On28January2010,theIASBamendedIFRS1toexemptfirsttimeadoptersofIFRSsfromprovidingthe
ad
d i
tionaldis
clo
suresin
tro
d ucedinMarch2009byImprovingDis
clo
stru
ments
(Amend
mentstoIFRS7).Theamendmentgivesfirsttimeadoptersthesametran
si
tionpro
vi
sionsthat
Amend
mentstoIFRS7providestocurrentIFRSpreparers.Theamendmentiseffectiveon1July2010,
withearlierap
p li
ca
tionpermitted.ClickforIASBPressRelease(PDF100k).
December2010:TwoAmend
mentstoIFRS1
On20December,theIASBamendedIFRS1to:
providereliefforfirsttimeadoptersofIFRSsfromhavingtore
con
structtrans
a c
tionsthatoccurred
beforetheirdateoftran
si
tiontoIFRSs.
provideguidanceforentitiesemergingfromseverehy
p er
in
fla
tioneithertoresumepre
sent
ing
IFRSfinancialstate
mentsortopresentIFRSfinancialstate
mentsforthefirsttime.
ClickforIASBPressRelease(PDF33k).
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60
Contactus
About
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11/12
1/13/2015
information.
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QuickArticleLinks
Overview
IFRS2SharebasedPaymentrequiresanentitytorecognisesharebasedpaymenttrans
a c
tions(suchas
grantedshares,shareoptions,orshareap
p re
ci
a
tionrights)initsfinancialstate
ments,includingtrans
a c
tionswithemployeesorotherpartiestobesettledincash,otherassets,orequityin
stru
mentsofthe
entity.Specificre
q uire
mentsareincludedforeq
u ityset
tledandcashset
tledsharebasedpaymenttrans
ac
tions,aswellasthosewheretheentityorsupplierhasachoiceofcashorequityin
stru
ments.
IFRS2wasorig
i
n allyissuedinFebruary2004andfirstappliedtoannualperiodsbeginningonorafter1
January2005.
HistoryofIFRS2
Date
July2000
De
v el
op
ment
Comments
G4+1Dis
cus
sionPaperAccountingforShare
Commentdeadline31October
BasedPaymentspublished
2000
July2001
Historyoftheproject
20September2001IASBinvitescommentsonG4+1Dis
cus
sionPaper Commentdeadline15December
AccountingforShareBasedPayments
2001
7November2002 ExposureDraftED2ShareBasedPayment
Commentdeadline7March2003
published
19February2004 IFRS2SharebasedPaymentissued
Effectiveforannualperiods
beginningonorafter1January
2005
2February2006
ExposureDraftVestingCon
d i
tionsandCan
cel
la
Commentdeadline2June2006
tionspublished
17January2008 AmendedbyVestingCon
d i
tionsandCan
cel
la
tionsEffectiveforannualperiods
(Amend
mentstoIFRS2)
2009
16April2009
AmendedbyIm
p rove
mentstoIFRSs(scopeof
IFRS2andrevisedIFRS3)
AmendedbyGroupCashset
tledSharebased
PaymentTrans
a c
tions
18June2009
2010
12December2013 AmendedbyAnnualIm
p rove
mentstoIFRSs
20102012Cycle(de
f
i
n
i
tionofvestingcondition) beginningonorafter1July2014
RelatedIn
ter
pre
ta
tions
None
Amend
mentsundercon
sid
er
a
tion
IFRS2Clar
i
fi
ca
tionsofclas
si
fi
ca
tionandmea
sure
mentofsharebasedpaymenttrans
a c
tions
1/10
1/13/2015
ResearchprojectSharebasedpayments
SummaryofIFRS2
InJune2007,theDeloitteIFRSGlobalOfficepublishedanupdatedversionofourIASPlusGuide
toIFRS2SharebasedPayment2007(PDF748k,128pages).Theguidenotonlyexplainsthe
detailedpro
vi
sionsofIFRS2butalsodealswithitsap
p li
ca
tioninmanypracticalsit
u
a
tions.
Becauseofthecom
p lex
ityandvarietyofsharebasedpaymentawardsinpractice,itisnotalways
possibletobede
fin
i
tiveastowhatisthe'right'answer.However,inthisguideDeloitteshares
withyouourapproachtofindingsolutionsthatwebelieveareinac
cor
d ancewiththeobjectiveof
theStandard.
SpecialeditionofourIASPlusnewslet
ter
YouwillfindafourpagesummaryofIFRS2inaspecialeditionofourIASPlusnewslet
ter(PDF49k).
De
f
i
n
i
tionofsharebasedpayment
Asharebasedpaymentisatrans
a c
tioninwhichtheentityreceivesgoodsorserviceseitherascon
sid
e r
a
tionforitsequityin
stru
mentsorbyincurringli
a
b il
i
tiesforamountsbasedonthepriceoftheentity'sshares
orotherequityin
stru
mentsoftheentity.Theaccountingre
q uire
mentsforthesharebasedpayment
dependonhowthetrans
a c
tionwillbesettled,thatis,bytheissuanceof(a)equity,(b)cash,or(c)equity
orcash.
Scope
Theconceptofsharebasedpaymentsisbroaderthanemployeeshareoptions.IFRS2en
com
p assesthe
issuanceofshares,orrightstoshares,inreturnforservicesandgoods.Examplesofitemsincludedinthe
scopeofIFRS2areshareap
p re
ci
a
tionrights,employeesharepurchaseplans,employeeshare
ownershipplans,shareoptionplansandplanswheretheissuanceofshares(orrightstoshares)may
dependonmarketornonmar
ketrelatedcon
d i
tions.
IFRS2appliestoallentities.Thereisnoexemptionforprivateorsmallerentities.Fur
ther
more,sub
sidiariesusingtheirparent'sorfellowsub
sidiary'sequityascon
sid
e r
a
tionforgoodsorservicesarewithin
thescopeoftheStandard.
Therearetwoex
e mp
tionstothegeneralscopeprinciple:
First,theissuanceofsharesinabusinesscom
b i
n a
tionshouldbeaccountedforunderIFRS3
BusinessCom
b i
n a
tions.However,careshouldbetakentodis
tin
g uishsharebasedpayments
relatedtotheac
q ui
si
tionfromthoserelatedtocon
tin
u
ingemployeeservices
Second,IFRS2doesnotaddresssharebasedpaymentswithinthescopeofpara
g raphs810of
IAS32FinancialIn
stru
ments:Pre
sen
ta
tion,orpara
g raphs57ofIAS39FinancialIn
stru
ments:
Recog
n i
tionandMea
sure
ment.Therefore,IAS32andIAS39shouldbeappliedforcom
mod
ity
basedde
riv
a
tivecontractsthatmaybesettledinsharesorrightstoshares.
IFRS2doesnotapplytosharebasedpaymenttrans
a c
tionsotherthanfortheac
q ui
si
tionofgoodsand
services.Sharedividends,thepurchaseoftreasuryshares,andtheissuanceofad
d i
tionalsharesare
thereforeoutsideitsscope.
2/10
1/13/2015
Recog
ni
tionandmea
s ure
ment
Theissuanceofsharesorrightstosharesrequiresanincreaseinacomponentofequity.IFRS2requires
theoff
set
tingdebitentrytobeexpensedwhenthepaymentforgoodsorservicesdoesnotrepresentan
asset.Theexpenseshouldberecog
n isedasthegoodsorservicesareconsumed.Forexample,the
issuanceofsharesorrightstosharestopurchaseinventorywouldbepresentedasanincreasein
inventoryandwouldbeexpensedonlyoncetheinventoryissoldorimpaired.
Theissuanceoffullyvestedshares,orrightstoshares,ispresumedtorelatetopastservice,requiringthe
fullamountofthegrantdatefairvaluetobeexpensedim
me
d i
a tely.Theissuanceofsharestoemployees
with,say,athreeyearvestingperiodiscon
sid
e redtorelatetoservicesoverthevestingperiod.Therefore,
thefairvalueofthesharebasedpayment,de
ter
minedatthegrantdate,shouldbeexpensedoverthe
vestingperiod.
Asageneralprinciple,thetotalexpenserelatedtoeq
u ityset
tledsharebasedpaymentswillequalthe
multipleofthetotalin
stru
mentsthatvestandthegrantdatefairvalueofthosein
stru
ments.Inshort,there
istruinguptoreflectwhathappensduringthevestingperiod.However,iftheeq
u ityset
tledsharebased
paymenthasamarketrelatedper
for
mancecondition,theexpensewouldstillberecog
n isedifallother
vestingcon
d i
tionsaremet.Thefollowingexampleprovidesanil
lus
tra
tionofatypicaleq
u ityset
tledshare
basedpayment.
Il
lus
tra
tionRecog
ni
tionofemployeeshareoptiongrant
Companygrantsatotalof100shareoptionsto10membersofitsexecutiveman
a ge
mentteam(10
optionseach)on1January20X5.Theseoptionsvestattheendofathreeyearperiod.Thecompanyhas
de
ter
minedthateachoptionhasafairvalueatthedateofgrantequalto15.Thecompanyexpectsthat
all100optionswillvestandthereforerecordsthefollowingentryat30June20X5theendofitsfirstsix
monthinterimreportingperiod.
Dr.Shareoptionexpense
250
Cr.Equity
250
[(10015)6periods]=250perperiod
Ifall100sharesvest,theaboveentrywouldbemadeattheendofeach6monthreportingperiod.
However,ifonememberoftheexecutiveman
a ge
mentteamleavesduringthesecondhalfof20X6,
thereforefor
feit
ingtheentireamountof10options,thefollowingentryat31December20X6wouldbe
made:
Dr.Shareoptionexpense
150
Cr.Equity
150
[(9015)6periods=225perperiod.[2254][250+250+250]=150
Mea
s ure
mentguidance
Dependingonthetypeofsharebasedpayment,fairvaluemaybede
ter
minedbythevalueoftheshares
orrightstosharesgivenup,orbythevalueofthegoodsorservicesreceived:
Generalfairvaluemea
s ure
mentprinciple.Inprinciple,trans
a c
tionsinwhichgoodsorservices
arereceivedascon
sid
e r
a
tionforequityin
stru
mentsoftheentityshouldbemeasuredatthefair
valueofthegoodsorservicesreceived.Onlyifthefairvalueofthegoodsorservicescannotbe
measuredreliablywouldthefairvalueoftheequityin
stru
mentsgrantedbeused.
3/10
1/13/2015
Measuringemployeeshareoptions.Fortrans
a c
tionswithemployeesandothersprovidingsimilar
services,theentityisrequiredtomeasurethefairvalueoftheequityin
stru
mentsgranted,
becauseitistypicallynotpossibletoestimatereliablythefairvalueofemployeeservices
received.
Whentomeasurefairvalueoptions.Fortrans
a c
tionsmeasuredatthefairvalueoftheequity
in
stru
mentsgranted(suchastrans
a c
tionswithemployees),fairvalueshouldbeestimatedat
grantdate.
Whentomeasurefairvaluegoodsandservices.Fortrans
a c
tionsmeasuredatthefairvalueof
thegoodsorservicesreceived,fairvalueshouldbeestimatedatthedateofreceiptofthose
goodsorservices.
Mea
s ure
mentguidance.Forgoodsorservicesmeasuredbyreferencetothefairvalueofthe
equityin
stru
mentsgranted,IFRS2specifiesthat,ingeneral,vestingcon
d i
tionsarenottakeninto
accountwhenes
ti
mat
ingthefairvalueofthesharesoroptionsattherelevantmea
sure
mentdate
(asspecifiedabove).Instead,vestingcon
d i
tionsaretakenintoaccountbyadjustingthenumber
ofequityin
stru
mentsincludedinthemea
sure
mentofthetrans
a c
tionamountsothat,ul
ti
mately,
theamountrecog
n isedforgoodsorservicesreceivedascon
sid
e r
a
tionfortheequityin
stru
ments
grantedisbasedonthenumberofequityin
stru
mentsthateven
tu
a llyvest.
Moremea
s ure
mentguidance.IFRS2requiresthefairvalueofequityin
stru
mentsgrantedtobe
basedonmarketprices,ifavailable,andtotakeintoaccountthetermsandcon
d i
tionsupon
whichthoseequityin
stru
mentsweregranted.Intheabsenceofmarketprices,fairvalueis
estimatedusingavaluationtechniquetoestimatewhatthepriceofthoseequityin
stru
ments
wouldhavebeenonthemea
sure
mentdateinanarm'slengthtrans
a c
tionbetweenknowl
e dge
able,willingparties.Thestandarddoesnotspecifywhichpar
tic
u
larmodelshouldbeused.
Iffairvaluecannotbereliablymeasured.IFRS2requiresthesharebasedpaymenttrans
a c
tion
tobemeasuredatfairvalueforbothlistedandunlistedentities.IFRS2permitstheuseofintrinsic
value(thatis,fairvalueoftheshareslessexerciseprice)inthose"rarecases"inwhichthefair
valueoftheequityin
stru
mentscannotbereliablymeasured.Howeverthisisnotsimplymeasured
atthedateofgrant.Anentitywouldhavetoremeasureintrinsicvalueateachreportingdateuntil
finalset
tle
ment.
Per
for
mancecon
di
tions.IFRS2makesadis
tinc
tionbetweenthehandlingofmarketbasedper
for
mancecon
d i
tionsfromnonmar
ketper
for
mancecon
d i
tions.Marketcon
d i
tionsarethoserelated
tothemarketpriceofanentity'sequity,suchasachievingaspecifiedsharepriceoraspecified
targetbasedonacom
p ar
i
sonoftheentity'ssharepricewithanindexofsharepricesofother
entities.Marketbasedper
for
mancecon
d i
tionsareincludedinthegrantdatefairvaluemea
sure
ment(similarly,nonvest
ingcon
d i
tionsaretakenintoaccountinthemea
sure
ment).However,the
fairvalueoftheequityin
stru
mentsisnotadjustedtotakeintocon
sid
e r
a
tionnonmar
ketbased
per
for
mancefeaturestheseareinsteadtakenintoaccountbyadjustingthenumberofequityin
stru
mentsincludedinthemea
sure
mentofthesharebasedpaymenttrans
a c
tion,andareadjusted
eachperioduntilsuchtimeastheequityin
stru
mentsvest.
Note:AnnualIm
p rove
mentstoIFRSs20102012Cycleamendsthede
f
i
n
i
tionsof'vestingcondition'and
'marketcondition'andaddsde
f
i
n
i
tionsfor'per
for
mancecondition'and'servicecondition'(whichwerepre
vi
o uslypartofthede
f
i
n
i
tionof'vestingcondition').Theamend
mentsareeffectiveforannualperiods
beginningonorafter1July2014.
4/10
1/13/2015
Mod
i
fi
c a
tions,can
c el
la
tions,andset
tle
ments
Thede
ter
mi
n a
tionofwhetherachangeintermsandcon
d i
tionshasaneffectontheamountrecog
n ised
dependsonwhetherthefairvalueofthenewin
stru
mentsisgreaterthanthefairvalueoftheoriginalin
stru
ments(bothde
ter
minedatthemod
i
fi
ca
tiondate).
Mod
i
fi
ca
tionofthetermsonwhichequityin
stru
mentsweregrantedmayhaveaneffectontheexpense
thatwillberecorded.IFRS2clarifiesthattheguidanceonmod
i
fi
ca
tionsalsoappliestoin
stru
ments
modifiedaftertheirvestingdate.Ifthefairvalueofthenewin
stru
mentsismorethanthefairvalueofthe
oldin
stru
ments(e.g.byreductionoftheexercisepriceorissuanceofad
d i
tionalin
stru
ments),thein
cre
men
talamountisrecog
n isedovertheremainingvestingperiodinamannersimilartotheoriginalamount.
Ifthemod
i
fi
ca
tionoccursafterthevestingperiod,thein
cre
men
talamountisrecog
n isedim
me
d i
a tely.If
thefairvalueofthenewin
stru
mentsislessthanthefairvalueoftheoldin
stru
ments,theoriginalfair
valueoftheequityin
stru
mentsgrantedshouldbeexpensedasifthemod
i
fi
ca
tionneveroccurred.
Thecan
cel
la
tionorset
tle
mentofequityin
stru
mentsisaccountedforasanac
cel
e r
a
tionofthevesting
periodandthereforeanyamountun
recog
n isedthatwouldotherwisehavebeenchargedshouldberecog
nisedim
me
d i
a tely.Anypaymentsmadewiththecan
cel
la
tionorset
tle
ment(uptothefairvalueofthe
equityin
stru
ments)shouldbeaccountedforasthere
p ur
chaseofanequityinterest.Anypaymentin
excessofthefairvalueoftheequityin
stru
mentsgrantedisrecog
n isedasanexpense
Newequityin
stru
mentsgrantedmaybeiden
ti
fiedasare
p lace
mentofcancelledequityin
stru
ments.In
thosecases,there
p lace
mentequityin
stru
mentsareaccountedforasamod
i
fi
ca
tion.Thefairvalueofthe
re
p lace
mentequityin
stru
mentsisde
ter
minedatgrantdate,whilethefairvalueofthecancelledin
stru
mentsisde
ter
minedatthedateofcan
cel
la
tion,lessanycashpaymentsoncan
cel
la
tionthatisaccounted
forasadeductionfromequity.
Dis
c lo
s ure
Requireddis
clo
suresinclude:
thenatureandextentofsharebasedpaymentarrange
mentsthatexistedduringtheperiod
howthefairvalueofthegoodsorservicesreceived,orthefairvalueoftheequityin
stru
ments
granted,duringtheperiodwasde
ter
mined
theeffectofsharebasedpaymenttrans
a c
tionsontheentity'sprofitorlossfortheperiodandon
itsfinancialposition.
Effectivedate
IFRS2iseffectiveforannualperiodsbeginningonorafter1January2005.Earlierap
p li
ca
tionisen
cour
aged.
Tran
s i
tion
Alleq
u ityset
tledsharebasedpaymentsgrantedafter7November2002,thatarenotyetvestedatthe
effectivedateofIFRS2shallbeaccountedforusingthepro
vi
sionsofIFRS2.Entitiesareallowedand
en
cour
a ged,butnotrequired,toapplythisIFRStoothergrantsofequityin
stru
mentsif(andonlyif)the
entityhaspre
vi
o uslydisclosedpubliclythefairvalueofthoseequityin
stru
mentsde
ter
minedinac
cor
dancewithIFRS2.
Thecom
p ar
a
tivein
for
ma
tionpresentedinac
cor
d ancewithIAS1shallberestatedforallgrantsofequity
5/10
1/13/2015
in
stru
mentstowhichthere
q uire
mentsofIFRS2areapplied.Thead
just
menttoreflectthischangeis
presentedintheopeningbalanceofretainedearningsfortheearliestperiodpresented.
IFRS2amendsparagraph13ofIFRS1FirsttimeAdoptionofInternationalFinancialReportingStandards
toaddanexemptionforsharebasedpaymenttrans
a c
tions.SimilartoentitiesalreadyapplyingIFRS,first
timeadopterswillhavetoapplyIFRS2forsharebasedpaymenttrans
a c
tionsonorafter7November
2002.Ad
d i
tion
a lly,afirsttimeadopterisnotrequiredtoapplyIFRS2tosharebasedpaymentsgranted
after7November2002thatvestedbeforethelaterof(a)thedateoftran
si
tiontoIFRSand(b)1January
2005.AfirsttimeadoptermayelecttoapplyIFRS2earlieronlyifithaspubliclydisclosedthefairvalueof
thesharebasedpaymentsde
ter
minedatthemea
sure
mentdateinac
cor
d ancewithIFRS2.
Dif
fer
e nceswithFASBStatement123Revised2004
InDecember2004,theUSFASBpublishedFASBStatement123(revised2004)ShareBasedPayment.
Statement123(R)requiresthatthecom
p en
sa
tioncostrelatingtosharebasedpaymenttrans
a c
tionsbe
recog
n isedinfinancialstate
ments.ClickforFASBPressRelease(PDF17k).Deloitte(USA)haspublished
aspecialissueofitsHeadsUpnewslet
tersum
maris
ingthekeyconceptsofFASBStatementNo.123(R).
ClicktodownloadtheHeadsUpNewslet
ter(PDF292k).WhileStatement123(R)islargelycon
sis
tentwith
IFRS2,somedif
fer
e ncesremain,asdescribedinaQ&AdocumentFASBissuedalongwiththenew
Statement:
Q22.IstheStatementcon
v er
gentwithInternationalFinancialReportingStandards?
TheStatementislargelycon
ver
g entwithInternationalFinancialReportingStandard(IFRS)2,Share
basedPayment.TheStatementandIFRS2havethepotentialtodifferinonlyafewareas.Themoresig
nif
i
cantareasarebrieflydescribedbelow.
IFRS2requirestheuseofthemodifiedgrantdatemethodforsharebasedpaymentarrange
mentswithnon
e m
p loy
e es.Incontrast,Issue9618requiresthatgrantsofshareoptionsandother
equityin
stru
mentstonon
e m
p loy
e esbemeasuredattheearlierof(1)thedateatwhichacom
mit
mentforper
for
mancebythecoun
ter
p artytoearntheequityin
stru
mentsisreachedor(2)thedate
atwhichthecoun
ter
p arty'sper
for
manceiscomplete.
IFRS2containsmorestringentcriteriaforde
ter
min
ingwhetheranemployeesharepurchaseplan
iscom
p en
satoryornot.Asaresult,someemployeesharepurchaseplansforwhichIFRS2
requiresrecog
n i
tionofcom
p en
sa
tioncostwillnotbecon
sid
e redtogiverisetocom
p en
sa
tioncost
undertheStatement.
IFRS2appliesthesamemea
sure
mentre
q uire
mentstoemployeeshareoptionsre
g ard
lessof
whethertheissuerisapublicoranonpublicentity.TheStatementrequiresthatanonpublicentity
accountforitsoptionsandsimilarequityin
stru
mentsbasedontheirfairvalueunlessitisnotprac
ti
ca
b letoestimatetheexpectedvolatil
ityoftheentity'sshareprice.Inthatsituation,theentityis
requiredtomeasureitsequityshareoptionsandsimilarin
stru
mentsatavalueusingthehis
tor
i
cal
volatil
ityofanap
p ro
p ri
a teindustrysectorindex.
Intaxju
ris
d ic
tionssuchastheUnitedStates,wherethetimevalueofshareoptionsgenerallyis
notde
d uctiblefortaxpurposes,IFRS2requiresthatnodeferredtaxassetberec
o g
n izedforthe
com
p en
sa
tioncostrelatedtothetimevaluecomponentofthefairvalueofanaward.Adeferred
taxassetisrec
o g
n izedonlyifandwhentheshareoptionshaveintrinsicvaluethatcouldbede
ductiblefortaxpurposes.Therefore,anentitythatgrantsanatthemoneyshareoptiontoan
6/10
1/13/2015
employeeinexchangeforserviceswillnotrecognizetaxeffectsuntilthatawardisinthemoney.
Incontrast,theStatementrequiresrecog
n i
tionofadeferredtaxassetbasedonthegrantdatefair
valueoftheaward.Theeffectsofsub
se
q uentdecreasesintheshareprice(orlackofan
increase)arenotreflectedinaccountingforthedeferredtaxassetuntiltherelatedcom
p en
sa
tion
costisrec
o g
n izedfortaxpurposes.Theeffectsofsub
se
q uentincreasesthatgenerateexcesstax
benefitsarerec
o g
n izedwhentheyaffecttaxespayable.
TheStatementrequiresaportfolioapproachinde
ter
min
ingexcesstaxbenefitsofequityawards
inpaidincapitalavailabletooffsetwriteoffsofdeferredtaxassets,whereasIFRS2requiresan
in
d i
vid
u alin
stru
mentapproach.Thus,somewriteoffsofdeferredtaxassetsthatwillberec
o g
nizedinpaidincapitalundertheStatementwillberec
o g
n izedinde
ter
min
ingnetincomeunder
IFRS2.
Dif
fer
e ncesbetweentheStatementandIFRS2maybefurtherreducedinthefuturewhentheIASBand
FASBconsiderwhethertoundertakead
d i
tionalworktofurtherconvergetheirre
spec
tiveaccounting
standardsonsharebasedpayment.
March2005:SECStaffAccountingBulletin107
On29March2005,thestaffoftheUSSe
cu
ri
tiesandExchangeCom
mis
sionissuedStaffAccounting
Bulletin107dealingwithval
u
a
tionsandotheraccountingissuesforsharebasedpaymentarrange
ments
bypubliccompaniesunderFASBStatement123RShareBasedPayment.Forpubliccompanies,val
u
a
tionsunderStatement123RaresimilartothoseunderIFRS2SharebasedPayment.SAB107provides
guidancerelatedtosharebasedpaymenttrans
a c
tionswithnon
e m
p loy
e es,thetran
si
tionfromnonpublic
topublicentitystatus,valuationmethods(includingas
sump
tionssuchasexpectedvolatil
ityandexpected
term),theaccountingforcertainre
d eemablefinancialin
stru
mentsissuedundersharebasedpayment
arrange
ments,theclas
si
fi
ca
tionofcom
p en
sa
tionexpense,nonGAAPfinancialmeasures,firsttime
adoptionofStatement123Rinaninterimperiod,cap
i
tal
i
sa
tionofcom
p en
sa
tioncostrelatedtoshare
basedpaymentarrange
ments,accountingfortheincometaxeffectsofsharebasedpaymentarrange
mentsonadoptionofStatement123R,themod
i
fi
ca
tionofemployeeshareoptionspriortoadoptionof
Statement123R,anddis
clo
suresinMan
a ge
ment'sDis
cus
sionandAnalysis(MD&A)sub
se
q uentto
adoptionofStatement123R.Oneofthein
ter
p re
ta
tionsinSAB107iswhethertherearedif
fer
e nces
betweenStatement123RandIFRS2thatwouldresultinarec
o n
cil
ingitem:
Question:Doesthestaffbelievetherearedif
fer
e ncesinthemea
sure
mentpro
vi
sionsforsharebased
paymentarrange
mentswithemployeesunderInternationalAccountingStandardsBoardInternational
FinancialReportingStandard2,SharebasedPayment('IFRS2')andStatement123Rthatwouldresultin
arec
o n
cil
ingitemunderItem17or18ofForm20F?
In
ter
pre
tiveResponse:Thestaffbelievesthatap
p li
ca
tionoftheguidanceprovidedbyIFRS2regarding
themea
sure
mentofemployeeshareoptionswouldgenerallyresultinafairvaluemea
sure
mentthatis
con
sis
tentwiththefairvalueobjectivestatedinStatement123R.Ac
cord
ingly,thestaffbelievesthatap
p li
ca
tionofStatement123R'smea
sure
mentguidancewouldnotgenerallyresultinarec
o n
cil
ingitem
requiredtobereportedunderItem17or18ofForm20Fforaforeignprivateissuerthathascompliedwith
thepro
vi
sionsofIFRS2forsharebasedpaymenttrans
a c
tionswithemployees.However,thestaff
remindsforeignprivateissuersthattherearecertaindif
fer
e ncesbetweentheguidanceinIFRS2and
Statement123Rthatmayresultinrec
o n
cil
ingitems.[Footnotesomitted]
Clicktodownload:
7/10
1/13/2015
SECPressRelease(PDF30k)
StaffAccountingBulletin107(PDF362k)
March2005:Bear,StearnsStudyonImpactofExpensingStockOptionsintheUnitedStates
IfUSpubliccompanieshadbeenrequiredtoexpenseemployeestockoptionsin2004,aswillberequired
underFASBStatement123RShareBasedPaymentstartinginthirdquar
ter2005:
thereported2004posttaxnetincomefromcon
tin
u
ingop
e r
a
tionsoftheS&P500companies
wouldhavebeenreducedby5%,and
2004NASDAQ100posttaxnetincomefromcon
tin
u
ingop
e r
a
tionswouldhavebeenreducedby
22%.
ThosearekeyfindingsofastudyconductedbytheEquityResearchgroupatBear,Stearns&Co.Inc.
Thepurposeofthestudyistohelpinvestorsgaugetheimpactthatexpensingemployeestockoptionswill
haveonthe2005earningsofUSpubliccompanies.TheBear,Stearnsanalysiswasbasedonthe2004
stockoptiondis
clo
suresinthemostrecentlyfiled10KsofcompaniesthatwereS&P500andNASDAQ
100con
stituentsasof31December2004.Exhibitstothestudypresenttheresultsbycompany,by
sector,andbyindustry.VisitorstoIASPlusarelikelytofindthestudyofinterestbecausethere
q uire
mentsofFAS123RforpubliccompaniesareverysimilartothoseofIFRS2.WearegratefultoBear,
Stearnsforgivingusper
mis
siontopostthestudyonIASPlus.ThereportremainscopyrightBear,Stears
&Co.Inc.,allrightsreserved.Clicktodownload2004EarningsImpactofStockOptionsontheS&P500
&NASDAQ100Earnings(PDF486k).
November2005:Standard&Poor'sStudyonImpactofExpensingStockOptions
InNovember2005Standard&Poor'spublishedareportoftheimpactofexpensingstockoptionsonthe
S&P500companies.FAS123(R)requiresexpensingofstockoptions(mandatoryformostSECreg
is
trants
in2006).IFRS2isnearlyidenticaltoFAS123(R).S&Pfound:
OptionexpensewillreduceS&P500earningsby4.2%.In
for
ma
tionTech
n ol
o gyisaffectedthe
most,reducingearningsby18%....P/Eratiosforallsectorswillbeincreased,butwillremain
belowhis
tor
i
calaverages.
TheimpactofoptionexpensingontheStandard&Poor's500willbeno
tice
a ble,butinanen
vi
ron
mentofrecordearnings,highmarginsandhis
tor
i
callylowoperatingpricetoearn
ingsratios,
theindexisinitsbestpositionindecadestoabsorbthead
d i
tionalexpense.
S&Ptakesissuewiththosecompaniesthattrytoemphasiseearningsbeforedeductingstockoption
expenseandwiththoseanalystswhoignoreoptionexpensing.Thereportem
p ha
sisesthat:
Standard&Poor'swillincludeandreportoptionexpenseinallofitsearningsvalues,acrossallofits
businesslines.ThisincludesOperating,AsReportedandCore,andappliestoitsan
a
lyt
i
calworkinthe
S&PDomesticIndices,StockReports,aswellasitsforwardestimates.Itincludesallofitselec
tronic
products....Thein
vest
mentcommunitybenefitswhenithasclearandcon
sis
tentin
for
ma
tionand
analyses.Acon
sis
tentearningsmethod
o l
o gythatbuildsonacceptedaccountingstandardsandpro
ce
duresisavitalcomponentofinvesting.Bysup
p ort
ingthisde
f
i
n
i
tion,Standard&Poor'siscon
tribut
ingtoa
morereliablein
vest
menten
vi
ron
ment.
Thecurrentdebateastothepre
sen
ta
tionbycompaniesofearningsthatexcludeoptionexpense,
generallybeingreferredtoasnonGAAPearnings,speakstotheheartofcorporategov
e r
n ance.Ad
d i
tion
8/10
1/13/2015
ally,manyequityanalystsarebeingen
cour
a gedtobasetheirestimatesonnonGAAPearnings.Whilewe
donotexpectarepeatoftheEBBS(EarningsBeforeBadStuff)proformaearningsof2001,theabilityto
compareissuesandsectorsdependsonanacceptedsetofaccountingrulesobservedbyall.Inorderto
makeinformedin
vest
mentdecisions,theinvestingcommunityrequiresdatathatconformtoaccepted
accountingpro
ce
d ures.Ofevenmoreconcernistheimpactthatsuchal
ter
n a
tivepre
sen
ta
tionandcal
cu
la
tionscouldhaveonthereducedleveloffaithandtrustinvestorsputintocompanyreporting.The
corporategov
e r
n anceeventsofthelasttwoyearshaveerodedthetrustofmanyinvestors,trustthatwill
takeyearstoearnback.Inaneraofinstantaccessandcarefullyscriptedinvestorreleases,trustisnowa
majorissue.
January2008:AmendmentofIFRS2toclarifyvestingcon
di
tionsandcan
c el
la
tions
On17January2008,theIASBpublishedfinalamend
mentstoIFRS2SharebasedPaymenttoclarifythe
terms'vestingcon
d i
tions'and'can
cel
la
tions'asfollows:
Vestingcon
d i
tionsareservicecon
d i
tionsandper
for
mancecon
d i
tionsonly.Otherfeaturesofa
sharebasedpaymentarenotvestingcon
d i
tions.UnderIFRS2,featuresofasharebased
paymentthatarenotvestingcon
d i
tionsshouldbeincludedinthegrantdatefairvalueofthe
sharebasedpayment.Thefairvaluealsoincludesmar
ketre
latedvestingcon
d i
tions.
Allcan
cel
la
tions,whetherbytheentityorbyotherparties,shouldreceivethesameaccounting
treatment.UnderIFRS2,acan
cel
la
tionofequityin
stru
mentsisaccountedforasanac
cel
e r
a
tion
ofthevestingperiod.Thereforeanyamountun
recog
n isedthatwouldotherwisehavebeen
chargedisrecog
n isedim
me
d i
a tely.Anypaymentsmadewiththecan
cel
la
tion(uptothefairvalue
oftheequityin
stru
ments)isaccountedforasthere
p ur
chaseofanequityinterest.Anypaymentin
excessofthefairvalueoftheequityin
stru
mentsgrantedisrecog
n isedasanexpense.
TheBoardhadproposedtheamendmentinanexposuredrafton2February2006.Theamendmentis
effectiveforannualperiodsbeginningonorafter1January2009,withearlierap
p li
ca
tionpermitted.
ClickforPressRelease(PDF47k).
DeloittehaspublishedaSpecialEditionofourIASPlusNewslet
terex
p lain
ingtheamend
mentstoIFRS2
forvestingcon
d i
tionsandcan
cel
la
tions(PDF126k).
June2009:IASBamendsIFRS2forgroupcashset
a c
tions,withdraws
IFRICs8and11
On18June2009,theIASBissuedamend
mentstoIFRS2SharebasedPaymentthatclarifythe
accountingforgroupcashset
a c
tions.Theamend
mentsclarifyhowanin
di
vid
u alsub
sidiaryinagroupshouldaccountforsomesharebasedpaymentarrange
mentsinitsown
financialstate
ments.Inthesearrange
ments,thesub
sidiaryreceivesgoodsorservicesfromemployeesor
suppliersbutitsparentoranotherentityinthegroupmustpaythosesuppliers.Theamend
mentsmake
clearthat:
Anentitythatreceivesgoodsorservicesinasharebasedpaymentarrange
mentmustaccountfor
thosegoodsorservicesnomatterwhichentityinthegroupsettlesthetrans
a c
tion,andnomatter
whetherthetrans
a c
tionissettledinsharesorcash.
InIFRS2a'group'hasthesamemeaningasinIAS27Con
sol
i
d atedandSeparateFinancial
State
ments,thatis,itincludesonlyaparentanditssub
sidiaries.
9/10
1/13/2015
Theamend
mentstoIFRS2alsoin
cor
p o
rateguidancepre
vi
o uslyincludedinIFRIC8ScopeofIFRS2
andIFRIC11IFRS2GroupandTreasuryShareTrans
a c
tions.Asaresult,theIASBhaswithdrawnIFRIC
8andIFRIC11.Theamend
mentsareeffectiveforannualperiodsbeginningonorafter1January2010
andmustbeappliedret
ro
spec
tively.Earlierap
p li
ca
tionispermitted.ClickforIASBpressrelease(PDF
103k).
Like
32
Contactus
About
Legal
Privacy
FAQs
information.
10/10
1/13/2015
IFRS3BusinessCombinations
QuickArticleLinks
Overview
IFRS3BusinessCom
b i
n a
tionsoutlinestheaccountingwhenanacquirerobtainscontrolofabusiness
(e.g.anac
q ui
si
tionormerger).Suchbusinesscom
b i
n a
tionsareaccountedforusingthe'ac
q ui
si
tion
method',whichgenerallyrequiresassetsacquiredandli
a
b il
i
tiesassumedtobemeasuredattheirfair
valuesattheac
q ui
si
tiondate.
