FINANCIAL INSTRUMENTS

1. FRS 7 (IFRS 7): DISCLOSURE FRS 132 (IAS 32): PRESENTATION FRS 139 (IAS 39): RECOGNITION AND MEASUREMENT FINANCIAL INSTRUMENTS

2. INTRODUCTION:FINANCIAL INSTRUMENTS FRS Overview: FRS 7 Financial Instrument Disclosure: Issue – Part of IASB improvement project Detailing Financial Instruments DISCLOSURE,incorporate IAS 32 original disclosures req. + add. quantitative & qualitative disclosures on risks assoc. with finl. Instru. Effective date 1/1/2010 FRS 132 Financial Instrument Presentation: Amended in Feb. 2008 to specifically focus on the PRESENTATION of financial instrument, Initially was an IASC financial instruments project which began in 1988 until the std issuance in 1995 that dealt with issues on disclosures and presentations of financial instruments. Effective date 1/1/2010 FRS 139 Financial Instrument Recognition and Measurement: IASC financial instrument project, First issued on 1998 to address finl. instru RECOGNITION AND MEASUREMENT, Revised in 2000, Latest amendment August 2005. Effective date 1/1/2010

3. Financial Instruments – The Concern • Information availability? • Encompass Financial assets, financial liabilities, equity instruments and derivatives • E.g: Interest rate swaps, Treasury bond options, credit swaps, bonds, receivables, loans, shares etc • Have become > complex over the past 20 yrs – Cause difficulties in recognising, measuring, presenting and disclosing such instruments in finl report + lack of understanding of users of accounts of the significance of such instruments on entity’s finl perform, position and cash flows. (iv) WERE CARRIED OFF BALANCE SHEET. As a result user was unable to access the effect of these unless assisted by adequate disclosure and presentation. Potential of Misconduct? Using finl instru. entity can significantly change its financial risk profile ….reporting excessive gains or losses depending on whether instru prices move against or in favour of the entity

4. Continue…… (v) IASB noted Main problem – valuation of financial assets and liabilities at fair value…Presently IASB has not reached any conclusion about its imposition…Option given to preparer about its application…. IASB published discussion paper (March, 2008) ‘Reducing Complexity in Reporting Financial Instruments’…due to many ways measuring fin instruments. The discussion paper proposes, long- term solution to the complexity is to measure all financial instruments at FV BUTacknowledges there are issues and concerns to be addressed before IASB can require general FV measurement. 2 MAIN concerns: (i) Volatility of earnings arising from changes in FV (ii) Presentation of unrealised gains and losses in earnings Also, IASB will need to address further 4 issues wrt finl. instruments: (i) Presentation: How should the effects of changes in FV be presented in earnings? (ii) Disclosure: What info. about finl. instr. should be disclosed? (iii) Measurement: What is the def. of FV and how should FV be measured? (iv) Scope: What is the appropriate def of a finl. instru. and which finl instru., if any should be outside the scope of a std for finl. Instru.?

5. Continue… (B) Measurement Practice • Historical cost x necessarily provide the most relevant or consistent info for users. • Fair value identified give more relevant info about finl assets and liabilities. However where should unrealised gain or loss reported - P&L or Stat of Changes in Eq? Principally, gain recognised when it’s realised. This < relevance when entity trading underlying risks. Course of action….careful consideration given to information derived by measuring finl instru. at fair value + recognise gain or loss arising in P&L , compared with historical cost valuation (Norm …..Accountant reluctance to recognise unrealised gain or loss?)

6. FRS 132: Objective • To enhance financial statement users’ understanding of the significance of financial instruments to an entity’s financial position, performance and cash flows • Contains requirement for the presentation of finl instruments (and identifies info that should be disclosed by them). Presentation requirements apply to Classification of financial instruments, from the perspective of issuer into: (a) financial assets (b) financial liabilities (c) equity instruments Classification of related: (a) interest (b) dividends (c) losses (d) gains Circumstances in which financial assets and liabilities should be offset

7. FRS 132: Scope Exception (Para 4) Interests in Subsidiaries (FRS 127) Interests in Associates (FRS 128) Interests in Joint Ventures (FRS 131) Employee Benefit Plans (FRS 119) Share based payments transactions (FRS 2) Contract for Contingent Considerations (FRS 3) Insurance Contracts (FRS 4)

