An Executive Guide to IFRS

Preface ix Acknowledgements x About the author xi 1 Worldwide convergence on IFRS 1 Convergence 3 Large company advantages 5 Why governments support IFRS 7 The use of IAS/IFRS in the world 8 Problems with convergence 10 Modified convergence 13 Small and medium-sized business 13 Conclusion 14 2 Content of financial statements 15 IAS 1 presentation of financial statements 18 Statement of Comprehensive Income 19 Statement of Financial Position 23 Statement of Cash Flows 26 Statement of Changes in Equity 30 Accounting policies and changes 30 Fair presentation 33 Conventions 34 Interim financial statements 34 Conclusion 36 Appendix: The IASB Conceptual Framework 37 Qualitative characteristics 39 Assets and liabilities 41 3 Investments in other companies 45 Consolidation 46 Translation of foreign subsidiaries 48 Business combinations 51 Investments in associates 54 Joint ventures 55 Assets held for disposal 56 Equity investments 57 Conclusion 58 Appendix: Fair value measurement 59 The market 60 Measurement hierarchy 61 Highest and best use 62 Liabilities 63 Conclusion 64 4 Income statement items 65 Revenue recognition 66 Agriculture 70 Government grants 71 Pensions 72 Stock options 75 Inventories 78 Income taxes 79 Interest expense 80 Foreign exchange differences 82 Accounting in hyperinflationary economies 83 Conclusion 84 5 Balance sheet items 85 Property, plant and equipment 86 Investment property 89 Leased assets 90 Intangible assets 92 Mineral rights 94 Impairment 95 Assets held for sale 99 Financial instruments 100 Disclosures about financial instruments 105 Defining equity 106 Liabilities 109 Contingent liabilities 112 Conclusion 113 6 Other significant standards 115 First time adoption 115 Related party transactions 118 Segment reporting 120 Concessions 122 Events after balance sheet date 123 Insurance 124 Conclusion 126 7 The IFRS for SMEs 127 Development of the standard 128 Content 131 Conclusion 134 8 Comparison with US GAAP 137 Conceptual Framework 140 Consolidation 142 Financial instruments 143 Offsetting 146 Non-financial assets 147 Impairment 149 Miscellaneous 150 Conclusion 153 9 The IASB s standard-setting process 155 Due process 157 Discussion paper 159 Exposure draft 160 New standard 163 Interpretations 165 Structure 168 Finance 170 Lobbying the IASB 171 Monitoring the IASB 173 Conclusion 174 10 History of the IASB 175 The start-up phase 176 Steady progress 177 The enhancement phase 180 Transition 185 Global convergence 189 Relations with the US 191 Relations with Europe 192 The financial crisis 195 Conclusion 197 11 Observer notes 199 Standard-setters are people 200 What sort of people? 201 What do they think? 205 Fair value controversies 209 Executory contracts 211 True and fair view 213 Anti-abuse measures 213 Conclusions 216 Further reading 217 Index 221