ArevisedversionofIFRS3wasissuedinJanuary2008andappliestobusinesscom
b i
n a
tionsoccurring
inanentity'sfirstannualperiodbeginningonorafter1July2009.
HistoryofIFRS3
Date
July2001
De
v el
op
ment
Comments
Historyoftheproject
(carriedoverfromtheoldIASC)
5December2002 ExposureDraftED3BusinessCom
b i
n a
tions Commentdeadline4April2003
andrelatedexposuredraftsproposingamend
mentstoIAS36andIAS38published
31March2004
IFRS3BusinessCom
b i
n a
tions(2004)and
Effectiveforbusinesscom
b i
n a
tionsfor
relatedamendedversionsofIAS36andIAS whichtheagreementdateisonorafter
38issued
31March2004
(IFRS3su
p er
sedesIAS22)
29April2004
ExposureDraftCom
b i
n a
tionsbyContract
Commentdeadline31July2004
AloneorInvolvingMutualEntitiespublished
(Theseproposalswerenotfinalised,but
insteadcon
sid
e redaspartoftheJune2005
exposuredraft)
30June2005
ExposureDraftProposedAmend
mentstoIFRSCommentdeadline28October2005
3published
10January2008 IFRS3BusinessCom
b i
n a
tions(2008)issued Appliestobusinesscom
b i
n a
tionsfor
whichtheac
q ui
si
tiondateisonorafter
thebeginningofthefirstannual
reportingperiodbeginningonorafter1
July2009
6May2010
AmendedbyAnnualIm
p rove
mentstoIFRSs Effectiveforannualperiodsbeginning
2010(mea
sure
mentofnoncon
trol
ling
onorafter1July2010
interests,replacedsharebasedpayment
awards,tran
si
tionalarrange
mentsforcon
tin
gentcon
sid
e r
a
tion)
12December2013AmendedbyAnnualIm
p rove
mentstoIFRSs Ap
p lic
a
b leforbusinesscom
b i
n a
tions
20102012Cycle(con
tin
g entcon
sid
e r
a
tion) forwhichtheac
q ui
si
tiondateisonor
after1July2014
1/12
1/13/2015
p rove
mentstoIFRSs
20112013Cycle(scopeexceptionforjoint
ventures)
onorafter1July2014
RelatedIn
ter
pre
ta
tions
None
Amend
mentsundercon
sid
er
a
tionbytheIASB
Commoncontroltrans
a c
tions
Postim
p le
men
ta
tionreviewIFRS3
SummaryofIFRS3
Back
ground
IFRS3(2008)seekstoenhancetherelevance,re
li
a
b il
ityandcom
p a
ra
b il
ityofin
for
ma
tionprovidedabout
businesscom
b i
n a
tions(e.g.ac
q ui
si
tionsandmergers)andtheireffects.Itsetsouttheprin
ci
p lesonthe
recog
n i
tionandmea
sure
mentofacquiredassetsandli
a
b il
i
ties,thede
ter
mi
n a
tionofgoodwillandthe
necessarydis
clo
sures.
IFRS3(2008)resultedfromajointprojectwiththeUSFinancialAccountingStandardsBoard(FASB)and
replacedIFRS3(2004).FASBissuedasimilarstandardinDecember2007(SFAS141(R)).Therevisions
resultinahighdegreeofcon
ver
g encebetweenIFRSsandUSGAAPintheaccountingforbusinesscom
bi
n a
tions,althoughsomepo
ten
tiallysig
n if
i
cantdif
fer
e ncesremain.
Keyde
f
i
n
i
tions
[IFRS3,AppendixA]
businesscom
bi
na
tion
Atrans
a c
tionorothereventinwhichanacquirerobtainscontrolofoneormorebusi
n esses.Trans
a c
tions
sometimesreferredtoas'truemergers'or'mergersofequals'arealsobusinesscom
b i
n a
tionsasthatterm
isusedin[IFRS3]
business
Anin
te
g ratedsetofac
tiv
i
tiesandassetsthatiscapableofbeingconductedandmanagedforthe
purposeofprovidingareturnintheformofdividends,lowercostsorothereconomicbenefitsdirectlyto
investorsorotherowners,membersorpar
tic
i
p ants
ac
qui
s i
tiondate
Thedateonwhichtheacquirerobtainscontroloftheacquiree
acquirer
Theentitythatobtainscontroloftheacquiree
acquiree
Thebusinessorbusi
n essesthattheacquirerobtainscontrolofinabusinesscom
b i
n a
tion
Scope
IFRS3mustbeappliedwhenaccountingforbusinesscom
b i
n a
tions,butdoesnotapplyto:
Theformationofajointventure*[IFRS3.2(a)]
Theac
q ui
si
tionofanassetorgroupofassetsthatisnotabusiness,althoughgeneralguidance
isprovidedonhowsuchtrans
a c
tionsshouldbeaccountedfor[IFRS3.2(b)]
2/12
1/13/2015
Com
b i
n a
tionsofentitiesorbusi
n essesundercommoncontrol(theIASBhasaseparateagenda
projectoncommoncontroltrans
a c
tions)[IFRS3.2(c)]
Ac
q ui
si
tionsbyanin
vest
mententityofasub
sidiarythatisrequiredtobemeasuredatfairvalue
throughprofitorlossunderIFRS10Con
sol
i
ments.[IFRS3.2A]
*AnnualIm
p rove
mentstoIFRSs20112013Cycle,effectiveforannualperiodsbeginningonorafter1
July2014,amendsthisscopeexclusiontoclarifythatisappliestotheaccountingfortheformationofa
jointarrange
mentinthefinancialstate
mentsofthejointarrange
mentitself.
De
ter
min
ingwhetheratrans
a c
tionisabusinesscom
bi
na
tion
IFRS3providesad
d i
tionalguidanceonde
ter
min
ingwhetheratrans
a c
tionmeetsthede
f
i
n
i
tionofa
businesscom
b i
n a
tion,andsoaccountedforinac
cor
d ancewithitsre
q uire
ments.Thisguidanceincludes:
Businesscom
b i
n a
tionscanoccurinvariousways,suchasbytrans
fer
ringcash,incurringli
a
b il
i
ties,issuingequityin
stru
ments(oranycom
b i
n a
tionthereof),orbynotissuingcon
sid
e r
a
tionatall
(i.e.bycontractalone)[IFRS3.B5]
Businesscom
b i
n a
tionscanbestruc
turedinvariouswaystosatisfylegal,taxationorotherob
jec
tives,includingoneentitybecomingasub
sidiaryofanother,thetransferofnetassetsfromone
entitytoanotherortoanewentity[IFRS3.B6]
Thebusinesscom
b i
n a
tionmustinvolvetheac
q ui
si
tionofabusiness,whichgenerallyhasthree
elements:[IFRS3.B7]
Inputsaneconomicresource(e.g.noncur
rentassets,in
tel
lec
tualproperty)thatcreates
outputswhenoneormoreprocessesareappliedtoit
Processasystem,standard,protocol,con
ven
tionorrulethatwhenappliedtoaninput
orinputs,createsoutputs(e.g.strategicman
a ge
ment,op
e r
a
tionalprocesses,resource
man
a ge
ment)
Outputtheresultofinputsandprocessesappliedtothoseinputs.
Methodofaccountingforbusinesscom
bi
na
tions
Ac
qui
s i
tionmethod
Theac
q ui
si
tionmethod(calledthe'purchasemethod'inthe2004versionofIFRS3)isusedforall
businesscom
b i
n a
tions.[IFRS3.4]
Stepsinapplyingtheac
q ui
si
tionmethodare:[IFRS3.5]
1. Iden
ti
fi
ca
tionofthe'acquirer'
2. De
ter
mi
n a
tionofthe'ac
q ui
si
tiondate'
3. Recog
n i
tionandmea
sure
mentoftheiden
ti
fi
a bleassetsacquired,theli
a
b il
i
tiesassumedandany
noncon
trol
linginterest(NCI,formerlycalledminorityinterest)intheacquiree
4. Recog
n i
tionandmea
sure
mentofgoodwilloragainfromabargainpurchase
Iden
ti
fy
inganacquirer
TheguidanceinIFRS10Con
sol
i
mentsisusedtoidentifyanacquirerinabusiness
com
b i
n a
tion,i.e.theentitythatobtains'control'oftheacquiree.[IFRS3.7]
IftheguidanceinIFRS10doesnotclearlyindicatewhichofthecombiningentitiesisanacquirer,IFRS3
providesad
d i
tionalguidancewhichisthencon
sid
e red:
3/12
1/13/2015
Theacquirerisusuallytheentitythattransferscashorotherassetswherethebusinesscom
b i
n a
tioniseffectedinthismanner[IFRS3.B14]
Theacquirerisusually,butnotalways,theentityissuingequityinterestswherethetrans
a c
tionis
effectedinthismanner,howevertheentityalsoconsidersotherpertinentfactsandcir
cum
stances
including:[IFRS3.B15]
relativevotingrightsinthecombinedentityafterthebusinesscom
b i
n a
tion
theexistenceofanylargeminorityinterestifnootherownerorgroupofownershasasig
nif
i
cantvotinginterest
thecom
p o
si
tionofthegoverningbodyandseniorman
a ge
mentofthecombinedentity
thetermsonwhichequityinterestsareexchanged
Theacquirerisusuallytheentitywiththelargestrelativesize(assets,revenuesorprofit)[IFRS
3.B16]
Forbusinesscom
b i
n a
tionsinvolvingmultipleentities,con
sid
e r
a
tionisgiventotheentityini
ti
a t
ing
thecom
b i
n a
tion,andtherelativesizesofthecombiningentities.[IFRS3.B17]
Ac
qui
s i
tiondate
Anacquirerconsidersallpertinentfactsandcir
cum
stanceswhende
ter
min
ingtheac
q ui
si
tiondate,i.e.the
dateonwhichitobtainscontroloftheacquiree.Theac
q ui
si
tiondatemaybeadatethatisearlierorlater
thantheclosingdate.[IFRS3.89]
IFRS3doesnotprovidedetailedguidanceonthede
ter
mi
n a
tionoftheac
q ui
si
tiondateandthedateiden
ti
fiedshouldreflectallrelevantfactsandcir
cum
stances.Con
sid
e r
a
tionsmightinclude,amongothers,the
dateapublicofferbecomesun
con
d i
tional(withacon
trol
linginterestacquired),whentheacquirercan
effectchangeintheboardofdirectorsoftheacquiree,thedateofac
cep
tanceofanun
con
d i
tionaloffer,
whentheacquirerstartsdirectingtheacquiree'soperatingandfinancingpolicies,orthedatecom
p e
ti
tion
orotherau
thor
i
tiesprovidenec
e s
sar
ilyclear
a nces.
Acquiredassetsandli
a
bil
i
ties
IFRS3es
tab
lishesthefollowingprin
ci
p lesinrelationtotherecog
n i
tionandmea
sure
mentofitemsarising
inabusinesscom
b i
n a
tion:
Recog
ni
tionprinciple.Iden
ti
fi
a bleassetsacquired,li
a
b il
i
tiesassumed,andnoncon
trol
ling
interestsintheacquiree,arerecog
n isedsep
a
ratelyfromgoodwill[IFRS3.10]
Mea
s ure
mentprinciple.Allassetsacquiredandli
a
b il
i
tiesassumedinabusinesscom
b i
n a
tionare
measuredatac
q ui
si
tiondatefairvalue.[IFRS3.18]
Ex
c ep
tionstotherecog
ni
tionandmea
s ure
mentprin
c i
ples
Thefollowingex
cep
tionstotheaboveprin
ci
p lesapply:
Con
tin
gentli
a
bil
i
tiesthere
q uire
mentsofIAS37Pro
vi
sions,Con
tin
g entLi
a
b il
i
tiesandCon
tin
gentAssetsdonotapplytotherecog
n i
tionofcon
tin
g entli
a
b il
i
tiesarisinginabusinesscom
b i
n a
tion[IFRS3.2223]
Incometaxestherecog
n i
tionandmea
sure
mentofincometaxesisinac
cor
d ancewithIAS12
IncomeTaxes[IFRS3.2425]
Employeebenefitsassetsandli
a
b il
i
tiesarisingfromanacquiree'semployeebenefitsarrange
4/12
1/13/2015
mentsarerecog
n isedandmeasuredinac
cor
d ancewithIAS19EmployeeBenefits(2011)[IFRS
2.26]
In
dem
ni
fi
c a
tionassetsanacquirerrecog
n isesin
d em
n i
fi
ca
tionassetsatthesametimeandon
thesamebasisasthein
d em
n i
fieditem[IFRS3.2728]
Reac
quiredrightsthemea
sure
mentofreac
q uiredrightsisbyreferencetotheremainingcon
trac
tualtermwithoutrenewals[IFRS3.29]
Sharebasedpaymenttrans
a c
tionsthesearemeasuredbyreferencetothemethodinIFRS2
SharebasedPayment
AssetsheldforsaleIFRS5Noncur
con
tin
u edOp
e r
a
tionsis
appliedinmeasuringacquirednoncur
rentassetsanddisposalgroupsclas
si
fiedasheldforsale
attheac
q ui
si
tiondate.
Inapplyingtheprin
ci
p les,anacquirerclas
si
fiesanddes
ig
n atesassetsacquiredandli
a
b il
i
tiesassumed
onthebasisofthecon
trac
tualterms,economiccon
d i
tions,operatingandaccountingpoliciesandother
pertinentcon
d i
tionsexistingattheac
q ui
si
tiondate.Forexample,thismightincludetheiden
ti
fi
ca
tionof
de
riv
a
tivefinancialin
stru
mentsashedgingin
stru
ments,orthesep
a
ra
tionofembeddedde
riv
a
tivesfrom
hostcontracts.[IFRS3.15]However,ex
cep
tionsaremadeforleaseclas
si
fi
ca
tion(betweenoperatingand
financeleases)andtheclas
si
fi
ca
tionofcontractsasinsurancecontracts,whichareclas
si
fiedonthe
basisofcon
d i
tionsinplaceattheinceptionofthecontract.[IFRS3.17]
Acquiredin
tan
g i
b leassetsmustberecog
n isedandmeasuredatfairvalueinac
cor
d ancewiththeprin
ci
plesifitisseparableorarisesfromothercon
trac
tualrights,ir
re
spec
tiveofwhethertheacquireehad
recog
n isedtheassetpriortothebusinesscom
b i
n a
tionoccurring.Thisisbecausethereisalwayssuf
fi
cientin
for
ma
tiontoreliablymeasurethefairvalueoftheseassets.[IAS38.3337]Thereisno'reliable
mea
sure
ment'exceptionforsuchassets,aswaspresentunderIFRS3(2004).
Goodwill
Goodwillismeasuredasthedif
fer
e ncebetween:
theaggregateof(i)thevalueofthecon
sid
e r
a
tiontrans
ferred(generallyatfairvalue),(ii)the
amountofanynoncon
trol
linginterest(NCI,seebelow),and(iii)inabusinesscom
b i
n a
tion
achievedinstages(seebelow),theac
q ui
si
tiondatefairvalueoftheacquirer'spre
vi
o uslyheld
equityinterestintheacquiree,and
thenetoftheac
q ui
si
tiondateamountsoftheiden
ti
fi
a bleassetsacquiredandtheli
a
b il
i
ties
assumed(measuredinac
cor
d ancewithIFRS3).[IFRS3.32]
Thiscanbewritteninsim
p li
fiedequationformasfollows:
Goodwill
Con
sid
e r
a
tion
trans
ferred
Amountofnoncon
+
trol
linginterests
Fairvalueof
previousequity
interests
Net
assets
recog
nised
5/12
1/13/2015
Ifthedif
fer
e nceaboveisnegative,theresultinggainisabargainpurchaseinprofitorloss,whichmay
ariseincir
cum
stancessuchasaforcedselleractingundercom
p ul
sion.[IFRS3.3435]However,before
anybargainpurchasegainisrecog
n isedinprofitorloss,theacquirerisrequiredtoundertakeareviewto
ensuretheiden
ti
fi
ca
tionofassetsandli
a
b il
i
tiesiscomplete,andthatmea
sure
mentsap
p ro
p ri
a telyreflect
con
sid
e r
a
tionofallavailablein
for
ma
tion.[IFRS3.36]
Choiceinthemea
s ure
mentofnoncon
trol
linginterests(NCI)
IFRS3allowsanaccountingpolicychoice,availableonatrans
a c
tionbytrans
a c
tionbasis,tomeasure
noncon
trol
linginterests(NCI)eitherat:[IFRS3.19]
fairvalue(sometimescalledthefullgoodwillmethod),or
theNCI'spro
p or
tion
a teshareofnetassetsoftheacquiree.
Thechoiceinaccountingpolicyappliesonlytopresentownershipinterestsintheacquireethatentitle
holderstoapro
p or
tion
a teshareoftheentity'snetassetsintheeventofaliq
u i
d a
tion(e.g.outside
holdingsofanacquiree'sordinaryshares).Othercom
p o
n entsofnoncon
trol
linginterestsatmustbe
measuredatac
q ui
si
tiondatefairvaluesorinac
cor
d ancewithotherap
p lic
a
b leIFRSs(e.g.sharebased
paymenttrans
a c
tionsaccountedforunderIFRS2SharebasedPayment).[IFRS3.19]
Example
Ppays800toacquirean80%interestintheordinarysharesofS.Theag
g re
g atedfairvalueof100%of
S'siden
ti
fi
a bleassetsandli
a
b il
i
ties(de
ter
minedinac
cor
d ancewiththere
q uire
mentsofIFRS3)is600,
andthefairvalueofthenoncon
trol
linginterest(theremaining20%holdingofordinaryshares)is185.
Themea
sure
mentofthenoncon
trol
linginterest,anditsresultantimpactsonthede
ter
mi
n a
tionof
goodwill,undereachoptionisil
lus
tratedbelow:
NCIbasedon
fairvalue
Con
sid
e r
a
tiontrans
ferred
Noncon
trol
linginterest
Netassets
Goodwill
NCIbasedon
netassets
800
185 (1)
985
(600)
385
800
120 (2)
920
(600)
320
(1)Thefairvalueofthe20%noncon
trol
linginterestinSwillnotnec
e s
sar
ilybepro
p or
tion
a tetotheprice
paidbyPforits80%interest,primarilyduetoanycontrolpremiumordiscount[IFRS3.B45]
(2)Cal
cu
latedas20%ofthefairvalueofthenetassetsof600.
Businesscom
bi
na
tionachievedinstages(stepac
qui
s i
tions)
Priortocontrolbeingobtained,anacquireraccountsforitsin
vest
mentintheequityinterestsofan
acquireeinac
cor
d ancewiththenatureofthein
vest
mentbyapplyingtherelevantstandard,e.g.IAS28
In
vest
mentsinAs
so
ci
a tesandJointVentures(2011),IFRS11JointArrange
ments,IAS39FinancialIn
6/12
1/13/2015
stru
ments:Recog
n i
tionandMea
sure
mentorIFRS9FinancialIn
stru
ments.Aspartofaccountingforthe
businesscom
b i
n a
tion,theacquirerre
mea
suresanypre
vi
o uslyheldinterestatfairvalueandtakesthis
amountintoaccountinthede
ter
mi
n a
tionofgoodwillasnotedabove[IFRS3.32]Anyresultantgainor
lossisrecog
n isedinprofitorlossorothercom
p re
h en
siveincomeasap
p ro
p ri
a te.[IFRS3.42]
Theaccountingtreatmentofanentity'sprecom
b i
n a
tioninterestinanacquireeiscon
sis
tentwiththeview
thattheobtainingofcontrolisasig
n if
i
canteconomiceventthattriggersare
mea
sure
ment.Con
sis
tentwith
thisview,alloftheassetsandli
a
b il
i
tiesoftheacquireearefullyre
mea
suredinac
cor
d ancewiththere
quire
mentsofIFRS3(generallyatfairvalue).Ac
cord
ingly,thede
ter
mi
n a
tionofgoodwilloccursonlyatthe
ac
q ui
si
tiondate.Thisisdifferenttotheaccountingforstepac
q ui
si
tionsunderIFRS3(2004).
Mea
s ure
mentperiod
Iftheinitialaccountingforabusinesscom
b i
n a
tioncanbede
ter
minedonlypro
vi
sion
a llybytheendofthe
firstreportingperiod,thebusinesscom
b i
n a
tionisaccountedforusingpro
vi
sionalamounts.Ad
just
ments
topro
vi
sionalamounts,andtherecog
n i
tionofnewlyiden
ti
fiedassetandli
a
b il
i
ties,mustbemadewithin
the'mea
sure
mentperiod'wheretheyreflectnewin
for
ma
tionobtainedaboutfactsandcir
cum
stancesthat
wereinexistenceattheac
q ui
si
tiondate.[IFRS3.45]Themea
sure
mentperiodcannotexceedoneyear
fromtheac
q ui
si
tiondateandnoad
just
mentsarepermittedafteroneyearexcepttocorrectanerrorinac
cor
d ancewithIAS8.[IFRS3.50]
Relatedtrans
a c
tionsandsub
s e
quentaccounting
Generalprin
c i
ples
Ingeneral:
trans
a c
tionsthatarenotpartofwhattheacquirerandacquiree(oritsformerowners)exchanged
inthebusinesscom
b i
n a
tionareiden
ti
fiedandaccountedforsep
a
ratelyfrombusinesscom
b i
n a
tion
therecog
n i
tionandmea
sure
mentofassetsandli
a
b il
i
tiesarisinginabusinesscom
b i
n a
tionafter
theinitialaccountingforthebusinesscom
b i
n a
tionisdealtwithunderotherrelevantstandards,
e.g.acquiredinventoryissub
se
q uentlyaccountedunderIAS2In
ven
to
ries.[IFRS3.54]
Whende
ter
min
ingwhetherapar
tic
u
laritemispartoftheexchangefortheacquireeorwhetheritis
separatefromthebusinesscom
b i
n a
tion,anacquirerconsidersthereasonforthetrans
a c
tion,who
initiatedthetrans
a c
tionandthetimingofthetrans
a c
tion.[IFRS3.B50]
Con
tin
gentcon
s id
e r
a
tion
Con
tin
g entcon
sid
e r
a
tionmustbemeasuredatfairvalueatthetimeofthebusinesscom
b i
n a
tionandis
takenintoaccountinthede
ter
mi
n a
tionofgoodwill.Iftheamountofcon
tin
g entcon
sid
e r
a
tionchangesas
aresultofapostac
q ui
si
tionevent(suchasmeetinganearningstarget),accountingforthechangein
con
sid
e r
a
tiondependsonwhetherthead
d i
tionalcon
sid
e r
a
tionisclas
si
fiedasanequityin
stru
mentoran
assetorliability:[IFRS3.58]
Ifthecon
tin
g entcon
sid
e r
a
tionisclas
si
fiedasanequityin
stru
ment,theoriginalamountisnotre
mea
sured
Ifthead
d i
tionalcon
sid
e r
a
tionisclas
si
fiedasanassetorliabilitythatisafinancialin
stru
ment,the
con
tin
g entcon
sid
e r
a
tionismeasuredatfairvalueandgainsandlossesarerecog
n isedineither
7/12
1/13/2015
profitorlossorothercom
p re
h en
siveincomeinac
cor
d ancewithIFRS9FinancialIn
stru
mentsor
IAS39FinancialIn
stru
ments:Recog
n i
tionandMea
sure
ment
Ifthead
d i
tionalcon
sid
e r
a
tionisnotwithinthescopeofIFRS9(orIAS39),itisaccountedforin
ac
cor
d ancewithIAS37Pro
vi
sions,Con
tin
g entLi
a
b il
i
tiesandCon
tin
g entAssetsorotherIFRSs
asap
p ro
p ri
a te.
Note:AnnualIm
p rove
mentstoIFRSs20102012Cyclechangesthesere
q uire
mentsforbusinesscom
b i
na
tionsforwhichtheac
q ui
si
tiondateisonorafter1July2014.Undertheamendedre
q uire
ments,con
tin
gentcon
sid
e r
a
tionthatisclas
si
fiedasanassetorliabilityismeasuredatfairvalueateachreportingdate
andchangesinfairvaluearerecog
n isedinprofitorloss,bothforcon
tin
g entcon
sid
e r
a
tionthatiswithin
thescopeofIFRS9/IAS39orotherwise.
Whereachangeinthefairvalueofcon
tin
g entcon
sid
e r
a
tionistheresultofad
d i
tionalin
for
ma
tionabout
factsandcir
cum
stancesthatexistedattheac
q ui
si
tiondate,thesechangesareaccountedforasmea
sure
mentperiodad
just
mentsiftheyariseduringthemea
sure
mentperiod(seeabove).[IFRS3.58]
Ac
qui
s i
tioncosts
Costsofissuingdebtorequityin
stru
mentsareaccountedforunderIAS32FinancialIn
stru
ments:Pre
sen
ta
tionandIAS39FinancialIn
stru
ments:Recog
n i
tionandMea
sure
ment/IFRS9FinancialIn
stru
ments.All
othercostsas
so
ci
a tedwithanac
q ui
si
tionmustbeexpensed,includingre
im
b urse
mentstotheacquiree
forbearingsomeoftheac
q ui
si
tioncosts.Examplesofcoststobeexpensedincludefinder'sfees
advisory,legal,accounting,valuationandotherpro
fes
sionalorcon
sult
ingfeesandgeneralad
min
is
tra
tivecosts,includingthecostsofmain
tain
inganinternalac
q ui
si
tionsde
p art
ment.[IFRS3.53]
Preex
ist
ingre
la
tion
s hipsandreac
quiredrights
Iftheacquirerandacquireewerepartiestoapreex
ist
ingre
la
tion
ship(forinstance,theacquirerhad
grantedtheacquireearighttouseitsin
tel
lec
tualproperty),thismustmustbeaccountedforsep
a
rately
fromthebusinesscom
b i
n a
tion.Inmostcases,thiswillleadtotherecog
n i
tionofagainorlossforthe
amountofthecon
sid
e r
a
tiontrans
ferredtothevendorwhichef
fec
tivelyrep
re
sentsa'set
tle
ment'ofthe
preex
ist
ingre
la
tion
ship.Theamountofthegainorlossismeasuredasfollows:
forpreex
ist
ingnoncon
trac
tualre
la
tion
ships(forexample,alawsuit):byreferencetofairvalue
forpreex
ist
ingcon
trac
tualre
la
tion
ships:atthelesserof(a)thefavourable/un
favourablecontract
positionand(b)anystatedset
tle
mentpro
vi
sionsinthecontractavailabletothecoun
ter
p artyto
whomthecontractisun
favourable.[IFRS3.B5153]
However,wherethetrans
a c
tionef
fec
tivelyrep
re
sentsareac
q uiredright,anin
tan
g i
b leassetisrecog
n ised
andmeasuredonthebasisoftheremainingcon
trac
tualtermoftherelatedcontractexcludingany
renewals.Theassetisthensub
se
q uentlyamortisedovertheremainingcon
trac
tualterm,againexcluding
anyrenewals.[IFRS3.55]
Con
tin
gentli
a
bil
i
ties
Untilacon
tin
g entliabilityissettled,cancelledorexpired,acon
tin
g entliabilitythatwasrecog
n isedinthe
initialaccountingforabusinesscom
b i
n a
tionismeasuredatthehigheroftheamounttheliabilitywouldbe
recog
n isedunderIAS37Pro
vi
sions,Con
tin
g entLi
a
b il
i
tiesandCon
tin
g entAssets,andtheamountless
ac
cu
mu
latedamor
ti
sa
tionunderIAS18Revenue.[IFRS3.56]
Con
tin
gentpaymentstoemployeesandshare
hold
e rs
8/12
1/13/2015
Aspartofabusinesscom
b i
n a
tion,anacquirermayenterintoarrange
mentswithsellingshare
h old
e rsor
employees.Inde
ter
min
ingwhethersucharrange
mentsarepartofthebusinesscom
b i
n a
tionoraccounted
forsep
a
rately,theacquirerconsidersanumberoffactors,includingwhetherthearrange
mentrequires
con
tin
u
ingem
p loy
ment(andifso,itsterm),thelevelorre
mu
n er
a
tioncomparedtootheremployees,
whetherpaymentstoshare
h olderemployeesarein
cre
men
taltononem
p loyeeshare
h old
e rs,therelative
numberofsharesowns,linkagestovaluationoftheacquiree,howthecon
sid
e r
a
tioniscal
cu
lated,and
otheragree
mentsandissues.[IFRS3.B55]
Wheresharebasedpaymentarrange
mentsoftheacquireeexistandarereplaced,thevalueofsuch
awardsmustbeap
p or
tionedbetweenprecom
b i
n a
tionandpostcom
b i
n a
tionserviceandaccountedfor
ac
cord
ingly.[IFRS3.B56B62B]
In
dem
ni
fi
c a
tionassets
In
d em
n i
fi
ca
tionassetsrecog
n isedattheac
q ui
si
tiondate(undertheex
cep
tionstothegeneralrecog
n i
tion
andmea
sure
mentprin
ci
p lesnotedabove)aresub
se
q uentlymeasuredonthesamebasisofthein
d em
n i
fiedliabilityorasset,subjecttocon
trac
tualimpactsandcol
lectibil
ity.In
d em
n i
fi
ca
tionassetsareonlydere
cog
n isedwhencollected,soldorwhenrightstoitarelost.[IFRS3.57]
Otherissues
Inaddition,IFRS3providesguidanceonsomespecificaspectsofbusinesscom
b i
n a
tionsincluding:
businesscom
b i
n a
tionsachievedwithoutthetransferofcon
sid
e r
a
tion,e.g.'duallisted'and
'stapled'arrange
ments[IFRS3.4344]
reverseac
q ui
si
tions[IFRS3.B19]
iden
ti
fy
ingin
tan
g i
b leassetsacquired[IFRS3.B3134]
Dis
c lo
s ure
Dis
c lo
s ureofin
for
ma
tionaboutcurrentbusinesscom
bi
na
tions
Anacquirerisrequiredtodisclosein
for
ma
tionthatenablesusersofitsfinancialstate
mentstoevaluate
thenatureandfinancialeffectofabusinesscom
b i
n a
tionthatoccurseitherduringthecurrentreporting
periodoraftertheendoftheperiodbutbeforethefinancialstate
mentsareau
tho
risedforissue.[IFRS
3.59]
Amongthedis
clo
suresrequiredtomeettheforegoingobjectivearethefollowing:[IFRS3.B64B66]
nameandade
scrip
tionoftheacquiree
ac
q ui
si
tiondate
per
cent
a geofvotingequityinterestsacquired
primaryreasonsforthebusinesscom
b i
n a
tionandade
scrip
tionofhowtheacquirerobtained
controloftheacquiree
de
scrip
tionofthefactorsthatmakeupthegoodwillrecog
n ised
qual
i
ta
tivede
scrip
tionofthefactorsthatmakeupthegoodwillrecog
n ised,suchasexpected
synergiesfromcombiningop
e r
a
tions,in
tan
g i
b leassetsthatdonotqualifyforseparaterecog
n i
tion
ac
q ui
si
tiondatefairvalueofthetotalcon
sid
e r
a
tiontrans
ferredandtheac
q ui
si
tiondatefairvalue
ofeachmajorclassofcon
sid
e r
a
tion
9/12
1/13/2015
detailsofcon
tin
g entcon
sid
e r
a
tionarrange
mentsandin
d em
n i
fi
ca
tionassets
detailsofacquiredre
ceiv
a bles
theamountsrecog
n isedasoftheac
q ui
si
tiondateforeachmajorclassofassetsacquiredandli
a
bil
i
tiesassumed
detailsofcon
tin
g entli
a
b il
i
tiesrecog
n ised
totalamountofgoodwillthatisexpectedtobede
d uctiblefortaxpurposes
detailsaboutanytrans
a c
tionsthatarerecog
n isedsep
a
ratelyfromtheac
q ui
si
tionofassetsand
as
sump
tionofli
a
b il
i
tiesinthebusinesscom
b i
n a
tion
in
for
ma
tionaboutabargainpurchase
in
for
ma
tionaboutthemea
sure
mentofnoncon
trol
linginterests
detailsaboutabusinesscom
b i
n a
tionachievedinstages
in
for
ma
tionabouttheacquiree'srevenueandprofitorloss
in
for
ma
tionaboutabusinesscom
b i
n a
tionwhoseac
q ui
si
tiondateisaftertheendofthereporting
periodbutbeforethefinancialstate
mentsareau
tho
risedforissue
Dis
c lo
s ureofin
for
ma
tionaboutad
just
mentsofpastbusinesscom
bi
na
tions
Anacquirerisrequiredtodisclosein
for
ma
mentstoevaluate
thefinancialeffectsofad
just
mentsrecog
n isedinthecurrentreportingperiodthatrelatetobusinesscom
bi
n a
tionsthatoccurredintheperiodorpreviousreportingperiods.[IFRS3.61]
Amongthedis
clo
suresrequiredtomeettheforegoingobjectivearethefollowing:[IFRS3.B67]
detailswhentheinitialaccountingforabusinesscom
b i
n a
tionisin
com
p leteforpar
tic
u
larassets,
li
a
b il
i
ties,noncon
trol
linginterestsoritemsofcon
sid
e r
a
tion(andtheamountsrecog
n isedinthe
financialstate
mentsforthebusinesscom
b i
n a
tionthushavebeende
ter
minedonlypro
vi
sion
a lly)
followupin
for
ma
tiononcon
tin
g entcon
sid
e r
a
tion
followupin
for
ma
tionaboutcon
tin
g entli
a
b il
i
tiesrecog
n isedinabusinesscom
b i
n a
tion
arec
o n
cil
i
a
tionofthecarryingamountofgoodwillatthebeginningandendofthereporting
period,withvariousdetailsshownsep
a
rately
theamountandanex
p la
n a
tionofanygainorlossrecog
n isedinthecurrentreportingperiodthat
both:
relatestotheiden
ti
fi
a bleassetsacquiredorli
a
b il
i
tiesassumedinabusinesscom
b i
n a
tion
thatwaseffectedinthecurrentorpreviousreportingperiod,and
isofsuchasize,natureorincidencethatdis
clo
sureisrelevanttoun
d er
stand
ingthe
combinedentity'sfinancialstate
ments.
DeloitteguidetoIFRS3andIAS27
InJuly2008,theDeloitteIFRSGlobalOfficehaspublishedBusinessCom
b i
n a
tionsand
ChangesinOwnershipInterests:AGuidetotheRevisedIFRS3andIAS27.This164
pageguidedealsmainlywithaccountingforbusinesscom
b i
n a
tionsunderIFRS3(2008).
Whereap
p ro
p ri
a te,itdealswithrelatedre
q uire
mentsofIAS27(2008)par
tic
u
larlyas
regardsthede
f
i
n
i
tionofcontrol,accountingfornoncon
trol
linginterests,andchangesin
ownershipinterests.OtheraspectsofIAS27(suchasthere
q uire
mentstopreparecon
10/12
1/13/2015
sol
i
mentsanddetailedpro
ce
d uresforcon
sol
i
d a
tion)arenot
addressed.
ClicktodownloadthenewGuidetoIFRS3andIAS27(PDF647k).
DeloitteUnitedStatesguidetoaccountingforbusinesscom
bi
na
tions
InDecember2009,DeloitteUnitedStatespublishedanupdatededitionofARoadmapto
AccountingforBusinessCom
b i
n a
tionsandRelatedTopics(PDF2,197k).This285page
bookreflectstheFASBAccountingStandardsCod
i
fi
ca
tionandincludesa12pageappendix
thatexaminesdif
fer
e ncesbetweenUSGAAPandIFRSs(IFRS3andIASs27,36,and38)
onthistopic.
