Liezel Mae Monteron ACCTG 324 – 74263

BSA – 3 TThS ; 11:30 – 1:00

Scope Full PFRS PFRS for SMEs

Business combination Measurement Measurement
o Transaction costs are excluded under o Transaction costs are included in the
IFRS 3. acquisition costs.
o Contingent consideration is recognized o Contingent considerations are included
regardless of the probability of as part of the acquisition cost if it is
payment probable that the amount will be paid
and its fair value can be measured
reliably.

Purchase accounting Purchase accounting

o Business combinations are accounted o The fair value of acquired assets and
for by applying the purchase method. liabilities (with some exceptions) is
compared to the fair value of the
consideration to determine goodwill.

Goodwill Goodwill
o Amortization of goodwill is not o Amortized over its useful life, which is
permitted. presumed to be 10 years if the entity is
o Subject to an impairment test annually unable to make a reliable estimate of
and when there is an indicator of the useful life.
impairment.
Conceptual Framework for Financial More detailed than the other reporting Less detailed than the full standard of PFRS.
Reporting standards.

Measurement Measurement
o Uses historical cost o Historical cost
o For present value it uses fair value, o Fair value
 value in use and fulfillment value, or
current cost.
Financial Statements Presentation (PAS 1) Requires additional statement of financial Presentation and disclosure of the following
position when an entity: are not required:
o Retrospectively apply an accounting o Segment information
policy o Earnings per share
o Restatements of items in its financial o Interim financial report
statements are made retrospectively
o Reclassifies items in its financial
statements.

Presentation Presentation
o Presented as a line item those assets o Present line items for both investment
and liabilities that are included in the in associates and joint ventures
disposal group are classified as held o Presentation for additional financial
for sale and those investments where position statements is not required
the investor has significant influence o Permitted but not required to present a
over the investee but not an investment single statement of income and
in the joint venture. retained earnings instead of a
o Income statement can be presented as statement of comprehensive income
a single statement of profit or loss and and statement of changes in equity if
other comprehensive income the only changes to the equity are the
o Cash transactions are classified into result of profit or loss, payment of
operating, investing, and financing dividends, prior period errors, or
activities. Operating activities can be changes in accounting policy.
presented using direct or indirect
method
Related Parties (PAS 24) Disclosure of key management personnel Disclosure of key management personnel
compensation is required per total and compensation is required only in total.
category.
Investment in Associate and Joint Ventures Measurement Measurement
(PAS 28) o Uses equity method. o If unquoted it uses a cost model.
o Equity method
o If quoted, use fair value through the
profit and loss model.

Proportionate consolidation Proportionate consolidation

o requires the venturer’s share of the o Does not permit a proportionate
assets, liabilities, income, and consolidation.
expenses to be either combined on a
line-by-line basis or reported as
separate line items in the venturer’s
financial statements.
Government Grant (PAS 20) Recognition Recognition
o Recognized in the statement of o Does not impose specified future
comprehensive income over the performance - recognized as income
periods necessary to match them with when grant proceeds are receivable.
the related costs. o Imposes specified future performance
o Revenue is not recognized until the - recognized in income only when the
entity complies with the conditions performance conditions are met
attached to the grants and receivable o Grant related to asset is treated as
with reasonable assurance. deferred income until the conditions
are satisfied.

