Principal IFRS requirements

• Financial statements
  • Statement of financial position
  • Statement of comprehensive income – one income statement or two
  • Statement of changes in equity
  • Statement of cash flows
  • Notes
• Assets and liabilities recognised
• Measurement bases – amortised cost and fair value

Transition to IFRS

• IFRS 1 - full retrospective application at date of transition
• Easing the burden - optional exemptions
• Mandatory exceptions
• Entities to be included – scope of consolidation
• Accounting policy selection – choosing between alternatives
• Explaining the transition - reconciliation to previous GAAP

Financial Instruments

• Classification – the four categories
• Fair value for unlisted equity securities
• Amortised cost
  • Effective interest rate
  • Impairment triggers and measurement
• Embedded derivatives
  • Convertible debt
• Derecognition   
  • Transferring risks and rewards
  • Surrendering control
  • Continuing involvement

Foreign Currencies

• Functional currency
  • Primary and secondary indicators
  • Translation and treatment of exchange differences
• Presentation currency
  • Translation and treatment of exchange differences

Tangible Assets

• Investment property
  • Historical cost basis or fair value
  • Treatment of gains and losses
• Long-lived assets held for use
  • Asset retirement obligations – changes in estimates
  • Depreciation – the component approach
  • Impairment testing – one step or two?
• Borrowing costs – capitalisation now the norm

Liabilities

• Provisions
  • The meaning of probable
  • Provision/ accrual and note disclosure
• Retirement benefits
  • Actuarial gains and losses – corridor approach or recognition in other comprehensive income
  • Pension cost components – aggregation and net presentation or inclusion within different lines in the income statement

IFRS and US GAAP

• Revenue recognition
  • Expense recognition
• Asset measurement
  • Revaluation
  • Inventory costing
• Lease classification – operating or finance/capital?
  • Overall substance or specific criteria
  • Land and buildings - bifurcation

Consolidation

• Business combinations
  • Non-controlling interests – full fair value?
• Special purpose entities
• Joint ventures
  • Proportionate consolidation
  • Equity method