Audit Committee Institute

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About the Audit,Committee Institute,Sponsored by more than 40 member. firms around the world KPMG s Audit,Committee Institutes ACIs provide. audit committee and board members,with practical insights resources and. peer exchange opportunities focused,on strengthening oversight of financial. reporting and audit quality and the array of,challenges facing boards and businesses.
today from risk management and,emerging technologies to strategy and. global compliance,For more information speak to your. usual KPMG contact or go to,home kpmg globalACI,Insights into IFRS An overview 1. Facing new challenges, The past few years have certainly been busy for financial statement preparers so many. will be relieved to have filed their first sets of financial statements under the new financial. instruments and revenue standards The focus now will be on consistency in application of. the new standards and the post implementation issues that will undoubtedly emerge. However there s no let up for preparers as they focus on their next milestones the. implementation of IFRS 16 which reveals lease liabilities that might previously have been. hidden and for insurers perhaps the biggest accounting change IFRS 17 Although. the deferral of IFRS 17 s effective date to 2022 and the proposed amendments will help. there s still a huge amount to do with the impacts felt far beyond accounting The benefits. for users of financial statements including greater transparency and comparability should. not be underestimated, Looking forward as businesses grow and evolve whether by developing new goods.
and services embedding new technology or seeking new business opportunities new. challenges will arise when navigating IFRS Standards Our practical guidance in Insights. into IFRS reflects the extensive insight and hands on experience that we ve gained on. all of the standards so it s well placed to help you apply them consistently across your. business whatever direction that takes It will also help you with the disclosures that. you will need to provide in your financial statements remember to keep them clear and. meaningful users require financial information that is relevant and consistent For more. visit home kpmg betterbusinessreporting, This companion guide aims to help Audit Committee members and others by providing a. structured guide to the key issues arising from the Standards. Audit Committee Institute,September 2019, 2019 KPMG IFRG Limited a UK company limited by guarantee All rights reserved. 2 Insights into IFRS An overview,Facing new challenges 1. How to navigate this publication 4,1 Background 5,1 1 Introduction 5. 1 2 The Conceptual Framework 6,2 General issues 8,2 1 Form and components of financial statements 8.
2 2 Changes in equity 10,2 3 Statement of cash flows 11. 2 4 Fair value measurement 12,2 5 Consolidation 14. 2 6 Business combinations 17,2 7 Foreign currency translation 19. 2 8 Accounting policies errors and estimates 21,2 9 Events after the reporting date 22. 2 10 Hyperinflation 23,3 Statement of financial position 24.
3 1 General 24,3 2 Property plant and equipment 25. 3 3 Intangible assets and goodwill 27,3 4 Investment property 29. 3 5 Associates and the equity method 31,3 6 Joint arrangements 33. 3 7 Not used,3 8 Inventories 34,3 9 Biological assets 35. 3 10 Impairment of non financial assets 36,3 11 Not used.
3 12 Provisions contingent assets and liabilities 38. 3 13 Income taxes 40, 4 Statement of profit or loss and other comprehensive income 43. 4 1 General 43,4 2 Revenue 45,4 3 Government grants 48. 4 4 Employee benefits 49,4 5 Share based payments 51. 4 6 Borrowing costs 53,5 Special topics 54,5 1 Leases 54. 5 2 Operating segments 56, 2019 KPMG IFRG Limited a UK company limited by guarantee All rights reserved.
Insights into IFRS An overview 3,5 3 Earnings per share 58. 5 4 Non current assets held for sale and discontinued operations 60. 5 5 Related party disclosures 61,5 6 Investment entities 62. 5 7 Non monetary transactions 64, 5 8 Accompanying financial and other information 65. 5 9 Interim financial reporting 66,5 10 Disclosure of interests in other entities 67. 5 11 Extractive activities 69,5 12 Service concession arrangements 70.
5 13 Common control transactions and Newco formations 72. 6 First time adoption of IFRS Standards 74,6 1 First time adoption of IFRS Standards 74. 6 2 Regulatory deferral accounts and first time adoption of IFRS Standards 76. Financial instruments Introduction to sections 7 and 7I 78. 7 Financial instruments 79,7 1 Scope and definitions 79. 7 2 Derivatives and embedded derivatives 80,7 3 Equity and financial liabilities 81. 7 4 Classification of financial assets 82,7 5 Classification of financial liabilities 83. 7 6 Recognition and derecognition 84,7 7 Measurement 85.
7 8 Impairment 87,7 9 Hedge accounting 88,7 10 Presentation and disclosures 90. 7 11 Transition to IFRS 9 92,7I Financial instruments IAS 39 94. 7I 1 Scope and definitions 94,7I 2 Derivatives and embedded derivatives 95. 7I 3 Equity and financial liabilities 96, 7I 4 Classification of financial assets and financial liabilities 97. 7I 5 Recognition and derecognition 98,7I 6 Measurement and gains and losses 99.
7I 7 Hedge accounting 101,7I 8 Presentation and disclosures 103. 8 Insurance contracts 105,8 1 Insurance contracts 105. 8 1A Insurance contracts IFRS 17 107,Appendix I 110. New standards or amendments for 2019 and forthcoming requirements 110. Keeping in touch 113, 2019 KPMG IFRG Limited a UK company limited by guarantee All rights reserved. 4 Insights into IFRS An overview,How to navigate this publication.