8. FRS 132 & 139: Financial Instrument Definition: Any contract that gives rise to (i) a financial asset of one entity and (ii) a financial liabilityor equity instrument of another entity

9. FRS 132: Financial Asset DEFINITION: Any asset that is: • Cash • An equity instrument of another entity (e.g investment in Ord Shares) • A contractual right: (i) to receive cash or another financial asset from another entity, or (ii) to exchange financial instruments or financial liabilities with another entity under conditions that are potentially favourable to the entity (d) A contract that will or may be settled in the entity’s own equity instruments and is: (i) a non-derivative for which the entity is or may be obliged to receive a variable number of the entity’s own instruments or (ii) a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the entity’s own equity instruments. For this purpose the entity’s own equity instruments do not include instruments that are themselves contracts for the future receipt or delivery of the equity’s own equity instruments. (Similar to part (b) definition of financial liability) E.g: Trade receivables, loan receivable, investment in shares and bonds of another entity, investment in subsidiaries and bills receivable

10. FRS 132: Financial Liability DEFINITION : Any liability that is: • A contractual obligation (i) to deliver cash or another financial asset to another entity; or (ii) to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavourable to the entity (b) A contract that will or may be settled in the entity’s own equity instruments and is: (i) a non-derivative for which the entity is or may be obliged to receive a variable number of the entity’s own instruments or (ii) a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the entity’s own equity instruments. For this purpose the entity’s own equity instruments do not include instruments that are themselves contracts for the future receipt or delivery of the equity’s own equity instruments (Similar to part (d) definition of financial asset) E.g.: Trade payables, borrowings, debentures, bonds and redeemable preference shares Deferred revenue and most warranty obligationsX financial liabilities as obligation to provide services or goods rather than to obligation to deliver cash; Income taxes Xfinancial liability as no contractual obligation

11. FRS 132: Equity Instrument – Para 11 and 16 Definition: Any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities E.g: Ordinary shares, preference shares, share options and warrants In the case issuer needs to determine a finlinstru. is an equity instru or finlliab, the instrument, equity instru. if and only if: • The instrument includes x contractual obligation (i) to deliver cash or another financial asset to another entity or (ii) to exchange finl assets or finl liabilities with another entity under conditions that are potentially unfavourable to the issuer • If the instrument will or may be settled in the issuer’s own equity instruments, it is: (i) a non-derivative that includes X contractual obligation for the issuer to deliver variable number of its own equity instruments or (ii) a derivative that will or may be settled by the issuer exchanging a fixed amt of cash or another finl asset for a fixed no of its own equity instru. For this purpose the issuer’s own equity instruments do not include instruments that are themselves contract for the future receipt or delivery of the issuer’s own equity instru. Acontractual obligat., including arising from a derivative finlinstru., that will or may result in future receipt or delivery of the issuer’s own equity instru., but x meet conditions (a) and (b),isnot equity instru.

12. FRS 132: Fair Value The amount for which an asset could be exchanged or a liability settled bet. knowledgeable, willing parties in an arm’s length transaction

13. Financial Instrument….Contract Financial Instrument is the contract, not the asset or liability. Thus needs to be clear what is meant by contract, contractual right and obligation. Para 13, FRS 132 identifies ‘contract’ and ‘contractual’ as an agreement between 2 or > parties that has clear economic consequences that the parties have little, if any, discretion to avoid, usually bec. the agreement is enforceable by law. Contracts, thus financial instruments, may take variety of forms and need not be in writing.

14. Exercise: Which of the following financial instruments? KEY POINT….Any of these items represents a contract? • Cash – • Gold bullion – • Debtors - • Creditors - • Loans- • Bank deposits- • Debentures- • A promissory note payable in govt bonds – • Ordinary shares – • Preference shares – • Plant and equipment previously bought and paid for by the entity – • Prepayments for goods and services – • Derivatives –