Contentsofthebook:
Section1ScopeofASC805
Section2Iden
ti
fy
ingtheAcquirer
Section3Rec
o g
n iz
ingandMeasuringAssetsAcquiredandLi
a
b il
i
tiesAssumed
General
Section4Rec
o g
n iz
ingandMeasuringAssetsAcquiredandLi
a
b il
i
tiesAssumed
(OtherThanIn
tan
g i
b leAssetsandGoodwill)
Section5Rec
o g
n iz
ingandMeasuringAcquiredIn
tan
g i
b leAssetsandGoodwill
Section6Rec
o g
n iz
ingandMeasuringtheCon
sid
e r
a
tionTrans
ferredinaBusiness
Com
b i
n a
tion
Section7Non
con
trol
lingInterests
Section8IncomeTaxCon
sid
e r
a
tions
Section9PushDownBasisofAccounting
Section10Sub
se
q uentAccountingforIn
tan
g i
b leAssets(OtherThanGoodwill)
Section11Sub
se
q uentAccountingforGoodwill
Section12FinancialStatementPre
sen
ta
tionRe
q uire
ments
Section13FinancialStatementDis
clo
sureRe
q uire
ments
Section14Tran
si
tionRe
q uire
mentsandOtherAdoptionCon
sid
e r
a
tions
Overviewofdif
fer
e ncesbetweenIFRS3(2008)andIFRS3(2004)
Thetablebelowsum
marisessomeofkeydif
fer
e ncesinaccountingforbusinesscom
b i
n a
tionsunderIFRS
3(2008)andIFRS3(2004).Thetableisnotex
h aus
tive.
Area
Trans
a c
tioncosts
Cal
cu
la
tionofgoodwill
Highleveloverviewofchanges
ac
q ui
si
tioncostssuchasadvisersfees,stampdutyandsimilar
costscannotbeincludedinthemea
sure
mentofgoodwill
preex
ist
ingownershipinterestsaremeasuredfairvaluedatac
qui
si
tiondate
11/12
1/13/2015
optiontomeasurenoncon
trol
linginterestsonthebasisoffair
valueornetassets(trans
a c
tionbytrans
a c
tion)
Con
tin
g entcon
sid
e r
a
tion(e.g.
earnouts)
fairvalueaccountingattheac
q ui
si
tiondate
Trans
a c
tionsarisingincon
junc
tionwithbusinesscom
b i
n a
tions
newdetailedguidanceonthesplitbetweencom
p en
sa
tionand
con
sid
e r
a
tionforre
p lace
mentsharebasedpaymentawards
sub
se
q uentchangesdonotimpactgoodwillbutareaccounted
forsep
a
rately
set
tle
mentofpreex
ist
ingre
la
tion
ships(contracts,legalcases,
etc.)canresultinagain/loss
un
recog
n iseddeferredtaxesnolongerimpactgoodwillonsub
se
q uentmea
sure
ment
Recog
n i
tionandmea
sure
ment
'reliablemea
sure
ment'exclusionforin
tan
g i
b leassetsremoved
newguidanceonin
d em
n i
fi
ca
tionassetsandassetsnot
expectedtobeused
Changesinownershipinterests
(seeIFRS10)
buyingorsellingminorityinterestsinasub
sidiaryonlyimpacts
equity
lossofcontrolrequiresfairvaluingofretainedholdingand
recyclingofreserves
Like
81
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QuickArticleLinks
Overview
IFRS4InsuranceContractsapplies,withlimitedex
cep
tions,toallinsurancecontracts(includingrein
sur
ancecontracts)thatanentityissuesandtorein
sur
a ncecontractsthatitholds.InlightoftheIASB'scom
pre
h en
siveprojectoninsurancecontracts,thestandardprovidesatemporaryexemptionfromthere
q uire
mentsofsomeotherIFRSs,includingthere
q uire
menttoconsiderIAS8AccountingPolicies,Changesin
AccountingEstimatesandErrorswhenselectingaccountingpoliciesforinsurancecontracts.
IFRS4wasissuedinMarch2004andappliestoannualperiodsbeginningonorafter1January2005.
HistoryofIFRS4
Date
1April2001
De
v el
op
ment
Com
p re
h en
siveinsurancecontractsproject
carriedoverfromIASCtonewIASB
May2002
Shortterminsurancecontractsprojectsplitoff
fromcom
p re
h en
siveproject
31July2003 ExposureDraftED5InsuranceContracts
published
31March2004 IFRS4InsuranceContractsissued
18August2005AmendedbyFinancialGuaranteeContracts
(Amend
mentstoIAS39andIFRS4)
Comments
Historyofthecom
p re
h en
siveproject
Historyoftheshorttermproject
RelatedIn
ter
pre
ta
tions
None
Amend
mentsundercon
sid
er
a
tionbyIASB
InsurancecontractsCom
p re
h en
siveproject
SummaryofIFRS4
Back
ground
IFRS4isthefirstguidancefromtheIASBonaccountingforinsurancecontractsbutnotthelast.Acom
pre
h en
siveprojectoninsurancecontractsisunderway.TheBoardissuedIFRS4becauseitsawan
urgentneedforimproveddis
clo
suresforinsurancecontracts,andsomeim
p rove
mentstorecog
n i
tionand
mea
sure
mentpractices,intimefortheadoptionofIFRSbylistedcompaniesthrough
o utEuropeand
elsewherein2005.
Scope
IFRS4appliestovirtuallyallinsurancecontracts(includingrein
sur
a ncecontracts)thatanentityissues
andtorein
sur
a ncecontractsthatitholds.[IFRS4.2]Itdoesnotapplytootherassetsandli
a
b il
i
tiesofan
insurer,suchasfinancialassetsandfinancialli
a
b il
i
tieswithinthescopeofIAS39FinancialIn
stru
ments:
Recog
n i
tionandMea
sure
ment.[IFRS4.3]Fur
ther
more,itdoesnotaddressaccountingbypol
i
cy
h old
e rs.
1/5
1/13/2015
[IFRS4.4(f)]
In2005,theIASBamendedthescopeofIAS39toincludefinancialguaranteecontractsissued.
However,ifanissueroffinancialguaranteecontractshaspre
vi
o uslyassertedex
p lic
itlythatitregards
suchcontractsasinsurancecontractsandhasusedaccountingap
p lic
a
b letoinsurancecontracts,the
issuermayelecttoapplyeitherIAS39orIFRS4tosuchfinancialguaranteecontracts.[IFRS4.4(d)]
De
f
i
n
i
tionofinsurancecontract
Aninsurancecontractisa"contractunderwhichoneparty(theinsurer)acceptssig
n if
i
cantinsurancerisk
fromanotherparty(thepol
i
cy
h older)byagreeingtocom
p en
satethepol
i
cy
h olderifaspecifieduncertain
futureevent(theinsuredevent)adverselyaffectsthepol
i
cy
h older."[IFRS4.
AppendixA]
Accountingpolicies
TheIFRSexemptsaninsurertem
p orar
ily(untilcom
p le
tionofPhaseIIoftheInsuranceProject)fromsome
re
q uire
mentsofotherIFRSs,includingthere
q uire
menttoconsiderIAS8AccountingPolicies,Changesin
AccountingEstimatesandErrorsinselectingaccountingpoliciesforinsurancecontracts.However,the
standard:[IFRS4.14]
prohibitspro
vi
sionsforpossibleclaimsundercontractsthatarenotinexistenceatthereporting
date(suchascat
a
stro
p heandequal
i
sa
tionpro
vi
sions)
requiresatestfortheadequacyofrecog
n isedinsuranceli
a
b il
i
tiesandanim
p air
menttestforrein
sur
a nceassets
requiresaninsurertokeepinsuranceli
a
b il
i
tiesinitsbalancesheetuntiltheyaredis
chargedor
cancelled,orexpire,andprohibitsoff
set
tinginsuranceli
a
b il
i
tiesagainstrelatedrein
sur
a nce
assetsandincomeorexpensefromrein
sur
a ncecontractsagainsttheexpenseorincomefromthe
relatedinsurancecontract.
Changesinaccountingpolicies
IFRS4permitsaninsurertochangeitsaccountingpoliciesforinsurancecontractsonlyif,asaresult,its
financialstate
mentspresentin
for
ma
tionthatismorerelevantandnolessreliable,ormorereliableandno
lessrelevant.[IFRS4.22]Inpar
tic
u
lar,aninsurercannotintroduceanyofthefollowingpractices,although
itmaycontinueusingaccountingpoliciesthatinvolvethem:[IFRS4.25]
measuringinsuranceli
a
b il
i
tiesonanundis
countedbasis
measuringcon
trac
tualrightstofuturein
vest
mentman
a ge
mentfeesatanamountthatexceeds
theirfairvalueasimpliedbyacom
p ar
i
sonwithcurrentmar
ketbasedfeesforsimilarservices
usingnonuni
formaccountingpoliciesfortheinsuranceli
a
b il
i
tiesofsub
sidiaries.
Re
mea
s ur
inginsuranceli
a
bil
i
ties
TheIFRSpermitsthein
tro
d uc
tionofanaccountingpolicythatinvolvesre
mea
sur
ingdes
ig
n atedinsurance
li
a
b il
i
tiescon
sis
tentlyineachperiodtoreflectcurrentmarketinterestrates(and,iftheinsurersoelects,
othercurrentestimatesandas
sump
tions).Withoutthisper
mis
sion,aninsurerwouldhavebeenrequired
toapplythechangeinaccountingpoliciescon
sis
tentlytoallsimilarli
a
b il
i
ties.[IFRS4.24]
Prudence
2/5
1/13/2015
Aninsurerneednotchangeitsaccountingpoliciesforinsurancecontractstoeliminateexcessive
prudence.However,ifaninsureralreadymeasuresitsinsurancecontractswithsuf
fi
cientprudence,it
shouldnotintroducead
d i
tionalprudence.[IFRS4.26]
Futurein
v est
mentmargins
Thereisare
b ut
tablepre
sump
tionthataninsurer'sfinancialstate
mentswillbecomelessrelevantand
reliableifitin
tro
d ucesanaccountingpolicythatreflectsfuturein
vest
mentmarginsinthemea
sure
mentof
insurancecontracts.[IFRS4.27]
Assetclas
s i
fi
c a
tions
Whenaninsurerchangesitsaccountingpoliciesforinsuranceli
a
b il
i
ties,itmayre
clas
sifysomeorall
financialassetsas'atfairvaluethroughprofitorloss'.[IFRS4.45]
Otherissues
Thestandard:
clarifiesthataninsurerneednotaccountforanembeddedde
riv
a
tivesep
a
ratelyatfairvalueifthe
embeddedde
riv
a
tivemeetsthede
f
i
n
i
tionofaninsurancecontract[IFRS4.78]
requiresaninsurertounbundle(thatis,toaccountsep
a
ratelyfor)depositcom
p o
n entsofsome
insurancecontracts,toavoidtheomissionofassetsandli
a
b il
i
tiesfromitsbalancesheet[IFRS
4.10]
clarifiestheap
p lic
a
b il
ityofthepracticesometimesknownas'shadowaccounting'[IFRS4.30]
permitsanexpandedpre
sen
ta
tionforinsurancecontractsacquiredinabusinesscom
b i
n a
tionor
portfoliotransfer[IFRS4.3133]
addresseslimitedaspectsofdis
cre
tionarypar
tic
i
p a
tionfeaturescontainedininsurancecontracts
orfinancialin
stru
ments.[IFRS4.3435]
Dis
c lo
s ures
Thestandardrequiresdis
clo
sureof:
in
for
ma
tionthathelpsusersun
d er
standtheamountsintheinsurer'sfinancialstate
mentsthat
arisefrominsurancecontracts:[IFRS4.3637]
accountingpoliciesforinsurancecontractsandrelatedassets,li
a
b il
i
ties,income,and
expense
therecog
n isedassets,li
a
b il
i
ties,income,expense,andcashflowsarisingfrominsurance
contracts
iftheinsurerisacedant,certainad
d i
tionaldis
clo
suresarerequired
in
for
ma
tionabouttheas
sump
tionsthathavethegreatesteffectonthemea
sure
mentof
assets,li
a
b il
i
ties,income,andexpenseincluding,ifprac
ti
ca
b le,quan
ti
fieddis
clo
sureof
thoseas
sump
tions
theeffectofchangesinas
sump
tions
rec
o n
cil
i
a
tionsofchangesininsuranceli
a
b il
i
ties,rein
sur
a nceassets,and,ifany,related
deferredac
q ui
si
tioncosts
3/5
1/13/2015
In
for
ma
tionthathelpsuserstoevaluatethenatureandextentofrisksarisingfrominsurance
contracts:[IFRS4.3839]
riskman
a ge
mentob
jec
tivesandpolicies
thosetermsandcon
d i
tionsofinsurancecontractsthathaveamaterialeffectonthe
amount,timing,andun
cer
taintyoftheinsurer'sfuturecashflows
in
for
ma
tionaboutinsurancerisk(bothbeforeandafterriskmit
i
g a
tionbyrein
sur
a nce),
includingin
for
ma
tionabout:
thesen
si
tiv
itytoinsurancerisk
con
cen
tra
tionsofinsurancerisk
actualclaimscomparedwithpreviousestimates
thein
for
ma
tionaboutcreditrisk,liquidityriskandmarketriskthatIFRS7wouldrequireif
theinsurancecontractswerewithinthescopeofIFRS7
in
for
ma
tionaboutexposurestomarketriskarisingfromembeddedde
riv
a
tivescontainedin
ahostinsurancecontractiftheinsurerisnotrequiredto,anddoesnot,measurethe
embeddedde
riv
a
tivesatfairvalue.
RatingagencyanalysisofIFRS4
FitchRatingsaleadingglobalfixedincomeratingagencyhasanalysedtheim
p li
ca
tionsofIFRS4
InsuranceContractsandhasconcludedthatFitch"doesnotexpectanyratingactionsasadirectresultof
themovetoIFRS.However,Fitchcannotruleoutthepos
si
b il
itythatthead
d i
tionaldis
clo
sureandin
for
ma
tioncontainedintheaccountscouldleadtoratingchangesduetoanimprovedper
cep
tionofriskbased
ontheenhancedin
for
ma
tionavailable."ThespecialreportMindtheGAAP:Fitch'sViewonInsurance
IFRSprovidesanoverviewofIFRS4andtheissuesbeingaddressedinPhaseIIoftheIASB'sinsurance
projectassessestheim
p li
ca
tionsincludingincreasedvolatil
ity,greateruseofdis
count
ingandfairvalues,
changestoincomerecog
n i
tion,andenhanceddis
clo
suresanddiscusseshowthechangesaffectratings
analysis.Anexcerpt:
FitchwelcomestheprogressmadebytheIASBtowardsstandardsthatwillbemoretrans
p ar
e ntandcom
pa
ra
b leacrossregions.Theagencyrecog
n isesthesig
n if
i
cantlim
i
ta
tionsofphase1butbelievesthatthe
enhanceddis
clo
sureandgreatercon
sis
tencyatphase1oftheinsuranceaccountingproject(setoutin
IFRS4)willaidintheanalysisofinsurersandisausefulsteppingstonetothemorevaluablephase2.
WearegratefultoFitchRatingsforallowingustoposttheircopy
rightedreport:ClicktoDownload(PDF
209k).
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4/5
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5/5
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IFRS5NoncurrentAssetsHeldforSaleandDiscontinuedOperations
QuickArticleLinks
Overview
IFRS5Noncur
con
tin
u edOp
e r
a
tionsoutlineshowtoaccountfornon
cur
rentassetsheldforsale(orfordis
tri
b
u
tiontoowners).Ingeneralterms,assets(ordisposalgroups)
heldforsalearenotde
p re
ci
a ted,aremeasuredatthelowerofcarryingamountandfairvaluelesscosts
tosell,andarepresentedsep
a
ratelyinthestatementoffinancialposition.Specificdis
clo
suresarealso
requiredfordis
con
tin
u edop
e r
a
tionsanddisposalsofnoncur
rentassets.
IFRS5wasissuedinMarch2004andappliestoannualperiodsbeginningonorafter1January2005.
HistoryofIFRS5
Date
September2002
24July2003
De
v el
op
ment
Comments
Historyoftheproject
ExposureDraftED4DisposalofNoncur
rentAssetsand Commentdeadline24
Pre
sen
ta
tionofDis
con
tin
u edOp
e r
a
tionspublished
October2003
31March2004
IFRS5Noncur
con
tin
uedOp
e r
a
tionsissued
beginningonorafter1
January2005
22May2008
AmendedbyIm
p rove
mentstoIFRSs2007(saleofa
con
trol
linginterestinthesub
sidiary)
beginningonorafter1July
2009
27November2008Con
se
q uen
tialamend
mentsfromIFRIC17Dis
tri
b
u
tions Effectiveforannualperiods
ofNoncashAssetstoOwners(assetsheldfordis
tri
b
u
beginningonorafter1July
tiontoowners)
2009
16April2009
AmendedbyIm
p rove
mentstoIFRSs2009(dis
clo
surere
quire
mentsinotherstandards)
beginningonorafter1
January2010
25September
2014
AmendedbyIm
p rove
mentstoIFRSs2014(changesin
methodsofdisposal)
beginningonorafter1
January2016
RelatedIn
ter
pre
ta
tions
None
Amend
mentsundercon
sid
er
a
tion
Con
ver
g enceAssetsheldforsaleanddis
con
tin
u edop
e r
a
tions
SummaryofIFRS5
Back
ground
IFRS5achievessub
stan
tialcon
ver
g encewiththere
q uire
mentsofUSSFAS144AccountingfortheIm
pair
mentorDisposalofLongLivedAssetswithrespecttothetimingoftheclas
si
fi
ca
tionofop
e r
a
tionsas
1/5
1/13/2015
dis
con
tin
u edop
e r
a
tionsandthepre
sen
ta
tionofsuchop
e r
a
tions.Withrespecttolonglivedassetsthat
arenotbeingdisposedof,theim
p air
mentrecog
n i
tionandmea
sure
mentstandardsinSFAS144aresig
n if
i
cantlydifferentfromthoseinIAS36Im
p air
mentofAssets.Howeverthosedif
fer
e nceswerenot
addressedintheshorttermIASBFASBcon
ver
g enceproject.
Keypro
v i
s ionsofIFRS5relatingtoassetsheldforsale
Heldforsaleclas
s i
fi
c a
tion
Ingeneral,thefollowingcon
d i
tionsmustbemetforanasset(or'disposalgroup')tobeclas
si
fiedasheld
forsale:[IFRS5.68]
man
a ge
mentiscommittedtoaplantosell
theassetisavailableforimmediatesale
anactiveprogrammetolocateabuyerisinitiated
thesaleishighlyprobable,within12monthsofclas
si
fi
ca
tionasheldforsale(subjecttolimited
ex
cep
tions)
theassetisbeingactivelymarketedforsaleatasalespricerea
son
a bleinrelationtoitsfairvalue
actionsrequiredtocompletetheplanindicatethatitisunlikelythatplanwillbesig
n if
i
cantly
changedorwithdrawn
Theassetsneedtobedisposedofthroughsale.Therefore,op
e r
a
tionsthatareexpectedtobewound
downorabandonedwouldnotmeetthede
f
i
n
i
tion(butmaybeclas
si
fiedasdis
con
tin
u edonce
abandoned).[IFRS5.13]
Anentitythatiscommittedtoasaleinvolvinglossofcontrolofasub
sidiarythatqualifiesforheldforsale
clas
si
fi
ca
tionunderIFRS5clas
si
fiesalloftheassetsandli
a
b il
i
tiesofthatsub
sidiaryasheldforsale,
eveniftheentitywillretainanoncon
trol
linginterestinitsformersub
sidiaryafterthesale.[IFRS5.8A]
Heldfordis
tri
b
u
tiontoownersclas
s i
fi
c a
tion
Theclas
si
fi
ca
tion,pre
sen
ta
tionandmea
sure
mentre
q uire
mentsofIFRS5alsoapplytoanoncur
rent
asset(ordisposalgroup)thatisclas
si
fiedasheldfordis
tri
b
u
tiontoowners.[IFRS5.5AandIFRIC17]
Theentitymustbecommittedtothedis
tri
b
u
tion,theassetsmustbeavailableforimmediatedis
tri
b
u
tion
andthedis
tri
b
u
tionmustbehighlyprobable.[IFRS5.12A]
Disposalgroupconcept
A'disposalgroup'isagroupofassets,possiblywithsomeas
so
ci
a tedli
a
b il
i
ties,whichanentityintendsto
disposeofinasingletrans
a c
tion.Themea
sure
mentbasisrequiredfornoncur
rentassetsclas
si
fiedas
heldforsaleisappliedtothegroupasawhole,andanyresultingim
p air
mentlossreducesthecarrying
amountofthenoncur
rentassetsinthedisposalgroupintheorderofal
lo
ca
tionrequiredbyIAS36.
[IFRS5.4]
Mea
s ure
ment
Thefollowingprin
ci
p lesapply:
Atthetimeofclas
si
fi
ca
tionasheldforsale.Im
me
d i
a telybeforetheinitialclas
si
fi
ca
tionofthe
assetasheldforsale,thecarryingamountoftheassetwillbemeasuredinac
cor
d ancewithap
plic
a
b leIFRSs.Resultingad
just
mentsarealsorecog
n isedinac
cor
d ancewithap
p lic
a
b leIFRSs.
2/5
1/13/2015
[IFRS5.18]
Afterclas
si
fi
ca
tionasheldforsale.Noncur
rentassetsordisposalgroupsthatareclas
si
fiedas
heldforsalearemeasuredatthelowerofcarryingamountandfairvaluelesscoststosell(fair
valuelesscoststodis
trib
u teinthecaseofassetsclas
si
fiedasheldfordis
tri
b
u
tiontoowners).
[IFRS5.1515A]
Im
p air
ment.Im
p air
mentmustbecon
sid
e redbothatthetimeofclas
si
fi
ca
tionasheldforsaleand
sub
se
q uently:
Atthetimeofclas
si
fi
ca
tionasheldforsale.Im
me
d i
a telypriortoclas
si
fy
inganassetor
disposalgroupasheldforsale,im
p air
mentismeasuredandrecog
n isedinac
cor
d ance
withtheap
p lic
a
b leIFRSs(generallyIAS16Property,PlantandEquipment,IAS36Im
p air
mentofAssets,IAS38In
tan
g i
b leAssets,andIAS39FinancialIn
stru
ments:Recog
n i
tion
andMea
sure
ment/IFRS9FinancialIn
stru
ments).Anyim
p air
mentlossisrecog
n isedin
profitorlossunlesstheassethadbeenmeasuredatrevaluedamountunderIAS16or
IAS38,inwhichcasetheim
p air
mentistreatedasareval
u
a
tiondecrease.
Afterclas
si
fi
ca
tionasheldforsale.Calculateanyim
p air
mentlossbasedonthedif
fer
e nce
betweentheadjustedcarryingamountsoftheasset/disposalgroupandfairvalueless
coststosell.Anyim
p air
mentlossthatarisesbyusingthemea
sure
mentprin
ci
p lesin
IFRS5mustberecog
n isedinprofitorloss[IFRS5.20],evenforassetspre
vi
o uslycarried
atrevaluedamounts.ThisissupportedbyIFRS5BC.47andBC.48,whichindicatethein
con
sis
tencywithIAS36.
Assetscarriedatfairvaluepriortoinitialclas
si
fi
ca
tion.Forsuchassets,there
q uire
menttodeduct
coststosellfromfairvaluemayresultinanimmediatechargetoprofitorloss.
Sub
se
q uentincreasesinfairvalue.Againforanysub
se
q uentincreaseinfairvaluelesscoststo
sellofanassetcanberecog
n isedintheprofitorlosstotheextentthatitisnotinexcessofthe
cu
mu
la
tiveim
p air
mentlossthathasbeenrecog
n isedinac
cor
d ancewithIFRS5orpre
vi
o uslyin
ac
cor
Node
p re
ci
a
tion.Noncur
rentassetsordisposalgroupsthatareclas
si
fiedasheldforsalearenot
de
p re
ci
a ted.[IFRS5.25]
Themea
sure
mentpro
vi
sionsofIFRS5donotapplytodeferredtaxassets,assetsarisingfromemployee
benefits,financialassetswithinthescopeofIFRS9FinancialIn
stru
ments,noncur
rentassetsmeasured
atfairvalueinac
cor
d ancewithIAS41Agri
cul
ture,andcon
trac
tualrightsunderinsurancecontracts.
[IFRS5.5]
Pre
s en
ta
tion
Assetsclas
si
fiedasheldforsale,andtheassetsandli
a
b il
i
tiesincludedwithinadisposalgroupclas
si
fied
asheldforsale,mustbepresentedsep
a
ratelyonthefaceofthestatementoffinancialposition.
[IFRS5.38]
Dis
c lo
s ures
IFRS5requiresthefollowingdis
clo
suresaboutassets(ordisposalgroups)thatareheldforsale:
[IFRS5.41]
de
scrip
tionofthenoncur
rentassetordisposalgroup
3/5
1/13/2015
de
scrip
tionoffactsandcir
cum
stancesofthesale(disposal)andtheexpectedtiming
im
p air
mentlossesandreversals,ifany,andwhereinthestatementofcom
p re
h en
siveincome
theyarerecog
n ised
ifap
p lic
a
b le,there
p ortablesegmentinwhichthenoncur
rentasset(ordisposalgroup)is
presentedinac
cor
d ancewithIFRS8OperatingSegments
Dis
clo
suresinotherIFRSsdonotapplytoassetsheldforsale(ordis
con
tin
u edop
e r
a
tions,discussed
below)unlessthoseotherIFRSsrequirespecificdis
clo
suresinrespectofsuchassets,orinrespectof
certainmea
sure
mentdis
clo
sureswhereassetsandli
a
b il
i
tiesareoutsidethescopeofthemea
sure
ment
re
q uire
mentsofIFRS5.[IFRS5.5B]
Keypro
v i
s ionsofIFRS5relatingtodis
c on
tin
uedop
e r
a
tions
Clas
s i
fi
c a
tionasdis
c on
tin
u
ing
Adis
con
tin
u edoperationisacomponentofanentitythateitherhasbeendisposedoforisclas
si
fiedas
heldforsale,and:[IFRS5.32]
rep
re
sentseitheraseparatemajorlineofbusinessorage
o
g raph
i
calareaofop
e r
a
tions
ispartofasinglecoor
d i
n atedplantodisposeofaseparatemajorlineofbusinessorge
o
g raph
i
calareaofop
e r
a
tions,or
isasub
sidiaryacquiredex
clu
sivelywithaviewtoresaleandthedisposalinvolveslossofcontrol.
IFRS5prohibitstheretroac
tiveclas
si
fi
ca
tionasadis
con
tin
u edoperation,whenthedis
con
tin
u edcriteria
aremetaftertheendofthereportingperiod.[IFRS5.12]
Dis
c lo
s ureinthestatementofcom
pre
hen
s iveincome
Thesumoftheposttaxprofitorlossofthedis
con
tin
u edoperationandtheposttaxgainorlossrecog
nisedonthemea
sure
menttofairvaluelesscosttosellorfairvaluead
just
mentsonthedisposalofthe
assets(ordisposalgroup)ispresentedasasingleamountonthefaceofthestatementofcom
p re
h en
sive
income.Iftheentitypresentsprofitorlossinaseparatestatement,asectioniden
ti
fiedasrelatingtodis
con
tin
u edop
e r
a
tionsispresentedinthatseparatestatement.[IFRS5.3333A].
Detaileddis
clo
sureofrevenue,expenses,pretaxprofitorlossandrelatedincometaxesisrequiredeither
inthenotesorinthestatementofcom
p re
h en
siveincomeinasectiondistinctfromcon
tin
u
ingop
e r
a
tions.
[IFRS5.33]Suchdetaileddis
clo
suresmustcoverboththecurrentandallpriorperiodspresentedinthe
financialstate
ments.[IFRS5.34]
Cashflowin
for
ma
tion
Thenetcashflowsat
trib
u t
a bletotheoperating,investing,andfinancingac
tiv
i
tiesofadis
con
tin
u ed
operationissep
a
ratelypresentedonthefaceofthecashflowstatementordisclosedinthenotes.
[IFRS5.33]
Dis
c lo
s ures
Thefollowingad
d i
tionaldis
clo
suresarerequired:
4/5
1/13/2015
ad
just
mentsmadeinthecurrentperiodtoamountsdisclosedasadis
con
tin
u edoperationinprior
periodsmustbesep
a
ratelydisclosed[IFRS5.35]
ifanentityceasestoclassifyacomponentasheldforsale,theresultsofthatcomponentpre
vi
ouslypresentedindis
con
tin
u edop
e r
a
tionsmustbere
clas
si
fiedandincludedinincomefromcon
tin
u
ingop
e r
a
tionsforallperiodspresented[IFRS5.36]
SpecialeditionofIASPlusNewslet
teronIFRS5
ClicktodownloadaSpecialGlobalEditionofourIASPlusNewslet
ter(PDF56k)devotedtoIFRS5.
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IFRS6ExplorationforandEvaluationofMineralResources
QuickArticleLinks
Overview
IFRS6Ex
p lo
rationforandEval
u
a
tionofMineralResourceshastheeffectofallowingentitiesadopting
thestandardforthefirsttimetouseaccountingpoliciesforex
p lo
rationandeval
u
a
tionassetsthatwere
appliedbeforeadoptingIFRSs.Italsomodifiesim
p air
menttestingofex
p lo
rationandeval
u
a
tionassetsby
in
tro
d uc
ingdifferentim
p air
mentin
d i
ca
torsandallowingthecarryingamounttobetestedatanaggregate
level(notgreaterthanasegment).
IFRS6wasissuedinDecember2004andappliestoannualperiodsbeginningonorafter1January
2006.
HistoryofIFRS6
Date
De
v el
op
ment
November2000 IASCissuespaperSummaryofIssues:Ex
trac
tiveIn
d us
tries
publishedandcommentsinvited
1April2001
Projectonex
trac
tivein
d us
triescarriedoverfromIASC
Comments
Commentdeadline30
June2001
Historyofthecom
p re
hen
siveproject
September2002 Shorttermprojectsplitofffromcom
p re
h en
siveproject
Historyoftheshort
termproject
16January2004 ExposureDraftED6Ex
p lo
rationforandEval
u
a
tionofMineral
Commentdeadline16
Resourcespublished
April2004
9December2004IFRS6Ex
p lo
rationandEval
u
a
tionofMineralResourcesissued Effectiveforannual
periodsbeginningon
orafter1January
2006
30June2005
AmendedbyAmend
mentstoIFRS1FirsttimeAdoptionof
AmendedBasisfor
InternationalFinancialReportingStandardsandIFRS6Ex
p lo
Con
clu
sionstoIFRS6
rationforandEval
u
a
tionofMineralResources(tran
si
tionalrelief) only
RelatedIn
ter
pre
ta
tions
None
Amend
mentsundercon
sid
er
a
tionbytheIASB
ResearchprojectIn
tan
g i
b leassets
SummaryofIFRS6
De
f
i
n
i
tions
Ex
p lo
rationforandeval
u
a
tionofmineralresourcesmeansthesearchformineralresources,including
minerals,oil,naturalgasandsimilarnonre
g en
e r
a
tiveresourcesaftertheentityhasobtainedlegalrights
toexploreinaspecificarea,aswellasthede
ter
mi
n a
tionofthetechnicalfea
si
b il
ityandcom
mer
cial
viabilityofex
tract
ingthemineralresource.[IFRS6.
AppendixA]
1/3
1/13/2015
Ex
p lo
rationandeval
u
a
tionex
p en
d i
turesareex
p en
d i
turesincurredincon
n ec
tionwiththeex
p lo
rationand
eval
u
a
tionofmineralresourcesbeforethetechnicalfea
si
b il
ityandcom
mer
cialviabilityofex
tract
inga
mineralresourceisdemon
stra
b le.[IFRS6.
AppendixA]
Accountingpoliciesforex
plo
rationandeval
u
a
tion
IFRS6permitsanentitytodevelopanaccountingpolicyforrecog
n i
tionofex
p lo
rationandeval
u
a
tionex
pen
d i
turesasassetswithoutspecif
i
callycon
sid
e r
ingthere
q uire
mentsofpara
g raphs11and12ofIAS8
AccountingPolicies,ChangesinAccountingEstimatesandErrors.[IFRS6.9]Thus,anentityadopting
IFRS6maycontinuetousetheaccountingpoliciesappliedim
me
d i
a telybeforeadoptingtheIFRS.This
includescon
tin
u
ingtouserecog
n i
tionandmea
sure
mentpracticesthatarepartofthoseaccounting
policies.
Im
pair
ment
IFRS6ef
fec
tivelymodifiestheap
p li
ca
tionofIAS36Im
p air
mentofAssetstoex
p lo
rationandeval
u
a
tion
assetsrecog
n isedbyanentityunderitsaccountingpolicy.Specif
i
cally:
Entitiesrecog
n is
ingex
p lo
rationandeval
u
a
tionassetsarerequiredtoperformanim
p air
menttest
onthoseassetswhenspecificfactsandcir
cum
stancesoutlinedinthestandardindicateanim
pair
menttestisrequired.Thefactsandcir
cum
stancesoutlinedinIFRS6arenonex
h aus
tive,and
areappliedinsteadofthe'in
d i
ca
torsofim
p air
ment'inIAS36[IFRS6.1920]
Entitiesarepermittedtodetermineanaccountingpolicyforal
lo
cat
ingex
p lo
rationandeval
u
a
tion
assetstocashgen
e r
a t
ingunitsorgroupsofCGUs.[IFRS6.21]Thisaccountingpolicymayresult
inadifferental
lo
ca
tionthanmightotherwiseariseonapplyingthere
q uire
mentsofIAS36
Ifanim
p air
menttestisrequired,anyim
p air
mentlossismeasured,presentedanddisclosedinac
cor
Pre
s en
ta
tionanddis
c lo
s ure
Anentitytreatsex
p lo
rationandeval
u
a
tionassetsasaseparateclassofassetsandmakethedis
clo
sures
requiredbyeitherIAS16Property,PlantandEquipmentorIAS38In
tan
g i
b leAssetscon
sis
tentwithhow
theassetsareclas
si
fied.[IFRS6.25]
IFRS6requiresdis
clo
sureofin
for
ma
tionthatiden
ti
fiesandexplainstheamountsrecog
n isedinits
financialstate
mentsarisingfromtheex
p lo
rationforandeval
u
a
tionofmineralresources,including:[IFRS
6.2324]
a. itsaccountingpoliciesforex
p lo
rationandeval
u
a
tionex
p en
d i
turesincludingtherecog
n i
tionofex
p lo
rationandeval
u
a
tionassets
b. theamountsofassets,li
a
b il
i
ties,incomeandexpenseandoperatingandinvestingcashflowsarising
fromtheex
p lo
rationforandeval
u
a
tionofmineralresources.
SpecialIASPlusNewslet
terex
plain
ingIFRS6
On31January2005,Deloitte'sIFRSGlobalOfficepublishedaspecialeditionofourIASPlusNewslet
ter
titledIFRS6Ex
p lo
rationforandEval
u
a
tionofMineralResources.
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2/3
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FAQs
information.
3/3
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IFRS7FinancialInstruments:Disclosures
QuickArticleLinks
Overview
IFRS7FinancialIn
stru
ments:Dis
clo
suresrequiresdis
clo
sureofin
for
ma
tionaboutthesig
n if
i
canceof
financialin
stru
mentstoanentity,andthenatureandextentofrisksarisingfromthosefinancialin
stru
ments,bothinqual
i
ta
tiveandquan
ti
ta
tiveterms.Specificdis
clo
suresarerequiredinrelationtotrans
ferred
financialassetsandanumberofothermatters.
IFRS7wasorig
i
n allyissuedinAugust2005andappliestoannualperiodsbeginningonorafter1
January2007.
