IFRS standards. IFRS standards International financial reporting standards

Why do we need IFRS standards and who applies them, what standards are in effect in 2019 and where to get a list of them - these questions arise for many who are just switching to IFRS. Look for answers in the article.

The abbreviation IFRS (IAS) means International Financial Reporting Standards. This is a set of principles and rules for reflecting various business transactions in financial statements. IFRS is issued by a non-profit international organization - the IFRS Foundation (includes the IASB and the IFRS Interpretations Committee), which is based in London. The main purpose of creating IFRS is to provide a basis for the preparation and disclosure of financial statements by public companies. At the same time, IFRS contains only general guidance for the preparation of financial statements, but does not establish specific rules for their preparation. This is what makes the standards applicable by companies around the world.

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As conceived by the developers, IFRS standards should become general principles for the preparation of financial statements for the whole world. Applying them on a global scale will allow investors and business owners to save money on the comparison of company statements prepared on the basis of different accounting standards, as well as allow more freedom to disseminate information. In addition, thanks to the implementation of IFRS, companies will be able to enter the global capital markets and reduce the cost of capital. ...

IFRS for beginners

We have brought together all the materials created specifically for beginners, those who are just getting acquainted with international standards. These are articles on basic standards, a selection of “IFRS in Schemes”, as well as mini-cases to test the knowledge gained.

What are the IFRS 2019 standards

IFRS documents include:

International Financial Reporting Standards (IFRS). They are issued by the IASB.
International Financial Reporting Standards (IAS). They were issued by the IASB, the predecessor of the IASB.

Note!

The names of the first standards started with “IAS”, for example IAS 1 “Presentation of Financial Statements”. Since 2001, the names of new standards start with “IFRS”.

Interpretations to IFRS prepared by the Interpretations Committee (IFRS);
Interpretations to IFRSs issued by the Standing Committee on Interpretations (RIC), the predecessor of the IFRS.

IFRSs in the usual sense are intended for use by businesses. For enterprises in the public sector, the International Public Sector Accounting Standards Board has developed its international standards.

In 2009, the IASB issued the IFRS for Small and Medium Enterprises (IFRS) for non-public companies. This is a simplified version of IFRS designed to facilitate the preparation of financial statements for small firms.

There is another important document, which, however, is not included in the IFRS documents. This is the Conceptual Framework for Financial Reporting. The Conceptual Framework addresses the following issues:

The purpose of preparing financial statements.
Qualitative characteristics of useful financial information.
Definition of elements of financial statements, principles of their recognition and measurement.
The concept of capital and capital maintenance.

Since the Conceptual Framework is not a document within IFRS, its provisions have no advantages over specific IFRS. Even if the IFRS 16 standard conflicts with the Conceptual Framework.

However, the IASB is guided by the Conceptual Framework when developing new standards and revising existing ones. In addition, companies can use the Conceptual Framework to define accounting practices if none of the applicable standards provide specific guidance.

Which countries apply IFRS standards in 2019

Now we can say with confidence that IFRS have become the global language of financial reporting. They are widely used in both developed and developing countries.

According to the IFRS Foundation, 144 of the 166 countries in the study currently require IFRS for all or most of the listed companies (table 1). And 12 more countries allow their use.

The iasplus.com portal provides the following statistics regarding the use of IFRS (the study covers 175 countries). For listed companies, IFRS standards are mandatory in 98 countries, in 9 countries they are required for some companies, in 25 countries they are allowed for use, in 22 countries they are not allowed, in 21 countries there are no stock exchanges.

Table 1.Worldwide use of IFRS

Region	Number of countries in the region	Countries that require the application of IFRS for all or most public companies	Countries requiring the application of IFRS,%	Countries that allow or require the application of IFRS for some (but not all or most) public companies	Countries that do not require and do not allow the application of IFRS standards for public companies
Europe
Africa
Near East
Asia and Oceania
America
Total
% Of the total

Note that IFRS was never adopted by the US, which uses US GAAP. Despite the efforts made by the IASB and the US FASB since 2002, the differences between accounting systems have not been completely eliminated. This discussion continues today.

However, differences in accounting for business combinations, consolidated financial statements, fair value measurements, share-based payments, and segment reporting have been minimized.

IFRS in Russia

For many Russian companies, IFRS is mandatory. In Russia, IFRS was recognized in 2012. Then the texts of the standards were officially published for the first time in the journal "Accounting" and posted on the official website of the RF Ministry of Finance.