15. Exercise: Which of the following financial instruments? KEY POINT….Any of these items represents a contract? • Cash – X a Fin Instru…A finl asset • Gold bullion – X a Fin Instru…A commodity or physical asset…No contractual right to receive cash or other financial asset • Debtors - X a Fin Instru…Are finl assets as x be described as a contract, although quite possibly arose from a contract • Creditors - X a Fin Instru…Are finl liabilities as x be described as a contract, although quite possibly arose from a contract • Loans- Finl assets of one and liabilities of another entity …Debatable whether they are actually finl instrument as this requires contract. Presumably there is a contract,they should be fin instrument • Bank deposits- As (v) • Debentures- As (v) • A promissory note payable in govt bonds – A finl. instr. Note is the contract that gives the holder the contractual right to receive and the issuer the obligation to deliver govt. bonds. Bonds finl assets of one and liabilities of another entity • Ordinary shares – A finl. instru. provided it represents a contract that ultimately result in the issuer entity paying cash to the holder. Std def of eq. instru. ..contract • Preference shares – As (ix) • Plant and equipment previously bought and paid for by the entity – X fin instru. X contract to settle anything in cash or another finl instrument. • Prepayments for goods and services – As (xi). Econ. benefit will be in a form of gds/services x finl asset. • Derivatives – A fin instru. E.g. finl options, futures and forwards, swaps.

16. Continue… Derivatives: Para 9, FRS 139 A financial instrument or other contract within the scope of FRS 139 (i.e. Para 2-7) with all three of the following characteristics: (i) whose value changes in response to the change in a specified i/r, security price, commodity price, foreign exchange rate, index of prices or rates, a credit rating or credit index or similar variable (underlying) (ii) that requires no initial net investment or little initial net investment relative to other types of contracts that have a similar response to changes in market conditions, and (iii) that is settled at future date * Contract that x give rise to finl instru. E.g: Operating lease for the use of physical asset – Can only be settled only by the receipt and delivery of services and thus x finl. Instru. Note from Exe. : Difficult to identify finl. instrument: Std uses the terms financial instrument, financial asset and financial liabilities rather loosely

17. Exercise 2: Are the following contracts finlinstru? 1. Entity A enters both derivatives and an interest rate swap with another, B, that requires A to pay a fixed rate of 7% and receive a variable amt based on 3-mth KLIBOR (Kuala Lumpur Interbank Offered Rate). The notional amt of the swap is RM 1 Mil but this amt is not exchanged. A pays or receives a net cash amt each quarter based on the difference bet 7% and KLIBOR 2. A also enters into a pay fixed, receive variable interest swap with C. The notional amt is for RM 100 Mil and fixed rate of 10%. The variable rate based on 3-mth KLIBOR. A prepays its fixed interest rate obligation as RM 100 Mil x 10% x 5 yrs discounted at market interest rates at the inception of the swap 3. A enters a contract to pay RM10 Mil if D shares increase by 5% or more during 6-mth period and to receive RM10 Mil if the share price decreases by 5% or more in the same period. No payment is made if the price movement is < 5% up or down.

18. Exercise 2: Are the following contracts finlinstru? • Entity A enters both derivatives and an interest rate swap with another, B, that requires A to pay a fixed rate of 7% and receive a variable amt based on 3-mth KLIBOR (Kuala Lumpur Interbank Offered Rate). The notional amt of the swap is RM 1 Mil but this amt is not exchanged. Apays or receives a net cash amt each quarterbased on the difference bet 7% and KLIBOR Answer: (i) There is no initial investment, settlement occurs at future date and its value changes based on changes in KLIBOR, the underlying variable. Hence this is finl instrument as it meets def of derivative • A also enters into a pay fixed, receive variable interest swap with C. The notional amt is for RM 100 Mil and fixed rate of 10%. The variable rate based on 3-mth KLIBOR. A prepays its fixed interest rate obligation as RM100 Mil x 10% x 5 yrsdiscounted at market interest rates at theinception of the swap Answer: This is also a derivative and thus finl instru eventhough there is initial net invest. Payment of fixed i/r at inception will be regarded as ‘little’ compared with other similar contracts such as a variable rate bond where notional amt of RM100 Mil would be paid over.

19. Continue…Exercise 2 (3) A enters a contract to pay 10 Mil if Dshare price increase by 5% or more during 6-mth period and to receive 10 Mil if the share price decreases by 5% or more in the same period. No payment is made if the price movement is < 5% up or down. Answer: There is no initial net investment, settlement occurs at future date and the underlying variable is the share price. This is a derivative and Therefore a finl. Instrument.