HistoryofIFRS7
Date
22July2004
De
v el
op
ment
ExposureDraftED7FinancialIn
stru
ments:Dis
clo
sures
published
IFRS7FinancialIn
stru
ments:Dis
clo
suresissued
Comments
Commentdeadline14
September2009
18August2005
Effectiveforannual
periodsbeginningonor
after1January2007
22May2008
AmendedbyIm
p rove
mentstoIFRSs(requireddis
clo
sures Effectiveforannual
wheninterestsinjointlycon
trolledentitiesareaccountedfor periodsbeginningonor
atfairvaluethroughprofitorloss,pre
sen
ta
tionoffinance
after1January2009
costs)
13October2008 Re
clas
si
fi
ca
tionofFinancialAssets(Amend
mentstoIAS39 Effective1July2008
andIFRS7)issued
23December2008ExposureDraftIn
vest
mentsinDebtIn
stru
ments(Proposed Commentdeadline15
Amend
mentstoIFRS7)published
January2009
(Projectsub
se
q uently
abandonedinJanuary
2009)
5March2009
ImprovingDis
clo
stru
ments(Amend
Effectiveforannual
mentstoIFRS7)issued
after1January2009
6May2010
AmendedbyIm
p rove
mentstoIFRSs(clar
i
fi
ca
tionofdis
clo
Effectiveforannual
sures)
after1January2011
7October2010
Dis
clo
suresTransfersofFinancialAssets(Amend
mentsto Effectiveforannual
IFRS7)issued
after1July2011
16December2011Dis
clo
suresOff
set
tingFinancialAssetsandFinancialLi
a
Effectiveforannual
bil
i
ties(Amend
mentstoIFRS7)issued
after1January2013
1/7
1/13/2015
16December2011MandatoryEffectiveDateandTran
si
tionDis
clo
sures
Effectiveforannual
(Amend
mentstoIFRS9andIFRS7)issued
after1January2015(or
otherwisewhenIFRS9is
firstapplied)*
19November2013IFRS9FinancialIn
stru
ments(HedgeAccountingand
ApplieswhenIFRS9is
amend
mentstoIFRS9,IFRS7andIAS39)issued,im
p le
applied*
ment
ingad
d i
tionaldis
clo
sures(andcon
se
q uen
tialamend
ments)resultingfromthein
tro
d uc
tionofthehedge
accountingchapterinIFRS9
25September
AmendedbyIm
p rove
mentstoIFRSs2014(servicing
Effectiveforannual
2014
contractsandap
p lic
a
b il
ityoftheamend
mentstoIFRS7to periodsbeginningonor
condensedinterimfinancialstate
ments)
after1January2016
*ThereleaseofIFRS9FinancialIn
stru
ments(2013)on19November2013containednostatedeffective
dateandcontainedcon
se
q uen
tialamend
mentswhichremovedthemandatoryeffectivedateofIFRS9
(2010)andIFRS9(2009),leavingtheeffectivedateopenbutleavingeachstandardavailableforap
p li
ca
tion.Ac
cord
ingly,theseamend
mentsapplywhenIFRS9isapplied.
RelatedIn
ter
pre
ta
tions
None
Amend
mentsundercon
sid
er
a
tionbyIASB
None
SummaryofIFRS7
OverviewofIFRS7
IFRS7:
addscertainnewdis
clo
suresaboutfinancialin
stru
mentstothosepre
vi
o uslyrequiredbyIAS32
FinancialIn
stru
ments:Dis
clo
sureandPre
sen
ta
tion(asitwasthencited)
replacesthedis
clo
surespre
vi
o uslyrequiredbyIAS30Dis
clo
suresintheFinancialState
mentsof
BanksandSimilarFinancialIn
sti
tu
tions
putsallofthosefinancialin
stru
mentsdis
clo
surestogetherinanewstandardonFinancialIn
stru
ments:Dis
clo
sures.TheremainingpartsofIAS32dealonlywithfinancialin
stru
mentspre
sen
ta
tionmatters.
Dis
c lo
s urere
quire
mentsofIFRS7
IFRSrequirescertaindis
clo
surestobepresentedbycategoryofin
stru
mentbasedontheIAS39mea
sure
mentcat
e
g ories.Certainotherdis
clo
suresarerequiredbyclassoffinancialin
stru
ment.Forthosedis
clo
suresanentitymustgroupitsfinancialin
stru
mentsintoclassesofsimilarin
stru
mentsasap
p ro
p ri
a teto
thenatureofthein
for
ma
tionpresented.[IFRS7.6]
Thetwomaincat
e
g oriesofdis
clo
suresrequiredbyIFRS7are:
1. in
for
ma
tionaboutthesig
n if
i
canceoffinancialin
stru
ments.
2. in
for
ma
tionaboutthenatureandextentofrisksarisingfromfinancialin
stru
ments
In
for
ma
tionaboutthesig
nif
i
c anceoffinancialin
s tru
ments
2/7
1/13/2015
Statementoffinancialposition
Disclosethesig
n if
i
canceoffinancialin
stru
mentsforanentity'sfinancialpositionandper
for
mance.[IFRS7.7]Thisincludesdis
clo
suresforeachofthefollowingcat
e
g ories:[IFRS7.8]
financialassetsmeasuredatfairvaluethroughprofitandloss,showingsep
a
ratelythose
heldfortradingandthosedes
ig
n atedatinitialrecog
n i
tion
heldtoma
tu
rityin
vest
ments
loansandre
ceiv
a bles
avail
a bleforsaleassets
financialli
a
b il
i
tiesatfairvaluethroughprofitandloss,showingsep
a
ratelythoseheldfor
tradingandthosedes
ig
n i
tion
financialli
a
b il
i
tiesmeasuredatamortisedcost
Otherbalancesheetre
lateddis
clo
sures:
specialdis
clo
suresaboutfinancialassetsandfinancialli
a
b il
i
tiesdes
ig
n atedtobe
measuredatfairvaluethroughprofitandloss,includingdis
clo
suresaboutcreditriskand
marketrisk,changesinfairvaluesat
trib
u t
a bletotheserisksandthemethodsofmea
sure
ment.[IFRS7.911]
re
clas
si
fi
ca
tionsoffinancialin
stru
mentsfromonecategorytoanother(e.g.fromfairvalue
toamortisedcostorviceversa)[IFRS7.1212A]
in
for
ma
tionaboutfinancialassetspledgedascol
lat
e ralandaboutfinancialornonfi
n an
cialassetsheldascol
lat
e ral[IFRS7.1415]
rec
o n
cil
i
a
tionoftheallowanceaccountforcreditlosses(baddebts)byclassoffinancial
assets[IFRS7.16]
in
for
ma
tionaboutcompoundfinancialin
stru
mentswithmultipleembeddedde
riv
a
tives
[IFRS7.17]
breachesoftermsofloanagree
ments[IFRS7.1819]
Statementofcom
p re
h en
siveincome
Itemsofincome,expense,gains,andlosses,withseparatedis
clo
sureofgainsandlossesfrom:
[IFRS7.20(a)]
financialassetsmeasuredatfairvaluethroughprofitandloss,showingsep
a
ratelythose
ig
n i
tion.
heldtoma
tu
rityin
vest
ments.
loansandre
ceiv
a bles.
avail
a bleforsaleassets.
financialli
a
b il
i
tiesmeasuredatfairvaluethroughprofitandloss,showingsep
a
ratelythose
ig
n i
tion.
financialli
a
b il
i
tiesmeasuredatamortisedcost.
Otherincomestate
mentre
lateddis
clo
sures:
totalinterestincomeandtotalinterestexpenseforthosefinancialin
stru
mentsthatarenot
measuredatfairvaluethroughprofitandloss[IFRS7.20(b)]
feeincomeandexpense[IFRS7.20(c)]
3/7
1/13/2015
amountofim
p air
mentlossesbyclassoffinancialassets[IFRS7.20(e)]
interestincomeonimpairedfinancialassets[IFRS7.20(d)]
Otherdis
clo
sures
Accountingpoliciesforfinancialin
stru
ments[IFRS7.21]
In
for
ma
tionabouthedgeaccounting,including:[IFRS7.22]
de
scrip
tionofeachhedge,hedgingin
stru
ment,andfairvaluesofthosein
stru
ments,and
natureofrisksbeinghedged
forcashflowhedges,theperiodsinwhichthecashflowsareexpectedtooccur,when
theyareexpectedtoenterintothede
ter
mi
n a
tionofprofitorloss,andade
scrip
tionofany
forecasttrans
a c
tionforwhichhedgeaccountinghadpre
vi
o uslybeenusedbutwhichisno
longerexpectedtooccur
ifagainorlossonahedgingin
stru
mentinacashflowhedgehasbeenrecog
n isedin
othercom
p re
h en
siveincome,anentityshoulddisclosethefollowing:[IAS7.23]
theamountthatwassorecog
n isedinothercom
p re
h en
siveincomeduringtheperiod
theamountthatwasremovedfromequityandincludedinprofitorlossfortheperiod
theamountthatwasremovedfromequityduringtheperiodandincludedintheinitialmea
sure
mentoftheac
q ui
si
tioncostorothercarryingamountofanonfi
n an
cialassetornon
financialliabilityinahedgedhighlyprobableforecasttrans
a c
tion
Note:WhereIFRS9FinancialIn
stru
ments(2013)isapplied,reviseddis
clo
surere
q uire
mentsapply.Therequiredhedgeaccountingdis
clo
suresapplywheretheentityelectsto
adopthedgeaccountingandrequirein
for
ma
tiontobeprovidedinthreebroadcat
e
g ories:
(1)theentitysriskman
a ge
mentstrategyandhowitisappliedtomanagerisk(2)howthe
entityshedgingac
tiv
i
tiesmayaffecttheamount,timingandun
cer
taintyofitsfuturecash
flows,and(3)theeffectthathedgeaccountinghashadontheentitysstatementof
financialposition,statementofcom
p re
h en
siveincomeandstatementofchangesin
equity.Thedis
clo
suresarerequiredtobepresentedinasinglenoteorseparatesection
initsfinancialstate
ments,althoughsomein
for
ma
tioncanbein
cor
p o
ratedbyreference.
Forfairvaluehedges,in
for
ma
tionaboutthefairvaluechangesofthehedgingin
stru
mentandthe
hedgeditem[IFRS7.24(a)]
Hedgein
e f
fec
tive
n essrecog
n isedinprofitandloss(sep
a
ratelyforcashflowhedgesandhedges
ofanetin
vest
mentinaforeignoperation)[IFRS7.24(bc)]
In
for
ma
tionaboutthefairvaluesofeachclassoffinancialassetandfinancialliability,alongwith:
[IFRS7.2530]
com
p a
ra
b lecarryingamounts
de
scrip
tionofhowfairvaluewasde
ter
mined
thelevelofinputsusedinde
ter
min
ingfairvalue
rec
o n
cil
i
a
tionsofmovementsbetweenlevelsoffairvaluemea
sure
menthierarchyad
d i
tionaldis
clo
suresforfinancialin
stru
mentswhosefairvalueisde
ter
minedusinglevel3
inputsincludingimpactsonprofitandloss,othercom
p re
h en
siveincomeandsen
si
tiv
ity
analysis
in
for
ma
tioniffairvaluecannotbereliablymeasured
4/7
1/13/2015
Thefairvaluehierarchyin
tro
d uces3levelsofinputsbasedonthelowestlevelofinputsig
n if
i
canttothe
overallfairvalue(IFRS7.27A27B):
Level1quotedpricesforsimilarin
stru
ments
Level2directlyob
serv
a blemarketinputsotherthanLevel1inputs
Level3inputsnotbasedonob
serv
a blemarketdata
Notethatdis
clo
sureoffairvaluesisnotrequiredwhenthecarryingamountisarea
son
a bleap
p rox
i
ma
tion
offairvalue,suchasshorttermtradere
ceiv
a blesandpayables,orforin
stru
mentswhosefairvalue
cannotbemeasuredreliably.[IFRS7.29(a)]
Natureandextentofexposuretorisksarisingfromfinancialin
s tru
ments
Qual
i
ta
tivedis
clo
sures[IFRS7.33]
Thequal
i
ta
tivedis
clo
suresdescribe:
riskexposuresforeachtypeoffinancialin
stru
ment
man
a ge
ment'sob
jec
tives,policies,andprocessesformanagingthoserisks
changesfromthepriorperiod
Quan
ti
ta
tivedis
clo
sures
Thequan
ti
ta
tivedis
clo
suresprovidein
for
ma
tionabouttheextenttowhichtheentityisexposedto
risk,basedonin
for
ma
tionprovidedin
ter
n allytotheentity'skeyman
a ge
mentpersonnel.These
dis
clo
suresinclude:[IFRS7.34]
summaryquan
ti
ta
tivedataaboutexposuretoeachriskatthereportingdate
dis
clo
suresaboutcreditrisk,liquidityrisk,andmarketriskandhowtheserisksare
managedasfurtherdescribedbelow
con
cen
tra
tionsofrisk
Creditrisk
Creditriskistheriskthatonepartytoafinancialin
stru
mentwillcausealossfortheotherpartyby
failingtopayforitsoblig
a
tion.[IFRS7.AppendixA]
Dis
clo
suresaboutcreditriskinclude:[IFRS7.3638]
maximumamountofexposure(beforedeductingthevalueofcol
lat
e ral),de
scrip
tionofcol
lat
e ral,in
for
ma
tionaboutcreditqualityoffinancialassetsthatareneitherpastduenor
impaired,andin
for
ma
tionaboutcreditqualityoffinancialassetswhosetermshavebeen
rene
g o
ti
a ted[IFRS7.36]
forfinancialassetsthatarepastdueorimpaired,an
a
lyt
i
caldis
clo
suresarerequired[IFRS
7.37]
in
for
ma
tionaboutcol
lat
e ralorothercrediten
h ance
mentsobtainedorcalled[IFRS7.38]
Liquidityrisk
Liquidityriskistheriskthatanentitywillhavedif
fi
cul
tiesinpayingitsfinancialli
a
b il
i
ties.[IFRS7.
AppendixA]
Dis
clo
suresaboutliquidityriskinclude:[IFRS7.39]
amaturityanalysisoffinancialli
a
b il
i
ties
de
scrip
tionofapproachtoriskman
a ge
ment
5/7
1/13/2015
Marketrisk[IFRS7.4042]
Marketriskistheriskthatthefairvalueorcashflowsofafinancialin
stru
mentwillfluctuatedueto
changesinmarketprices.Marketriskreflectsinterestraterisk,currencyriskandotherpricerisks.
[IFRS7.AppendixA]
Dis
clo
suresaboutmarketriskinclude:
asen
si
tiv
ityanalysisofeachtypeofmarketrisktowhichtheentityisexposed
ad
d i
tionalin
for
ma
tionifthesen
si
tiv
ityanalysisisnotrep
re
sen
ta
tiveoftheentity'srisk
exposure(forexamplebecauseexposuresduringtheyearweredifferenttoexposuresat
yearend).
IFRS7providesthatifanentitypreparesasen
si
tiv
ityanalysissuchasvalueatriskfor
man
a ge
mentpurposesthatreflectsin
ter
d e
p en
d en
ciesofmorethanonecomponentof
marketrisk(forinstance,interestriskandforeigncurrencyriskcombined),itmaydisclose
thatanalysisinsteadofaseparatesen
si
tiv
ityanalysisforeachtypeofmarketrisk
Transfersoffinancialassets[IFRS7.42AH]
Anentityshalldisclosein
for
ma
ments:
1. toun
d er
standthere
la
tion
shipbetweentrans
ferredfinancialassetsthatarenotdere
cog
n isedintheir
entiretyandtheas
so
ci
a tedli
a
b il
i
tiesand
2. toevaluatethenatureof,andrisksas
so
ci
a tedwith,theentity'scon
tin
u
ingin
volve
mentindere
cog
nisedfinancialassets.[IFRS742B]
Trans
ferredfinancialassetsthatarenotdere
c og
nisedintheirentirety
Requireddis
clo
suresincludede
scrip
tionofthenatureofthetrans
ferredassets,natureofriskand
rewardsaswellasde
scrip
tionofthenatureandquan
ti
ta
tivedis
clo
suredepictingre
la
tion
ship
betweentrans
ferredfinancialassetsandtheas
so
ci
a tedli
a
b il
i
ties.[IFRS7.42D]
Trans
ferredfinancialassetsthataredere
c og
nisedintheirentirety
Requireddis
clo
suresincludethecarryingamountoftheassetsandli
a
b il
i
tiesrecog
n ised,fair
valueoftheassetsandli
a
b il
i
tiesthatrepresentcon
tin
u
ingin
volve
ment,maximumexposureto
lossfromthecon
tin
u
ingin
volve
mentaswellasmaturityanalysisoftheundis
countedcashflows
tore
p ur
chasethedere
cog
n isedfinancialassets.[IFRS7.42E]
Ad
d i
tionaldis
clo
suresarerequiredforanygainorlossrecog
n isedatthedateoftransferofthe
assets,incomeorexpensesrecognisefromtheentity'scon
tin
u
ingin
volve
mentinthedere
cog
nisedfinancialassetsaswellasdetailsofunevendis
tri
b
u
tionofproceedfromtransferactivity
through
o utthereportingperiod.[IFRS7.42G]
Ap
pli
c a
tionguidance
Anappendixofmandatoryap
p li
ca
tionguidance(AppendixB)ispartofthestandard.
Thereisalsoanappendixofnonmanda
toryim
p le
men
ta
tionguidance(AppendixC)thatdescribeshow
anentitymightprovidethedis
clo
suresrequiredbyIFRS7.
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QuickArticleLinks
Overview
IFRS8OperatingSegmentsrequirespar
tic
u
larclassesofentities(es
sen
tiallythosewithpubliclytraded
se
cu
ri
ties)todisclosein
for
ma
tionabouttheiroperatingsegments,productsandservices,thege
o
g raph
i
calareasinwhichtheyoperate,andtheirmajorcustomers.In
for
ma
tionisbasedoninternalman
a ge
ment
reports,bothintheiden
ti
fi
ca
tionofoperatingsegmentsandmea
sure
mentofdisclosedsegmentin
for
ma
tion.
IFRS8wasissuedinNovember2006andappliestoannualperiodsbeginningonorafter1January
2009.
HistoryofIFRS8
Date
19January2006
De
v el
op
ment
ED8OperatingSegmentsissued
Comments
Commentdeadline19May2006.(IASB
pressrelease)
30November2006IFRS8OperatingSegmentsissued
onorafter1January2009,su
p er
sed
ingIAS14SegmentReporting
16April2009
AmendedbyAnnualIm
p rove
2009(dis
clo
suresofsegmentassets)
18July2013
ReportandFeedbackStatementPostim
p le
Areasforpotentialim
p rove
mentand
men
ta
tionReview:IFRS8Operating
amendmentwillbecon
sid
e redthrough
Segmentspublished
theIASB'snormalprocesses
p rove
20102012Cycle(ag
g re
g a
tionofoperating
onorafter1July2014
segments,rec
o n
cil
i
a
tionsofassets)
RelatedIn
ter
pre
ta
tions
None
Amend
mentsundercon
sid
er
a
tionbyIASB
None
Deloitteresources
Specialeditionnewslet
ter
DeloittehaspublishedaSpecialeditionIASPlusnewslet
terex
p lain
ingthere
q uire
mentsofIFRS8and
whathaschangedfromIAS14SegmentReporting.
SummaryofIFRS8
Scope
IFRS8appliestotheseparateorin
d i
vid
u alfinancialstate
mentsofanentity(andtothecon
sol
i
d ated
1/4
1/13/2015
financialstate
mentsofagroupwithaparent):
whosedebtorequityin
stru
mentsaretradedinapublicmarketor
thatfiles,orisintheprocessoffiling,its(con
sol
i
d ated)financialstate
mentswithase
cu
ri
tiescom
mis
sionorotherreg
u
la
toryorganisationforthepurposeofissuinganyclassofin
stru
mentsina
publicmarket[IFRS8.2]
However,whenbothseparateandcon
sol
i
mentsfortheparentarepresentedina
singlefinancialreport,segmentin
for
ma
tionneedbepresentedonlyonthebasisofthecon
sol
i
d ated
financialstate
ments[IFRS8.4]
Operatingsegments
IFRS8definesanoperatingsegmentasfollows.Anoperatingsegmentisacomponentofanentity:[IFRS
8.2]
thatengagesinbusinessac
tiv
i
tiesfromwhichitmayearnrevenuesandincurexpenses(including
revenuesandexpensesrelatingtotrans
a c
tionswithothercom
p o
n entsofthesameentity)
whoseoperatingresultsarereviewedregularlybytheentity'schiefoperatingdecisionmakerto
makedecisionsaboutresourcestobeallocatedtothesegmentandassessitsper
for
manceand
forwhichdiscretefinancialin
for
ma
tionisavailable
Re
portablesegments
IFRS8requiresanentitytoreportfinancialandde
scrip
tivein
for
ma
tionaboutitsre
p ortablesegments.Re
portablesegmentsareoperatingsegmentsorag
g re
g a
tionsofoperatingsegmentsthatmeetspecified
criteria:[IFRS8.13]
itsreportedrevenue,frombothexternalcustomersandin
ter
seg
mentsalesortransfers,is10per
centormoreofthecombinedrevenue,internalandexternal,ofalloperatingsegments,or
theabsolutemeasureofitsreportedprofitorlossis10percentormoreofthegreater,inabsolute
amount,of(i)thecombinedreportedprofitofalloperatingsegmentsthatdidnotreportalossand
(ii)thecombinedreportedlossofalloperatingsegmentsthatreportedaloss,or
itsassetsare10percentormoreofthecombinedassetsofalloperatingsegments.
Twoormoreoperatingsegmentsmaybeag
g re
g atedintoasingleoperatingsegmentifag
g re
g a
tionis
con
sis
tentwiththecoreprin
ci
p lesofthethestandard,thesegmentshavesimilareconomicchar
a c
ter
is
tics
andaresimilarinvariouspre
scribedrespects.[IFRS8.12]
Ifthetotalexternalrevenuereportedbyoperatingsegmentscon
sti
tuteslessthan75percentofthe
entity'srevenue,ad
d i
tionaloperatingsegmentsmustbeiden
ti
fiedasre
p ortablesegments(eveniftheydo
notmeetthequan
ti
ta
tivethresh
o ldssetoutabove)untilatleast75percentoftheentity'srevenueis
includedinre
p ortablesegments.[IFRS8.15]
Dis
c lo
s urere
quire
ments
Requireddis
clo
suresinclude:
generalin
for
ma
tionabouthowtheentityiden
ti
fieditsoperatingsegmentsandthetypesof
productsandservicesfromwhicheachoperatingsegmentderivesitsrevenues[IFRS8.22]
2/4
1/13/2015
judge
mentsmadebyman
a ge
mentinapplyingtheag
g re
g a
tioncriteriatoallowtwoormore
operatingsegmentstobeag
g re
g ated[IFRS8.22(aa)]#
in
for
ma
tionabouttheprofitorlossforeachre
p ortablesegment,includingcertainspecified
revenues*andexpenses*suchasrevenuefromexternalcustomersandfromtrans
a c
tionswith
othersegments,interestrevenueandexpense,de
p re
ci
a
tionandamor
ti
sa
tion,incometax
expenseorincomeandmaterialnoncashitems[IFRS8.21(b)and23]
ameasureoftotalassets*andtotalli
a
b il
i
ties*foreachre
p ortablesegment,andtheamountofin
vest
mentsinas
so
ci
a tesandjointventuresandtheamountsofadditionstocertainnoncur
rent
assets('capitalex
p en
d i
ture')[IFRS8.2324]
anex
p la
n a
tionofthemea
sure
mentsofsegmentprofitorloss,segmentassetsandsegmentli
a
b il
i
ties,includingcertainminimumdis
clo
sures,e.g.howtrans
a c
tionsbetweensegmentsare
measured,thenatureofmea
sure
mentdif
fer
e ncesbetweensegmentin
for
ma
tionandotherin
for
ma
tionincludedinthefinancialstate
ments,andasym
met
ri
calal
lo
ca
tionstore
p ortablesegments
[IFRS8.27]
rec
o n
cil
i
a
tionsofthetotalsofsegmentrevenues,reportedsegmentprofitorloss,segment
assets*,segmentli
a
b il
i
ties*andothermaterialitemstocor
re
spond
ingitemsintheentity'sfinancial
state
ments[IFRS8.21(b)and28]
someen
titywidedis
clo
suresthatarerequiredevenwhenanentityhasonlyonere
p ortable
segment,includingin
for
ma
tionabouteachproductandserviceorgroupsofproductsandservices
[IFRS8.32]
analysesofrevenuesandcertainnoncur
rentassetsbyge
o
g raph
i
calareawithanexpandedre
quire
menttodiscloserevenues/assetsbyin
d i
vid
u alforeigncountry(ifmaterial),ir
re
spec
tiveofthe
iden
ti
fi
ca
tionofoperatingsegments[IFRS8.33]
in
for
ma
tionabouttrans
a c
tionswithmajorcustomers[IFRS8.34]
#Thisdis
clo
surere
q uire
mentwasaddedbyAnnualIm
p rove
mentstoIFRSs20102012Cycle,
effectiveforannualperiodsbeginningonorafter1July2014.
*Thisdis
clo
sureisrequiredonlyifsuchamountsareregularlyprovidedtothechiefoperating
decisionmaker,orinthecaseofspecificitemsofrevenueandexpenseoras
setre
lateditems,if
thosespecifiedamountsareincludedintherelevantmeasure(segmentprofitorlossorsegment
assets).
Con
sid
e r
a blesegmentin
for
ma
tionisrequiredatinterimreportingdatesbyIAS34.
Remainingdif
fer
e nceswithUSGAAP
Theremainingdif
fer
e nceswithUSGAAP(SFAS131)arelistedinIFRS8.
BC60.
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information.
4/4
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IFRS9FinancialInstruments
QuickArticleLinks
Overview
IFRS9FinancialIn
stru
mentsissuedon24July2014istheIASB'sre
p lace
mentofIAS39FinancialIn
stru
ments:Recog
n i
tionandMea
sure
ment.TheStandardincludesre
q uire
mentsforrecog
n i
tionandmea
sure
ment,im
p air
ment,dere
cog
n i
tionandgeneralhedgeaccounting.TheIASBcompleteditsprojecttoreplace
IAS39inphases,addingtothestandardasitcompletedeachphase.
TheversionofIFRS9issuedin2014su
p er
sedesallpreviousversionsandismanda
to
rilyeffectivefor
periodsbeginningonorafter1January2018withearlyadoptionpermitted(subjecttolocalen
d orse
ment
re
q uire
ments).Foralimitedperiod,previousversionsofIFRS9maybeadoptedearlyifnotalreadydone
soprovidedtherelevantdateofinitialap
p li
ca
tionisbefore1February2015.
IFRS9doesnotreplacethere
q uire
mentsforportfoliofairvaluehedgeaccountingforinterestraterisk
(oftenreferredtoasthemacrohedgeaccountingre
q uire
ments)sincethisphaseoftheprojectwas
separatedfromtheIFRS9projectduetothelongertermnatureofthemacrohedgingprojectwhichis
currentlyatthedis
cus
sionpaperphaseofthedueprocess.InApril2014,theIASBpublishedaDis
cus
sionPaperAccountingforDynamicRiskman
a ge
ment:aPortfolioReval
u
a
tionApproachtoMacro
Hedging.Con
se
q uently,theexceptioninIAS39forafairvaluehedgeofaninterestrateexposureofa
portfoliooffinancialassetsorfinancialli
a
b il
i
tiescontinuestoapply.
HistoryofIFRS9
Date
14July2009
De
v el
op
ment
Comments
ExposureDraftED/2009/7Financial Commentdeadline14September2009
In
stru
ments:Clas
si
fi
ca
tionandMea
sure
mentpublished
12November2009IFRS9FinancialIn
stru
mentsissued, Originaleffectivedate1January2013,later
coveringclas
si
fi
ca
tionandmea
sure
removed
mentoffinancialassets
11May2010
ExposureDraftED/2010/4FairValue Commentdeadline16July2010
OptionforFinancialLi
a
b il
i
ties
published
28October2010 IFRS9FinancialIn
stru
ments
Originaleffectivedate1January2013,later
reissued,in
cor
p o
rat
ingnewre
q uire
removed
mentsonaccountingforfinancialli
a
bil
i
tiesandcarryingoverfromIAS39
there
q uire
mentsfordere
cog
n i
tionof
financialassetsandfinancialli
a
b il
i
ties
4August2011
ED/2011/3Amend
mentstoIFRS9
(2009)andIFRS9(2010):Mandatory
1/15
1/13/2015
EffectiveDatepublished,proposing
theadjustthemandatoryeffective
dateofIFRS9from1January2013
to1January2015
16December2011MandatoryEffectiveDateandTran
si
AmendedtheeffectivedateofIFRS9toannual
tionDis
clo
sures(Amend
mentsto
periodsbeginningonorafter1January2015
IFRS9andIFRS7)published
(removedin2013),andmodifiedtherelieffrom
restatingcom
p ar
a
tiveperiodsandtheas
so
ci
ateddis
clo
suresinIFRS7
28November2012ExposureDraftED/2012/4Clas
si
fi
ca
Commentdeadline28March2013
tionandMea
sure
ment:Limited
Amend
mentstoIFRS9(proposed
amend
mentstoIFRS9(2010))
published
19November2013IASBissuesIFRS9FinancialIn
stru
RemovedthemandatoryeffectivedateofIFRS
ments(HedgeAccountingand
9(2009)andIFRS9(2010)
amend
mentstoIFRS9,IFRS7and
IAS39)amendingIFRS9to:
includethenewgeneral
hedgeaccountingmodel
allowearlyadoptionofthere
quire
menttopresentfair
valuechangesduetoown
creditonli
a
b il
i
tiesdes
ig
n ated
asatfairvaluethroughprofit
orlosstobepresentedin
othercom
p re
h en
siveincome
and
removethe1January2015
effectivedate
24July2014
IASBissuesIFRS9FinancialIn
stru
IFRS9(2014)wasissuedasacomplete
ments
standardincludingthere
q uire
mentspre
vi
o usly
issuedandthead
d i
tionalamend
mentsto
introduceanewexpectedlossim
p air
mentmodel
andlimitedchangestotheclas
si
fi
ca
tionand
mea
sure
mentre
q uire
mentsforfinancialassets.
ThisamendmentcompletestheIASBsfinancial
in
stru
mentsprojectandtheStandardiseffective
forreportingperiodsbeginningonorafter1
January2018withearlyadoptionpermitted
(subjecttolocalen
d orse
mentre
q uire
ments).
RelatedIn
ter
pre
ta
tions
None
2/15
1/13/2015
Relatedprojects
Financialin
stru
mentsMacrohedgeaccounting
SummaryofIFRS9
Thephasedcom
ple
tionofIFRS9
On12November2009,theIASBissuedIFRS9FinancialIn
stru
mentsasthefirststepinitsprojectto
replaceIAS39FinancialIn
stru
ments:Recog
n i
tionandMea
sure
ment.IFRS9in
tro
d ucednewre
q uire
mentsforclas
si
fy
ingandmeasuringfinancialassetsthathadtobeappliedstarting1January2013,with
earlyadoptionpermitted.ClickforIASBPressRelease(PDF101k).
On28October2010,theIASBreissuedIFRS9,in
cor
p o
rat
ingnewre
q uire
mentsonaccountingfor
financialli
a
b il
i
ties,andcarryingoverfromIAS39there
q uire
mentsfordere
cog
n i
tionoffinancialassets
andfinancialli
a
b il
i
ties.ClickforIASBPressRelease(PDF33k).
On16December2011,theIASBissuedMandatoryEffectiveDateandTran
si
tionDis
clo
sures(Amend
mentstoIFRS9andIFRS7),whichamendedtheeffectivedateofIFRS9toannualperiodsbeginningon
orafter1January2015,andmodifiedtherelieffromrestatingcom
p ar
a
tiveperiodsandtheas
so
ci
a teddis
clo
suresinIFRS7.
On19November2013,theIASBissuedIFRS9FinancialIn
stru
ments(HedgeAccountingandamend
mentstoIFRS9,IFRS7andIAS39)amendingIFRS9toincludethenewgeneralhedgeaccounting
model,allowearlyadoptionofthetreatmentoffairvaluechangesduetoowncreditonli
a
b il
i
tiesdes
ig
natedatfairvaluethroughprofitorlossandremovethe1January2015effectivedate.
On24July2014,theIASBissuedthefinalversionofIFRS9in
cor
p o
rat
inganewexpectedlossim
p air
mentmodelandin
tro
d uc
inglimitedamend
mentstotheclas
si
fi
ca
tionandmea
sure
mentre
q uire
mentsfor
financialassets.Thisversionsu
p er
sedesallpreviousversionsandismanda
to
rilyeffectiveforperiods
beginningonorafter1January2018withearlyadoptionpermitted(subjecttolocalen
d orse
mentre
q uire
ments).Foralimitedperiod,previousversionsofIFRS9maybeadoptedearlyifnotalreadydoneso
providedtherelevantdateofinitialap
p li
ca
tionisbefore1February2015.
OverviewofIFRS9
Initialmea
s ure
mentoffinancialin
s tru
ments
Allfinancialin
stru
mentsareinitiallymeasuredatfairvalueplusorminus,inthecaseofafinancialassetor
financialliabilitynotatfairvaluethroughprofitorloss,trans
a c
tioncosts.[IFRS9,paragraph5.1.1]
Sub
s e
quentmea
s ure
mentoffinancialassets
IFRS9dividesallfinancialassetsthatarecurrentlyinthescopeofIAS39intotwoclas
si
fi
ca
tionsthose
measuredatamortisedcostandthosemeasuredatfairvalue.
Whereassetsaremeasuredatfairvalue,gainsandlossesareeitherrecog
n isedentirelyinprofitorloss
(fairvaluethroughprofitorloss,FVTPL),orrecog
n isedinothercom
p re
h en
siveincome(fairvaluethrough
othercom
p re
h en
siveincome,FVTOCI).
Fordebtin
stru
mentstheFVTOCIclas
si
fi
ca
tionismandatoryforcertainassetsunlessthefairvalueoption
iselected.Whilstforequityin
vest
ments,theFVTOCIclas
si
fi
ca
tionisanelection.Fur
ther
more,there
q uire
3/15
1/13/2015
mentsforre
clas
si
fy
inggainsorlossesrecog
n isedinothercom
p re
h en
siveincomearedifferentfordebtin
stru
mentsandequityin
vest
ments.
Theclas
si
fi
ca
tionofafinancialassetismadeatthetimeitisinitiallyrecog
n ised,namelywhentheentity
becomesapartytothecon
trac
tualpro
vi
sionsofthein
stru
ment.[IFRS9,paragraph4.1.1]Ifcertaincon
d i
tionsaremet,theclas
si
fi
ca
tionofanassetmaysub
se
q uentlyneedtobere
clas
si
fied.
Debtin
s tru
ments
Adebtin
stru
mentthatmeetsthefollowingtwocon
d i
tionsmustbemeasuredatamortisedcost(netofany
writedownforim
p air
ment)unlesstheassetisdes
ig
n atedatFVTPLunderthefairvalueoption(see
below):
[IFRS9,paragraph4.1.2]
Businessmodeltest:Theobjectiveoftheentity'sbusinessmodelistoholdthefinancialassetto
collectthecon
trac
tualcashflows(ratherthantosellthein
stru
mentpriortoitscon
trac
tualmaturity
torealiseitsfairvaluechanges).
Cashflowchar
a c
ter
is
ticstest:Thecon
trac
tualtermsofthefinancialassetgiveriseonspecified
datestocashflowsthataresolelypaymentsofprincipalandinterestontheprincipalamountout
stand
ing.
Adebtin
stru
mentthatmeetsthefollowingtwocon
d i
tionsmustbemeasuredatFVTOCIunlesstheasset
isdes
ig
n atedatFVTPLunderthefairvalueoption(seebelow):
[IFRS9,paragraph4.1.2A]
Businessmodeltest:Thefinancialassetisheldwithinabusinessmodelwhoseobjectiveis
achievedbybothcol
lect
ingcon
trac
tualcashflowsandsellingfinancialassets.
Cashflowchar
a c
ter
is
ticstest:Thecon
trac
tualtermsofthefinancialassetgiveriseonspecified
datestocashflowsthataresolelypaymentsofprincipalandinterestontheprincipalamountout
stand
ing.
Allotherdebtin
stru
mentsmustbemeasuredatfairvaluethroughprofitorloss(FVTPL).[IFRS9,
paragraph4.1.4]
Fairvalueoption
Evenifanin
stru
mentmeetsthetwore
q uire
mentstobemeasuredatamortisedcostorFVTOCI,IFRS9
containsanoptiontodesignate,atinitialrecog
n i
tion,afinancialassetasmeasuredatFVTPLifdoingso
elim
i
n atesorsig
n if
i
cantlyreducesamea
sure
mentorrecog
n i
tionin
con
sis
tency(sometimesreferredtoas
an'accountingmismatch')thatwouldotherwisearisefrommeasuringassetsorli
a
b il
i
tiesorrecog
n is
ingthe
gainsandlossesonthemondifferentbases.[IFRS9,paragraph4.1.5]
Equityin
s tru
ments
Allequityin
vest
mentsinscopeofIFRS9aretobemeasuredatfairvalueinthestatementoffinancial
position,withvaluechangesrecog
n isedinprofitorloss,exceptforthoseequityin
vest
mentsforwhichthe
entityhaselectedtopresentvaluechangesin'othercom
p re
h en
siveincome'.Thereisno'costexception'
forunquotedequities.
