Full PFRS JEFF-MIKE SMITH SULE,

FRIACC, ENP, REB, REA,

CPA, MICB

Part 1 LECTURER
IFRS i s a set of principles increasingly being prescribed and is used extensively around the world.

The body responsible for development of IFRS is the International Accounting Standards Board (IASB)
which was established in 2001, replacing the International Accounting Standards Committee (IASC).

I A S B D e v e l o p e d n e w s t a n d a rd s a n d i n t e r p r e t a t i o n s , cal ling each new standard an I FRS and each

i nterpretation an I FRIC .
P R E FA C E TO I N T E R N AT I O N A L F I N A N C I A L R E P O R T I N G S TA N D A R D S
1. The objectives of the IASB

2. The scope of IFRS

3. Due process for developing standards and interpretations

4. Equal status of “bold type” and “plain type” paragraphs

5. Po licy o n effective d ates

6. Use of English as the official language

Conceptual Framework For Fi nancial Reporting

• D e f i n e s t h e o b j e c t i v e o f g e n e ra l p u r p o s e f i n a n c i a l r e p o r t i n g
• I d e n t i f i e s t h e q u a l i ta t i v e c h a ra c t e r i s t i c s t h a t m a ke f i n a n c i a l i n fo r m a t i o n i n f i n a n c i a l r e p o r t i n g u s e f u l
• Defines the basic elements of financial statements and the criteria for recognizing them in financial
statements
I FRS 1 : FI RST-TIME ADOPTION OF I NTERNATIONAL FINANCIAL REPORTIN G STANDARDS

• Prescribes the procedures when an entry adopts IFRS for the first time as the basis for preparing its
g e n e ra l p u r p o s e f i n a n c i a l s t a t e m e n t s
REQUIREMENTS
• S e l e c t a c c o u n t i n g p o l i c i e s b a s e d o n I F R S s e f fe c t i v e a t 3 1 D e c e m b e r 2 0 1 8
• P r e p a r e a t l e a s t 2 0 1 8 a n d 2 0 1 7 f i n a n c i a l s t a t e m e n t s a n d r e s ta t e r e t ro s p e c t i v e l y t h e o p e n i n g s t a t e m e n t
of financial position
EXEMPTIONS

• The opening statement of financial position is prepared at Jan. 1, 2017 at the latest

• T h e o p e n i n g s t a t e m e n t o f f i n a n c i a l p o s i t i o n i s p r e s e n t e d i n t h e e n t i t y ’s f i r s t I F R S f i n a n c i a l s t a t e m e n t s

• If a Dec. 31, 2018 adopter reports selected financial data (but not full financial statements) on an IFRS
basis for periods prior to 2017, in addition to full financial statements for 2017 and 2018, that does
not change the fact that its opening IFRS statement of financial position is as at 1 Jan 2017
I FRS 2 : SHARE-BASED PAYMENT

• P r e s c r i b e s t h e a c c o u n t i n g f o r t r a n s a c t i o n s i n w h i c h a n e n t i t y r e c e i v e s o r a c q u i re s g o o d s o r s e r v i c e s e i t h e r
a s c o n s i d e ra t i o n f o r i t s e q u i t y i n s t r u m e n t s o r b y i n c u r r i n g l i a b i l i t i e s f o r a m o u n t s b a s e d o n t h e p r i c e o f t h e
e n t i t y ’s s h a r e s o r o t h e r e q u i t y i n s t r u m e n t s o f t h e e n t i t y
• It applies to both public and non -public entities
• T h e f a i r v a l u e o f e q u i t y i n s t r u m e n t s g r a n t e d i s b a s e d o n m a r ke t p r i c e s , i f a v a i l a b l e a n d t a ke s i n t o a c c o u n t
the terms and conditions ono which those equity instruments were granted

V E S T I N G C O N D I T I O N S a r e e i t h e r s e r v i c e c o n d i t i o n s o r p e r fo r m a n c e c o n d i t i o n s
SERVICE CONDITION is a vesting condition that requires the counterparty to complete a specified period of
service to the entity
PERFORMANCE CONDITIONS require the completion of a specified period of service in addition to specified
performance targets
I FRS 2 : SHARE-BASED PAYMENT

A p e r fo r m a n c e t a r g e t i s d e f i n e d b y r e fe re n c e t o
a ) T h e e n t i t y ’s o w n o p e ra t i o n s o r a c t i v i t i e s ( i n c l u d i n g t h o s e o f a n o t h e r e n t i t y i n t h e s a m e g r o u p )
b ) T h e p r i c e o f t h e e n t i t y ’s e q u i t y i n s t r u m e n t s ( o r e n t i t i e s i n t h e s a m e g r o u p )
I F R S 2 i n c l u d e s s p e c i f i c g u i d a n c e o n t h e a c c o u n t i n g f o r s h a r e - b a s e d p ay m e n t t r a n s a c t i o n s a m o n g g r o u p
entities
I FRS 3 : BUSINESS COMBINATIONS