20. FRS 132: Presentation of Liabilities and Equity Para 15: Issuer of finl instrumentshall classify the instru or its component parts, on initial recog. as a finl. liability, finl asset or equity instrument in accordance with the substance of the contractual arrangement (x merely their legal form) and definitions of a finl liab, finl asset and equity instru. Substance Vs Legal Form (i) Finl liab- Its defining characteristic is there is a contractual obliga. on 1 party to deliver cash or finl asset or exchange finl asset or finl liab in terms that unfavourable to the issuer *Finl instru is finl liability if obligation exists irrespective of the manner it is settled whether issuer may or x fulfill the obligat. *When issuer has obligat to purchase its own shares for cash or finl asset, there is liab. for the amt. (e.g. Present Value of the redemption amt) that the issuer obliged to pay [Para 23, FRS 132)

21. Continue….Para 17-24 (ii) Equity Instrument – *Obligation to deliver cash or another finl asset or to exchange finl instru. on potentially unfavourable terms X exist. *Issuer x have contractual obligat. to distribute dividends, that instru that entitles holders to such dividend is equity Most of the times substance and form go hand in hand Exceptions: • Preference shares – Redeemable preference shares Preference shares redeemable for a fixed amt at a pre-determined future date is finl liab [See FRS 132 Para 18 (a)] • Non redeemable preference shares Classification determined by other rights attached to them and to be based on an assessment of the substance of the contractual arrangements and def. of finl liab and equity instru. If dividends whether cumulative or non-cumulative at issuer discretion, the instru is equity • Puttable instruments Finl instru that gives holder right to return instru to issuer for cash or another finl asset (a ‘puttable instru’) is finl. liab. E.g Puttable instruments that gives holders to return instru to issuer are unit trusts, open-ended mutual funds, ownership units in co-operatives [See FRS 132 Para 18(b)]

22. Puttable Instruments: Financial Liab Vs Equity Under these conditions, the puttable instruments will be cllsified as equity rather than finl liability, when: • It entitles the holder to a pro-rata share of the entity’s net assets in the event of liquidation • It is subordinate to all other classes of instruments, i.e. it has no priority under liquidation before others and it does not need to be converted into another instru before it is subordinate • In subordinate class all instruments have identical features • It does not include obligation to deliver cash or another finl asset except for the redemption • Its cash flows are based substantially on P&L attained

23. Example 1 Z has 2 classes of shares, founder shares and investor shares. The fund has issued 1000 founder shares with par value of $1 which are held for regulatory purposes. The founder shares are not redeemable, carry voting rights but are x entitled to dividends. The investor shares issued are 900,000 with par value of 1 cent each, they are redeemable at fair value at the option of the holder, carry x voting rights, but entitled to dividends. In the case of liquidation the founder shares rank equally with investor shares with each entitled to amt equal to its par value. The investor shares are entitled to any surplus after payment of par values. Which if any,… of the shares is equity?

24. Answer Investor shares x equity as x form part of the subordinate class of instru. The founder shares are the most subordinate as x gain any of the surplus nor do investor shares have same features as founder shares. If however the founder shares is repurchased by Z then the investor shares would be reclassified as equity. Founder shares are equity as x puttable, they are subordinate and there is x obligation on the entity to deliver cash or other finl assets to holder.

25. Homework • Questions 30.1 and 30.2 pg. 416 Lazar et al, Financial Reporting Stds for Malaysia, 2nd ed.

26. Contingent Settlement Provision –Para 25 If the manner of settlement of the financial instruments depends on the outcome of uncertain future events which are beyond the ctrl of both the issuer and the holder (i.e. change in stock market index or consumer price index) these finl instruments classified as fin liabilities unless possibility of settlement in cash is remote.