'Othercom
pre
hen
s iveincome'option
4/15
1/13/2015
Ifanequityin
vest
mentisnotheldfortrading,anentitycanmakeanir
rev
o
ca
b leelectionatinitialrecog
n i
tiontomeasureitatFVTOCIwithonlydividendincomerecog
n isedinprofitorloss.[IFRS9,paragraph
5.7.5]
Mea
s ure
mentguidance
Despitethefairvaluere
q uire
mentforallequityin
vest
ments,IFRS9containsguidanceonwhencostmay
bethebestestimateoffairvalueandalsowhenitmightnotberep
re
sen
ta
tiveoffairvalue.
Sub
s e
quentmea
s ure
mentoffinancialli
a
bil
i
ties
IFRS9doesn'tchangethebasicaccountingmodelforfinancialli
a
b il
i
tiesunderIAS39.Twomea
sure
ment
cat
e
g oriescontinuetoexist:FVTPLandamortisedcost.Financialli
a
b il
i
tiesheldfortradingaremeasured
atFVTPL,andallotherfinancialli
a
b il
i
tiesaremeasuredatamortisedcostunlessthefairvalueoptionis
applied.[IFRS9,paragraph4.2.1]
Fairvalueoption
IFRS9containsanoptiontodesignateafinancialliabilityasmeasuredatFVTPLif[IFRS9,paragraph
4.2.2]:
doingsoelim
i
n atesorsig
n if
i
cantlyreducesamea
sure
mentorrecog
n i
tionin
con
sis
tency
(sometimesreferredtoasan'accountingmismatch')thatwouldotherwisearisefrommeasuring
assetsorli
a
b il
i
tiesorrecog
n is
ingthegainsandlossesonthemondifferentbases,or
theliabilityispartoragroupoffinancialli
a
b il
i
tiesorfinancialassetsandfinancialli
a
b il
i
tiesthatis
managedanditsper
for
manceisevaluatedonafairvaluebasis,inac
cor
d ancewithadoc
u
mentedriskman
a ge
mentorin
vest
mentstrategy,andin
for
ma
tionaboutthegroupisprovidedin
ter
n allyonthatbasistotheentity'skeyman
a ge
mentpersonnel.
Afinancialliabilitywhichdoesnotmeetanyofthesecriteriamaystillbedes
ig
n atedasmeasuredat
FVTPLwhenitcontainsoneormoreembeddedde
riv
a
tivesthatsuf
fi
cientlymodifythecashflowsofthe
liabilityandarenotclearlycloselyrelated.[IFRS9,paragraph4.3.5]
IFRS9requiresgainsandlossesonfinancialli
a
b il
i
tiesdes
ig
n atedasatFVTPLtobesplitintotheamount
ofchangeinfairvalueat
trib
u t
a bletochangesincreditriskoftheliability,presentedinothercom
p re
h en
siveincome,andtheremainingamountpresentedinprofitorloss.Thenewguidanceallowstherecog
n i
tionofthefullamountofchangeinthefairvalueinprofitorlossonlyifthepre
sen
ta
tionofchangesinthe
liability'screditriskinothercom
p re
h en
siveincomewouldcreateorenlargeanaccountingmismatchin
profitorloss.Thatde
ter
mi
n a
tionismadeatinitialrecog
n i
tionandisnotre
a ssessed.[IFRS9,para
g raphs
5.7.75.7.8]
Amountspresentedinothercom
p re
h en
siveincomeshallnotbesub
se
q uentlytrans
ferredtoprofitorloss,
theentitymayonlytransferthecu
mu
la
tivegainorlosswithinequity.
Dere
c og
ni
tionoffinancialassets
Thebasicpremiseforthedere
cog
n i
tionmodelinIFRS9(carriedoverfromIAS39)istodeterminewhether
theassetundercon
sid
e r
a
tionfordere
cog
n i
tionis:[IFRS9,paragraph3.2.2]
anassetinitsentiretyor
specif
i
callyiden
ti
fiedcashflowsfromanasset(oragroupofsimilarfinancialassets)or
5/15
1/13/2015
afullypro
p or
tion
a te(prorata)shareofthecashflowsfromanasset(oragroupofsimilarfinancial
assets).or
afullypro
p or
tion
a te(prorata)shareofspecif
i
callyiden
ti
fiedcashflowsfromafinancialasset(ora
groupofsimilarfinancialassets)
Oncetheassetundercon
sid
e r
a
tionfordere
cog
n i
tionhasbeende
ter
mined,anas
sess
mentismadeasto
whethertheassethasbeentrans
ferred,andifso,whetherthetransferofthatassetissub
se
q uently
eligiblefordere
cog
n i
tion.
Anassetistrans
ferredifeithertheentityhastrans
ferredthecon
trac
tualrightstoreceivethecashflows,
ortheentityhasretainedthecon
trac
tualrightstoreceivethecashflowsfromtheasset,buthasassumed
acon
trac
tualoblig
a
tiontopassthosecashflowsonunderanarrange
mentthatmeetsthefollowingthree
con
d i
tions:[IFRS9,para
g raphs3.2.43.2.5]
theentityhasnooblig
a
tiontopayamountstotheeventualrecipientunlessitcollectsequiv
a
lent
amountsontheoriginalasset
theentityispro
h ib
itedfromsellingorpledgingtheoriginalasset(otherthanassecuritytothe
eventualrecipient),
theentityhasanoblig
a
tiontoremitthosecashflowswithoutmaterialdelay
Onceanentityhasde
ter
minedthattheassethasbeentrans
ferred,itthende
ter
mineswhetherornotit
hastrans
ferredsub
stan
tiallyalloftherisksandrewardsofownershipoftheasset.Ifsub
stan
tiallyallthe
risksandrewardshavebeentrans
ferred,theassetisdere
cog
n ised.Ifsub
stan
tiallyalltherisksand
rewardshavebeenretained,dere
cog
n i
tionoftheassetisprecluded.[IFRS9,para
g raphs3.2.6(a)(b)]
Iftheentityhasneitherretainednortrans
ferredsub
stan
tiallyalloftherisksandrewardsoftheasset,then
theentitymustassesswhetherithasre
lin
q uishedcontroloftheassetornot.Iftheentitydoesnotcontrol
theassetthendere
cog
n i
tionisap
p ro
p ri
a tehoweveriftheentityhasretainedcontroloftheasset,then
theentitycontinuestorecognisetheassettotheextenttowhichithasacon
tin
u
ingin
volve
mentinthe
asset.[IFRS9,paragraph3.2.6(c)]
Thesevariousdere
cog
n i
tionstepsaresum
marisedinthedecisiontreeinparagraphB3.2.1.
Dere
c og
ni
tionoffinancialli
a
bil
i
ties
Afinancialliabilityshouldberemovedfromthebalancesheetwhen,andonlywhen,itisex
tin
g uished,
thatis,whentheoblig
a
tionspecifiedinthecontractiseitherdis
chargedorcancelledorexpires.[IFRS9,
paragraph3.3.1]Wheretherehasbeenanexchangebetweenanexistingborrowerandlenderofdebtin
stru
mentswithsub
stan
tiallydifferentterms,ortherehasbeenasub
stan
tialmod
i
fi
ca
tionofthetermsofan
existingfinancialliability,thistrans
a c
tionisaccountedforasanex
tin
g uish
mentoftheoriginalfinancial
liabilityandtherecog
n i
tionofanewfinancialliability.Againorlossfromex
tin
g uish
mentoftheoriginal
financialliabilityisrecog
n isedinprofitorloss.[IFRS9,para
g raphs3.3.23.3.3]
De
riv
a
tives
Allde
riv
a
tivesinscopeofIFRS9,includingthoselinkedtounquotedequityin
vest
ments,aremeasuredat
fairvalue.Valuechangesarerecog
n isedinprofitorlossunlesstheentityhaselectedtoapplyhedge
accountingbydes
ig
n at
ingthede
riv
a
tiveasahedgingin
stru
mentinaneligiblehedgingre
la
tion
ship.
Embeddedde
riv
a
tives
6/15
1/13/2015
Anembeddedde
riv
a
tiveisacomponentofahybridcontractthatalsoincludesanonde
riv
a
tivehost,with
theeffectthatsomeofthecashflowsofthecombinedin
stru
mentvaryinawaysimilartoastandalone
de
riv
a
tive.Ade
riv
a
tivethatisattachedtoafinancialin
stru
mentbutiscon
trac
tu
a llytrans
fer
a blein
d e
p en
dentlyofthatin
stru
ment,orhasadifferentcoun
ter
p arty,isnotanembeddedde
riv
a
tive,butaseparate
financialin
stru
ment.[IFRS9,paragraph4.3.1]
Theembeddedde
riv
a
tiveconceptthatexistedinIAS39hasbeenincludedinIFRS9toapplyonlyto
hoststhatarenotfinancialassetswithinthescopeoftheStandard.Con
se
q uently,embeddedde
riv
a
tives
thatunderIAS39wouldhavebeensep
a
ratelyaccountedforatFVTPLbecausetheywerenotclosely
relatedtothehostfinancialassetwillnolongerbeseparated.Instead,thecon
trac
tualcashflowsofthe
financialassetareassessedintheirentirety,andtheassetasawholeismeasuredatFVTPLifthecon
trac
tualcashflowchar
a c
ter
is
ticstestisnotpassed(seeabove).
Theembeddedde
riv
a
tiveguidancethatexistedinIAS39isincludedinIFRS9tohelppreparersidentify
whenanembeddedde
riv
a
tiveiscloselyrelatedtoafinancialliabilityhostcontractorahostcontractnot
withinthescopeoftheStandard(e.g.leasingcontracts,insurancecontracts,contractsforthepurchaseor
saleofanonfi
n an
cialitems).
Re
c las
s i
fi
c a
tion
Forfinancialassets,re
clas
si
fi
ca
tionisrequiredbetweenFVTPL,FVTOCIandamortisedcost,ifandonlyif
theentity'sbusinessmodelobjectiveforitsfinancialassetschangessoitspreviousmodelas
sess
ment
wouldnolongerapply.[IFRS9,paragraph4.4.1]
Ifre
clas
si
fi
ca
tionisap
p ro
p ri
a te,itmustbedoneprospec
tivelyfromthere
clas
si
fi
ca
tiondatewhichis
definedasthefirstdayofthefirstreportingperiodfollowingthechangeinbusinessmodel.Anentitydoes
notrestateanypre
vi
o uslyrecog
n isedgains,losses,orinterest.
IFRS9doesnotallowre
clas
si
fi
ca
tion:
forequityin
vest
mentsmeasuredatFVTOCI,or
wherethefairvalueoptionhasbeenexercisedinanycir
cum
stanceforafinancialassetsor
financialliability.
Hedgeaccounting
Thehedgeaccountingre
q uire
mentsinIFRS9areoptional.Ifcertainel
i
g i
b il
ityandqual
i
fi
ca
tioncriteriaare
met,hedgeaccountingallowsanentitytoreflectriskman
a ge
mentac
tiv
i
tiesinthefinancialstate
mentsby
matchinggainsorlossesonfinancialhedgingin
stru
mentswithlossesorgainsontheriskexposuresthey
hedge.
ThehedgeaccountingmodelinIFRS9isnotdesignedtoac
com
mo
d atehedgingofopen,dynamicport
fo
lios.Asaresult,forafairvaluehedgeofinterestrateriskofaportfoliooffinancialassetsorli
a
b il
i
tiesan
entitycanapplythehedgeaccountingre
q uire
mentsinIAS39insteadofthoseinIFRS9.[IFRS9
paragraph6.1.3]
InadditionwhenanentityfirstappliesIFRS9,itmaychooseasitsaccountingpolicychoicetocontinue
toapplythehedgeaccountingre
q uire
mentsofIAS39insteadofthere
q uire
mentsofChapter6ofIFRS9
[IFRS9paragraph7.2.21]
7/15
1/13/2015
Qual
i
fy
ingcriteriaforhedgeaccounting
Ahedgingre
la
tion
shipqualifiesforhedgeaccountingonlyifallofthefollowingcriteriaaremet:
1. thehedgingre
la
tion
shipconsistsonlyofeligiblehedgingin
stru
mentsandeligiblehedgeditems.
2. attheinceptionofthehedgingre
la
tion
shipthereisformaldes
ig
n a
tionanddoc
u
men
ta
tionofthe
hedgingre
la
tion
shipandtheentitysriskman
a ge
mentobjectiveandstrategyforun
d er
tak
ingthe
hedge.
3. thehedgingre
la
tion
shipmeetsallofthehedgeef
fec
tive
n essre
q uire
ments(seebelow)[IFRS9
paragraph6.4.1]
Hedgingin
stru
ments
Onlycontractswithapartyexternaltothereportingentitymaybedes
ig
n atedashedgingin
stru
ments.
Ahedgingin
stru
mentmaybeade
riv
a
tive(exceptforsomewrittenoptions)ornonde
riv
a
tivefinancialin
stru
mentmeasuredatFVTPLunlessitisafinancialliabilitydes
ig
n atedasatFVTPLforwhichchanges
duetocreditriskarepresentedinOCI.Forahedgeofforeigncurrencyrisk,theforeigncurrencyrisk
componentofanonde
riv
a
tivefinancialin
stru
ment,exceptequityin
vest
mentsdes
ig
n atedasFVTOCI,
maybedes
ig
n atedasthehedgingin
stru
ment.[IFRS9para
g raphs6.2.16.2.2]
IFRS9allowsapro
p or
tion(e.g.60%)butnotatimeportion(egthefirst6yearsofcashflowsofa10year
in
stru
ment)ofahedgingin
stru
menttobedes
ig
stru
ment.IFRS9alsoallowsonly
theintrinsicvalueofanoption,orthespotelementofaforwardtobedes
ig
stru
ment.Anentitymayalsoexcludetheforeigncurrencybasisspreadfromades
ig
n atedhedgingin
stru
ment.[IFRS9paragraph6.2.4]
IFRS9allowscom
b i
n a
tionsofde
riv
a
tivesandnonde
riv
a
tivestobedes
ig
stru
ment.[IFRS9paragraph6.2.5]
Com
b i
n a
tionsofpurchasedandwrittenoptionsdonotqualifyiftheyamounttoanetwrittenoptionatthe
dateofdes
ig
n a
tion.[IFRS9paragraph6.2.6]
Hedgeditems
Ahedgeditemcanbearecog
n isedassetorliability,anun
recog
n isedfirmcom
mit
ment,ahighlyprobable
forecasttrans
a c
tionoranetin
vest
mentinaforeignoperationandmustbereliablymea
sur
a ble.[IFRS9
para
g raphs6.3.16.3.3]
Anag
g re
g atedexposurethatisacom
b i
n a
tionofaneligiblehedgeditemasdescribedaboveandade
riv
a
tivemaybedes
ig
n atedasahedgeditem.[IFRS9paragraph6.3.4]
Thehedgeditemmustgenerallybewithapartyexternaltothereportingentity,however,asanexception
theforeigncurrencyriskofanin
tra
g roupmonetaryitemmayqualifyasahedgediteminthecon
sol
i
d ated
financialstate
mentsifitresultsinanexposuretoforeignexchangerategainsorlossesthatarenotfully
elim
i
n atedoncon
sol
i
d a
tion.Inaddition,theforeigncurrencyriskofahighlyprobableforecastin
tra
g roup
trans
a c
tionmayqualifyasahedgeditemincon
sol
i
mentsprovidedthatthetrans
a c
tionisde
n om
i
n atedinacurrencyotherthanthefunc
tionalcurrencyoftheentityenteringintothattrans
a c
8/15
1/13/2015
tionandtheforeigncurrencyriskwillaffectcon
sol
i
d atedprofitorloss.[IFRS9para
g raphs6.3.56.3.6]
Anentitymaydesignateaniteminitsentiretyoracomponentofanitemasthehedgeditem.The
componentmaybeariskcomponentthatissep
a
ratelyiden
ti
fi
a bleandreliablymea
sur
a bleoneormore
selectedcon
trac
tualcashflowsorcom
p o
n entsofanominalamount.[IFRS9paragraph6.3.7]
Agroupofitems(includingnetpositionsisaneligiblehedgeditemonlyif:
1. itconsistsofitemsin
d i
vid
u
a lly,eligiblehedgeditems
2. theitemsinthegrouparemanagedtogetheronagroupbasisforriskman
a ge
mentpurposesand
3. inthecaseofacashflowhedgeofagroupofitemswhosevari
a bil
i
tiesincashflowsarenot
expectedtobeap
p rox
i
matelypro
p or
tionaltotheoverallvari
a bil
ityincashflowsofthegroup:
1. itisahedgeofforeigncurrencyriskand
2. thedes
ig
n a
tionofthatnetpositionspecifiesthereportingperiodinwhichtheforecasttrans
a c
tionsareexpectedtoaffectprofitorloss,aswellastheirnatureandvolume[IFRS9paragraph
6.6.1]
Forahedgeofanetpositionwhosehedgedriskaffectsdifferentlineitemsinthestatementofprofitor
lossandothercom
p re
h en
siveincome,anyhedginggainsorlossesinthatstatementarepresentedina
separatelinefromthoseaffectedbythehedgeditems.[IFRS9paragraph6.6.4]
Accountingforqual
i
fy
inghedgingre
la
tion
ships
Therearethreetypesofhedgingre
la
tion
ships:
Fairvaluehedge:ahedgeoftheexposuretochangesinfairvalueofarecog
n isedassetorliabilityoran
un
recog
n isedfirmcom
mit
ment,oracomponentofanysuchitem,thatisat
trib
u t
a bletoapar
tic
u
larrisk
andcouldaffectprofitorloss(orOCIinthecaseofanequityin
stru
mentdes
ig
n atedasatFVTOCI).[IFRS
9para
g raphs6.5.2(a)and6.5.3]
Forafairvaluehedge,thegainorlossonthehedgingin
stru
mentisrecog
n isedinprofitorloss(orOCI,if
hedginganequityin
stru
mentatFVTOCIandthehedginggainorlossonthehedgeditemadjuststhe
carryingamountofthehedgeditemandisrecog
n isedinprofitorloss.However,ifthehedgeditemisan
equityin
stru
mentatFVTOCI,thoseamountsremaininOCI.Whenahedgeditemisanun
recog
n isedfirm
com
mit
mentthecu
mu
la
tivehedginggainorlossisrecog
n isedasanassetoraliabilitywithacor
re
spond
inggainorlossrecog
n isedinprofitorloss.[IFRS9paragraph6.5.8]
Ifthehedgeditemisadebtin
stru
mentmeasuredatamortisedcostorFVTOCIanyhedgead
just
mentis
amortisedtoprofitorlossbasedonare
cal
cu
latedeffectiveinterestrate.Amor
ti
sa
tionmaybeginassoon
asanad
just
mentexistsandshallbeginnolaterthanwhenthehedgeditemceasestobeadjustedfor
hedginggainsandlosses.[IFRS9paragraph6.5.10]
Cashflowhedge:ahedgeoftheexposuretovari
a bil
ityincashflowsthatisat
trib
u t
a bletoapar
tic
u
lar
riskas
so
ci
a tedwithall,oracomponentof,arecog
n isedassetorliability(suchasallorsomefuture
interestpaymentsonvari
a bleratedebt)orahighlyprobableforecasttrans
a c
tion,andcouldaffectprofitor
loss.[IFRS9paragraph6.5.2(b)]
Foracashflowhedgethecashflowhedgereserveinequityisadjustedtothelowerofthefollowing(in
absoluteamounts):
9/15
1/13/2015
thecu
mu
la
tivegainorlossonthehedgingin
stru
mentfrominceptionofthehedgeand
thecu
mu
la
tivechangeinfairvalueofthehedgeditemfrominceptionofthehedge.
Theportionofthegainorlossonthehedgingin
stru
mentthatisde
ter
minedtobeaneffectivehedgeis
recog
n isedinOCIandanyremaininggainorlossishedgein
e f
fec
tive
n essthatisrecog
n isedinprofitor
loss.
Ifahedgedforecasttrans
a c
tionsub
se
q uentlyresultsintherecog
n i
tionofanonfi
n an
cialitemorbecomes
afirmcom
mit
mentforwhichfairvaluehedgeaccountingisapplied,theamountthathasbeenac
cu
mu
latedinthecashflowhedgereserveisremovedandincludeddirectlyintheinitialcostorothercarrying
amountoftheassetortheliability.Inothercasestheamountthathasbeenac
cu
mu
latedinthecashflow
hedgereserveisre
clas
si
fiedtoprofitorlossinthesameperiod(s)asthehedgedcashflowsaffectprofit
orloss.[IFRS9paragraph6.5.11]
Whenanentitydis
con
tin
u eshedgeaccountingforacashflowhedge,ifthehedgedfuturecashflowsare
stillexpectedtooccur,theamountthathasbeenac
cu
mu
latedinthecashflowhedgereserveremains
thereuntilthefuturecashflowsoccurifthehedgedfuturecashflowsarenolongerexpectedtooccur,
thatamountisim
me
d i
a telyre
clas
si
fiedtoprofitorloss[IFRS9paragraph6.5.12]
Ahedgeoftheforeigncurrencyriskofafirmcom
mit
mentmaybeaccountedforasafairvaluehedgeora
cashflowhedge.[IFRS9paragraph6.5.4]
Hedgeofanetin
v est
mentinaforeignoperation(asdefinedinIAS21),includingahedgeofamonetary
itemthatisaccountedforaspartofthenetin
vest
ment,isaccountedforsimilarlytocashflowhedges:
theportionofthegainorlossonthehedgingin
stru
mentthatisde
ter
minedtobeaneffective
hedgeisrecog
n isedinOCIand
thein
e f
fec
tiveportionisrecog
n isedinprofitorloss.[IFRS9paragraph6.5.13]
Thecu
mu
la
tivegainorlossonthehedgingin
stru
mentrelatingtotheeffectiveportionofthehedgeisre
clas
si
fiedtoprofitorlossonthedisposalorpartialdisposaloftheforeignoperation.[IFRS9paragraph
6.5.14]
Hedgeef
fec
tive
n essre
q uire
ments
Inordertoqualifyforhedgeaccounting,thehedgere
la
tion
shipmustmeetthefollowingef
fec
tive
n ess
criteriaatthebeginningofeachhedgedperiod:
thereisaneconomicre
la
tion
shipbetweenthehedgeditemandthehedgingin
stru
ment
theeffectofcreditriskdoesnotdominatethevaluechangesthatresultfromthateconomicre
la
tion
shipand
thehedgeratioofthehedgingre
la
tion
shipisthesameasthatactuallyusedintheeconomic
hedge[IFRS9paragraph6.4.1(c)]
Re
b al
a nc
inganddis
con
tin
u
a
tion
Ifahedgingre
la
tion
shipceasestomeetthehedgeef
fec
tive
n essre
q uire
mentrelatingtothehedgeratio
buttheriskman
a ge
mentobjectiveforthatdes
ig
n atedhedgingre
la
tion
shipremainsthesame,anentity
adjuststhehedgeratioofthehedgingre
la
tion
ship(i.e.re
b al
a ncesthehedge)sothatitmeetsthequal
i
fy
10/15
1/13/2015
ingcriteriaagain.[IFRS9paragraph6.5.5]
Anentitydis
con
tin
u eshedgeaccountingprospec
tivelyonlywhenthehedgingre
la
tion
ship(orapartofa
hedgingre
la
tion
ship)ceasestomeetthequal
i
fy
ingcriteria(afteranyre
b al
a nc
ing).Thisincludesinstances
whenthehedgingin
stru
mentexpiresorissold,ter
mi
n atedorexercised.Dis
con
tin
u
inghedgeaccounting
caneitheraffectahedgingre
la
tion
shipinitsentiretyoronlyapartofit(inwhichcasehedgeaccounting
continuesfortheremainderofthehedgingre
la
tion
ship).[IFRS9paragraph6.5.6]
Timevalueofoptions
Whenanentityseparatestheintrinsicvalueandtimevalueofanoptioncontractanddes
ig
n atesasthe
hedgingin
stru
mentonlythechangeinintrinsicvalueoftheoption,itrecog
n isessomeorallofthechange
inthetimevalueinOCIwhichislaterremovedorre
clas
si
fiedfromequityasasingleamountoronan
amortisedbasis(dependingonthenatureofthehedgeditem)andul
ti
matelyrecog
n isedinprofitorloss.
[IFRS9paragraph6.5.15]Thisreducesprofitorlossvolatil
itycomparedtorecog
n is
ingthechangein
valueoftimevaluedirectlyinprofitorloss.
Forwardpointsandforeigncurrencybasisspreads
Whenanentityseparatestheforwardpointsandthespotelementofaforwardcontractanddes
ig
n ates
asthehedgingin
stru
mentonlythechangeinthevalueofthespotelement,orwhenanentityexcludes
theforeigncurrencybasisspreadfromahedgetheentitymayrecognisethechangeinvalueofthe
excludedportioninOCItobelaterremovedorre
clas
si
fiedfromequityasasingleamountoronan
amortisedbasis(dependingonthenatureofthehedgeditem)andul
ti
matelyrecog
n isedinprofitorloss.
[IFRS9paragraph6.5.16]Thisreducesprofitorlossvolatil
itycomparedtorecog
n is
ingthechangein
valueofforwardpointsorcurrencybasisspreadsdirectlyinprofitorloss.
Creditexposuresdes
ig
n atedatFVTPL
Ifanentityusesacreditde
riv
a
tivemeasuredatFVTPLtomanagethecreditriskofafinancialin
stru
ment
(creditexposure)itmaydesignateallorapro
p or
tionofthatfinancialin
stru
mentasmeasuredatFVTPLif:
thenameofthecreditexposurematchesthereferenceentityofthecreditde
riv
a
tive(name
matching)and
theseniorityofthefinancialin
stru
mentmatchesthatofthein
stru
mentsthatcanbedeliveredin
ac
cor
d ancewiththecreditde
riv
a
tive.
Anentitymaymakethisdes
ig
n a
tionir
re
spec
tiveofwhetherthefinancialin
stru
mentthatismanagedfor
creditriskiswithinthescopeofIFRS9(forexample,itcanapplytoloancom
mit
mentsthatareoutsidethe
scopeofIFRS9).Theentitymaydesignatethatfinancialin
stru
mentat,orsub
se
q uentto,initialrecog
n i
tion,orwhileitisun
recog
n isedandshalldocumentthedes
ig
n a
tioncon
cur
rently.[IFRS9paragraph
6.7.1]
Ifdes
ig
n atedafterinitialrecog
n i
tion,anydif
fer
e nceinthepreviouscarryingamountandfairvalueis
recog
n isedim
me
d i
a telyinprofitorloss[IFRS9paragraph6.7.2]
Anentitydis
con
tin
u esmeasuringthefinancialin
stru
mentthatgaverisetothecreditriskatFVTPLifthe
qual
i
fy
ingcriteriaarenolongermetandthein
stru
mentisnototherwiserequiredtobemeasuredat
FVTPL.Thefairvalueatdis
con
tin
u
a
tionbecomesitsnewcarryingamount.[IFRS9para
g raphs6.7.3and
11/15
1/13/2015
6.7.4]
Im
pair
ment
Theim
p air
mentmodelinIFRS9isbasedonthepremiseofprovidingforexpectedlosses.
Scope
IFRS9requiresthatthesameim
p air
mentmodelapplytoallofthefollowing:
Financialassetsmeasuredatamortisedcost
Financialassetsmanda
to
rilymeasuredatFVTOCI
Loancom
mit
mentswhenthereisapresentoblig
a
tiontoextendcredit(exceptwheretheseare
measuredatFVTPL)
FinancialguaranteecontractstowhichIFRS9isapplied(exceptthosemeasuredat
FVTPL)
Leasere
ceiv
a bleswithinthescopeofIAS17Leasesand
ContractassetswithinthescopeofIFRS15RevenuefromContractswithCustomers(i.e.
rightstocon
sid
e r
a
tionfollowingtransferofgoodsorservices).
Generalapproach
Withtheexceptionofpurchasedororig
i
n atedcreditimpairedfinancialassets(seebelow),expectedcredit
lossesarerequiredtobemeasuredthroughalossallowanceatanamountequalto:
[IFRS9para
g raphs5.5.3and5.5.5]
the12monthexpectedcreditlosses(expectedcreditlossesthatresultfromthosedefaultevents
onthefinancialin
stru
mentthatarepossiblewithin12monthsafterthereportingdate)or
fulllifetimeexpectedcreditlosses(expectedcreditlossesthatresultfromallpossibledefault
eventsoverthelifeofthefinancialin
stru
ment).
Alossallowanceforfulllifetimeexpectedcreditlossesisrequiredforafinancialin
stru
mentifthecreditrisk
ofthatfinancialin
stru
menthasincreasedsig
n if
i
cantlysinceinitialrecog
n i
tion,aswellastocontract
assetsortradere
ceiv
a blesthatdonotcon
sti
tuteafinancingtrans
a c
tioninac
cor
d ancewithIFRS15.
[IFRS9para
g raphs5.5.3and5.5.15]
Ad
d i
tion
a lly,entitiescanelectanaccountingpolicytorecognisefulllifetimeexpectedlossesforall
contractassetsand/oralltradere
ceiv
a blesthatdocon
sti
tuteafinancingtrans
a c
tioninac
cor
d ancewith
IFRS15.Thesameelectionisalsosep
a
ratelypermittedforleasere
ceiv
a bles.[IFRS9paragraph5.5.16]
Forallotherfinancialin
stru
ments,expectedcreditlossesaremeasuredatanamountequaltothe12
monthexpectedcreditlosses.[IFRS9paragraph5.5.5]
Sig
nif
i
c antincreaseincreditrisk
Withtheexceptionofpurchasedororig
i
n atedcreditim
p airedfinancialassets(seebelow),theloss
allowanceforfinancialin
stru
mentsismeasuredatanamountequaltolifetimeexpectedlossesifthe
creditriskofafinancialin
stru
menthasincreasedsig
n if
i
n i
tion,unlessthecreditrisk
ofthefinancialin
stru
mentislowatthereportingdateinwhichcaseitcanbeassumedthatcreditriskon
12/15
1/13/2015
thefinancialin
stru
menthasnotincreasedsig
n if
i
n i
tion.[IFRS9para
g raphs5.5.3
and5.5.10]
TheStandardconsiderscreditrisklowifthereisalowriskofdefault,theborrowerhasastrongcapacityto
meetitscon
trac
tualcashflowoblig
a
tionsintheneartermandadversechangesineconomicand
businesscon
d i
tionsinthelongertermmay,butwillnotnec
e s
sar
ily,reducetheabilityoftheborrowerto
fulfilitscon
trac
tualcashflowoblig
a
tions.TheStandardsuggeststhatin
vest
mentgraderatingmightbe
anindicatorforalowcreditrisk.[IFRS9para
g raphsB5.5.22B5.5.24]
Theas
sess
mentofwhethertherehasbeenasig
n if
i
cantincreaseincreditriskisbasedonanincreasein
theprob
a
b il
ityofadefaultoccurringsinceinitialrecog
n i
tion.UndertheStandard,anentitymayuse
variousap
p roachestoassesswhethercreditriskhasincreasedsig
n if
i
cantly(providedthattheapproach
iscon
sis
tentwiththere
q uire
ments).Anapproachcanbecon
sis
tentwiththere
q uire
mentsevenifitdoes
notincludeanexplicitprob
a
b il
ityofdefaultoccurringasaninput.Theap
p li
ca
tionguidanceprovidesalist
offactorsthatmayassistanentityinmakingtheas
sess
ment.Also,whilstinprincipletheas
sess
mentof
whetheralossallowanceshouldbebasedonlifetimeexpectedcreditlossesistobemadeonanin
d i
vid
ualbasis,somefactorsorin
d i
ca
torsmightnotbeavailableatanin
stru
mentlevel.Inthiscase,theentity
shouldperformtheas
sess
mentonap
p ro
p ri
a tegroupsorportionsofaportfoliooffinancialin
stru
ments.
There
q uire
mentsalsocontainare
b ut
tablepre
sump
tionthatthecreditriskhasincreasedsig
n if
i
cantly
whencon
trac
tualpaymentsaremorethan30dayspastdue.IFRS9alsorequiresthat(otherthanfor
purchasedororig
i
n atedcreditimpairedfinancialin
stru
ments)ifasig
n if
i
cantincreaseincreditriskthathad
takenplacesinceinitialrecog
n i
tionandhasreversedbyasub
se
q uentreportingperiod(i.e.,cu
mu
la
tively
creditriskisnotsig
n if
i
cantlyhigherthanatinitialrecog
n i
tion)thentheexpectedcreditlossesonthe
financialin
stru
mentreverttobeingmeasuredbasedonanamountequaltothe12monthexpectedcredit
losses.[IFRS9paragraph5.5.11]
Purchasedororig
i
natedcreditim
pairedfinancialassets
Purchasedororig
i
n atedcreditim
p airedfinancialassetsaretreateddif
fer
e ntlybecausetheassetiscredit
im
p airedatinitialrecog
n i
tion.Fortheseassets,anentitywouldrecognisechangesinlifetimeexpected
lossessinceinitialrecog
n i
tionasalossallowancewithanychangesrecog
n isedinprofitorloss.Under
there
q uire
ments,anyfavourablechangesforsuchassetsareanim
p air
mentgaineveniftheresulting
expectedcashflowsofafinancialassetexceedtheestimatedcashflowsoninitialrecog
n i
tion.[IFRS9
para
g raphs5.5.135.5.14]
Creditim
pairedfinancialasset
UnderIFRS9afinancialassetiscreditim
p airedwhenoneormoreeventsthathaveoccurredandhavea
sig
n if
i
cantimpactontheexpectedfuturecashflowsofthefinancialasset.Itincludesob
serv
a bledatathat
hascometotheattentionoftheholderofafinancialassetaboutthefollowingevents:
[IFRS9AppendixA]
sig
n if
i
cantfinancialdif
fi
cultyoftheissuerorborrower
abreachofcontract,suchasadefaultorpastdueevent
thelendersforeconomicorcon
trac
tualreasonsrelatingtotheborrowersfinancialdif
fi
culty
grantedtheborroweracon
ces
sionthatwouldnototherwisebecon
sid
e red
itbecomingprobablethattheborrowerwillenterbank
ruptcyorotherfinancialre
o r
g an
i
sa
tion
13/15
1/13/2015
thedis
a p
p ear
a nceofanactivemarketforthefinancialassetbecauseoffinancialdif
fi
cul
tiesor
thepurchaseororig
i
n a
tionofafinancialassetatadeepdiscountthatreflectsincurredcredit
losses.
Basisfores
ti
mat
ingexpectedcreditlosses
Anymea
sure
mentofexpectedcreditlossesunderIFRS9shallreflectanunbiasedandprob
a
b il
ity
weightedamountthatisde
ter
minedbyeval
u
a t
ingtherangeofpossibleoutcomesaswellasin
cor
p o
rat
ingthetimevalueofmoney.Also,theentityshouldconsiderrea
son
a bleandsup
p ort
a blein
for
ma
tion
aboutpastevents,currentcon
d i
tionsandrea
son
a bleandsup
p ort
a bleforecastsoffutureeconomiccon
d i
tionswhenmeasuringexpectedcreditlosses.[IFRS9paragraph5.5.17]
TheStandarddefinesexpectedcreditlossesastheweightedaverageofcreditlosseswiththere
spec
tive
risksofadefaultoccurringastheweight
ings.[IFRS9AppendixA]Whilstanentitydoesnotneedto
considereverypossiblescenario,itmustconsidertheriskorprob
a
b il
itythatacreditlossoccursbycon
sid
er
ingthepos
si
b il
itythatacreditlossoccursandthepos
si
b il
itythatnocreditlossoccurs,eveniftheprob
a
b il
ityofacreditlossoccurringislow.[IFRS9paragraph5.5.18]
Inpar
tic
u
lar,forlifetimeexpectedlosses,anentityisrequiredtoestimatetheriskofadefaultoccurringon
thefinancialin
stru
mentduringitsexpectedlife.12monthexpectedcreditlossesrepresentthelifetime
cashshort
fallsthatwillresultifadefaultoccursinthe12monthsafterthereportingdate,weightedbythe
prob
a
b il
ityofthatdefaultoccurring.