This guide provides a quick overview of the key requirements of IFRS Standards for easy. reference and is organised by topic, This edition is designed for companies with a year end of 31 December 2019 It is based. on IFRS Standards in issue at 1 August 2019 and includes standards and interpretations. that are effective at that date1 currently effective requirements and significant. amendments that are effective in later periods forthcoming requirements. Appendix I lists new standards or amendments for 2019 and forthcoming requirements. other than minor amendments, 1 IAS 26 Accounting and Reporting by Retirement Benefit Plans and the IFRS for Small and Medium sized. Entities are excluded, 2019 KPMG IFRG Limited a UK company limited by guarantee All rights reserved. Insights into IFRS An overview 5,1 Background,1 1 Introduction. Currently effective IFRS Foundation Constitution International Accounting Standards. Board and IFRS Interpretations Committee Due Process Handbook Preface to IFRS. Standards IAS 1,IFRS Standards, IFRS Standards the Standards are a set of globally accepted standards for financial.
reporting applied primarily by listed entities in over 160 countries. Individual standards and interpretations are developed and maintained by the. International Accounting Standards Board and the IFRS Interpretations Committee. The Standards are designed for use by profit oriented entities. Compliance with IFRS Standards, Any entity claiming compliance with the Standards complies with all standards. and interpretations including disclosure requirements and makes an explicit and. unreserved statement of compliance with the Standards. The overriding requirement of the Standards is for the financial statements to give a fair. presentation or a true and fair view, 2019 KPMG IFRG Limited a UK company limited by guarantee All rights reserved. 6 Insights into IFRS An overview,1 2 The Conceptual Framework. Currently effective Conceptual Framework for Financial Reporting. The Conceptual Framework is a point of reference, for the International Accounting Standards Board and the IFRS Interpretations. Committee in developing and maintaining standards and interpretations and. for preparers of financial statements in the absence of specific guidance in IFRS. The Conceptual Framework does not override any specific standard. Objective of general purpose financial reporting, The objective of general purpose financial reporting is to provide financial information.
about the reporting entity that is useful to existing and potential investors lenders and. other creditors in making decisions about providing resources to the entity. Qualitative characteristics of useful financial information. For financial information to be useful it needs to be relevant to users and faithfully. represent what it purports to represent The usefulness of financial information is. enhanced by its comparability verifiability timeliness and understandability. Financial statements and the reporting entity, The Conceptual Framework sets the objective of financial statements describes their. types and provides the definition of a reporting entity. Financial statements are prepared on a going concern basis unless management. intends or has no alternative other than to liquidate the entity or to stop trading. The elements of financial statements, The Conceptual Framework sets out the definitions of assets and liabilities The. definitions of equity income and expenses are derived from the definitions of assets. and liabilities, 2019 KPMG IFRG Limited a UK company limited by guarantee All rights reserved. Insights into IFRS An overview 7,Recognition and derecognition. Any item meeting the definition of an asset a liability equity income or expense is. recognised in the financial statements unless it affects the relevance or the faithful. representation of the information provided, An item is derecognised from the financial statements when it no longer meets the.
definition of an asset or liability This is accompanied by appropriate presentation and. disclosure,Measurement, The Conceptual Framework describes two measurement bases and the factors to. consider when selecting a measurement basis, Historical cost Under the historical cost basis an asset or liability is measured using. information derived from the transaction price and that measurement is not changed. unless it relates to impairment of an asset or a liability becoming onerous. Current value Under the current value basis an asset or liability is measured using. information that reflects current conditions at the measurement date. Current value measurement bases include fair value value in use and fulfilment value. that are based on present values of cash flows and current cost. Presentation and disclosure, The Conceptual Framework includes high level concepts that describe how information. is presented and disclosed in financial statements. The Conceptual Framework also outlines principles for the Board to follow when. deciding whether an item of income or expense should be included in profit or loss or. other comprehensive income OCI and if it should be reclassified from OCI to profit. 2019 KPMG IFRG Limited a UK company limited by guarantee All rights reserved. 8 Insights into IFRS An overview,2 General issues,2 1 Form and components of financial statements. Currently effective IFRS 10 IFRS 11 IAS 1 IAS 27 IAS 28. Forthcoming Amendments to IAS 1,Complete set of financial statements.
A complete set of financial statements comprises the following. A statement of financial position, A statement of profit or loss and other comprehensive income. A statement of changes in equity,A statement of cash flows. Notes including accounting policies,Comparative information. A statement of financial position as at the beginning of the preceding period third. statement of financial position in certain circumstances. Reporting date, The reporting date may change only in exceptional circumstances. Comparative information, Comparative information is required for the immediately preceding period only.
Additional comparative information may be presented if it is compliant with IFRS. Standards however it need not comprise a complete set of financial statements. Types of financial statements, The Standards set out the requirements that apply to consolidated individual and. separate financial statements, 2019 KPMG IFRG Limited a UK company limited by guarantee All rights reserved. Insights into IFRS An overview 9,Consolidated financial statements. An entity with one or more subsidiaries presents consolidated financial statements. unless it is a qualifying investment entity see 5 6 or specific exemption criteria are met. Individual financial statements, An entity with no subsidiaries but with investments in associates or joint ventures. prepares individual financial statements if those investments are accounted for using. the equity method unless specific exemption criteria are met. Separate financial statements, A parent an investor in an associate or a venturer in a joint venture that is not required.
to prepare consolidated or individual financial statements is permitted but not required. to present separate financial statements Alternatively separate financial statements. may be prepared in addition to consolidated or individual financial statements. Presenting pro forma information, In our view it is acceptable to present pro forma information if it is allowed by local. regulations and relevant stock exchange rules and if certain cri. This edition is designed for companies with a year end of 31 December 2019 It is based on IFRS Standards in issue at 1 August 2019 and includes standards and interpretations

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