FINANCIAL REPORTING UNDER

IFRS
FINANCIAL STATEMENTS
 Consolidated Statement of Financial Position (as at … for
current year and two previous years)

 Consolidated Statement of Profit & Loss and Other

Comprehensive Income (for the year ended … current year
and previous year )

 Consolidated Statement of Changes in Equity (for the year

ended … for the current year and two previous years)

 Consolidated Statement of Cash Flows (for the year ended

… current year and previous year)
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
Non-current Assets Current Assets

 Property, Plant &  Biological assets

Equipment  Inventories
 Intangible Assets &  Contract assets
Goodwill  Other investments,
 Biological Assets including derivatives
 Investment Property  Current tax assets
 Equity-accounted investees  Trade and other
 Other Investments,
receivables
including derivatives  Prepayments
 Deferred tax assets  Cash & cash equivalents
 Employee benefits  Assets held for sale
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
Equity
 Share capital
 Share premium
 Reserves
 Retained earnings
 Equity attributable to the
owners of the company
 Non-controlling interest
 Total equity
Non-current Liabilities
 Loans & borrowings
 Employee benefits
 Trade & other payables
 Deferred income
 Provisions
 Deferred tax liabilities
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
Current Liabilities

 Bank overdraft  Total Liabilities

 Current tax obligations  Total equity and liabilities
 Loans & borrowings
 Employee benefits
 Trade & other payables
 Contract liabilities
 Deferred income
 Provisions
 Liabilities directly
associated with the assets
held for sale
CONSOLIDATED STATEMENT OF PROFIT OR
LOSS AND OTHER COMPREHENSIVE INCOME

Continuing operations Continuing operations

 Revenues  Operating profit

 Cost of sales  Finance income
 Gross profit
 Finance costs
 Other income
 Net finance costs
 Selling & distribution
expenses  Share of profit of equity
 Administrative expenses accounted investments,
 Research & development net of taxes
expenses  Profit before tax
 Impairment loss on trade  Income tax expense
receivables and other
contract assets  Profit from continuing
 Other expenses operations
CONSOLIDATED STATEMENT OF PROFIT OR
LOSS AND OTHER COMPREHENSIVE INCOME

Discontinued operations

 Profit (loss) from  Other comprehensive

discontinued operations, income for the period, net of
net of taxes taxes
 Profit for the period  Total comprehensive income
for the period
 Other comprehensive
income  Profits attributable to:
 Items that will not be  Owners’ of the company
reclassified to profit or  Non-controlling interest
loss  Total comprehensive income
 Items that are or may be attributable to:
reclassified subsequently  Owners’ of the company
to profit or loss  Non-controlling interest
CONSOLIDATED STATEMENT OF PROFIT OR
LOSS AND OTHER COMPREHENSIVE INCOME
 Earnings per share  Adjusted Earnings before
 Basic EPS interest, tax, depreciation
and amortization
 Diluted EPS
(Adjusted EBITDA)
 Earnings per share:
comprehensive operations
 Basic EPS
 Diluted EPS
SALE AND LEASEBACK ARRANGEMENT
 IFRS 15
 Carrying Amount: $1,000,000

 Fair Value: $1,500,000

 Estimated future useful life: 20 years

 Lease term: 5 years

 Annual Lease rentals: $100,000 ( in arrears)

 PV of Minimum LR (10%) $379,100

SALE AND LEASEBACK ARRANGEMENT
 Derecognize PP&E on April 1, 20X6 (Sale satisfies the
requirement of IFRS 15)

 Measure & Recognize ‘Right of Use of Asset” on April 1,

20X6

 PV of Lease rental / Fair value of PP&E

 Carrying amount of ‘Right of Use of Asset’

 Gain on Sale of PP&E

 To the extent right is transferred in PP&E to the entity
SALE AND LEASEBACK ARRANGEMENT
 ‘Right of Use of Asset’ to be depreciated over the lease term

 Statement of Financial Position at March 31, 20X7 to show

‘Right of Use of Asset’ under ‘Non-current assets’

 Interest as Finance Cost in the Statement of Profit & Loss

 Closing Lease Liability:

 Current
 Non-current
INVESTMENT PROPERTIES: IAS 40
 Held for investment purpose rather than for use in the
ordinary course of business
 For rental income or capital appreciation or both

 Permitted methods of Accounting for Investment

Properties:
 Fair Value Method:
 Investment properties are not depreciated, but are measured annually
at fair value;
 Gains or losses on re-measurement being recognized in Statement of
Profit and Loss

 Cost Method: PP&E: IAS 16

 Cost Model
 Revaluation Model: Gain on revaluation generally recognized in
‘other comprehensive income’, but losses are generally
recognized in Statement of Profit & Loss.
ACCOUNTING TREATMENT FOR
INTANGIBLE ASSETS: IAS 38
 How they have arisen?

 Intangible assets of acquired subsidiaries result of

business combinations – IFRS 3: Business
Combinations

 Purchase Consideration allocation to the identifiable

assets and liabilities of the acquired subsidiary

 Brand name is recognized,

 If it is separable or arises from contractual or other legal
rights
 Fair value can be reliably estimated.
PROVISIONS, CONTINGENT LIABILITIES &
CONTINGENT ASSETS – IAS 37
 Legal claim against Omega: Provision, as it is a
liability of uncertain timing or amount or both

 Provision to be recognized
 Probable Outflow of economic benefits
 Which can be reliably measured

 Legal claim by Omega against supplier Y:

Contingent Asset
 Possible asset from the past events
 Contingent assets not to be recognized in the
financial statements, to make a disclosure only
OPERATING SEGMENTS – IFRS 8
 Operating segments definition

 Component of an entity
 Which engages in business activities from which it
may earn revenues and incur expenses;
 Whose operating results are regularly reviewed by
Chief Operating decision maker; and
 For which discrete financial information is available
PROPERTY, PLANT & EQUIPMENT: IAS 16
 Allows entities to revalue its PP&E to fair value

 Measurement model used (Cost or Fair value) should be

consistent on class by class basis
 Similar nature and use
 Land & buildings a distinct class and PP&E would be another
class

 Land & buildings: measurement using fair value (revaluation)

model and Plant and machinery measurement using ‘cost
model’

 ‘Cherry picking’ or ‘mixed measurement’ model not allowed.

 Fair value: revalue with sufficient regularity to ensure that

carrying amount of revalued asset is true reflection of its
current value
PROPERTY PLANT & EQUIPMENT: IAS 16
Tangible items which are held for use in the
production or supply of goods and services, for
rental to others, or for administrative purposes;
&
 Are expected to be used for more than one
period.

 IAS 38 defines intangible assets as identifiable,

non-monetary assets without physical substance.
RELATED PARTY DISCLOSURES – IAS 24
 Son of the Financial Controller of the company is a related
party to Omega

 Business is controlled by son, who is one of the close family

members of the Key Managerial Personnel of the company

 Disclosure of all transactions with related parties

irrespective of their size

 Transactions with the related parties are material by their

nature.
CURRENT ASSET: IAS 1
 An asset is classified as current when the entity:
 – Expects to realize the asset, or intends to sell or
consume it, in its normal operating cycle.
 – Holds the asset primarily for the purpose of
trading.
 – Expects to realize the asset within 12 months after
the reporting period.
 – Has cash or a cash equivalent which is not subject
to an exchange restriction.