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Consolidation and IFRS: an introduction
Academic year 2010/2011
Patrice Schumesch Sebastian Harushimana

Table of contents (1/4)
 Introduction
- Why IFRS ? - General principles

 Measurement of assets and liabilities
- Formation expenses - Intangible assets - Property, plant & equipment - Leases - Impairment of assets

Slide 2

Consolidation and IFRS: an introduction

Table of contents (2/4)
 Measurement of assets and liabilities (cont’d)
- Government grants - Inventories and contracts in progress - Revenue recognition - Provisions and contingencies - Events after the reporting period - Employee benefits and share-based payments - Deferred taxes - Foreign currency transactions - Financial instruments

Slide 3

Consolidation and IFRS: an introduction

Table of contents (3/4)
 Consolidation
- Consolidation - Business combinations - Translation of financial statements of foreign operations

 Presentation of financial statements
- Structure and contents of financial statements - Statement of financial position - Statement of comprehensive income - Statement of changes in equity - Statement of cash flows - Structure of disclosures

Slide 4

Consolidation and IFRS: an introduction

Table of contents (4/4)
 Presentation of financial statements (cont’d)
- Discontinued operations - Operating segments - Earnings per share - Related party transactions - Interim financial reporting

 Changes in accounting policies and first-time application rules - Changes in accounting policies, changes in accounting estimates and errors - First-time adoption of IFRS

Slide 5

Consolidation and IFRS: an introduction

Why IFRS ?

Why IFRS ?
 IFRS Worldwide
 Globalisation of business and capital markets require that there be one single accounting language  There is also an increasing need for high-quality and transparent financial information (cfr Enron, Worldcom, L&H, Parmalat, etc.)  IASC (International Accounting Standards Committee) was set up in 1973. IASC Foundation (now known as IFRS foundation) constitution reviewed in March 2010:  to develop, in the public interest, a single set of high quality, understandable, enforceable and globally accepted financial reporting standards based upon clearly articulated principles.  to promote the use and rigorous application of those standards.  to take account of, as appropriate, the needs of a range of sizes and types of entities in diverse economic settings.  to promote and facilitate adoption of International Financial Reporting Standards (IFRSs), through the convergence of national accounting standards and IFRSs. Slide 7 Consolidation and IFRS: an introduction

Why IFRS ?
 Consensus that the international accounting/financial reporting harmonisation process be carried out at the level of the IASB (International Accounting Standards Board)  Convergence between IFRS and US GAAP  IOSCO (International Organisation of Securities Commission) recommends to its members to accept IFRS for listing purposes on their respective markets

Slide 8

Consolidation and IFRS: an introduction

Why IFRS ?

Slide 9

Consolidation and IFRS: an introduction

Why IFRS ?
 The IFRS foundation (formerly known as IASC Foundation), an independent organisation with 22 trustees who appoints the IASB members, exercise oversight, and raise the funds needed.  The IASB (Board) which has 16 full-time and 3 part-time independent board members with sole responsibility for setting accounting standards.  The Standards Advisory Council includes users, regulators, academics, preparers & others representing the “real world”.  The IFRIC, mandated with interpreting IAS and IFRS standards and providing timely guidance.

Slide 10

Consolidation and IFRS: an introduction

Why IFRS ?
IASB Due Process 1 AGENDA 2 Discussion Memorandum 3 Public Hearing 4

Topics for standard setting are identified
Slide 11

The IASB issues initial...
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