27. Settlement Options – Para 26 When a derivative finlinstru. gives 1 party a choice over how it is settled (e.g. the issuer or the holder can choose settlement net in cash or by exchanging shares for cash), it is a finl asset or a finlliab. unless all the settlement alternatives would result in it being an equity instrument. E.g: (i) Derivative finlinstru. with a settlement option is a finl liability eg. share option – Issuer can decide to net in cash or by exchanging own shares for cash (ii) Some contracts to buy or sell a non-finl item in exchange for the entity’s own equity instru. (within the scope of this Std ) and such that they can be settled either by delivery of the non-finl item or net in cash or another finlinstru. Such contracts are finl assets or finl. liabilities , X equity instrument

28. Compound Financial Instrument (i) Also called hybrid instruments (mixed of finl. liab or equity instrument). (ii) Classified by the issuer according to substance of contractual arrangement and the def. of finl. liab and an eq. instru. (iii) The approach to accounting for compound instr is to apply split accounting, to present the liab and equity elements separately (iv) Issuer of nonderivative finl instrument shall evaluate the terms of the fin instru to determine whether it contains both a liab or equity component. (v) The components shall be classified separately as finl liab, finl assets or equity instruments

29. Continue….. (vi) Economic effect of such instrument = Issuing conventional debt + warrant to purchase shares in the future (vii) Equity component of compound instrument can be obtained after deducting liab component from the FV of the instrument as a whole, i.e. residual value (viii) Initial Recog. Value = Total carrying amt of the EQUITY and LIABILITY Components = FV that ascribed to the instrument as a whole (ix) Transaction costs on issue of compound instruments to be allocated to the liab and equity components in proportion to the allocation of the proceeds.

30. Continue…… E.g: Bond that grants an option to holder to convert it into a fixed no. of ord. shares of the issuer. It comprises two components (a) Finl Liab – Contractual agree. for the issuer to deliver cash or other finl asset. There exists an obligation to pay interest and principal payment on the bond as long as it is not converted (b) Equity Instru- Option to convert to fixed no of ord. shares. When exercise by holder, issuer to settle contract with ord. shrs

31. Continue…. Instruments that from the issuer’s perspective have both liab and equity elements are from holder’s perspective are financial assets that contain embedded derivatives under FRS 139.However split actg under FRS 132 is different from embedded derivatives actg under FRS 139 bec the latter embedded derivative is separated and accounted for as a finl asset or finl liab at FV, while under FRS 132, embedded derivative that meet def of equity instru classified and presented as own equity

32. Continue… * To determine the initial carrying amt of the liab and eq. components, (a) Firstly to determine FV of the instrument as a whole. Generally it equals to proceeds (consideration) received in issuing instru. (b) FV Liab component measured separately without eq. instru. (c) Equity component is assigned the residual amt after deducting from FV of compound instru the liab component i.e. FV of compound instru – FV of liab com (Initial CA) = Initial Carryng Amt (CA) of eq instru It is x permitted to determine FV of eq and allocate the residual as FV of liab

33. Continue… * Equity is not remeasured subsequent to initial recognition *Classification of the liab and eq components of a convertible debt instru X revised as a result of a change in the likelihood that the equity conversion option will be exercised

34. Example 2 On October 31, 20X5, Entity A issues convertible bonds with a maturity of 5 yrs. The issue is for a total of 1,000 convertible bonds. Each bond has a par value of RM100,000, a stated interest rate is 5% per year and is convertible into 5,000 ordinary shares of Entity A. The convertible bonds are issued at par. The per share price for an Entity A share is RM15. Quotes for similar bonds issued by Entity A without a conversion option (i.e. bonds with similar principal and interest cash flows) suggest that they can be sold for RM90,000. Required: (a) Indicate how Entity A should account for the compound instrument on initial recognition Answer

35. Example 3 Lux Bhd issues 5,000 convertible bonds at the beginning of year 2004. The bonds have a 3-yr term and are issued at par with a face value of RM1,000 per bond. Each bond is convertible at any time up to maturity into 250 ord. shares. Interest is payable annually in arrears at a nominal annual interest rate of 5%. Prevailing market i/r for similar debt without conversion option is 7%. Required: Determine both the value of the equity and liab. omponents of the bond Answer

36. Redeemable Preference Shares with Discretionary Dividends (i) They are compound instruments provided the dividends are non-cumulative and their payments at discretion of the issuer (ii) The PV of the redemption value is recognised as liability (iii) The dividend paid relates to the equity and recognised as distribution of equity

37. Continue… Example 3: Winning Bhd issued RM500Mil redeemable preference shares to be redeemed at a premium of 20% after 5 yrs. Prevailing i/r is 5%. Dividend on the shares is not fixed but discretionary. Required Discuss accounting treatment of the redeemable preference shares