Currently, they are required to prepare financial statements in accordance with IFRS (Article 8 of the Federal Law of July 27, 2010 No. 208-FZ "On Consolidated Financial Statements"):

1) credit organizations;

2) insurance organizations;

3) non-state pension funds;

4) management companies of investment funds, unit investment funds and non-state pension funds;

5) clearing organizations;

6) federal state unitary enterprises (according to the list approved by the Government of the Russian Federation);

7) joint stock companies, the shares of which are in federal ownership and the list of which is approved by the Government of the Russian Federation;

8) other companies, whose securities are admitted to organized trading by including them in the quotation list.

note!

Starting with the reporting for the first half of 2019, these companies are also required to prepare interim financial statements in accordance with IFRS. The term for its preparation is no later than 60 days after the end of the reporting period for which these statements were drawn up.

List of current IFRS standards in 2019

From 1 January 2019, companies must apply the new IFRS 16 Leases, from 1 January 2021 - IFRS 17 Insurance Contracts. Now companies can use them voluntarily. see also

The International Accounting Standards Committee (IASC) was established in 1973. During these years, the accounting profession underwent significant changes - in the same years, the FASB (Financial Accounting Standards Board) was created in the USA, and a national organization for the development of standards was created in the UK.

It started after informal meetings between representatives of the UK (ICAEW) and US (AICPA) accounting associations. Then, after consultation with the accounting associations of Canada, Australia, Mexico, Japan, France, Germany, the Netherlands and New Zealand, these countries were invited to participate in an international project. Due to pressure from the UK, coupled with its financial injections, the IASC was located in London. There is also the headquarters of the IASB, which took over all the functions of the Committee after its restructuring in 2001.

The real reasons for creating the IASB are shrouded in mystery. Of course, at that time there was already a need to create a single language for the growing international business. But, most likely, the main motivation was the desire of the UK to create an organization to develop international standards in opposition to the attempts of the European Union to create a similar body. Indeed, if the countries of Europe did this first, then the continental model of reporting would dominate in international standards, and not the model (Anglo-Saxon) that was adopted in the UK and in most English-speaking nations (Anglo- Saxon financial reporting approach).

In March 1974, E1 was issued, a draft of the first standard called Disclosure Of Accounting Policies, and in January 1975 this standard was adopted. 2 standards were issued in 1975, 3 more in 1976, two in 1977, three in 1978.

Initially, few people used these standards, but over time the situation has changed a lot.

List of current IFRS standards

IAS 1 Presentation of Financial Statements

IAS 2 "Inventories"

IAS 7 "Statements of Cash Flows"

IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors"

IAS 10 Events after the End of the Reporting Period

IAS 11 “Construction Contracts” (expired on January 1, 2018; new revenue standard effective from 01.01.18 - IFRS 15)

IAS 12 Income Taxes

IAS 14 "Segment Reporting"

IAS 16 "Property, plant and equipment" (IAS 16 "Property, Plant and Equipment")

IAS 17 “Leases” (IAS 17 “Leases”) () (expired from 1 January 2019; new standard on leases effective from 01.01.19 - IFRS 16)

IAS 18 “Revenue” (IAS 18 “Revenue”) (expired from 1 January 2018; new revenue standard from 01.01.18 - IFRS 15)

IAS 19 Employee Benefits

IAS 20 Accounting for Government Grants and Disclosure of Government Assistance

IAS 21 The Effects of Changes in Foreign Exchange Rates ()

IAS 23 Borrowing Costs

IAS 24 Related Party Disclosures

IAS 26 Accounting and Reporting by Retirement Benefit Plans

IAS 27 "Consolidated and Separate Financial Statements"

IAS 28 Investments in Associates

IAS 29 Financial Reporting in a Hyperinflationary Economy

IAS 31 Interests in Joint Ventures

IAS 32 Financial Instruments: Presentation

IAS 33 Earnings per Share

IAS 34 "Interim Financial Reporting"

IAS 36 Impairment of Assets

IAS 37 "Provisions, Contingent Liabilities and Contingent Assets" (detail,)

IAS 38 Intangible Assets ()

IAS 39 "Financial Instruments: Recognition and Measurement"

IAS 40 Investment Property

IAS 41 Agriculture

IFRS 1 First-time Adoption of International Standards

IFRS 2 Share-based Payment

IFRS 3 Business Combinations

IFRS 5 Non-current Assets Held for Sale and Discontinued Operations

IFRS 6 Exploration for and Evaluation of Mineral Resources ()

IFRS 7 Financial Instruments: Disclosures

IFRS 8 Operating Segments

IFRS 9 Financial Instruments ()

IFRS 10 Consolidated Financial Statements ()

IFRS 11 Joint Arrangements

IFRS 12 Disclosure of Interests in Other Entities

IFRS 13 Fair Value Measurement

IFRS 14 Regulatory Deferred Accounts ( Regulatory Deferral Accounts) - will come into force on January 01, 2016

IFRS 15 Revenue from Contracts with Customers ( Revenue from Contracts with Customers) -will enter into force with 01 January 2017 (read and). In September 2015, the effective date was postponed. The new effective date is January 1, 2018.