• A T R A N S A C T I O N O R E V E N T I N W H I C H A N A C Q U I R E R O BTA I N S C O N T R O L O F O N E O R M O R E B U S I N E S S E S

BUSINESS
• A N I N T E G R AT E D S E T O F A C T I V I T I E S A N D A S S E T S T H AT I S C A PA B L E O F B E I N G C O N D U C T E D A N D M A N A G E D
F O R T H E P U R P O S E O F P R O V I D I N G A R E T U R N D I R E C T LY TO I N V E S TO R S O R O T H E R O W N E RS , M E M B E R S O R
PA R T I C I PA N T S .

D O E S N OT A P P LY TO :
• T h e i n fo r m a t i o n o f a j o i n t a r ra n g e m e n t i n t h e f i n a n c i a l s t a t e m e n t s o f t h e j o i n t a r ra n g e m e n t i t s e l f
• C o m b i n a t i o n s o f e n t i t i e s o r b u s i n e s s e s u n d e r c o m m o n c o n t ro l
• To t h e a c q u i s i t i o n o f a n a s s e t o r a g r o u p o f a s s e t t h a t d o n o t c o n s t i t u t e a b u s i n e s s
I FRS 3 : BUSINESS COMBINATIONS

S T E P S I N A P P LY I N G T H E A C Q U I S I T I O N M E T H O D
1 . I d e n t i f i c at i o n o f t h e ‘ a c q u i r e r ’
2. Determination of the ‘acquisition date’
3 . R e c o g n i t i o n a n d m e a s u r e m e n t o f t h e i d e n t i f i a b l e a s s e t s a c q u i re d , t h e l i a b i l i t i e s a s s u m e d a n d a ny N o n -
c o n t ro l l i n g I n t e re s t ( N C I ) i n t h e a c q u i r e r
4 . R e c o g n i t i o n a n d m e a s u r e m e n t o f g o o d w i l l o r a g a i n f r o m a b a r ga i n p u r c h a s e

A s s e t s a n d l i a b i l i t i e s a r e m e a s u re d a t t h e i r a c q u i s i t i o n - d a t e f a i r v a l u e s ( w i t h a l i m i t e d n u m b e r o f s p e c i f i e d
e xc e p t i o n s )
I FRS 3 : BUSINESS COMBINATIONS

GOODWILL i s m e a s u r e d a s t h e d i f fe r e n c e b e t w e e n

A . T h e a g g r e ga t e o f t h e
• A c q u i s i t i o n - d a t e f a i r v a l u e o f t h e c o n s i d e ra t i o n t ra n s fe r re d
• T h e a m o u n t o f a ny N C I
• In a business combination achieved in stages
B . T h e n e t o f t h e a c q u i s i t i o n - d a t e a m o u n t s o f t h e i d e n t i f i a b l e a s s e t s a c q u i re d a n d t h e l i a b i l i t i e s
assumed

C o n s i d e ra t i o n f o r t h e a c q u i s i t i o n i n c l u d e s t h e a c q u i s i t i o n - d a t e f a i r v a l u e o f c o n t i n g e n t c o n s i d e ra t i o n
C O N T I N G E N T C O N S I D E R AT I O N - M e a s u r e d a t f a i r v a l u e a t e a c h r e p o r t i n g d a t e i r r e s p e c t i v e o f w h e t h e r
t h e c o n t i n g e n t c o n s i d e ra t i o n i s a f i n a n c i a l o r n o n - f i n a n c i a l i n s t r u m e n t
I FRS 3 : BUSINESS COMBINATIONS

I N C L U D E D G U I D A N C E O N S O M E S P E C I F I C A S P E C T S O F B U S I N E S S C O M B I N AT I O N S
• B u s i n e s s c o m b i n a t i o n s a c h i e v e d w i t h o u t t h e t ra n s fe r o f c o n s i d e ra t i o n
• R e v e rs e a c q u i s i t i o n s
• I d e n t i f y i n g i n t a n g i b l e a s s e t s a c q u i re d
• U n r e p l a c e d a n d v o l u n ta r i l y r e p l a c e d s h a re - b a s e d p ay m e n t s a w a rd s
• P r e - ex i s t i n g r e l a t i o n s h i p s b e t w e e n t h e a c q u i re r a n d t h e a c q u i re e
• T h e r e a s s e s s m e n t o f t h e a c q u i re e ’s c o n t ra c t u a l a r ra n g e m e n t s a t t h e a c q u i s i t i o n d a t e
I FRS 4 : I NSURANCE CONTRACTS