38. Continue…. The repayable amount will be RM600M [RM500M x (1+ 20%)], if the prefer. shares to be redeemed after 5 years. This amount represents the principal payment of RM500M + premium payment for redeeming the pref shares (20% x 500). When the amt discounted at prevailing i/r it will generally be RM500M. The redeemable preference shares will be disclosed at RM500M. Over the 5 yrs, the liability will be increased by the amt of interest charges. The interest will be charged to P&L as finance cost. As in this case, the prevailing i/r at the date of issuance of the pref shares was 5%, then in the 1st yr interest expense will be 5% x 500M = 25M. The value of redeemable pref. shares will increase to RM525M. For the 2nd yr the interest cost will be RM525M x 5% = 26.25M. The interest payment increased bec principal amt only settled at end of yr 5 In addition, any dividend paid by Winning Bhd will be disclosed in stat. of changes in equity

39. Treasury Shares (a) Company repurchasing its issued equity shares, i.e. shares buy back (*) Co has option to cancel the shares or hold them (*) If cancel shares bought back, needs to follow legal requirement of Co Act 1965 i.e. to transfer to the capital redemption reserve an amount equal to the (b) On the other hand, the shares may not be cancelled but held to be reissued at a later date. Equity shares bought back but x cancelled are termed treasury shares.

40. Continue (*) Amt paid for the redemption is held in sep. a/c. (*) In bal. sheet. Treasury shares are deducted from equity (*) No gain or loss should be recog. in P&L on the purchase, sale, issue or cancellation of the entity’s own equity instru. (*) Consideration paid or received recognised directly in equity

41. Interests, Dividends, Losses and Gains (i) Their actg treatment and presentation depends on whether they related to liability or equity (ii) If relate to liability – Report in P&L as Expense or Income. E.g. Interest on bonds. (iii) If relate to equity – Recorded directly to Stat of Changes in Equity. (iv) Charges in P&L *Gains and Losses associated with redemption or refinancing of liability expenses disclosed in P&L * Premiums and discounts on liability *Cost of equity that is abandoned, expense and w/off * Dividend on redeemable pref shares, expense disclosed in P&L

42. Continue…. (v) Changes in Equity * Dividends on Equity Shares disclosed in Stat of Changes in Equity * Transaction costs on eq. transactions such as registration and professional fees, stamp duties and printing costs on the issue or share buy back deducted from equity

43. Example 4 On 1/1/x5, Armada Bhd issued RM10Mil 3% loan stock maturing on 1/1/x8. These loan stocks are redeemable at RM14.167Mil. At the time of the issue of the debt, the market interest rate was 15% . Required In the book of Armada show an extract of the income statement for years X5-x7. Answer

44. Example 5 Redeemable Preference Shares (Dividends are Non-Cumulative and at discretion of issuer) On 1/1/x6 Astronomy Bhd issued RM20 Mil redeemable pref shares at par. The shares were redeemable in 3 yrs time at a premium of 10%. No dividends were paid in year x6 but in year X7, the co paid a net dividend of RM400K. Prevailing interest rate is 8%. Required Discuss the actg treatment Answer

45. Offsetting Financial Asset and Financial Liability (i) Finl Asset and Finl Liab are presented separately (ii) However, they can be offset and the net amt presented in the balance sheet ONLY when an entity has a legally enforceable right of offset and intends to settle on a net basis orto realise the asset and settle the liability simultaneously

46. Continue…. (iii) Offsetting x derecognition (i.e x write off of balance sheet) Para 49 of FRS 132: offsetting is inappropriate when: (a) Several diff. finl instru used to emulate features of single instru.(a synthetic instrument) (b) Finl asset and fin liab arise from finl instru having same primary disclosure (c) Financial or other assets are pledged as collateral for non-recourse finl liab (d) Finl asset set aside in trust by debtor for discharging an obligation without those assets accepted by creditors in settlement of obligation (e) Obligations incurred as a result of events giving rise to losses are expected to be recovered from a 3rd party by virtue of claim made under insurance policy

47. FRS 132: Scope Exception (Para 4) Interests in Subsidiaries (FRS 127) Interests in Associates (FRS 128) Interests in Joint Ventures (FRS 131) Employee Benefit Plans (FRS 119) Share based payments transactions (FRS 2) Contract for Contingent Considerations (FRS 3) Insurance Contracts (FRS 4)