Anentityisrequiredtoin
cor
p o
raterea
son
a bleandsup
p ort
a blein
for
ma
tion(i.e.,thatwhichisrea
son
a bly
availableatthereportingdate).In
for
ma
tionisrea
son
a blyavailableifobtainingitdoesnotinvolveundue
costoreffort(within
for
ma
tionavailableforfinancialreportingpurposesqual
i
fy
ingassuch).
Forapplyingthemodeltoaloancom
mit
mentanentitywillconsidertheriskofadefaultoccurringunder
theloantobeadvanced,whilstap
p li
ca
tionofthemodelforfinancialguaranteecontractsanentity
considerstheriskofadefaultoccurringofthespecifieddebtor.[IFRS9para
g raphsB5.5.31andB5.5.32]
Anentitymayusepracticalex
p e
d i
e ntswhenes
ti
mat
ingexpectedcreditlossesiftheyarecon
sis
tentwith
theprin
ci
p lesintheStandard(forexample,expectedcreditlossesontradere
ceiv
a blesmaybecal
cu
lated
usingaprovisionmatrixwhereafixedprovisionrateappliesdependingonthenumberofdaysthata
tradere
ceiv
a bleisout
stand
ing).[IFRS9paragraphB5.5.35]
Toreflecttimevalue,expectedlossesshouldbedis
countedtothereportingdateusingtheeffective
interestrateoftheasset(oranap
p rox
i
ma
tionthereof)thatwasde
ter
minedatinitialrecog
n i
tion.Acredit
ad
justedeffectiveinterestrateshouldbeusedforexpectedcreditlossesofpurchasedororig
i
n ated
creditim
p airedfinancialassets.Incontrasttotheeffectiveinterestrate(cal
cu
latedusingexpectedcash
flowsthatignoreexpectedcreditlosses),thecreditad
justedeffectiveinterestratereflectsexpectedcredit
lossesofthefinancialasset.[IFRS9para
g raphsB5.5.4445]
Expectedcreditlossesofundrawnloancom
mit
mentsshouldbedis
countedbyusingtheeffectiveinterest
rate(oranap
p rox
i
ma
tionthereof)thatwillbeappliedwhenrecog
n is
ingthefinancialassetresultingfrom
thecom
mit
ment.Iftheeffectiveinterestrateofaloancom
mit
mentcannotbede
ter
mined,thediscount
rateshouldreflectthecurrentmarketas
sess
mentoftimevalueofmoneyandtherisksthatarespecificto
thecashflowsbutonlyif,andtotheextentthat,suchrisksarenottakenintoaccountbyadjustingthe
discountrate.Thisapproachshallalsobeusedtodiscountexpectedcreditlossesoffinancialguarantee
14/15
1/13/2015
contracts.[IFRS9para
g raphsB5.5.47]
Pre
s en
ta
tion
Whilstinterestrevenueisalwaysrequiredtobepresentedasaseparatelineitem,itiscal
cu
lateddif
fer
entlyaccordingtothestatusoftheassetwithregardtocreditim
p air
ment.Inthecaseofafinancialasset
thatisnotapurchasedororig
i
n atedcreditim
p airedfinancialassetandforwhichthereisnoobjective
evidenceofim
p air
mentatthereportingdate,interestrevenueiscal
cu
latedbyapplyingtheeffective
interestratemethodtothegrosscarryingamount.[IFRS9paragraph5.4.1]
Inthecaseofafinancialassetthatisnotapurchasedororig
i
n atedcreditim
p airedfinancialassetbut
sub
se
q uentlyhasbecomecreditim
p aired,interestrevenueiscal
cu
latedbyapplyingtheeffectiveinterest
ratetotheamortisedcostbalance,whichcomprisesthegrosscarryingamountadjustedforanyloss
allowance.[IFRS9paragraph5.4.1]
Inthecaseofpurchasedororig
i
n atedcreditim
p airedfinancialassets,interestrevenueisalwaysrecog
nisedbyapplyingthecreditad
justedeffectiveinterestratetotheamortisedcostcarryingamount.[IFRS9
paragraph5.4.1]Thecreditad
justedeffectiveinterestrateistheratethatdiscountsthecashflows
expectedoninitialrecog
n i
tion(ex
p lic
itlytakingaccountofexpectedcreditlossesaswellascon
trac
tual
termsofthein
stru
ment)backtotheamortisedcostatinitialrecog
n i
tion.[IFRS9AppendixA]
Con
se
q uen
tialamend
mentsofIFRS9toIAS1requirethatim
p air
mentlosses,includingreversalsofim
pair
mentlossesandim
p air
mentgains(inthecaseofpurchasedororig
i
n atedcreditim
p airedfinancial
assets),arepresentedinaseparatelineiteminthestatementofprofitorlossandothercom
p re
h en
sive
income.
Dis
c lo
s ures
IFRS9amendssomeofthere
q uire
mentsofIFRS7FinancialIn
stru
ments:Dis
clo
suresincludingadding
dis
clo
suresaboutin
vest
mentsinequityin
stru
mentsdes
ig
n atedasatFVTOCI,dis
clo
suresonriskman
age
mentac
tiv
i
tiesandhedgeaccountinganddis
clo
suresoncreditriskman
a ge
mentandim
p air
ment.
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IFRS10ConsolidatedFinancialStatements
QuickArticleLinks
Overview
IFRS10Con
sol
i
mentsoutlinesthere
q uire
mentsfortheprepa
ra
tionandpre
sen
ta
tionofcon
sol
i
ments,requiringentitiestocon
sol
i
d ateentitiesitcontrols.Control
requiresexposureorrightstovariablereturnsandtheabilitytoaffectthosereturnsthroughpoweroveran
investee.
IFRS10wasissuedinMay2011andappliestoannualperiodsbeginningonorafter1January2013.
HistoryofIFRS10
Date
April2002
De
v el
op
ment
Projectoncon
sol
i
d a
tionaddedtotheIASB'sagenda
(projecthistory)
18December2008 ED10Con
sol
i
mentspublished
Comments
Commentdeadline20
March2009
29September2010StaffdraftofIFRSXCon
sol
i
ments
published
12May2011
IFRS10Con
sol
i
mentspublished
28June2012
31October2012
Effectiveforannual
after1January2013
AmendedbyCon
sol
i
ments,Joint
Effectiveforannual
Arrange
mentsandDis
clo
sureofInterestsinOtherEntities: periodsbeginningonor
Tran
si
tionGuidance(projecthistory)
after1January2013
AmendedbyIn
vest
mentEntities(Amend
mentstoIFRS10, Effectiveforannual
IFRS12andIAS27)(projecthistory)
after1January2014
11September2014AmendedbySaleorCon
tri
b u
tionofAssetsbetweenan
InvestoranditsAssociateorJointVenture(Amend
mentsto
IFRS10andIAS28)
18December2014 AmendedbyIn
vest
mentEntities:ApplyingtheCon
sol
i
d a
tionException(Amend
mentstoIFRS10,IFRS12andIAS
28)(projecthistory)
Effectiveforannual
after1January2016
Effectiveforannual
after1January2016
RelatedIn
ter
pre
ta
tions
IFRS10su
p er
sededSIC12Con
sol
i
d a
tionSpecialPurposeEntities
Amend
mentsundercon
sid
er
a
tionbytheIASB
Commoncontroltrans
a c
tions
IFRS13Unitofaccount
Inaddition,theIASBhassignalledanintentiontoconductapostim
p le
men
ta
tionreview,com
menc
ingin
2016.
1/7
1/13/2015
Pub
li
ca
tionsandresources
IFRSinFocusNewslet
terIASBissuesnewstandardoncon
sol
i
d a
tionsum
maris
ingthere
q uire
mentsofIFRS10(PDF82k,May2011)
DeloitteIFRSPodcast(May2011,12minutes,8mb)
EffectanalysisforIFRS10andIFRS12(linktoIASBwebsite)
SummaryofIFRS10
Objective
TheobjectiveofIFRS10istoestablishprin
ci
p lesforthepre
sen
ta
tionandprepa
ra
tionofcon
sol
i
d ated
financialstate
mentswhenanentitycontrolsoneormoreotherentities.[IFRS10:1]
TheStandard:[IFRS10:1]
requiresaparententity(anentitythatcontrolsoneormoreotherentities)topresentcon
sol
i
d ated
financialstate
ments
definestheprincipleofcontrol,andes
tab
lishescontrolasthebasisforcon
sol
i
d a
tion
setouthowtoapplytheprincipleofcontroltoidentifywhetheraninvestorcontrolsaninvestee
andthereforemustcon
sol
i
d atetheinvestee
setsouttheaccountingre
q uire
mentsfortheprepa
ra
tionofcon
sol
i
ments
definesanin
vest
mententityandsetsoutanexceptiontocon
sol
i
d at
ingpar
tic
u
larsub
sidiariesof
anin
vest
mententity*.
*AddedbyIn
vest
mentEntitiesamend
ments,effective1January2014.
Keyde
f
i
n
i
tions
[IFRS10:AppendixA]
Con
s ol
i
datedfinancialstate
ments
Thefinancialstate
mentsofagroupinwhichtheassets,li
a
b il
i
ties,equity,income,expensesandcash
flowsoftheparentanditssub
sidiariesarepresentedasthoseofasingleeconomicentity
Controlofaninvestee
Aninvestorcontrolsaninvesteewhentheinvestorisexposed,orhasrights,tovariablereturnsfromitsin
volve
mentwiththeinvesteeandhastheabilitytoaffectthosereturnsthroughitspowerovertheinvestee
In
v est
mententity*
Anentitythat:
a. obtainsfundsfromoneormoreinvestorsforthepurposeofprovidingthoseinvestor(s)within
vest
mentman
a ge
mentservices
b. commitstoitsinvestor(s)thatitsbusinesspurposeistoinvestfundssolelyforreturnsfromcapitalap
pre
ci
a
tion,in
vest
mentincome,orboth,and
c. measuresandevaluatestheper
for
manceofsub
stan
tiallyallofitsin
vest
mentsonafairvaluebasis.
Parent
Anentitythatcontrolsoneormoreentities
Power
2/7
1/13/2015
Existingrightsthatgivethecurrentabilitytodirecttherelevantac
tiv
i
ties
Pro
tec
tiverights
Rightsdesignedtoprotecttheinterestofthepartyholdingthoserightswithoutgivingthatpartypower
overtheentitytowhichthoserightsrelate
Relevantac
tiv
i
ties
Ac
tiv
i
tiesoftheinvesteethatsig
n if
i
cantlyaffecttheinvestee'sreturns
*AddedbyIn
vest
mentEntitiesamend
Control
Aninvestorde
ter
mineswhetheritisaparentbyassessingwhetheritcontrolsoneormoreinvestees.An
investorconsidersallrelevantfactsandcir
cum
stanceswhenassessingwhetheritcontrolsaninvestee.
Aninvestorcontrolsaninvesteewhenitisexposed,orhasrights,tovariablereturnsfromitsin
volve
ment
withtheinvesteeandhastheabilitytoaffectthosereturnsthroughitspowerovertheinvestee.[IFRS
10:56IFRS10:8]
Aninvestorcontrolsaninvesteeifandonlyiftheinvestorhasallofthefollowingelements:[IFRS10:7]
powerovertheinvestee,i.e.theinvestorhasexistingrightsthatgiveittheabilitytodirectthe
relevantac
tiv
i
ties(theac
tiv
i
tiesthatsig
n if
i
cantlyaffecttheinvestee'sreturns)
exposure,orrights,tovariablereturnsfromitsin
volve
mentwiththeinvestee
theabilitytouseitspowerovertheinvesteetoaffecttheamountoftheinvestor'sreturns.
Powerarisesfromrights.Suchrightscanbestraight
for
ward(e.g.throughvotingrights)orbecomplex(e.g.
embeddedincon
trac
tualarrange
ments).Aninvestorthatholdsonlypro
tec
tiverightscannothavepower
overaninvesteeandsocannotcontrolaninvestee[IFRS10:11,IFRS10:14].
Aninvestormustbeexposed,orhaverights,tovariablereturnsfromitsin
volve
mentwithaninvesteeto
controltheinvestee.Suchreturnsmusthavethepotentialtovaryasaresultoftheinvestee'sper
for
manceandcanbepositive,negative,orboth.[IFRS10:15]
Aparentmustnotonlyhavepoweroveraninvesteeandexposureorrightstovariablereturnsfromitsin
volve
mentwiththeinvestee,aparentmustalsohavetheabilitytouseitspowerovertheinvesteeto
affectitsreturnsfromitsin
volve
mentwiththeinvestee.[IFRS10:17].
Whenassessingwhetheraninvestorcontrolsaninvesteeaninvestorwithde
ci
sionmak
ingrightsde
ter
mineswhetheritactsasprincipalorasanagentofotherparties.Anumberoffactorsarecon
sid
e redin
makingthisas
sess
ment.Forinstance,there
mu
n er
a
tionofthede
ci
sionmakeriscon
sid
e redinde
ter
min
ingwhetheritisanagent.[IFRS10:B58,IFRS10:B60]
Accountingre
quire
ments
Prepa
ra
tionofcon
s ol
i
datedfinancialstate
ments
Aparentpreparescon
sol
i
mentsusinguniformaccountingpoliciesforliketrans
a c
tions
andothereventsinsimilarcir
cum
stances.[IFRS10:19]
However,aparentneednotpresentcon
sol
i
mentsifitmeetsallofthefollowingcon
d i
3/7
1/13/2015
tions:[IFRS10:4(a)]
itisawhollyownedsub
sidiaryorisapar
tiallyownedsub
sidiaryofanotherentityanditsother
owners,includingthosenototherwiseentitledtovote,havebeeninformedabout,anddonot
objectto,theparentnotpre
sent
ingcon
sol
i
ments
itsdebtorequityin
stru
mentsarenottradedinapublicmarket(adomesticorforeignstock
exchangeoranoverthecountermarket,includinglocalandregionalmarkets)
itdidnotfile,norisitintheprocessoffiling,itsfinancialstate
mentswithase
cu
ri
tiescom
mis
sion
orotherreg
u
la
toryorganisationforthepurposeofissuinganyclassofin
stru
mentsinapublic
market,and
itsultimateoranyin
ter
me
d i
a teparentoftheparentproducesfinancialstate
mentsavailablefor
publicusethatcomplywithIFRSs,inwhichsub
sidiariesarecon
sol
i
d atedoraremeasuredatfair
valuethroughprofitorlossinac
cor
d ancewithIFRS10.*
*Fairvaluemea
sure
mentclauseaddedbyIn
vest
sol
i
d a
tion
Exception(Amend
mentstoIFRS10,IFRS12andIAS28)amend
In
vest
mententitiesarepro
h ib
itedfromcon
sol
i
d at
ingpar
tic
u
larsub
sidiaries(seefurtherin
for
ma
tionbelow).
Fur
ther
more,postem
p loy
mentbenefitplansorotherlongtermemployeebenefitplanstowhichIAS19
EmployeeBenefitsappliesarenotrequiredtoapplythere
q uire
mentsofIFRS10.[IFRS10:4B]
Con
s ol
i
da
tionpro
c e
dures
Con
sol
i
ments:[IFRS10:B86]
combinelikeitemsofassets,li
a
b il
i
ties,equity,income,expensesandcashflowsoftheparent
withthoseofitssub
sidiaries
offset(eliminate)thecarryingamountoftheparent'sin
vest
mentineachsub
sidiaryandthe
parent'sportionofequityofeachsub
sidiary(IFRS3BusinessCom
b i
n a
tionsexplainshowto
accountforanyrelatedgoodwill)
eliminateinfullin
tra
g roupassetsandli
a
b il
i
ties,equity,income,expensesandcashflowsrelating
totrans
a c
tionsbetweenentitiesofthegroup(profitsorlossesresultingfromin
tra
g rouptrans
a c
tionsthatarerecog
n isedinassets,suchasinventoryandfixedassets,areelim
i
n atedinfull).
Areportingentityincludestheincomeandexpensesofasub
sidiaryinthecon
sol
i
mentsfromthedateitgainscontroluntilthedatewhenthereportingentityceasestocontrolthesub
sidiary.Incomeandexpensesofthesub
sidiaryarebasedontheamountsoftheassetsandli
a
b il
i
ties
recog
n isedinthecon
sol
i
mentsattheac
q ui
si
tiondate.[IFRS10:B88]
Theparentandsub
sidiariesarerequiredtohavethesamereportingdates,orcon
sol
i
d a
tionbasedonad
di
tionalfinancialin
for
ma
tionpreparedbysub
sidiary,unlessim
p rac
ti
ca
b le.Whereim
p rac
ti
ca
b le,themost
recentfinancialstate
mentsofthesub
sidiaryareused,adjustedfortheeffectsofsig
n if
i
canttrans
a c
tions
oreventsbetweenthereportingdatesofthesub
sidiaryandcon
sol
i
ments.Thedif
fer
encebetweenthedateofthesub
sidiary'sfinancialstate
mentsandthatofthecon
sol
i
d atedfinancial
state
mentsshallbenomorethanthreemonths[IFRS10:B92,IFRS10:B93]
Noncon
trol
linginterests(NCIs)
4/7
1/13/2015
Aparentpresentsnoncon
trol
linginterestsinitscon
sol
i
d atedstatementoffinancialpositionwithinequity,
sep
a
ratelyfromtheequityoftheownersoftheparent.[IFRS10:22]
Areportingentityat
trib
u testheprofitorlossandeachcomponentofothercom
p re
h en
siveincometothe
ownersoftheparentandtothenoncon
trol
linginterests.Thepro
p or
tionallocatedtotheparentandnon
con
trol
linginterestsarede
ter
minedonthebasisofpresentownershipinterests.[IFRS10:B94,IFRS
10:B89]
Thereportingentityalsoat
trib
u testotalcom
p re
h en
siveincometotheownersoftheparentandtothe
noncon
trol
linginterestsevenifthisresultsinthenoncon
trol
linginterestshavingadeficitbalance.[IFRS
10:B94]
Changesinownershipinterests
Changesinaparent'sownershipinterestinasub
sidiarythatdonotresultintheparentlosingcontrolof
thesub
sidiaryareequitytrans
a c
tions(i.e.trans
a c
tionswithownersintheircapacityasowners).Whenthe
pro
p or
tionoftheequityheldbynoncon
trol
linginterestschanges,thecarryingamountsofthecon
trol
ling
andnoncon
trol
linginterestsareaadjustedtoreflectthechangesintheirrelativeinterestsinthesub
sidiary.Anydif
fer
e ncebetweentheamountbywhichthenoncon
trol
linginterestsareadjustedandthe
fairvalueofthecon
sid
e r
a
tionpaidorreceivedisrecog
n iseddirectlyinequityandat
trib
u tedtotheowners
oftheparent.[IFRS10:23,IFRS10:B96]
Ifaparentlosescontrolofasub
sidiary,theparent[IFRS10:25]:
dere
cog
n isestheassetsandli
a
b il
i
tiesoftheformersub
sidiaryfromthecon
sol
i
d atedstatementof
financialposition
recog
n isesanyin
vest
mentretainedintheformersub
sidiarywhencontrolislostandsub
se
q uently
accountsforitandforanyamountsowedbyortotheformersub
sidiaryinac
cor
d ancewith
relevantIFRSs.Thatretainedinterestisre
mea
suredandthere
mea
suredvalueisregardedasthe
fairvalueoninitialrecog
n i
tionofafinancialassetinac
cor
stru
ments
or,whenap
p ro
p ri
a te,thecostoninitialrecog
n i
tionofanin
vest
mentinanassociateorjoint
venture
recog
n isesthegainorlossas
so
ci
a tedwiththelossofcontrolat
trib
u t
a bletotheformercon
trol
ling
interest.
Ifaparentlosescontrolofasub
sidiarythatdoesnotcontainabusinessinatrans
a c
tionwithan
associateorajointventuregainsorlossesresultingfromthosetrans
a c
tionsarerecog
n isedinthe
parent'sprofitorlossonlytotheextentoftheunrelatedinvestors'interestsinthatassociateorjoint
venture.*
*AddedbySaleorCon
tri
b u
tionofAssetsbetweenanInvestoranditsAssociateorJointVentureamend
In
v est
mententitiescon
s ol
i
da
tionexemption
[Note:Thein
vest
mententitycon
sol
i
d a
tionexemptionwasin
tro
d ucedbyIn
vest
mentEntities,issuedon31
October2012andeffectiveforannualperiodsbeginningonorafter1January2014.]
IFRS10containsspecialaccountingre
q uire
mentsforin
vest
mententities.Whereanentitymeetsthede
f
i
5/7
1/13/2015
n
i
tionofan'in
vest
mententity'(seeabove),itdoesnotcon
sol
i
d ateitssub
sidiaries,orapplyIFRS3
BusinessCom
b i
n a
tionswhenitobtainscontrolofanotherentity.[IFRS10:31]
Anentityisrequiredtoconsiderallfactsandcir
cum
stanceswhenassessingwhetheritisanin
vest
ment
entity,includingitspurposeanddesign.IFRS10providesthatanin
vest
mententityshouldhavethe
followingtypicalchar
a c
ter
is
tics[IFRS10:28]:
ithasmorethanonein
vest
ment
ithasmorethanoneinvestor
ithasinvestorsthatarenotrelatedpartiesoftheentity
ithasownershipinterestsintheformofequityorsimilarinterests.
Theabsenceofanyofthesetypicalchar
a c
ter
is
ticsdoesnotnec
e s
sar
ilydis
q ual
ifyanentityfrombeing
clas
si
fiedasanin
vest
mententity.
Anin
vest
mententityisrequiredtomeasureanin
vest
mentinasub
sidiaryatfairvaluethroughprofitor
lossinac
cor
stru
mentsorIAS39FinancialIn
stru
ments:Recog
n i
tionand
Mea
sure
ment.[IFRS10:31]
However,anin
vest
mententityisstillrequiredtocon
sol
i
d ateasub
sidiarywherethatsub
sidiaryprovides
servicesthatrelatetothein
vest
mententitysin
vest
mentac
tiv
i
ties.[IFRS10:32]*
*In
vest
sol
i
d a
tionException(Amend
mentstoIFRS10,IFRS12andIAS
28)clarifies,effective1January2016,thatthisrelatestoasub
sidiarythatisnotitselfanin
vest
mententity
andwhosemainpurposeandac
tiv
i
tiesareprovidingservicesthatrelatetothein
vest
mententity'sin
vest
mentac
tiv
i
ties.
Becauseanin
vest
mententityisnotrequiredtocon
sol
i
d ateitssub
sidiaries,in
tra
g rouprelatedpartytrans
ac
tionsandout
stand
ingbalancesarenotelim
i
n ated[IAS24.4,IAS39.80].
Specialre
q uire
mentsapplywhereanentitybecomes,orceasestobe,anin
vest
mententity.
[IFRS10:B100B101]
Theexemptionfromcon
sol
i
d a
tiononlyappliestothein
vest
mententityitself.Ac
cord
ingly,aparentofan
in
vest
mententityisrequiredtocon
sol
i
d ateallentitiesthatitcontrols,includingthosecon
trolledthrough
anin
vest
mententitysub
sidiary,unlesstheparentitselfisanin
vest
mententity.[IFRS10:33]
Dis
c lo
s ure
Therearenodis
clo
suresspecifiedinIFRS10.Instead,IFRS12Dis
clo
outlinesthedis
clo
suresrequired.
Ap
plic
a
bil
ityandearlyadoption
Note:Thissectionhasbeenupdatedtoreflecttheamend
mentstoIFRS10madeinJune2012and
October2012.
IFRS10isap
p lic
a
b letoannualreportingperiodsbeginningonorafter1January2013[IFRS10:C1].
Ret
ro
spec
tiveap
p li
ca
tionisgenerallyrequiredinac
cor
d ancewithIAS8AccountingPolicies,Changesin
AccountingEstimatesandErrors[IFRS10:C2].However,anentityisnotrequiredtomakead
just
mentsto
6/7
1/13/2015
theaccountingforitsin
volve
mentwithentitiesthatwerepre
vi
o uslycon
sol
i
d atedandcontinuetobecon
sol
i
d ated,orentitiesthatwerepre
vi
o uslyun
con
sol
i
d atedandcontinuenottobecon
sol
i
d atedatthedate
ofinitialap
p li
ca
tionoftheIFRS[IFRS10:C3].
Fur
ther
more,anentityisnotrequiredtopresentthequan
ti
ta
tivein
for
ma
tionrequiredbyparagraph28(f)of
IAS8fortheannualperiodim
me
d i
a telyprecedingthedateofinitialap
p li
ca
tionofthestandard(the
beginningoftheannualreportingperiodforwhichIFRS10isfirstapplied)[IFRS10:C2AC2B].However,
anentitymaychoosetopresentadjustedcom
p ar
a
tivein
for
ma
tionforearlierreportingperiods,anymust
clearlyidentifyanyun
a d
justedcom
p ar
a
tivein
for
ma
tionandexplainthebasisonwhichthecom
p ar
a
tive
in
for
ma
tionhasbeenprepared[IFRS10.C6AC6B].
IFRS10pre
scribesmodifiedaccountingonitsfirstap
p li
ca
tioninthefollowingcir
cum
stances:
anentitycon
sol
i
d atesanentitynotpre
vi
o uslycon
sol
i
d ated[IFRS10:C4C4C]
anentitynolongercon
sol
i
d atesanentitythatwaspre
vi
o uslycon
sol
i
d ated[IFRS10:C5C5A]
inrelationtocertainamend
mentstoIAS27madein2008thathavebeencarriedforwardinto
IFRS10[IFRS10:C6].
AnentitymayapplyIFRS10toanearlieraccountingperiod,butifdoingsoitmustdisclosethefactthatis
hasearlyadoptedthestandardandalsoapply:
IFRS11JointArrange
ments
IFRS12Dis
clo
IAS27SeparateFinancialState
ments(asamendedin2011)
IAS28In
vest
mentsinAs
so
ci
a tesandJointVentures(asamendedin2011).
Theamend
mentsmadebyIn
vest
mentEntitiesareap
p lic
a
b letoannualreportingperiodsbeginningonor
after1January2014[IFRS10:C1B].Atthedateofinitialap
p li
ca
tionoftheamend
ments,anentity
assesseswhetheritisanin
vest
mententityonthebasisofthefactsandcir
cum
stancesthatexistatthat
dateandad
d i
tionaltran
si
tionalpro
vi
sionsapply[IFRS10:C3BC3F].
Like
74
Contactus
About
Legal
Privacy
FAQs
information.
7/7
1/13/2015
IFRS11JointArrangements
QuickArticleLinks
Overview
IFRS11JointArrange
mentsoutlinestheaccountingbyentitiesthatjointlycontrolanarrange
ment.Joint
controlinvolvesthecon
trac
tu
a llyagreedsharingofcontrolandarrange
mentssubjecttojointcontrolare
clas
si
fiedaseitherajointventure(rep
re
sent
ingashareofnetassetsandequityaccounted)orajoint
operation(rep
re
sent
ingrightstoassetsandoblig
a
tionsforli
a
b il
i
ties,accountedforac
cord
ingly).
IFRS11wasissuedinMay2011andappliestoannualreportingperiodsbeginningonorafter1January
2013.
HistoryofIFRS11
Date
November2004
De
v el
op
ment
Projectonjointarrange
mentsaddedtotheIASB's
agenda
13September2007ExposureDraftED9JointArrange
mentspublished
12May2011
IFRS11JointArrange
mentsissued
28June2012
AmendedbyCon
sol
i
ments,Joint
Arrange
mentsandDis
clo
sureofInterestsinOther
Entities:Tran
si
tionGuidance
AmendedbyAccountingforAc
q ui
si
tionsofInterestsin
JointOp
e r
a
tions(Amend
mentstoIFRS11)
6May2014
Comments
Historyoftheproject
Commentdeadline11
January2008
beginningonorafter1
January2013
beginningonorafter1
January2013
beginningonorafter1
January2016
RelatedIn
ter
pre
ta
tions
IFRS11su
per
s ededSIC13JointlyCon
trolledEntitiesNonMon
e
taryCon
tri
b u
tionsbyVenturers
Amend
mentsundercon
sid
er
a
tionbytheIASB
TheIASBhassignalledanintentiontoconductapostim
p le
men
ta
tionreviewofIFRS11,com
menc
ingin
2016.
Pub
li
ca
tionsandresources
IFRSinFocusNewslet
terIASBissuesnewstandardonjointarrange
mentssum
maris
ingthere
quire
EffectanalysisforIFRS11(linktoIASBwebsite)
SummaryofIFRS11
Coreprinciple
1/6
1/13/2015
ThecoreprincipleofIFRS11isthatapartytoajointarrange
mentde
ter
minesthetypeofjointarrange
mentinwhichitisinvolvedbyassessingitsrightsandoblig
a
tionsandaccountsforthoserightsandoblig
a
tionsinac
cor
d ancewiththattypeofjointarrange
ment.[IFRS11:12]
Keyde
f
i
n
i
tions
[IFRS11:AppendixA]
Jointarrange
ment
Anarrange
mentofwhichtwoormorepartieshavejointcontrol
Jointcontrol
Thecon
trac
tu
a llyagreedsharingofcontrolofanarrange
ment,whichexistsonlywhendecisionsabout
therelevantac
tiv
i
tiesrequiretheunanimousconsentofthepartiessharingcontrol
Jointoperation
Ajointarrange
mentwherebythepartiesthathavejointcontrolofthearrange
menthaverightstothe
assets,andoblig
a
tionsfortheli
a
b il
i
ties,relatingtothearrange
ment
Jointventure
Ajointarrange
menthaverightstothenet
assetsofthearrange
ment
Jointventurer
Apartytoajointventurethathasjointcontrolofthatjointventure
Partytoajointarrange
ment
Anentitythatpar
tic
i
p atesinajointarrange
ment,re
g ard
lessofwhetherthatentityhasjointcontrolofthe
arrange
ment
Separatevehicle
Asep
a
ratelyiden
ti
fi
a blefinancialstructure,includingseparatelegalentitiesorentitiesrecog
n isedby
statute,re
g ard
lessofwhetherthoseentitieshavealegalper
son
a l
ity
Jointarrange
ments
Ajointarrange
mentisanarrange
mentofwhichtwoormorepartieshavejointcontrol.[IFRS11:4]
Ajointarrange
menthasthefollowingchar
a c
ter
is
tics:[IFRS11:5]
thepartiesareboundbyacon
trac
tualarrange
ment,and
thecon
trac
tualarrange
mentgivestwoormoreofthosepartiesjointcontrolofthearrange
ment.
Ajointarrange
mentiseitherajointoperationorajointventure.[IFRS11:6]
Jointcontrol
Jointcontrolisthecon
trac
tu
a llyagreedsharingofcontrolofanarrange
ment,whichexistsonlywhen
decisionsabouttherelevantac
tiv
i
tiesrequiretheunanimousconsentofthepartiessharingcontrol.
[IFRS11:7]
Beforeassessingwhetheranentityhasjointcontroloveranarrange
ment,anentityfirstassesseswhether
theparties,oragroupoftheparties,controlthearrange
ment(inac
cor
d ancewiththede
f
i
n
i
tionofcontrol
inIFRS10Con
sol
i
ments).[IFRS11:B5]
Aftercon
clud
ingthatalltheparties,oragroupoftheparties,controlthearrange
mentcol
lec
tively,an
entityshallassesswhetherithasjointcontrolofthearrange
ment.Jointcontrolexistsonlywhendecisions
2/6
1/13/2015
abouttherelevantac
tiv
i
tiesrequiretheunanimousconsentofthepartiesthatcol
lec
tivelycontrolthe
arrange
ment.[IFRS11:B6]
There
q uire
mentforunanimousconsentmeansthatanypartywithjointcontrolofthearrange
mentcan
preventanyoftheotherparties,oragroupoftheparties,frommakinguni
lat
e raldecisions(aboutthe
relevantac
tiv
i
ties)withoutitsconsent.[IFRS11:B9]
Typesofjointarrange
ments
Jointarrange
mentsareeitherjointop
e r
a
tionsorjointventures:
Ajointoperationisajointarrange
menthaverightstotheassets,andoblig
a
tionsfortheli
a
b il
i
ties,relatingtothearrange
ment.
Thosepartiesarecalledjointoperators.[IFRS11:15]
Ajointventureisajointarrange
menthaverightstothenetassetsofthearrange
ment.Thosepartiesarecalledjointventurers.
[IFRS11:16]
Clas
s i
fy
ingjointarrange
ments
Theclas
si
fi
ca
tionofajointarrange
mentasajointoperationorajointventuredependsupontherights
andoblig
a
tionsofthepartiestothearrange
ment.Anentityde
ter
minesthetypeofjointarrange
mentin
whichitisinvolvedbycon
sid
e r
ingthestructureandformofthearrange
ment,thetermsagreedbythe
partiesinthecon
trac
tualarrange
mentandotherfactsandcir
cum
stances.[IFRS11:6,IFRS11:14,
IFRS11:17]
Re
g ard
lessofthepurpose,structureorformofthearrange
ment,theclas
si
fi
ca
tionofjointarrange
ments
dependsupontheparties'rightsandoblig
a
tionsarisingfromthearrange
ment.[IFRS11:B14
IFRS11:B15]
Ajointarrange
mentinwhichtheassetsandli
a
b il
i
tiesrelatingtothearrange
mentareheldinaseparate
vehiclecanbeeitherajointventureorajointoperation.[IFRS11:B19]
Ajointarrange
mentthatisnotstruc
turedthroughaseparatevehicleisajointoperation.Insuchcases,
thecon
trac
tualarrange
mentes
tab
lishestheparties'rightstotheassets,andoblig
a
tionsfortheli
a
b il
i
ties,
relatingtothearrange
ment,andtheparties'rightstothecor
re
spond
ingrevenuesandoblig
a
tionsforthe
cor
re
spond
ingexpenses.[IFRS11:B16]
Financialstate
mentsofpartiestoajointarrange
ment
Jointop
e r
a
tions
Ajointoperatorrecog
n isesinrelationtoitsinterestinajointoperation:[IFRS11:20]
itsassets,includingitsshareofanyassetsheldjointly
itsli
a
b il
i
ties,includingitsshareofanyli
a
b il
i
tiesincurredjointly
itsrevenuefromthesaleofitsshareoftheoutputofthejointoperation
itsshareoftherevenuefromthesaleoftheoutputbythejointoperationand
itsexpenses,includingitsshareofanyexpensesincurredjointly.
3/6
1/13/2015
Ajointoperatoraccountsfortheassets,li
a
b il
i
ties,revenuesandexpensesrelatingtoitsin
volve
mentina
jointoperationinac
cor
d ancewiththerelevantIFRSs.[IFRS11:21]
Theacquirerofaninterestinajointoperationinwhichtheactivitycon
sti
tutesabusiness,asdefinedin
IFRS3BusinessCom
b i
n a
tions,isrequiredtoapplyalloftheprin
ci
p lesonbusinesscom
b i
n a
tions
accountinginIFRS3andotherIFRSswiththeexceptionofthoseprin
ci
p lesthatconflictwiththe
guidanceinIFRS11.[IFRS11:21A]Thesere
q uire
mentsapplybothtotheinitialac
q ui
si
tionofaninterest
inajointoperation,andtheac
q ui
si
tionofanad
d i
tionalinterestinajointoperation(inthelattercase,pre
vi
o uslyheldinterestsarenotre
mea
sured).[IFRS11:B33C]
Note:There
q uire
mentsabovewerein
tro
d ucedbyAccountingforAc
q ui
si
tionsofInterestsinJointOp
e r
a
tions,whichappliestoannualperiodsbeginningonorafter1January2016onaprospec
tivebasistoac
qui
si
tionsofinterestsinjointop
e r
a
tionsoccurringfromthebeginningofthefirstperiodinwhichthe
amend
mentsareapplied.
