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IFRS for SMEs

IFRS for SMEs. Sections 26, 27 and 28 Similarities and Differences of Full IFRS and IFRS for SMEs. ANTONIO CARONAN CO HUANG PEDRO. Section 26 Share-Based Payments. Section 26 Share-Based Payments. Scope

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IFRS for SMEs

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  1. IFRS for SMEs Sections 26, 27 and 28 Similarities and Differences of Full IFRS and IFRS for SMEs ANTONIO CARONAN CO HUANG PEDRO

  2. Section 26 Share-Based Payments

  3. Section 26 Share-Based Payments • Scope • Equity Settled- transactions where goods and services are acquired as consideration for equity instruments • Cash Settled- transactions where goods or services are acquired by incurring liabilities to the supplier for amounts that are based on the price (or value) of the entity’s shares or other equity instruments

  4. Section 26 Share-Based Payments

  5. Section 26 Share-Based Payments

  6. Section 26 Share-Based Payments

  7. Section 27Impairment of Assets

  8. Section 27 Impairment of Assets • Impairment- occurs when the carrying amount of an asset exceeds its recoverable amount.

  9. Section 27 Impairment of Assets *compared with IAS 36

  10. Section 27 Impairment of Assets

  11. Section 27 Impairment of Assets The impairment loss shall be allocated to reduce the carrying amount of the assets in the following order: • Reduce the goodwill of the CGU • Then, to the other assets of the CGU pro rata on the basis of the carrying amount of each asset

  12. Section 27 Impairment of Assets HOWEVER, an entity shall not reduce the carrying amount of any asset in the CGU below the highest of: • FV les cost to sell, if determinable • Value in use, if determinable • Zero ANY EXCESS is allocated to the other assets of the CGU pro rata based on the carrying amount.

  13. Section 27 Impairment of Assets

  14. Section 27 Impairment of Assets

  15. Section 27 Impairment of Assets

  16. Section 27 Impairment of Assets

  17. Section 27 Impairment of Assets

  18. Section 27 Impairment of Assets

  19. Section 27 Impairment of Assets The computation fro value in use shall not include: • Cash flows from financing activities • Income tax receipts and payments Cash flows measured based on current condition, so the following are not considered • Future restructuring • Enhancements and Improvements

  20. Section 27 Impairment of Assets The discount rate should be: • Pretax and reflects the time value • Reflects the risks specific to the asset

  21. Section 27 Impairment of Assets

  22. Section 27 Impairment of Assets

  23. Section 27 Impairment of Assets

  24. Section 27 Impairment of Assets Limitation for reversal of impairment for an individual asset: The reversal shall not increase the carrying amount above what it would have been, after depreciation and amortization, had no impairment loss been recognized in the previous periods.

  25. Section 27 Impairment of Assets For a CGU: Reversal shall not increase the carrying amount of any asset above the lower of: • Its recoverable amount • The carrying amount that would have been determined, after depreciation and amortization, had no impairment loss been recognized in the previous periods

  26. Section 28 Employee Benefits

  27. Section 28 Employee Benefits

  28. Section 28 Employee Benefits

  29. Section 28 Employee Benefits

  30. Section 28 Employee Benefits

  31. Section 28 Employee Benefits

  32. Section 28 Employee Benefits

  33. Section 28 Employee Benefits

  34. Section 28 Employee Benefits

  35. Section 28 Employee Benefits

  36. Section 28 Employee Benefits

  37. Section 28 Employee Benefits

  38. Section 28 Employee Benefits

  39. Section 28 Employee Benefits

  40. Section 28 Employee Benefits

  41. Section 28 Employee Benefits • Areas covered in IFRS but not in IFRS for SMEs include: • • Defined benefit plans that share risks between various entities under common control. • • Asset ceiling test. • • Detailed guidance on the measurement of defined benefit obligation.

  42. Section 26-28 Game

  43. Question • True or False Liabilities arising from cash settled share based transactions are re-measured at each reporting date but not on the date of final settlement.

  44. Answer • FALSE Re-measured at each reporting date and at the date of final settlement. IFRS for SMEs 26.14

  45. Question • True or False The full IFRS, like the IFRS for SMEs, provides a three tier hierarchy for measuring the fair value of the equity instrument.

  46. Answer • False Only in the IFRS for SMEs IFRS for SMEs 26.9 to 26.10

  47. Question The following are indicators of impairment for SMEs except: • Significant decline in an asset’s market value • Entity’s net asset value is above its market capitalization • Increases in market interest rates • Obsolescence

  48. Answer b. Entity’s net asset value is above its market capitalization Only for Full IFRS. IAS 36.12

  49. Question • True or False In the IFRS for SMEs, goodwill is tested for impairment irrespective of whether there is an indicator.

  50. Answer • False Assets (including goodwill) are tested for impairment when there is an indication at each reporting date that the asset may be impaired. IFRS for SMEs 27.7

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