Amendments to International Financial Reporting Standard (IFRS) 15 “Revenue from Contracts with Customers” amended on 12 April 2016

IFRS 17 "Insurance Contracts" was issued on May 18, 2017, will come into force on January 1, 2021

All the names of the standards in Russian are taken from the texts of the translation of IFRS into Russian on the website of the Ministry of Finance of the Russian Federation.

They can be viewed at: http://www.minfin.ru/ru/perfomance/accounting/mej_standart_fo/docs/

IFRS standards Is a normative guideline for preparing financial statements in accordance with international norms. From our article you will learn about the basic concepts, principles of classification, composition and structure of IFRS.

International accounting and financial reporting standards - 2016: concept, composition and basic principles of classification

Drawing up financial statements in accordance with international standards expands the capabilities of the company, allowing:

master new areas of activity through international partnership;
obtain credit funds on favorable terms in foreign banks;
enter foreign stock markets;
get other bonuses and benefits.

Reporting in accordance with international standards means presenting the results of your work based on the requirements of international financial reporting standards (IFRS).

Important! IFRS is a set of standards and interpretations, drawn up in the form of separate documents, which make it possible to prepare financial statements that are understandable to users in all countries of the world.

In general IFRS 2016 are represented by the following set of documents:

KOS FO according to IFRS (conceptual framework for drawing up financial statements according to international standards);
IFRS (IAS);
IFRS;
iFRIC clarifications;
clarification of the SIC.

The entire set of international standards can be classified into 5 groups by purpose:

organizational;
reporting;
industry;
detailing;
auxiliary.

These IFRS groups will be discussed in the following sections.

Organizational and reporting IFRS

The organizational group of standards contains general requirements for the accounting system used by the company, and also regulates such an important issue as entering the reporting system in accordance with international standards. These standards include:

IFRS 1 (on the firm's first application of IFRS);
IAS 8 (on its accounting policies).

The reporting group includes standards that disclose the features of the preparation and presentation of financial statements (FS). For example, standards dedicated to:

the nuances of financial statements in a hyperinflationary environment (IAS 29);
algorithms for presenting financial statements (IAS 1);
peculiarities of drawing up consolidated and individual financial statements (IFRS 10, IAS 27).

Read the reporting group of international standards in the materials posted on our website:

Industry Standards Group

The standards of this group take into account the specifics of individual industries and activities. This attention was paid to:

insurance activities (IFRS 4 Insurance Contracts);
the agricultural industry (IAS 41 Agriculture);
accounting nuances of the mining industry (IFRS 6 "Exploration for and Evaluation of Mineral Resources").

List of detailed IFRS: fixed assets, financial instruments, etc.

In these standards, the features of the formation of reporting indicators are deciphered, therefore this large set of standards can be classified by types of financial statements:

forming balance sheet items;
specifying lines of the statement of comprehensive income.

The 1st group includes standards that describe the nuances of recognition and measurement of various assets and liabilities, information about which is reflected in the statement of financial position (balance sheet). List of IFRS of this group is (partially) presented below:

IAS 2 Inventories;
IAS 16 Property, Plant and Equipment;
IAS 38 Intangible Assets;
IAS 39 Financial Instruments: Recognition and Measurement, etc.

The 2nd group of standards allows you to generate a profit and loss statement (comprehensive income):

IAS 18 Revenue;
IAS 23 Borrowing Costs;
IAS 33 Earnings per Share, etc.

Study detailed IFRS using materials from our website:

Supporting IFRS

This group of standards concretizes individual concepts and definitions used in the texts of other standards, the essence of which requires detailed consideration. For example, fair value, impairment, etc.

The article will help to understand the goals and objectives of subsidiary IFRS .

Outcome

IFRS standards allow you to generate clear and useful reporting for users.

In order for the indicators of financial statements to reliably reflect the financial position and financial performance of the company, it is necessary to take into account the requirements of an extensive list of international standards and interpretations.