Measurement Measurement
o Capital Approach o The fair value of the asset received or
o Income approach receivable.
o Non-monetary grant
- Fair value
- Nominal amount or zero, plus
direct cost incurred.
Financial Instruments (PFRS 9) Measurement Measurement
 o Initial: o Initial:
- Fair value plus transaction cost, at - Asset or liability is measured at
a case other than at fair value the present value of the future
through PL payments if payment is deferred or
is financed at an interest rate that
is not a market rate.
- Transaction price including
transaction costs unless the
instrument is measured at fair
value through profit or loss.
o Subsequent: o Subsequent:
- FVTPL - basic debt instruments are
- FVTOCI measured at amortized cost using
- Amortized cost the effective interest method.
- Commitments to receive a loan are
measured at cost less impairment.
- Non-convertible and non-puttable
ordinary shares are measured at
FVTPL or cost less impairment if
it cannot be measured reliably.
Investment property (IAS 40) Measurement Measurement
o Initial: o Initial:
- Borrowing costs that are directly - purchase price plus any directly
attributable to the acquisition, attributable costs for the cost of
construction, or production of a purchased investment.
qualifying asset are required to be - Borrowing costs are recognized as
capitalized as part of the cost of an expense
that asset.
o Subsequent: o Subsequent:
- Either carry it all at fair value or - carried at fair value if its fair value
cost. can be measured reliably without
 - If held by the lessee, the entity undue cost or effort.
follows the fair value model.
Property, Plant, and Equipment Measurement Measurement
o initial: o Initial:
- Borrowing costs that are directly - Borrowing costs are recognized as
attributable to the acquisition, an expense.
construction, or production of a
qualifying asset are required to be
capitalized as part of the cost of
that asset.
o Subsequent: o Subsequent:
- Cost model - Cost model
- Revaluation model(revalued
amount less any accumulated
depreciation and subsequent
accumulated impairment losses.)
Intangible Asset other than Goodwill (PAS Measurement Measurement
38) o Initial: o Initial:
- Research costs are expensed as - All research and development
incurred. Development costs are costs are recognized as an
capitalized when specific criteria expense.
are met.
o Subsequent: o Subsequent:
- Revaluation model (in addition to - The useful life of an intangible
cost model) asset is considered to be finite.
- The useful life of an intangible - All intangible assets are amortized
asset is either finite or indefinite. and tested for impairment when
- Intangible assets with finite useful there is an indication that the asset
life are amortized and tested for may be impaired.
impairment
- Indefinite useful life is not
 amortized but tested for
impairment annually and
whenever there is an indication
that the asset may be impaired
Employee Benefits (IAS 19) Measurement Measurement
o If the contributions to a DC plan do o The contribution payable for a period
not fall due wholly within 12 months by the employer to the fund is
after the end of the period, the future recognized as a liability for a DC plan
contributions are discounted. after deducting any amount already
paid.

Expected plan on return assets: Expected plan on return assets:

o No distinction between expected and o The expected return on plan assets is
actual return on plan assets. All based on market expectations at the
changes in the fair value of plan assets beginning of the period for returns
are recorded in profit or loss. over the entire life of the related
obligation.
o The difference between actual and
expected returns on plan assets is an
actuarial gain or loss.
Income taxes Tax basis: Tax basis:
o The tax basis of an asset or liability is o Asset
determined based on the expected - equals the amount that would
manner of recovery or settlement. have been deductible in arriving at
a taxable profit if the carrying
amount of the asset has been
recovered through sales at the end
of the reporting period.
o Liability
- equal its carrying amount less any
amounts deductible in determining
 taxable profit if the liability had
been settled at the end of the
reporting period.

Recognition in CI Recognition in CI
o Current and deferred tax o Current and deferred tax
- Profit and loss, except to the - Component of total
extent that the tax arises from a comprehensive income
business transaction or a
transaction or event that is
recognized in the same or another
period outside profit or loss
Borrowing cost Measurement Measurement
o Directly attributable costs are required o All borrowing costs shall be
to be capitalized as the cost of the recognized as expenses in the period
asset. when incurred.
o Those that are not directly attributable
to a qualifying asset shall be expensed
when incurred.
Agriculture Measurement Measurement
o Biological asset o Agricultural Produce harvested from
- FV-COD if FV is readily biological assets is measured at its fair
determinable without undue cost value less costs to sell at the point of
or effort. harvest.
- If FV is not determinable, cost less
accumulated depreciation and any
accumulated impairment.
o Agricultural produce
- FV-COD at the point of harvest –
initial cost when accounted for
inventory.
Accounting changes (PAS 8) Required to review at least each financial year- Shall/may not review the depreciation/
end, the depreciation/amortization method, amortization method, useful life, and residual
useful life, and residual value of its PPE or IA. value of its PPE or IA only.

If there are changes, the entity shall account If there are indications that there have been
for the changes in accounting changes since the most recent annual reporting
date.
Impairment of non-financial assets Impairment losses Impairment losses
o An impairment loss is recognized o An impairment loss is recognized
immediately in P/L. immediately in P/L only.
o If the asset is carried at the revalued
amount following another standard,
the impairment loss is treated as a
revaluation decrease by that other
standard.
Annual assessment of indicators Annual assessment of indicators
o The following are tested for o If there is an indication that the asset
impairment regardless of whether may be impaired, assets will be tested
there is an indication of impairment: for impairment.
- Intangible assets with an indefinite
useful life.
- Intangible assets not yet available
for use.
- Goodwill
Extractive industries Recognition Recognition
o Entity may develop a policy to o An entity that is engaged in an
determine which expenditures are extractive industry recognizes
recognized as exploration and exploration expenditure on the
evaluation assets. acquisition or development of
o Restricts recognition of certain type of tangible/intangible assets.
expenditures as an asset.
o Measured at cost.