PRESCRIBES THE FINANCIAL REPORTING FOR INSURANCE CONTRACTS PUT I N PLACE PENDING THE
COMPLETION OF THE SECOND PHASE OF THE IASB’S INSURANCE CONTRACTS PROJECT
T H I S S TA N D A R D A P P L I E S TO I N S U R A N C E C O N T R A C T S T H AT A N E N T I T Y I S S U E S
• I n s u r e rs a r e e xe m p t e d f r o m a p p l y i n g t h e I A S B f r a m e w o r k a n d s o m e I F R S s
• C a t a s t ro p h e r e s e r v e s a n d e q u a l i za t i o n p r o v i s i o n s a r e p r o h i b i t e d
• I n s u ra n c e l i a b i l i t i e s m ay n o t b e o f f s e t a g a i n s t r e l a t e d r e i n s u ra n c e a s s e t s

• Accounting policy changes are restricted

• S o m e d i s c l o s u r e s a r e r e q u i re d
I FRS 5 : NON -CURRENT ASSETS FOR SALE AND DISCONTINUED OPERATIONS

I t s e t s o u t t h e a c c o u n t i n g f o r n o n - c u r r e n t a s s e t s h e l d f o r s a l e a n d t h e p r e s e n ta t i o n a n d d i s c l o s u re o f
d i s c o n t i n u e d o p e ra t i o n s

N o n - c u r re n t a s s e t s , a n d t h e a s s e t s a n d l i a b i l i t i e s i n a d i s p o s a l g r o u p , c l a s s i f i e d a s h e l d f o r s a l e a r e :
• M e a s u re d a t t h e l o w e r o f c a r r y i n g a m o u n t a n d f a i r v a l u e l e s s c o s t s t o s e l l ( t h e n o n - c u r re n t a s s e t s a r e n o
longer depreciated)
• P r e s e n t e d s e p a ra t e l y i n t h e s t a t e m e n t o f f i n a n c i a l p o s i t i o n
I t a p p l i e s t o a n o n - c u r re n t a s s e t ( o r d i s p o s a l g r o u p ) t h a t i s c l a s s i f i e d a s h e l d f o r d i s t r i b u t i o n t o o w n e rs .
I FRS 5 : NON -CURRENT ASSETS FOR SALE AND DISCONTINUED OPERATIONS

A d i s c o n t i n u e d o p e ra t i o n i s a c o m p o n e n t o f a n e n t i t y t h a t e i t h e r h a s b e e n d i s p o s e d o f o r i s c l a s s i f i e d a s
held for sale
a ) R e p r e s e n t s a s e p a ra t e m a j o r l i n e o f b u s i n e s s o r m a j o r g e o g ra p h i c a l a r e a o f o p e ra t i o n s
b ) I s p a r t o f a s i n g l e c o o r d i n a t e d p l a n t o d i s p o s e o f a s e p a ra t e m a j o r l i n e o f b u s i n e s s o r g e o g ra p h i c a l a r e a
o f o p e ra t i o n s
c ) I s a s u b s i d i a r y a c q u i re d e x c l u s i v e l y w i t h a v i e w t o r e s a l e

I t r e q u i r e s d i s c l o s u re s i n r e s p e c t o f n o n - c u r r e n t a s s e t s ( o r d i s p o s a l g r o u p s ) c l a s s i f i e d a s h e l d f o r s a l e o r
d i s c o n t i n u e d o p e ra t i o n s
I FRS 6 : EXPLORATION FOR AND EVALUATION OF MINERAL RESOURCES

• P r e s c r i b e s t h e f i n a n c i a l r e p o r t i n g f o r t h e e x p l o ra t i o n f o r a n d e v a l u a t i o n o f m i n e ra l r e s o u r c e s u n t i l t h e
I A S B c o m p l e t e s a c o m p re h e n s i v e p r o j e c t i n t h i s a r e a
• D o e s n o t r e q u i r e o r p r o h i b i t a ny s p e c i f i c a c c o u n t i n g p o l i c i e s f o r t h e r e c o g n i t i o n a n d m e a s u re m e n t o f
e x p l o ra t i o n a n d e v a l u a t i o n a s s e t s
• R e q u i re s a n i m p a i r m e n t t e s t w h e n t h e re i s a n i n d i c a t i o n t h a t t h e c a r r y i n g a m o u n t o f e x p l o ra t i o n a n d
e v a l u a t i o n a s s e t s e x c e e d s r e c o v e ra b l e a m o u n t
• R e q u i re s d i s c l o s u r e o f i n f o r m a t i o n t h a t i d e n t i f i e s a n d e x p l a i n s a m o u n t s a r i s i n g f r o m e x p l o ra t i o n a n d
e v a l u a t i o n o f m i n e ra l r e s o u r c e s .
I FRS 7 : FINANCIAL I NSTRUMENTS – D ISCLOSURES

P r e s c r i b e s d i s c l o s u re s t h a t e n a b l e f i n a n c i a l s t a t e m e n t u s e rs t o e v a l u a t e
• The significance of financial instruments to an entity
• The nature and extent of their risks
• How the entity manages those risks.