Apartythatpar
tic
i
p atesin,butdoesnothavejointcontrolof,ajointoperationshallalsoaccountforits
interestinthearrange
mentinac
cor
d ancewiththeaboveifthatpartyhasrightstotheassets,andoblig
a
tionsfortheli
a
b il
i
ties,relatingtothejointoperation.[IFRS11:23]
Jointventures
Ajointventurerrecog
n isesitsinterestinajointventureasanin
vest
mentandshallaccountforthatin
vest
mentusingtheequitymethodinac
cor
d ancewithIAS28In
vest
mentsinAs
so
ci
a tesandJointVentures
unlesstheentityisexemptedfromapplyingtheequitymethodasspecifiedinthatstandard.[IFRS11:24]
Apartythatpar
tic
i
p atesin,butdoesnothavejointcontrolof,ajointventureaccountsforitsinterestinthe
arrange
mentinac
cor
stru
mentsunlessithassig
n if
i
cantinfluenceoverthe
jointventure,inwhichcaseitaccountsforitinac
cor
d ancewithIAS28(asamendedin2011).
[IFRS11:25]
SeparateFinancialState
ments
Theaccountingforjointarrange
mentsinanentity'sseparatefinancialstate
mentsdependsonthein
volve
mentoftheentityinthatjointarrange
mentandthetypeofthejointarrange
ment:
Iftheentityisajointoperatororjointventureritshallaccountforitsinterestin
ajointoperationinac
cor
d ancewithpara
g raphs2022
ajointventureinac
cor
d ancewithparagraph10ofIAS27SeparateFinancialState
ments.
[IFRS11:26]
Iftheentityisapartythatpar
tic
i
p atesin,butdoesnothavejointcontrolof,ajointarrange
ment
shallaccountforitsinterestin:
ajointoperationinac
cor
d ancewithpara
g raphs23
ajointventureinac
cor
d ancewithIFRS9,unlesstheentityhassig
n if
i
cantinfluenceover
thejointventure,inwhichcaseitshallapplyparagraph10ofIAS27(asamendedin
2011).[IFRS11:27]
Dis
c lo
s ure
Therearenodis
clo
suresspecifiedinIFRS11.Instead,IFRS12Dis
clo
4/6
1/13/2015
outlinesthedis
clo
suresrequired.
Ap
plic
a
bil
ityandearlyadoption
Note:Thissectionhasbeenupdatedtoreflecttheamend
mentstoIFRS11madeinJune2012.
IFRS11isap
p lic
a
b letoannualreportingperiodsbeginningonorafter1January2013.
[IFRS11:AppendixC1]
WhenIFRS11isfirstapplied,anentityneedonlypresentthequan
ti
ta
tivein
for
ma
tionrequiredby
paragraph28(f)ofIAS8fortheannualperiodim
me
d i
a telyprecedingthefirstannualperiodforwhichthe
standardisapplied[IFRS11:C1B]
Specialtran
si
tionalpro
vi
sionsareincludedfor:[IFRS11.
AppendixC2C13]
tran
si
tionfrompro
p or
tion
a tecon
sol
i
d a
tiontotheequitymethodforjointventures
tran
si
tionfromtheequitymethodtoaccountingforassetsandli
a
b il
i
tiesforjointop
e r
a
tions
tran
si
tioninanentity'sseparatefinancialstate
mentsforajointoperationpre
vi
o uslyaccountedfor
asanin
vest
mentatcost.
Ingeneralterms,thespecialtran
si
tionalad
just
mentsarerequiredtobeappliedatthebeginningoftheim
me
d i
a telyprecedingperiod(ratherthanthethebeginningoftheearliestperiodpresented).However,an
entitymaychoosetopresentadjustedcom
p ar
a
tivein
for
ma
tionforearlierreportingperiods,andmust
clearlyidentifyanyun
a d
justedcom
p ar
a
tivein
for
ma
tionandexplainthebasisonwhichthecom
p ar
a
tive
in
for
ma
tionhasbeenprepared[IFRS11.C12AC12B].
AnentitymayapplyIFRS11toanearlieraccountingperiod,butifdoingsoitmustdisclosethefactthatis
hasearlyadoptedthestandardandalsoapply:[IFRS11.
AppendixC1]
IFRS10Con
sol
i
ments
IFRS12Dis
clo
ments(asamendedin2011)
IAS28In
vest
mentsinAs
so
ci
a tesandJointVentures(asamendedin2011).
Like
30
Contactus
About
Legal
Privacy
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6/6
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IFRS12DisclosureofInterestsinOtherEntities
QuickArticleLinks
Overview
IFRS12Dis
clo
sureofInterestsinOtherEntitiesisacon
sol
i
d ateddis
clo
surestandardrequiringawide
rangeofdis
clo
suresaboutanentity'sinterestsinsub
sidiaries,jointarrange
ments,as
so
ci
a tesandun
con
sol
i
d ated'struc
turedentities'.Dis
clo
suresarepresentedasaseriesofob
jec
tives,withdetailedguidance
onsat
is
fy
ingthoseob
jec
tives.
IFRS12wasissuedinMay2011andappliestoannualperiodsbeginningonorafter1January2013.
HistoryofIFRS12
Date
April2002
De
v el
op
ment
Projectoncon
sol
i
d a
tionaddedtotheIASB'sagenda
November2004
Projectonjointarrange
mentsaddedtotheIASB'sagenda
13September2007ED9JointArrange
mentspublished
18December2008 ED10Con
sol
i
mentspublished
January2010
12May2011
28June2012
31October2012
Comments
Historyofthe
project
Historyofthe
project
Comment
deadline11
January2008
Comment
deadline20
March2009
IASBdecisiontoissueaseparatedis
clo
surestandardad
d ress
inga
reportingentity'sin
volve
mentwithotherentitiesthatarenotinthe
scopeofIAS39/IFRS9(includingsub
sidiaries,as
so
ci
a tesandjoint
arrange
mentsandun
con
sol
i
d atedSPEs/struc
turedentities)
IFRS12Dis
clo
sureofInterestsinOtherEntitiesissued
Effectivefor
annualperiods
beginningonor
after1January
2013
AmendedbyCon
sol
i
ments,JointArrange
ments Effectivefor
andDis
clo
sureofInterestsinOtherEntities:Tran
si
tionGuidance
annualperiods
(projecthistory)
beginningonor
after1January
2013
AmendedbyIn
vest
mentEntities(Amend
mentstoIFRS10,IFRS12 Effectivefor
andIAS27)(projecthistory)
annualperiods
beginningonor
after1January
2014
1/5
1/13/2015
18December2014 AmendedbyIn
vest
sol
i
d a
tion
Exception(Amend
mentstoIFRS10,IFRS12andIAS28)(project
history)
Effectivefor
annualperiods
beginningonor
after1January
2016
Amend
mentsundercon
sid
er
a
tionbytheIASB
IFRS13Unitofaccount
TheIASBhassignalledanintentiontoconductapostim
p le
men
ta
menc
ingin
2016.
RelatedIn
ter
pre
ta
tions
None
Pub
li
ca
tionsandresources
IFRSinFocusNewslet
terIASBissuesnewstandardondis
clo
sureofinterestsinotherentities
sum
maris
ingthere
q uire
EffectanalysisforIFRS10andIFRS12(linktoIASBwebsite)
SummaryofIFRS12
Objectiveandscope
TheobjectiveofIFRS12istorequirethedis
clo
sureofin
for
ma
tionthatenablesusersoffinancialstate
mentstoevaluate:[IFRS12:1]
thenatureof,andrisksas
so
ci
a tedwith,itsinterestsinotherentities
theeffectsofthoseinterestsonitsfinancialposition,financialper
for
manceandcashflows.
Wherethedis
clo
suresrequiredbyIFRS12,togetherwiththedis
clo
suresrequiredbyotherIFRSs,donot
meettheaboveobjective,anentityisrequiredtodisclosewhateverad
d i
tionalin
for
ma
tionisnecessaryto
meettheobjective.[IFRS12:3]
IFRS12isrequiredtobeappliedbyanentitythathasaninterestinanyofthefollowing:[IFRS12:5]
sub
sidiaries
jointarrange
ments(jointop
e r
a
tionsorjointventures)
as
so
ci
a tes
un
con
sol
i
d atedstruc
turedentities
IFRS12doesnotapplytocertainemployeebenefitplans,separatefinancialstate
mentstowhichIAS27
SeparateFinancialState
mentsapplies(exceptinrelationtoun
con
sol
i
d atedstruc
turedentitiesandin
vest
mententitiesinsomecases),certaininterestsinjointventuresheldbyanentitythatdoesnotsharein
jointcontrol,andthemajorityofinterestsinanotherentityaccountedforinac
cor
d ancewithIFRS9
FinancialIn
stru
ments.[IFRS12:6]
Anin
vest
mententitythatpreparesfinancialstate
mentsinwhichallofitssub
sidiariesaremeasuredatfair
valuethroughprofitorlosspresentsthedis
clo
suresrelatingtoin
vest
mententitiesrequiredbyIFRS12.
[IFRS12:6]*
2/5
1/13/2015
*AddedbyIn
vest
sol
i
d a
tionException(Amend
mentstoIFRS10,IFRS12
andIAS28)amend
Keyde
f
i
n
i
tions
[IFRS12:AppendixA]
Interestinanotherentity
Referstocon
trac
tualandnoncon
trac
tualin
volve
mentthatexposesanentitytovari
a bil
ityofreturnsfrom
theper
for
manceoftheotherentity.Aninterestinanotherentitycanbeevidencedby,butisnotlimitedto,
theholdingofequityordebtin
stru
mentsaswellasotherformsofin
volve
mentsuchastheprovisionof
funding,liquiditysupport,crediten
h ance
mentandguar
a n
tees.Itincludesthemeansbywhichanentity
hascontrolorjointcontrolof,orsig
n if
i
cantinfluenceover,anotherentity.Anentitydoesnotnec
e s
sar
ily
haveaninterestinanotherentitysolelybecauseofatypicalcustomersupplierre
la
tion
ship.
Struc
turedentity
Anentitythathasbeendesignedsothatvotingorsimilarrightsarenotthedominantfactorindeciding
whocontrolstheentity,suchaswhenanyvotingrightsrelatetoad
min
is
tra
tivetasksonlyandtherelevant
ac
tiv
i
tiesaredirectedbymeansofcon
trac
tualarrange
ments.
Dis
c lo
s uresrequired
Importantnote:Thesummaryofdis
clo
suresthatfollowsisahighlevelsummaryofthemainre
q uire
ments
ofIFRS12.Itdoesnotlisteveryspecificdis
clo
surerequiredbythestandard,butinsteadhigh
lightsthe
broadob
jec
tives,cat
e
g oriesandnatureofthedis
clo
suresrequired.IFRS12listsspecificexamplesand
ad
d i
tionaldis
clo
sureswhichfurtherexpanduponthedis
clo
sureob
jec
tives,andincludesotherguidance
onthedis
clo
suresrequired.Ac
cord
ingly,readersshouldnotconsiderthistobeacom
p re
h en
siveor
completelistingofthedis
clo
surere
q uire
mentsofIFRS12.
Sig
nif
i
c antjudge
mentsandas
s ump
tions
Anentitydisclosesin
for
ma
tionaboutsig
n if
i
cantjudge
mentsandas
sump
tionsithasmade(andchanges
inthosejudge
mentsandas
sump
tions)inde
ter
min
ing:[IFRS12:7]
thatitcontrolsanotherentity
thatithasjointcontrolofanarrange
mentorsig
n if
i
cantinfluenceoveranotherentity
thetypeofjointarrange
ment(i.e.jointoperationorjointventure)whenthearrange
menthasbeen
struc
turedthroughaseparatevehicle.
Interestsinsub
s idiaries
for
ma
tionthatenablesusersofitscon
sol
i
mentsto:[IFRS
12:10]
un
d er
standthecom
p o
si
tionofthegroup
un
d er
standtheinterestthatnoncon
trol
linginterestshaveinthegroup'sac
tiv
i
tiesandcashflows
evaluatethenatureandextentofsig
n if
i
cantre
stric
tionsonitsabilitytoaccessoruseassets,and
settleli
a
b il
i
ties,ofthegroup
3/5
1/13/2015
evaluatethenatureof,andchangesin,therisksas
so
ci
a tedwithitsinterestsincon
sol
i
d ated
struc
turedentities
evaluatethecon
se
q uencesofchangesinitsownershipinterestinasub
sidiarythatdonotresult
inalossofcontrol
evaluatethecon
se
q uencesoflosingcontrolofasub
sidiaryduringthereportingperiod.
Interestsinun
c on
s ol
i
datedsub
s idiaries
[Note:Thein
vest
mententitycon
sol
i
d a
tionexemptionreferredtointhissectionwasin
tro
d ucedbyIn
vest
mentEntities,issuedon31October2012andeffectiveforannualperiodsbeginningonorafter1January
2014.]
Inac
cor
d ancewithIFRS10Con
sol
i
ments,anin
vest
mententityisrequiredtoapply
theexceptiontocon
sol
i
d a
tionandinsteadaccountforitsin
vest
mentinasub
sidiaryatfairvaluethrough
profitorloss.[IFRS10:31].
Whereanentityisanin
vest
mententity,IFRS12requiresad
d i
tionaldis
clo
sure,including:
thefacttheentityisanin
vest
mententity[IFRS12:19A]
in
for
ma
tionaboutsig
n if
i
cantjudge
mentsandas
sump
tionsithasmadeinde
ter
min
ingthatitisan
in
vest
mententity,andspecif
i
callywheretheentitydoesnothaveoneormoreofthe'typicalchar
ac
ter
is
tics'ofanin
vest
mententity[IFRS12:9A]
detailsofsub
sidiariesthathavenotbeencon
sol
i
d ated(name,placeofbusiness,ownership
interestsheld)[IFRS12:19B]
detailsofthere
la
tion
shipandcertaintrans
a c
tionsbetweenthein
vest
mententityandthesub
sidiary(e.g.re
stric
tionsontransferoffunds,com
mit
ments,supportarrange
ments,con
trac
tual
arrange
ments)[IFRS12:19D19G]
in
for
ma
tionwhereanentitybecomes,orceasestobe,anin
vest
mententity[IFRS12:9B]
Anentitymakingthesedis
clo
suresarenotrequiredtoprovidevariousotherdis
clo
suresrequiredbyIFRS
12[IFRS12:21A,IFRS12:25A].
Interestsinjointarrange
mentsandas
s o
c i
a tes
for
ma
mentstoevaluate:[IFRS12:20]
thenature,extentandfinancialeffectsofitsinterestsinjointarrange
mentsandas
so
ci
a tes,
includingthenatureandeffectsofitscon
trac
tualre
la
tion
shipwiththeotherinvestorswithjoint
controlof,orsig
n if
i
cantinfluenceover,jointarrange
mentsandas
so
ci
a tes
thenatureof,andchangesin,therisksas
so
ci
a tedwithitsinterestsinjointventuresandas
so
ci
ates.
Interestsinun
c on
s ol
i
datedstruc
turedentities
for
ma
mentsto:[IFRS12:24]
un
d er
standthenatureandextentofitsinterestsinun
con
sol
i
d atedstruc
turedentities
evaluatethenatureof,andchangesin,therisksas
so
ci
a tedwithitsinterestsinun
con
sol
i
d ated
struc
turedentities.
4/5
1/13/2015
Ap
plic
a
bil
ityandearlyadoption
[IFRS12:AppendixC]
IFRS12isap
p lic
a
b letoannualreportingperiodsbeginningonorafter1January2013.Earlyap
p li
ca
tion
ispermitted.
Thedis
clo
surere
q uire
mentsofIFRS12neednotbeappliedforanyperiodpresentedthatbeginsbefore
theannualperiodim
me
d i
a telyprecedingthefirstannualperiodforwhichIFRS12isapplied[IFRS
12:C2A]
Entitiesareen
cour
a gedtovol
u n
tar
ilyprovidethein
for
ma
tionrequiredbyIFRS12priortoitsadoption.
Providingsomeofthedis
clo
suresrequiredbyIFRS12doesnotcompelanentitytocomplywithallofthe
re
q uire
mentsoftheIFRSortoalsoapply:
IFRS10Con
sol
i
ments
IFRS11JointArrange
ments
ments(2011)
IAS28In
vest
mentsinAs
so
ci
a tesandJointVentures(2011).
Like
19
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IFRS13FairValueMeasurement
QuickArticleLinks
Overview
IFRS13FairValueMea
sure
mentappliestoIFRSsthatrequireorpermitfairvaluemea
sure
mentsordis
clo
suresandprovidesasingleIFRSframeworkformeasuringfairvalueandrequiresdis
clo
suresaboutfair
valuemea
sure
ment.TheStandarddefinesfairvalueonthebasisofan'exitprice'notionandusesa'fair
valuehierarchy',whichresultsinamar
ketbased,ratherthanen
tityspe
cific,mea
sure
ment.
IFRS13wasorig
i
n allyissuedinMay2011andappliestoannualperiodsbeginningonorafter1January
2013.
HistoryofIFRS13
Date
September2005
De
v el
op
ment
Comments
Projectonfairvaluemea
sure
mentaddedtothe
Historyoftheproject
IASB'sagenda
30November2006Dis
cus
sionPaperFairValueMea
sure
mentspublished Commentdeadline2April2007
28May2009
ExposureDraftFairValueMea
sure
mentpublished
Commentdeadline28
September2009
29June2010
ExposureDraftMea
sure
mentUn
cer
taintyAnalysis
Commentdeadline7September
Dis
clo
sureforFairValueMea
sure
mentspublished
2010
19August2010
StaffdraftofaIFRSonfairvaluemea
sure
ment
released
12May2011
IFRS13FairValueMea
sure
mentissued
2013
p rove
mentstoIFRSs2010 Amendmenttothebasisforcon
2012Cycle(shorttermre
ceiv
a blesandpayables)
clu
sionsonly
p rove
mentstoIFRSs2011 Effectiveforannualperiod
2013Cycle(scopeofportfolioexceptioninparagraph beginningonorafter1July
52)
2014
RelatedIn
ter
pre
ta
tions
None
Amend
mentsundercon
sid
er
a
tionbytheIASB
IFRS13Unitofaccount
ResearchprojectDiscountrates
Inaddition,theIASBhassignalledanintentiontoconductapostim
p le
men
ta
menc
ingin2015.
Pub
li
ca
tionsandresources
IFRSinFocusNewslet
terIASBissuesnewstandardonfairvaluemea
sure
mentanddis
clo
sure
sum
maris
ingthere
q uire
1/8
1/13/2015
SummaryofIFRS13
Objective
IFRS13:[IFRS13:1]
definesfairvalue
setsoutinasingleIFRSaframeworkformeasuringfairvalue
requiresdis
clo
suresaboutfairvaluemea
sure
ments.
IFRS13applieswhenanotherIFRSrequiresorpermitsfairvaluemea
sure
mentsordis
clo
suresaboutfair
valuemea
sure
ments(andmea
sure
ments,suchasfairvaluelesscoststosell,basedonfairvalueordis
clo
suresaboutthosemea
sure
ments),exceptfor:[IFRS13:57]
sharebasedpaymenttrans
a c
tionswithinthescopeofIFRS2SharebasedPayment
leasingtrans
a c
tionswithinthescopeofIAS17Leases
mea
sure
mentsthathavesomesim
i
lar
i
tiestofairvaluebutthatarenotfairvalue,suchasnetre
a l
is
a blevalueinIAS2In
ven
to
riesorvalueinuseinIAS36Im
p air
mentofAssets.
Ad
d i
tionalex
e mp
tionsapplytothedis
clo
suresrequiredbyIFRS13.
Keyde
f
i
n
i
tions
[IFRS13:AppendixA]
Fairvalue
Thepricethatwouldbereceivedtosellanassetorpaidtotransferaliabilityinanorderlytrans
a c
tion
betweenmarketpar
tic
i
p antsatthemea
sure
mentdate
Activemarket
Amarketinwhichtrans
a c
tionsfortheassetorliabilitytakeplacewithsuf
fi
cientfrequencyandvolumeto
providepricingin
for
ma
tiononanongoingbasis
Exitprice
Thepricethatwouldbereceivedtosellanassetorpaidtotransferaliability
Highestandbestuse
Theuseofanonfi
n an
cialassetbymarketpar
tic
i
p antsthatwouldmaximisethevalueoftheassetorthe
groupofassetsandli
a
b il
i
ties(e.g.abusiness)withinwhichtheassetwouldbeused
Mostad
v an
ta
geousmarket
Themarketthatmaximisestheamountthatwouldbereceivedtoselltheassetorminimisestheamount
thatwouldbepaidtotransfertheliability,aftertakingintoaccounttrans
a c
tioncostsandtransportcosts
Principalmarket
Themarketwiththegreatestvolumeandlevelofactivityfortheassetorliability
Fairvaluehierarchy
Overview
IFRS13seekstoincreasecon
sis
tencyandcom
p a
ra
b il
ityinfairvaluemea
sure
mentsandrelateddis
clo
suresthrougha'fairvaluehierarchy'.Thehierarchycat
e
g orisestheinputsusedinvaluationtech
n iques
intothreelevels.Thehierarchygivesthehighestpriorityto(un
a d
justed)quotedpricesinactivemarkets
foridenticalassetsorli
a
b il
i
tiesandthelowestprioritytoun
o b
serv
a bleinputs.[IFRS13:72]
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1/13/2015
Iftheinputsusedtomeasurefairvaluearecat
e
g orisedintodifferentlevelsofthefairvaluehierarchy,the
fairvaluemea
sure
mentiscat
e
g orisedinitsentiretyinthelevelofthelowestlevelinputthatissig
n if
i
cant
totheentiremea
sure
ment(basedontheap
p li
ca
tionofjudgement).[IFRS13:73]
Level1inputs
Level1inputsarequotedpricesinactivemarketsforidenticalassetsorli
a
b il
i
tiesthattheentitycan
accessatthemea
sure
mentdate.[IFRS13:76]
Aquotedmarketpriceinanactivemarketprovidesthemostreliableevidenceoffairvalueandisused
withoutad
just
menttomeasurefairvaluewheneveravailable,withlimitedex
cep
tions.[IFRS13:77]
Ifanentityholdsapositioninasingleassetorliabilityandtheassetorliabilityistradedinanactive
market,thefairvalueoftheassetorliabilityismeasuredwithinLevel1astheproductofthequotedprice
forthein
d i
vid
u alassetorliabilityandthequantityheldbytheentity,evenifthemarket'snormaldaily
tradingvolumeisnotsuf
fi
cienttoabsorbthequantityheldandplacingorderstosellthepositionina
singletrans
a c
tionmightaffectthequotedprice.[IFRS13:80]
Level2inputs
Level2inputsareinputsotherthanquotedmarketpricesincludedwithinLevel1thatareob
serv
a blefor
theassetorliability,eitherdirectlyorin
d i
rectly.[IFRS13:81]
Level2inputsinclude:
quotedpricesforsimilarassetsorli
a
b il
i
tiesinactivemarkets
quotedpricesforidenticalorsimilarassetsorli
a
b il
i
tiesinmarketsthatarenotactive
inputsotherthanquotedpricesthatareob
serv
a blefortheassetorliability,forexample
interestratesandyieldcurvesob
serv
a bleatcommonlyquotedintervals
impliedvolatil
i
ties
creditspreads
inputsthatarederivedprin
ci
p allyfromorcor
rob
o
ratedbyob
serv
a blemarketdatabycor
re
la
tionor
othermeans('mar
ketcor
rob
o
ratedinputs').
Level3inputs
Level3inputsinputsareun
o b
serv
a bleinputsfortheassetorliability.[IFRS13:86]
Un
o b
serv
a bleinputsareusedtomeasurefairvaluetotheextentthatrelevantob
serv
a bleinputsarenot
available,therebyallowingforsit
u
a
tionsinwhichthereislittle,ifany,marketactivityfortheassetor
liabilityatthemea
sure
mentdate.Anentitydevelopsun
o b
serv
a bleinputsusingthebestin
for
ma
tion
availableinthecir
cum
stances,whichmightincludetheentity'sowndata,takingintoaccountallin
for
ma
tionaboutmarketpar
tic
i
p antas
sump
tionsthatisrea
son
a blyavailable.[IFRS13:8789]
Mea
s ure
mentoffairvalue
Overviewoffairvaluemea
s ure
mentapproach
Theobjectiveofafairvaluemea
sure
mentistoestimatethepriceatwhichanorderlytrans
a c
tiontosell
theassetortotransfertheliabilitywouldtakeplacebetweenmarketpar
tic
i
p antsatthemea
sure
mentdate
3/8
1/13/2015
undercurrentmarketcon
d i
tions.Afairvaluemea
sure
mentrequiresanentitytodetermineallofthe
following:[IFRS13:B2]
thepar
tic
u
larassetorliabilitythatisthesubjectofthemea
sure
ment(con
sis
tentlywithitsunitof
account)
foranonfi
n an
cialasset,thevaluationpremisethatisap
p ro
p ri
a teforthemea
sure
ment(con
sis
tentlywithitshighestandbestuse)
theprincipal(ormostad
van
ta
g eous)marketfortheassetorliability
thevaluationtechnique(s)ap
p ro
p ri
a teforthemea
sure
ment,con
sid
e r
ingtheavail
a bil
ityofdata
withwhichtodevelopinputsthatrepresenttheas
sump
tionsthatmarketpar
tic
i
p antswoulduse
whenpricingtheassetorliabilityandthelevelofthefairvaluehierarchywithinwhichtheinputs
arecat
e
g orised.
Guidanceonmea
s ure
ment
IFRS13providestheguidanceonthemea
sure
mentoffairvalue,includingthefollowing:
Anentitytakesintoaccountthechar
a c
ter
is
ticsoftheassetorliabilitybeingmeasuredthata
marketpar
tic
i
p antwouldtakeintoaccountwhenpricingtheassetorliabilityatmea
sure
mentdate
(e.g.theconditionandlocationoftheassetandanyre
stric
tionsonthesaleanduseoftheasset)
[IFRS13:11]
Fairvaluemea
sure
mentassumesanorderlytrans
a c
tionbetweenmarketpar
tic
i
p antsatthemea
sure
mentdateundercurrentmarketcon
d i
tions[IFRS13:15]
Fairvaluemea
sure
mentassumesatrans
a c
tiontakingplaceintheprincipalmarketfortheasset
orliability,orintheabsenceofaprincipalmarket,themostad
van
ta
g eousmarketfortheassetor
liability[IFRS13:24]
Afairvaluemea
sure
mentofanonfi
n an
cialassettakesintoaccountitshighestandbestuse
[IFRS13:27]
Afairvaluemea
sure
mentofafinancialornonfi
n an
cialliabilityoranentity'sownequityin
stru
mentsassumesitistrans
ferredtoamarketpar
tic
i
p antatthemea
sure
mentdate,withoutset
tle
ment,ex
tin
g uish
ment,orcan
cel
la
tionatthemea
sure
mentdate[IFRS13:34]
Thefairvalueofaliabilityreflectsnonper
for
mancerisk(therisktheentitywillnotfulfilanoblig
a
tion),includinganentity'sowncreditriskandassumingthesamenonper
for
manceriskbeforeand
afterthetransferoftheliability[IFRS13:42]
Anoptionalexceptionappliesforcertainfinancialassetsandfinancialli
a
b il
i
tieswithoff
set
ting
positionsinmarketrisksorcoun
ter
p artycreditrisk,providedcon
d i
tionsaremet(ad
d i
tionaldis
clo
sureisrequired).[IFRS13:48,IFRS13:96]
Valuationtech
niques
Anentityusesvaluationtech
n iquesap
p ro
p ri
a teinthecir
cum
stancesandforwhichsuf
fi
cientdataare
availabletomeasurefairvalue,max
imis
ingtheuseofrelevantob
serv
a bleinputsandmin
imis
ingtheuse
ofun
o b
serv
a bleinputs.[IFRS13:61,IFRS13:67]
Theobjectiveofusingavaluationtechniqueistoestimatethepriceatwhichanorderlytrans
a c
tiontosell
theassetortotransfertheliabilitywouldtakeplacebetweenmarketpar
tic
i
p antsandthemea
sure
ment
4/8
1/13/2015
dateundercurrentmarketcon
d i
tions.Threewidelyusedvaluationtech
n iquesare:[IFRS13:62]
marketapproachusespricesandotherrelevantin
for
ma
tiongeneratedbymarkettrans
a c
tions
involvingidenticalorcom
p a
ra
b le(similar)assets,li
a
b il
i
ties,oragroupofassetsandli
a
b il
i
ties(e.g.
abusiness)
costapproachreflectstheamountthatwouldberequiredcurrentlytoreplacetheservice
capacityofanasset(currentre
p lace
mentcost)
incomeapproachconvertsfutureamounts(cashflowsorincomeandexpenses)toasingle
current(dis
counted)amount,re
flect
ingcurrentmarketex
p ec
ta
tionsaboutthosefutureamounts.
Insomecases,asinglevaluationtechniquewillbeap
p ro
p ri
a te,whereasinothersmultiplevaluationtech
niqueswillbeap
p ro
p ri
a te.[IFRS13:63]
Dis
c lo
s ure
Dis
c lo
s ureobjective
IFRS13requiresanentitytodisclosein
for
ma
tionthathelpsusersofitsfinancialstate
mentsassessboth
ofthefollowing:[IFRS13:91]
forassetsandli
a
b il
i
tiesthataremeasuredatfairvalueonarecurringornonre
cur
ringbasisinthe
statementoffinancialpositionafterinitialrecog
n i
tion,thevaluationtech
n iquesandinputsusedto
developthosemea
sure
ments
forfairvaluemea
sure
mentsusingsig
n if
i
cantun
o b
serv
a bleinputs(Level3),theeffectofthemea
sure
mentsonprofitorlossorothercom
p re
h en
siveincomefortheperiod.
Dis
c lo
s ureex
e mp
tions
Thedis
clo
surere
q uire
mentsarenotrequiredfor:[IFRS13:7]
planassetsmeasuredatfairvalueinac
cor
d ancewithIAS19EmployeeBenefits
re
tire
mentbenefitplanin
vest
mentsmeasuredatfairvalueinac
cor
d ancewithIAS26Accounting
andReportingbyRe
tire
mentBenefitPlans
assetsforwhichre
cov
e r
a bleamountisfairvaluelesscostsofdisposalinac
cor
d ancewithIAS36
Im
p air
mentofAssets.
Iden
ti
fi
c a
tionofclasses
Wheredis
clo
suresarerequiredtobeprovidedforeachclassofassetorliability,anentityde
ter
minesap
pro
p ri
a teclassesonthebasisofthenature,char
a c
ter
is
ticsandrisksoftheassetorliability,andthelevel
ofthefairvaluehierarchywithinwhichthefairvaluemea
sure
mentiscat
e
g orised.[IFRS13:94]
De
ter
min
ingap
p ro
p ri
a teclassesofassetsandli
a
b il
i
tiesforwhichdis
clo
suresaboutfairvaluemea
sure
mentsshouldbeprovidedrequiresjudgement.Aclassofassetsandli
a
b il
i
tieswilloftenrequiregreater
dis
a g
g re
g a
tionthanthelineitemspresentedinthestatementoffinancialposition.Thenumberofclasses
mayneedtobegreaterforfairvaluemea
sure
mentscat
e
g orisedwithinLevel3.
Somedis
clo
suresaredif
fer
e n
ti
a tedonwhetherthemea
sure
mentsare:
Recurringfairvaluemea
sure
mentsfairvaluemea
sure
mentsrequiredorpermittedbyother
IFRSstoberecog
n isedinthestatementoffinancialpositionattheendofeachreportingperiod
5/8
1/13/2015
Nonre
cur
ringfairvaluemea
sure
mentsarefairvaluemea
sure
mentsthatarerequiredorpermitted
byotherIFRSstobemeasuredinthestatementoffinancialpositioninpar
tic
u
larcir
cum
stances.
Specificdis
c lo
s uresrequired
Tomeetthedis
clo
sureobjective,thefollowingminimumdis
clo
suresarerequiredforeachclassofassets
andli
a
b il
i
tiesmeasuredatfairvalue(includingmea
sure
mentsbasedonfairvaluewithinthescopeofthis
IFRS)inthestatementoffinancialpositionafterinitialrecog
n i
tion(notethesearere
q uire
mentshavebeen
sum
marisedandad
d i
tionaldis
clo
sureisrequiredwherenecessary):[IFRS13:93]
thefairvaluemea
sure
mentattheendofthereportingperiod*
fornonre
cur
ringfairvaluemea
sure
ments,thereasonsforthemea
sure
ment*
thelevelofthefairvaluehierarchywithinwhichthefairvaluemea
sure
mentsarecat
e
g orisedin
theirentirety(Level1,2or3)*
forassetsandli
a
b il
i
tiesheldatthereportingdatethataremeasuredatfairvalueonarecurring
basis,theamountsofanytransfersbetweenLevel1andLevel2ofthefairvaluehierarchy,the
reasonsforthosetransfersandtheentity'spolicyforde
ter
min
ingwhentransfersbetweenlevels
aredeemedtohaveoccurred,sep
a
ratelydis
clos
inganddis
cussingtransfersintoandoutofeach
level
forfairvaluemea
sure
mentscat
e
g orisedwithinLevel2andLevel3ofthefairvaluehierarchy,a
de
scrip
tionofthevaluationtechnique(s)andtheinputsusedinthefairvaluemea
sure
ment,any
changeinthevaluationtech
n iquesandthereason(s)formakingsuchchange(withsomeex
cep
tions)*
forfairvaluemea
sure
mentscat
e
g orisedwithinLevel3ofthefairvaluehierarchy,quan
ti
ta
tivein
for
ma
tionaboutthesig
n if
i
cantun
o b
serv
a bleinputsusedinthefairvaluemea
sure
ment(with
someex
cep
tions)
forrecurringfairvaluemea
sure
mentscat
e
g orisedwithinLevel3ofthefairvaluehierarchy,arec
on
cil
i
a
tionfromtheopeningbalancestotheclosingbalances,dis
clos
ingsep
a
ratelychanges
duringtheperiodat
trib
u t
a bletothefollowing:
totalgainsorlossesfortheperiodrecog
n isedinprofitorloss,andthelineitem(s)inprofit
orlossinwhichthosegainsorlossesarerecog
n isedsep
a
ratelydis
clos
ingtheamount
includedinprofitorlossthatisat
trib
u t
a bletothechangeinun
re
a lisedgainsorlosses
relatingtothoseassetsandli
a
b il
i
tiesheldattheendofthereportingperiod,andtheline
item(s)inprofitorlossinwhichthoseun
re
a lisedgainsorlossesarerecog
n ised
totalgainsorlossesfortheperiodrecog
n isedinothercom
p re
h en
siveincome,andthe
lineitem(s)inothercom
p re
h en
siveincomeinwhichthosegainsorlossesarerecog
n ised
purchases,sales,issuesandset
tle
ments(eachofthosetypesofchangesdisclosedsep
a
rately)
theamountsofanytransfersintooroutofLevel3ofthefairvaluehierarchy,thereasons
forthosetransfersandtheentity'spolicyforde
ter
min
ingwhentransfersbetweenlevels
aredeemedtohaveoccurred.TransfersintoLevel3shallbedisclosedanddiscussed
sep
a
ratelyfromtransfersoutofLevel3
forfairvaluemea
sure
mentscat
e
g orisedwithinLevel3ofthefairvaluehierarchy,ade
scrip
tionof
thevaluationprocessesusedbytheentity
6/8
1/13/2015
forrecurringfairvaluemea
sure
mentscat
e
g orisedwithinLevel3ofthefairvaluehierarchy:
anarrativede
scrip
tionofthesen
si
tiv
ityofthefairvaluemea
sure
menttochangesinun
o b
serv
a bleinputsifachangeinthoseinputstoadifferentamountmightresultinasig
n if
i
cantlyhigherorlowerfairvaluemea
sure
ment.Iftherearein
ter
re
la
tion
shipsbetween
thoseinputsandotherun
o b
serv
a bleinputsusedinthefairvaluemea
sure
ment,theentity
alsoprovidesade
scrip
tionofthosein
ter
re
la
tion
shipsandofhowtheymightmagnifyor
mitigatetheeffectofchangesintheun
o b
serv
a bleinputsonthefairvaluemea
sure
ment
forfinancialassetsandfinancialli
a
b il
i
ties,ifchangingoneormoreoftheun
o b
serv
a ble
inputstoreflectrea
son
a blypossibleal
ter
n a
tiveas
sump
tionswouldchangefairvaluesig
nif
i
cantly,anentityshallstatethatfactanddisclosetheeffectofthosechanges.The
entityshalldisclosehowtheeffectofachangetoreflectarea
son
a blypossibleal
ter
n a
tive
as
sump
tionwascal
cu
lated
ifthehighestandbestuseofanonfi
n an
cialassetdiffersfromitscurrentuse,anentityshall
disclosethatfactandwhythenonfi
n an
cialassetisbeingusedinamannerthatdiffersfromits
highestandbestuse*.