From January 1, 2016, the new IFRS 14 "Tariff Deferred Accounts" (hereinafter referred to as IFRS 14) came into force (in the Russian Federation it was adopted in accordance with the order of the Ministry of Finance of Russia dated December 17, 2014 N 151n), as well as a number of amendments to existing standards. Consider the most significant changes developed by the International Accounting Standards Board (IASB), hereinafter - the IASB), which may be relevant for companies applying IFRS.

Changes in accounting for assets and liabilities related to tariff regulation

In many countries, certain industries (eg utilities or transportation) are subject to tariff regulation by the government or regulatory authorities. They set limits for companies in these industries on the volume of supplies and prices they charge to buyers.

Previously, IFRS did not have a standard for accounting for assets and liabilities associated with tariff regulation. At the same time, some national accounting standards contain requirements for the need to recognize the latter on the balance sheet.

Preparers of IFRS financial statements often have a question: do these assets and liabilities meet the corresponding definition in the IFRS Conceptual Framework? The answer was very important, as the inability to recognize such assets and liabilities was an obstacle to the application of IFRS.

To eliminate this problem, IFRS 14 was enacted, which allowed a limited number of companies to use accounting policies based on national accounting standards in terms of recognition, measurement and impairment of assets and liabilities related to tariff regulation.

The scope of IFRS 14 is very narrow and only covers companies:

adopting IFRS for the first time;

carrying out activities subject to tariff regulation;
recognizing amounts that qualify as regulatory deferral account balances in financial statements prepared in accordance with previous generally accepted accounting principles.

If IFRS 14 is applied, an entity should separately account for assets and liabilities in "Regulatory Deferred Accounts". At the same time, "Regulatory deferral accounts" and the corresponding effect on profit or loss are reflected separately from other lines of the financial statements.

Note that the above rules are only available for first-time adopters of IFRS. Their financial statements will be comparable to the financial statements of other entities in that all other lines and subtotals will exclude the impact of tariff deferred differences.

Information on the possible relationship of IFRS 14 with certain other standards due to its application is presented in paragraphs 16-17 of IFRS 14 (Appendix B) and relates to the adaptation in accounting policies under national standards. So, when adapting, you should take into account the standards:

IAS 10 Events after the End of the Reporting Period;
IAS 12 Income Taxes;
IAS 33 Earnings per Share;
IAS 36 Impairment of Assets;
IFRS 3 Business Combinations;
IFRS 5 Non-current Assets Held for Sale and Discontinued Operations;
IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures;
IFRS 12 Disclosure of Interests in Other Entities.
IFRS 14 contains certain disclosure requirements in financial statements, in particular:

The nature of tariff regulation, which sets price limits for buyers, and the associated risks;

On the impact of tariff regulation on the statement of financial position, statement of financial results and statement of cash flows.

In addition, disclosures in the financial statements will require a detailed explanation of the amounts recognized. For example, for each “Regulatory Difference Account”, disclosure of the basis of initial and subsequent recognition and measurement is required, including information on impairment. For each type of activity related to tariff regulation, for each class of balances in the "Tariff Deferred Accounts" it is necessary to disclose:

reconciliation of the carrying amount at the beginning and end of the period (preferably in tabular form);
rate of return or discount rate;
the remaining periods during which the entity expects to recover (or amortize) the carrying amount of each class of regulatory deferral account debit balances, or to reverse each class of regulatory deferral account balance.

Note that IFRS 14 does not contain specific transition requirements. For first-time adopters of IFRS, an exemption from the requirements of IFRS 1 "First-time adoption of international financial reporting standards" (hereinafter - IFRS 1) will be available, including, in particular, the use of the current balance formed according to previously applied national rules accounting, as the notional value of fixed assets and intangible assets.

Clarified accounting for asset reclassification under IFRS 5

As part of the "Annual Improvements to International Financial Reporting Standards, 2012-2014 period." (hereinafter - Annual Improvements (2012-2014)), issued by the IASB on September 25, 2014, IFRS 5 "Non-current Assets Held for Sale and Discontinued Operations" (hereinafter - IFRS 5) was amended, clarifying that the reclassification of an asset (or disposal group) from held for sale to held for distribution to owners, or vice versa, does not change the substance of the original disposal plans. Accordingly, companies are free to apply all of the classification, presentation and measurement requirements of the standard that are relevant to the held for sale category. For example, if an asset is no longer classified as held for distribution to owners, then the requirements of IFRS 5 for assets that are no longer held for sale should apply.

The amendment is applied prospectively in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors (hereinafter IAS 8), which means that an entity can:

apply the new accounting policy to transactions, other events and conditions that took place after the date on which the policy was changed (from 01.01.2016);
recognize the effect of a change in accounting estimates in the current and future periods affected by the change (that is, without affecting previous periods).