R e q u i re s d i s c l o s u r e o f i n f o r m a t i o n a b o u t t h e s i g n i f i c a n c e o f f i n a n c i a l i n s t r u m e n t s f o r a n e n t i t y ’s f i n a n c i a l
p o s i t i o n a n d p e r fo r m a n c e
I FRS 7 : FINANCIAL I NSTRUMENTS – D ISCLOSURES

D I S C LO S U R E S :
• T h e e n t i t y ’s f i n a n c i a l p o s i t i o n
• T h e e n t i t y ’s p e r fo r m a n c e i n t h e p e r i o d
• Accounting policies
• T h e n a t u re a n d e x t e n t o f r i s k s a r i s i n g f r o m f i n a n c i a l i n s t r u m e n t s
• Q u a l i t a t i v e i n fo r m a t i o n a b o u t e x p o s u re s t o e a c h c l a s s o f r i s k a n d h o w t h o s e r i s k s a r e m a n a g e d
• Q u a n t i ta t i v e i n f o r m a t i o n a b o u t e x p o s u re s t o e a c h c l a s s o f r i s k , s e p a ra t e l y f o r c r e d i t r i s k , l i q u i d i t y r i s k a n d
m a r ke t r i s k
I FRS 8 : OPERATING SEGMENTS
R e q u i re s e n t i t i e s t o d i s c l o s e s e g m e n ta l i n f o r m a t i o n t h a t i s c o n s i s t e n t w i t h h o w i t i s r e p o r t e d i n t e r n a l l y t o
t h e c h i e f o p e ra t i n g d e c i s i o n m a ke r
A p p l i e s t o t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s o f a g r o u p w i t h a p a r e n t ( a n d t o t h e s e p a ra t e o r
individual financial statements of an entity)
• W h o s e d e b t o r e q u i t y i n s t r u m e n t s a r e t r a d e d i n a p u b l i c m a r ke t
• That files or is in the process of filing its (consolidated) financial statements with a securities
c o m m i s s i o n o r o t h e r r e g u l a t o r y o r g a n i za t i o n , f o r t h e p u r p o s e o f i s s u i n g a ny c l a s s o f i n s t r u m e n t s i n a
p u b l i c m a r ke t .
A n o p e ra t i n g s e g m e n t i s a c o m p o n e n t o f a n e n t i t y :
• T h a t e n ga g e s i n b u s i n e s s a c t i v i t i e s f r o m w h i c h i t m ay e a r n r e v e n u e s a n d i n c u r e x p e n s e s
• W h o s e o p e ra t i n g r e s u l t s a r e r e g u l a r l y r e v i e w e d b y t h e e n t i t y ’s c h i e f o p e ra t i n g d e c i s i o n m a ke r t o m a ke
d e c i s i o n s a b o u t r e s o u rc e s t o b e a l l o c a t e d t o t h e s e g m e n t a n d a s s e s s i t s p e r fo r m a n c e
• For which discrete financial information is available.
I FRS 8 : OPERATING SEGMENTS

I T D O E S N OT D E F I N E …
• Segment revenue
• Segment expense
• Segment result
• Segment assets
• Segment liabilities

I t d o e s n ’ t r e q u i re s e g m e n t i n fo r m a t i o n t o b e p r e p a r e d i n c o n fo r m i t y w i t h t h e a c c o u n t i n g p o l i c i e s a d o p t e d
f o r t h e e n t i t y ’s f i n a n c i a l s t a t e m e n t s
I FRS 8 : OPERATING SEGMENTS

E n t i t y - w i d e d i s c l o s u re s t h a t a r e r e q u i r e d i n c l u d e t h e s e i n fo r m a t i o n a b o u t :
• Each product and service or groups of products and services
• G e o g ra p h i c a l a r e a s
• M a j o r c u s t o m e rs
• J u d g e m e n t s m a d e b y m a n a g e m e n t i n a p p l y i n g t h e a g g r e ga t i o n c r i t e r i a f o r o p e ra t i n g s e g m e n t s