'*'inthelistaboveindicatesthatthedis
clo
sureisalsoap
p lic
a
b letoaclassofassetsorli
a
b il
i
tieswhichis
notmeasuredatfairvalueinthestatementoffinancialpositionbutforwhichthefairvalueisdisclosed.
[IFRS13:97]
Quan
ti
ta
tivedis
clo
suresarerequiredtobepresentedinatabularformatunlessanotherformatismoreap
pro
p ri
a te.[IFRS13:99]
Effectivedateandtran
s i
tion
[IFRS13:AppendixC]
IFRS13isap
p lic
a
b letoannualreportingperiodsbeginningonorafter1January2013.Anentitymay
applyIFRS13toanearlieraccountingperiod,butifdoingsoitmustdisclosethefact.
Ap
p li
ca
tionisrequiredprospec
tivelyasofthebeginningoftheannualreportingperiodinwhichtheIFRS
isinitiallyapplied.Com
p ar
a
tivein
for
ma
tionneednotbedisclosedforperiodsbeforeinitialap
p li
ca
tion.
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IFRS14RegulatoryDeferralAccounts
QuickArticleLinks
Overview
IFRS14Reg
u
la
toryDeferralAccountspermitsanentitywhichisafirsttimeadopterofInternational
FinancialReportingStandardstocontinuetoaccount,withsomelimitedchanges,for'reg
u
la
torydeferral
accountbalances'inac
cor
d ancewithitspreviousGAAP,bothoninitialadoptionofIFRSandinsub
se
quentfinancialstate
ments.Reg
u
la
torydeferralaccountbalances,andmovementsinthem,arepresented
sep
a
ratelyinthestatementoffinancialpositionandstatementofprofitorlossandothercom
p re
h en
sive
income,andspecificdis
clo
suresarerequired.
IFRS14wasorig
i
n allyissuedinJanuary2014andappliestoanentity'sfirstannualIFRSfinancialstate
mentsforaperiodbeginningonorafter1January2016.
HistoryofIFRS14
Date
De
v el
op
ment
December2012 IASBre
a c
ti
vatedtherate
regulatedac
tiv
i
tiesproject
25April2013
Comments
TheIASBindicateditwouldconsideraninterimstandard
forentitiesadoptingIFRSbeforecom
p let
ingacom
p re
h en
siveproject
Commentdeadline4September2013
ExposureDraftED/2013/5
Reg
u
la
published
30January2014IFRS14Reg
u
la
toryDeferral Effectiveforanentity'sfirstannualIFRSfinancialstate
Accountsissued
mentsforperiodsbeginningonorafter1January2016
RelatedIn
ter
pre
ta
tions
None
Amend
mentsundercon
sid
er
a
tionbytheIASB
Rateregulatedac
tiv
i
tiesCom
p re
h en
siveproject
SummaryofIFRS14
Objective
TheobjectiveofIFRS14istospecifythefinancialreportingre
q uire
mentsfor'reg
u
la
torydeferralaccount
balances'thatarisewhenanentityprovidesgoodorservicestocustomersatapriceorratethatissubject
toratereg
u
la
tion.[IFRS14:1]
IFRS14isdesignedasalimitedscopeStandardtoprovideaninterim,shorttermsolutionforratereg
u
latedentitiesthathavenotyetadoptedInternationalFinancialReportingStandards(IFRS).Itspurposeis
toallowratereg
u
latedentitiesadoptingIFRSforthefirsttimetoavoidchangesinaccountingpoliciesin
respectofreg
u
la
torydeferralaccountsuntilsuchtimeastheInternationalAccountingStandardsBoard
1/5
1/13/2015
(IASB)cancompleteitscom
p re
h en
siveprojectonrateregulatedac
tiv
i
ties.
Scope
IFRS14ispermitted,butnotrequired,tobeappliedwhereanentityconductsratereg
u
latedac
tiv
i
tiesand
hasrecog
n isedamountsinitspreviousGAAPfinancialstate
mentsthatmeetthede
f
i
n
i
tionof'reg
u
la
tory
deferralaccountbalances'(sometimesreferredto'reg
u
la
toryassets'and'reg
u
la
toryli
a
b il
i
ties').[IFRS
14.5]
EntitieswhichareeligibletoapplyIFRS14arenotrequiredtodoso,andsocanchosetoapplyonlythe
re
q uire
mentsofIFRS1FirsttimeAdoptionofInternationalFinancialReportingStandardswhenfirst
applyingIFRSs.TheelectiontoadoptIFRS14isonlyavailableontheinitialadoptionofIFRSs,meaning
anentitycannotapplyIFRS14forthefirsttimeinfinancialstate
mentssub
se
q uenttothosepreparedon
theinitialadoptionofIFRSs.However,anentitythatelectstoapplyIFRS14initsfirstIFRSfinancial
state
mentsmustcontinuetoapplyitinsub
se
ments.[IFRS14.6]
Whenapplied,there
q uire
mentsofIFRS14mustbeappliedtoallreg
u
la
torydeferralaccountbalances
arisingfromanentity'sratereg
u
latedac
tiv
i
ties.[IFRS14.8]
Keyde
f
i
n
i
tions
[IFRS14:AppendixA]
Ratereg
u
la
tion
Aframeworkfores
tab
lish
ingthepricesthatcanbechargedtocustomersforgoodsandservicesandthat
frameworkissubjecttooversightand/orapprovalbyaratereg
u
la
tor
Rateregulator
Anau
tho
risedbodythatisempoweredbystatuteorreg
u
la
tiontoestablishtherateorrangeofratesthat
bindanentity.Therateregulatormaybeathirdpartybodyorarelatedpartyoftheentity,includingthe
entity'sowngoverningboard,ifthatbodyisrequiredbystatuteorreg
u
la
tiontosetratesbothinthe
interestofcustomersandtoensuretheoverallfinancialviabilityoftheentity
Reg
u
la
torydeferralaccountbalance
Thebalanceofanyexpense(orincome)accountthatwouldnotberecog
n isedasanassetoraliabilityin
ac
cor
d ancewithotherStandards,butthatqualifiesfordeferralbecauseitisincluded,orisexpectedtobe
included,bytherateregulatorines
tab
lish
ingtherate(s)thatcanbechargedtocustomers
Accountingpoliciesforreg
u
la
IFRS14providesanexemptionfromparagraph11ofIAS8AccountingPolicies,ChangesinAccounting
EstimatesandErrorswhenanentityde
ter
minesitsaccountingpoliciesforreg
u
la
torydeferralaccount
balances.[IFRS14.9]Paragraph11ofIAS8requiresanentitytoconsiderthere
q uire
mentsofIFRSs
dealingwithsimilarmattersandthere
q uire
mentsoftheConceptualFrameworkwhensettingits
accountingpolicies.
Theeffectoftheexemptionisthateligibleentitiescancontinuetoapplytheaccountingpoliciesusedfor
reg
u
la
torydeferralaccountbalancesunderthebasisofaccountingusedim
me
d i
a telybeforeadopting
IFRS('previousGAAP')whenapplyingIFRSs,subjecttothepre
sen
ta
tionre
q uire
mentsofIFRS14[IFRS
14.11].
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1/13/2015
Entitiesarepermittedtochangetheiraccountingpoliciesforreg
u
la
torydeferralaccountbalancesinac
cor
dancewithIAS8,butonlyifthechangemakesthefinancialstate
mentsmorerelevantandnoless
reliable,ormorereliableandnotlessrelevant,totheeconomicde
ci
sionmak
ingneedsofusersofthe
entity'sfinancialstate
ments.However,anentityisnotpermittedtochangeaccountingpoliciestostartto
recognisereg
u
la
torydeferralaccountbalances.[IFRS14.13]
In
ter
a c
tionwithotherStandards
There
q uire
mentsofotherIFRSsarerequiredtobeappliedtoreg
u
la
torydeferralaccountbalances,
subjecttospecificex
cep
tions,ex
e mp
tionsandad
d i
tionalre
q uire
mentscontainedinIFRS14[IFRS
14.16].Thesearebrieflysum
marisedbelow:[IFRS14.B7B28]
IAS10EventsAftertheReportingPeriod
There
q uire
mentsofIAS10areappliedwhende
ter
min
ingwhicheventsaftertheendofthereporting
periodshouldbetakenintoaccountintherecog
n i
tionandmea
sure
mentofreg
u
la
torydeferralaccount
balances
IAS12IncomeTaxes
Deferredtaxassetsandli
a
b il
i
tiesarisingfromreg
u
la
torydeferralaccountbalancesarepresentedsep
a
ratelyfromtotaldeferredtaxamountsandmovementsinthosedeferredtaxbalancesarepresentedsep
a
ratelyfromtaxexpense(income)
IAS33EarningsPerShare
EntitiesapplyingIFRS14arerequiredtopresentanad
d i
tionalbasicanddilutedearningspersharethat
excludestheimpactsofthenetmovementinreg
u
la
IAS36Im
pair
mentofAssets
Reg
u
la
torydeferralaccountbalancesareincludedinthecarryingamountofanyrelevantcashgen
e r
a t
ing
unit(CGU)andaretreatedinthesamewayasotherassetsandli
a
b il
i
tieswhereanim
p air
mentlossarises
IFRS3BusinessCom
bi
na
tions
Theentity'saccountingpoliciesforreg
u
la
torydeferralaccountbalancesareusedinapplyingtheac
q ui
si
tionmethod,whichcanresultintherecog
n i
tionofreg
u
la
torydeferralaccountbalancesinrespectofan
acquiree,re
g ard
lessofwhethertheacquireeitselfrecog
n isedsuchbalances
IFRS5Noncur
c on
tin
uedOp
e r
a
tions
Themea
sure
mentre
q uire
mentsofIFRS5donotapplytoreg
u
la
torydeferralaccountbalances,andmod
i
fi
ca
tionsaremadetothepre
sen
ta
tionofin
for
ma
tionaboutdis
con
tin
u edop
e r
a
tionsanddisposalgroups
inrelationtosuchbalances
IFRS10Con
s ol
i
datedFinancialState
mentsandIAS28In
v est
mentsinAs
s o
c i
a tesandJointVentures
(2011)
Theentity'saccountingpoliciesinrespectofreg
u
la
torydeferralaccountbalancesarerequiredtobe
appliedinanentity'scon
sol
i
mentsorinthede
ter
mi
n a
tionofequityaccountedin
for
ma
tionofas
so
ci
a tesorjointventures,notwith
stand
ingthattheentity'sinvesteesmaynothaverecog
nisedreg
u
la
torydeferralaccountbalancesintheirfinancialstate
ments
IFRS12Dis
c lo
s ureofInterestsinOtherEntities
Separatedis
clo
sureofreg
u
la
torydeferralaccountbalancesandnetmovementsinthosebalancesrecog
nisedinprofitorlossorothercom
p re
h en
siveincomearerequiredforvariousIFRS12dis
clo
sures
Pre
s en
ta
tioninfinancialstate
ments
Theimpactofreg
u
la
torydeferralaccountbalancesaresep
a
ratelypresentedinanentity'sfinancialstate
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1/13/2015
ments.Thisre
q uire
mentsappliesre
g ard
lessoftheentity'spreviouspre
sen
ta
tionpoliciesinrespectofreg
u
la
torydeferralbalanceaccountsunderitspreviousGAAP.Ac
cord
ingly:
Separatelineitemsarepresentedinthestatementoffinancialpositionforthetotalofallreg
u
la
torydeferralaccountdebitbalances,andallreg
u
la
torydeferralaccountcreditbalances[IFRS
14.20]
Reg
u
la
torydeferralaccountbalancesarenotclas
si
fiedbetweencurrentandnoncur
rent,butare
sep
a
ratelydisclosedusingsubtotals[IFRS14.21]
Thenetmovementinreg
u
la
torydeferralaccountbalancesaresep
a
ratelypresentedinthe
statementofprofitorlossandothercom
p re
h en
siveincomeusingsubtotals[IFRS14.2223]
TheIl
lus
tra
tiveexamplesac
com
p a
n y
ingIFRS14setoutanil
lus
tra
tivepre
sen
ta
tionoffinancialstate
mentsbyanentityapplyingtheStandard.
Dis
c lo
s ures
IFRS14setsoutdis
clo
sureob
jec
tivestoallowuserstoassess:[IFRS14.27]
thenatureof,andrisksas
so
ci
a tedwith,theratereg
u
la
tionthates
tab
lishestheprice(s)theentity
canchargecustomersforthegoodsorservicesitprovidesincludingin
for
ma
tionaboutthe
entity'sratereg
u
latedac
tiv
i
tiesandtherateset
tingprocess,theidentityoftherateregulator(s),
andtheimpactsofrisksandun
cer
tain
tiesontherecoveryorreversalofreg
u
la
torydeferral
balanceaccounts
theeffectsofratereg
u
la
tionontheentity'sfinancialstate
mentsincludingthebasisonwhich
reg
u
la
torydeferralaccountbalancesarerecog
n ised,howtheyareassessedforrecovery,arec
on
cil
i
a
tionofthecarryingamountatthebeginningandendofthereportingperiod,discountrates
ap
p lic
a
b le,incometaximpactsanddetailsofbalancesthatarenolongercon
sid
e redre
cov
e r
a ble
orre
versible.
Effectivedate
Whereanentityelectstoapplyit,IFRS14iseffectiveforanentity'sfirstannualIFRSfinancialstate
ments
thatareforaperiodbeginningonorafter1January2016.Thestandardcanbeappliedearlier,butthe
entitymustdisclosewhenithasdoneso.[IFRS14.C1]
Like
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QuickArticleLinks
Overview
IFRS15specifieshowandwhenanIFRSreporterwillrecogniserevenueaswellasrequiringsuchentities
toprovideusersoffinancialstate
mentswithmorein
for
ma
tive,relevantdis
clo
sures.Thestandardprovides
asingle,prin
ci
p lesbasedfivestepmodeltobeappliedtoallcontractswithcustomers.
IFRS15wasissuedinMay2014andappliestoanannualreportingperiodbeginningonorafter1
January2017.
HistoryofIFRS15
Date
June2002
De
v el
op
ment
Comments
ProjectonrevenueaddedtotheIASB's Historyoftheproject
agenda
19December2008Dis
cus
sionPaperPre
lim
i
n aryViewson Commentdeadline19June2009
RevenueRecog
n i
tioninContractswith
Customerspublished
24June2010
ExposureDraftED/2010/6Revenuefrom Commentdeadline22October2010
ContractswithCustomerspublished
14November2011ExposureDraftED/2011/6Revenuefrom Commentdeadline13March2012
ContractswithCustomerspublished(re
ex
p o
sure)
28May2014
IFRS15RevenuefromContractswith
Effectiveforanentity'sfirstannualIFRS
Customersissued
financialstate
mentsforperiodsbeginningon
orafter1January2017
RelatedIn
ter
pre
ta
tions
None
Amend
mentsundercon
sid
er
a
tionbytheIASB
None
Su
per
sededStandards
IFRS15replacesthefollowingstandardsandin
ter
p re
ta
tions:
IAS11Con
struc
tioncontracts
IAS18Revenue
IFRIC13CustomerLoyaltyPro
g rammes
IFRIC15Agree
mentsfortheCon
struc
tionofRealEstate
IFRIC18TransfersofAssetsfromCustomers
SIC31RevenueBarterTrans
a c
tionsInvolvingAd
ver
tis
ingServices
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SummaryofIFRS15
Objective
TheobjectiveofIFRS15istoestablishtheprin
ci
p lesthatanentityshallapplytoreportusefulin
for
ma
tion
tousersoffinancialstate
mentsaboutthenature,amount,timing,andun
cer
taintyofrevenueandcash
flowsarisingfromacontractwithacustomer.[IFRS15:1]Ap
p li
ca
tionofthestandardismandatoryfor
annualreportingperiodsstartingfrom1January2017onwards.Earlierap
p li
ca
tionispermitted.
Scope
IFRS15RevenuefromContractswithCustomersappliestoallcontractswithcustomersexceptfor:leases
withinthescopeofIAS17Leasesfinancialin
stru
mentsandothercon
trac
tualrightsoroblig
a
tionswithin
thescopeofIFRS9FinancialIn
stru
ments,IFRS10Con
sol
i
ments,IFRS11Joint
Arrange
ments,IAS27SeparateFinancialState
mentsandIAS28In
vest
mentsinAs
so
ci
a tesandJoint
VenturesinsurancecontractswithinthescopeofIFRS4InsuranceContractsandnonmon
e
tary
exchangesbetweenentitiesinthesamelineofbusinesstofa
cil
i
tatesalestocustomersorpotential
customers.[IFRS15:5]
AcontractwithacustomermaybepartiallywithinthescopeofIFRS15andpartiallywithinthescopeof
anotherstandard.Inthatscenario:[IFRS15:7]
ifotherstandardsspecifyhowtoseparateand/orinitiallymeasureoneormorepartsofthe
contract,thenthosesep
a
ra
tionandmea
sure
mentre
q uire
mentsareappliedfirst.Thetrans
a c
tion
priceisthenreducedbytheamountsthatareinitiallymeasuredunderotherstandards
ifnootherstandardprovidesguidanceonhowtoseparateand/orinitiallymeasureoneormore
partsofthecontract,thenIFRS15willbeapplied.
Keyde
f
i
n
i
tions
[IFRS15:AppendixA]
Contract
Anagreementbetweentwoormorepartiesthatcreatesen
force
a blerightsandoblig
a
tions.
Customer
Apartythathascon
tractedwithanentitytoobtaingoodsorservicesthatareanoutputoftheentitys
ordinaryac
tiv
i
tiesinexchangeforcon
sid
e r
a
tion.
Income
Increasesineconomicbenefitsduringtheaccountingperiodintheformofinflowsoren
h ance
mentsof
assetsordecreasesofli
a
b il
i
tiesthatresultinanincreaseinequity,otherthanthoserelatingtocon
tri
b u
tionsfromequitypar
tic
i
p ants.
Per
for
manceoblig
a
tion
Apromiseinacontractwithacustomertotransfertothecustomereither:
agoodorservice(orabundleofgoodsorservices)thatisdistinctor
aseriesofdistinctgoodsorservicesthataresub
stan
tiallythesameandthathavethesame
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patternoftransfertothecustomer.
Revenue
Incomearisinginthecourseofanentitysordinaryac
tiv
i
ties.
Trans
a c
tionprice
Theamountofcon
sid
e r
a
tiontowhichanentityexpectstobeentitledinexchangefortrans
fer
ring
promisedgoodsorservicestoacustomer,excludingamountscollectedonbehalfofthirdparties.
Accountingre
quire
mentsforrevenue
Thefivestepmodelframework
ThecoreprincipleofIFRS15isthatanentitywillrecogniserevenuetodepictthetransferofpromised
goodsorservicestocustomersinanamountthatreflectsthecon
sid
e r
a
tiontowhichtheentityexpectsto
beentitledinexchangeforthosegoodsorservices.Thiscoreprincipleisdeliveredinafivestepmodel
framework:[IFRS15:IN7]
Identifythecontract(s)withacustomer
Identifytheper
for
manceoblig
a
tionsinthecontract
Determinethetrans
a c
tionprice
Allocatethetrans
a c
tionpricetotheper
for
manceoblig
a
tionsinthecontract
Recogniserevenuewhen(oras)theentitysatisfiesaper
for
manceoblig
a
tion.
Ap
p li
ca
tionofthisguidancewilldependonthefactsandcir
cum
stancespresentinacontractwitha
customerandwillrequiretheexerciseofjudgment.
Step1:Identifythecontractwiththecustomer
AcontractwithacustomerwillbewithinthescopeofIFRS15ifallthefollowingcon
d i
tionsaremet:[IFRS
15:9]
thecontracthasbeenapprovedbythepartiestothecontract
eachpartysrightsinrelationtothegoodsorservicestobetrans
ferredcanbeiden
ti
fied
thepaymenttermsforthegoodsorservicestobetrans
ferredcanbeiden
ti
fied
thecontracthascom
mer
cialsubstanceand
itisprobablethatthecon
sid
e r
a
tiontowhichtheentityisentitledtoinexchangeforthegoodsor
serviceswillbecollected.
Ifacontractwithacustomerdoesnotyetmeetalloftheabovecriteria,theentitywillcontinuetore
assessthecontractgoingforwardtodeterminewhetheritsub
se
q uentlymeetstheabovecriteria.From
thatpoint,theentitywillapplyIFRS15tothecontract.[IFRS15:14]
Thestandardprovidesdetailedguidanceonhowtoaccountforapprovedcontractmod
i
fi
ca
tions.Ifcertain
con
d i
tionsaremet,acontractmod
i
fi
ca
tionwillbeaccountedforasaseparatecontractwiththecustomer.
Ifnot,itwillbeaccountedforbymodifyingtheaccountingforthecurrentcontractwiththecustomer.
Whetherthelattertypeofmod
i
fi
ca
tionisaccountedforprospec
tivelyorret
ro
spec
tivelydependson
whethertheremaininggoodsorservicestobedeliveredafterthemod
i
fi
ca
tionaredistinctfromthose
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deliveredpriortothemod
i
fi
ca
tion.Furtherdetailsonaccountingforcontractmod
i
fi
ca
tionscanbefoundin
theStandard.[IFRS15:1821].
Step2:Identifytheper
for
manceoblig
a
tionsinthecontract
Attheinceptionofthecontract,theentityshouldassessthegoodsorservicesthathavebeenpromised
tothecustomer,andidentifyasaper
for
manceoblig
a
tion:[IFRS15.22]
agoodorservice(orbundleofgoodsorservices)thatisdistinctor
aseriesofdistinctgoodsorservicesthataresub
stan
tiallythesameandthathavethesame
patternoftransfertothecustomer.
Aseriesofdistinctgoodsorservicesistrans
ferredtothecustomerinthesamepatternifbothofthe
followingcriteriaaremet:[IFRS15:23]
eachdistinctgoodorserviceintheseriesthattheentitypromisestotransfercon
sec
u
tivelytothe
customerwouldbeaper
for
manceoblig
a
tionthatissatisfiedovertime(seebelow)and
asinglemethodofmeasuringprogresswouldbeusedtomeasuretheentitysprogresstowards
completesat
is
fac
tionoftheper
for
manceoblig
a
tiontotransfereachdistinctgoodorserviceinthe
seriestothecustomer.
Agoodorserviceisdistinctifbothofthefollowingcriteriaaremet:[IFRS15:27]
thecustomercanbenefitfromthegoodorservicesonitsownorincon
junc
tionwithotherreadily
availableresourcesand
theentityspromisetotransferthegoodorservicetothecustomerissep
a
ratelyiden
i
ti
fa
b lefrom
otherpromisesinthecontract.
Factorsforcon
sid
e r
a
tionastowhetherapromisetotransferthegoodorservicetothecustomerissep
a
ratelyiden
ti
fi
a bleinclude,butarenotlimitedto:[IFRS15:29]
theentitydoesnotprovideasig
n if
i
cantserviceofin
te
g rat
ingthegoodorservicewithothergoods
orservicespromisedinthecontract.
thegoodorservicedoesnotsig
n if
i
cantlymodifyorcustomiseanothergoodorservicepromisedin
thecontract.
thegoodorserviceisnothighlyin
ter
re
latedwithorhighlydependentonothergoodsorservices
promisedinthecontract.
Step3:Determinethetrans
a c
tionprice
Thetrans
a c
tionpriceistheamounttowhichanentityexpectstobeentitledinexchangeforthetransfer
ofgoodsandservices.Whenmakingthisde
ter
mi
n a
tion,anentitywillconsiderpastcustomarybusiness
practices.[IFRS15:47]
Whereacontractcontainselementsofvariablecon
sid
e r
a
tion,theentitywillestimatetheamountof
variablecon
sid
e r
a
tiontowhichitwillbeentitledunderthecontract.[IFRS15:50]Variablecon
sid
e r
a
tion
canarise,forexample,asaresultofdiscounts,rebates,refunds,credits,pricecon
ces
sions,in
cen
tives,
per
for
mancebonuses,penaltiesorothersimilaritems.Variablecon
sid
e r
a
tionisalsopresentifanentitys
righttocon
sid
e r
a
tioniscon
tin
g entontheoc
cur
renceofafutureevent.[IFRS15:51]
4/8
1/13/2015
Thestandarddealswiththeun
cer
taintyrelatingtovariablecon
sid
e r
a
tionbylimitingtheamountof
variablecon
sid
e r
a
tionthatcanberecog
n ised.Specif
i
cally,variablecon
sid
e r
a
tionisonlyincludedinthe
trans
a c
tionpriceif,andtotheextentthat,itishighlyprobablethatitsinclusionwillnotresultinasig
n if
i
cantrevenuereversalinthefuturewhentheun
cer
taintyhasbeensub
se
q uentlyresolved.[IFRS15:56]
However,adifferent,morere
stric
tiveapproachisappliedinrespectofsalesorus
a gebasedroyalty
revenuearisingfromlicencesofin
tel
lec
tualproperty.Suchrevenueisrecog
n isedonlywhentheun
d er
ly
ingsalesorusageoccur.[IFRS15:B63]
Step4:Allocatethetrans
a c
tionpricetotheper
for
manceoblig
a
tionsinthecontracts
Whereacontracthasmultipleper
for
manceoblig
a
tions,anentitywillallocatethetrans
a c
tionpricetothe
per
for
manceoblig
a
tionsinthecontractbyreferencetotheirrelativestand
a lonesellingprices.[IFRS
15:74]Ifastand
a lonesellingpriceisnotdirectlyob
serv
a ble,theentitywillneedtoestimateit.IFRS15
suggestsvariousmethodsthatmightbeused,including:[IFRS15:79]
Adjustedmarketas
sess
mentapproach
Expectedcostplusamarginapproach
Residualapproach(onlyper
mis
si
b leinlimitedcir
cum
stances).
Anyoveralldiscountcomparedtotheaggregateofstand
a lonesellingpricesisallocatedbetweenper
for
manceoblig
a
tionsonarelativestand
a lonesellingpricebasis.Incertaincir
cum
stances,itmaybeap
p ro
pri
a tetoallocatesuchadiscounttosomebutnotalloftheper
for
manceoblig
a
tions.[IFRS15:81]
Wherecon
sid
e r
a
tionispaidinadvanceorinarrears,theentitywillneedtoconsiderwhetherthecontract
includesasig
n if
i
cantfinancingarrange
mentand,ifso,adjustforthetimevalueofmoney.[IFRS15:60]A
practicalexpedientisavailablewheretheintervalbetweentransferofthepromisedgoodsorservicesand
paymentbythecustomerisexpectedtobelessthan12months.[IFRS15:63]
Step5:Recogniserevenuewhen(oras)theentitysatisfiesaper
for
manceoblig
a
tion
Revenueisrecog
n isedascontrolispassed,eitherovertimeoratapointintime.[IFRS15:32]
Controlofanassetisdefinedastheabilitytodirecttheuseofandobtainsub
stan
tiallyallofthe
remainingbenefitsfromtheasset.Thisincludestheabilitytopreventothersfromdirectingtheuseofand
obtainingthebenefitsfromtheasset.Thebenefitsrelatedtotheassetarethepotentialcashflowsthat
maybeobtaineddirectlyorin
d i
rectly.Theseinclude,butarenotlimitedto:[IFRS15:3133]
usingtheassettoproducegoodsorprovideservices
usingtheassettoenhancethevalueofotherassets
usingtheassettosettleli
a
b il
i
tiesortoreduceexpenses
sellingorex
chang
ingtheasset
pledgingtheassettosecurealoanand
holdingtheasset.
Anentityrecog
n isesrevenueovertimeifoneofthefollowingcriteriaismet:[IFRS15:35]
thecustomersi
mul
ta
n e
o uslyreceivesandconsumesallofthebenefitsprovidedbytheentityas
5/8
1/13/2015
theentityperforms
theentitysper
for
mancecreatesorenhancesanassetthatthecustomercontrolsastheassetis
createdor
theentitysper
for
mancedoesnotcreateanassetwithanal
ter
n a
tiveusetotheentityandthe
entityhasanen
force
a blerighttopaymentforper
for
mancecompletedtodate.
Ifanentitydoesnotsatisfyitsper
for
manceoblig
a
tionovertime,itsatisfiesitatapointintime.Revenue
willthereforeberecog
n isedwhencontrolispassedatacertainpointintime.Factorsthatmayindicatethe
pointintimeatwhichcontrolpassesinclude,butarenotlimitedto:[IFRS15:38]
theentityhasapresentrighttopaymentfortheasset
thecustomerhaslegaltitletotheasset
theentityhastrans
ferredphysicalpos
ses
sionoftheasset
thecustomerhasthesig
n if
i
cantrisksandrewardsrelatedtotheownershipoftheassetand
thecustomerhasacceptedtheasset.
Contractcosts
Thein
cre
men
talcostsofobtainingacontractmustberecog
n isedasanassetiftheentityexpectsto
recoverthosecosts.However,thosein
cre
men
talcostsarelimitedtothecoststhattheentitywouldnot
haveincurredifthecontracthadnotbeensuc
cess
fullyobtained(e.g.successfeespaidtoagents).A
practicalexpedientisavailable,allowingthein
cre
men
talcostsofobtainingacontracttobeexpensedif
theas
so
ci
a tedamor
ti
sa
tionperiodwouldbe12monthsorless.[IFRS15:9194]
Costsincurredtofulfilacontractarerecog
n isedasanassetifandonlyifallofthefollowingcriteriaare
met:[IFRS15:95]
thecostsrelatedirectlytoacontract(oraspecifican
tic
i
p atedcontract)
thecostsgenerateorenhanceresourcesoftheentitythatwillbeusedinsat
is
fy
ingper
for
mance
oblig
a
tionsinthefutureand
thecostsareexpectedtoberecovered.
Theseincludecostssuchasdirectlabour,directmaterials,andtheal
lo
ca
tionofoverheadsthatrelate
directlytothecontract.[IFRS15:97]
Theassetrecog
n isedinrespectofthecoststoobtainorfulfilacontractisamortisedonasys
tem
a tic
basisthatiscon
sis
tentwiththepatternoftransferofthegoodsorservicestowhichtheassetrelates.
[IFRS15:99]
Furtherusefulim
ple
men
ta
tionguidanceinrelationtoapplyingIFRS15
Thesetopicsinclude:
Per
for
manceoblig
a
tionssatisfiedovertime
Methodsformeasuringprogresstowardscompletesat
is
fac
tionofaper
for
manceoblig
a
tion
Salewitharightofreturn
War
ranties
6/8
1/13/2015
Principalversusagentcon
sid
e r
a
tions
Customeroptionsforad
d i
tionalgoodsorservices
Customersun
e x
e r
cisedrights
Nonre
fund
a bleupfrontfees
Licensing
Re
p ur
chasearrange
ments
Con
sign
mentarrange
ments
Billandholdarrange
ments
Customerac
cep
tance
Dis
clo
suresofdis
a g
g re
g a
tionofrevenue
Thesetopicsshouldbecon
sid
e redcarefullywhenapplyingIFRS15.
Pre
s en
ta
tioninfinancialstate
ments
Contractswithcustomerswillbepresentedinanentitysstatementoffinancialpositionasacontract
liability,acontractasset,orare
ceiv
a ble,dependingonthere
la
tion
shipbetweentheentitysper
for
mance
andthecustomerspayment.[IFRS15:105]
Acontractliabilityispresentedinthestatementoffinancialpositionwhereacustomerhaspaidan
amountofcon
sid
e r
a
tionpriortotheentityper
form
ingbytrans
fer
ringtherelatedgoodorservicetothe
customer.[IFRS15:106]
Wheretheentityhasperformedbytrans
fer
ringagoodorservicetothecustomerandthecustomerhas
notyetpaidtherelatedcon
sid
e r
a
tion,acontractassetorare
ceiv
a bleispresentedinthestatementof
financialposition,dependingonthenatureoftheentitysrighttocon
sid
e r
a
tion.Acontractassetisrecog
nisedwhentheentitysrighttocon
sid
e r
a
tioniscon
d i
tionalonsomethingotherthanthepassageoftime,
forexamplefutureper
for
manceoftheentity.Are
ceiv
a bleisrecog
n isedwhentheentitysrighttocon
sid
e r
a
tionisun
con
d i
tionalexceptforthepassageoftime.
Contractassetsandre
ceiv
a blesshallbeaccountedforinac
cor
d ancewithIFRS9.Anyim
p air
ment
relatingtocontractswithcustomersshouldbemeasured,presentedanddisclosedinac
cor
d ancewith
IFRS9.Anydif
fer
e ncebetweentheinitialrecog
n i
tionofare
ceiv
a bleandthecor
re
spond
ingamountof
revenuerecog
n isedshouldalsobepresentedasanexpense,forexample,anim
p air
mentloss.[IFRS
15:107108]
Dis
c lo
s ures
Thedis
clo
sureobjectivestatedinIFRS15isforanentitytodisclosesuf
fi
cientin
for
ma
tiontoenableusers
offinancialstate
mentstoun
d er
standthenature,amount,timingandun
cer
taintyofrevenueandcash
flowsarisingfromcontractswithcustomers.Therefore,anentityshoulddisclosequal
i
ta
tiveandquan
ti
ta
tivein
for
ma
tionaboutallofthefollowing:[IFRS15:110]
itscontractswithcustomers
7/8
1/13/2015
thesig
n if
i
cantjudgments,andchangesinthejudgments,madeinapplyingtheguidancetothose
contractsand
anyassetsrecog
n isedfromthecoststoobtainorfulfilacontractwithacustomer.
Entitieswillneedtoconsiderthelevelofdetailnecessarytosatisfythedis
clo
sureobjectiveandhow
muchemphasistoplaceoneachofthere
q uire
ments.Anentityshouldaggregateordis
a g
g re
g atedis
clo
surestoensurethatusefulin
for
ma
tionisnotobscured.[IFRS15:111]
Inordertoachievethedis
clo
sureobjectivestatedabove,theStandardin
tro
d ucesanumberofnewdis
clo
surere
q uire
ments.Furtherdetailaboutthesespecificre
q uire
mentscanbefoundatIFRS15:113129.
Effectivedateandtran
s i
tion
ThestandardshouldbeappliedinanentitysIFRSfinancialstate
mentsforannualreportingperiods
beginningonorafter1January2017.Earlierap
p li
ca
tionispermitted.Anentitythatchoosestoapply
IFRS15earlierthan1January2017shoulddisclosethisfactinitsrelevantfinancialstate
ments.[IFRS
15:C1]
WhenfirstapplyingIFRS15,entitiesshouldapplythestandardinfullforthecurrentperiod,includingret
ro
spec
tiveap
p li
ca
tiontoallcontractsthatwerenotyetcompleteatthebeginningofthatperiod.In
respectofpriorperiods,thetran
si
tionguidanceallowsentitiesanoptiontoeither:[IFRS15:C3]
applyIFRS15infulltopriorperiods(withcertainlimitedpracticalex
p e
d i
e ntsbeingavailable)or
retainpriorperiodfiguresasreportedunderthepreviousstandards,recog
n is
ingthecu
mu
la
tive
effectofapplyingIFRS15asanad
just
menttotheopeningbalanceofequityasatthedateof
initialap
p li
ca
tion(beginningofcurrentreportingperiod).
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