Clarifications on Accounting for Continuing Participation Eligibility

As part of the Annual Improvements (2012-2014), IFRS 7 Financial Instruments: Disclosures was amended to clarify the circumstances in which an entity retains the right to service a transferred financial asset (continuing involvement). The adopted clarifications are necessary in considering the derecognition requirements of IAS 39 Financial Instruments: Recognition and Measurement (hereinafter - IAS 39) and IFRS 9 Financial Instruments (hereinafter - IFRS 9).

Ongoing involvement occurs when a company continues to service a transferred financial asset and maintains a long-term interest in the financial results that can be obtained from it.

Continuing involvement in financial assets occurs when the award to the entity transferring the financial asset:

is variable and depends on the amount of cash flows from the transferred financial asset;
or is fixed but not fully paid if the transferred asset has poor financial performance.

The amendment is applied retrospectively in accordance with IAS 8, except for periods beginning before the annual period in which the company first used it. A corresponding amendment was made to IFRS 1 for first-time adopters. Thus, there is no need for companies to determine the fair value of servicing in prior periods.

Amendments to IAS 19 Employee Benefits

The amendments to IAS 19 Employee Benefits address the actuarial discount rate assumptions and clarify that high quality corporate bonds used to determine the discount rate (the value required for accounting for employee benefits) must be denominated in the same currency and the associated future employee benefits. In the absence of a sufficiently developed market for high quality corporate bonds in a particular currency in any jurisdiction, the market yields (at the end of the reporting period) of government bonds denominated in that currency should be used.

The amendments are applied retrospectively (in accordance with IAS 8) from the beginning of the earliest comparative period presented in the first financial statements in which the entity applied the amendment.

Changes in the equity method in the separate financial statements

The amendments to IAS 27 Separate Financial Statements (hereinafter - IAS 27) were prompted by requests from interested parties from those countries where the only difference between mandatory separate financial statements under local standards and separate financial statements under IFRS is the use of the equity method. participation.

The amendments make it possible to account for investments in subsidiaries, joint ventures and associates using the equity method (as described in IAS 28 Investments in Associates and Joint Ventures) in separate financial statements, which in turn reduces the cost of preparation of financial statements in accordance with IFRS for companies from such countries.

Note that the standards still do not require the preparation of separate financial statements. However, if the amendments are applied, the approach specified in them should be used for all types of investments. Previously, the company could account for such investments only at cost or in accordance with IFRS 9 (IAS 39).

The amendment is applied retrospectively in accordance with IAS 8. It can also be applied early.

Disclosures Outside of Notes to Interim Financial Statements

As a result of the amendments to IAS 34 Interim Financial Reporting, additional disclosures about significant events and transactions may be provided in the notes to the interim financial statements or elsewhere in the interim financial report.

If disclosures are made in another report, then it should be available to users of the financial statements under the same conditions and at the same time as the interim financial statements. Otherwise, the kit is incomplete.

The amendment is applied retrospectively in accordance with IAS 8.

Accounting for the acquisition of an interest in a joint operation whose activities are a business

IFRS 11 Joint Arrangements (hereinafter - IFRS 11) does not currently have guidance on the accounting by a party to a joint operation of acquiring an interest in a joint operation when the activity in that operation is a business as defined by that term. specified in IFRS 3 Business Combinations (hereinafter - IFRS 3).

Important!

A business is an integrated set of activities and assets, the implementation and management of which can lead to the receipt of income in the form of dividends, cost reduction or any other economic benefit, directly by investors or other owners, participants or members.

As a consequence, in practice, there are different approaches to accounting for the purchase of an interest in jointly controlled transactions that meet the definition of a business, including:

the excess of the payment over the fair value of the identifiable net assets is recognized either as a separate line item as goodwill, or is allocated proportionately to other identifiable assets;
deferred taxes are recognized or not recognized;
acquisition costs are capitalized or recognized as an expense.

If an entity acquires an interest in a joint operation that is a business as defined in IFRS 3, an entity shall apply the principles of that IFRS to acquisition accounting and disclose the related information.

At the same time, new paragraphs B33A-B33D have been added to the guidance on the application of IFRS 11, which clarify the following points.

1. Some of the accounting principles for business combinations that may be applicable to the purchase of an interest in a joint operation that constitutes a business, namely:

measuring at fair value of identifiable assets and liabilities other than items excluded in IFRS 3 and other IFRSs

recognition of costs associated with the acquisition of a share,

as an expense in the income statement in the periods in which these costs were incurred and the related services received (except that the cost of issuing debt or equity securities is recognized in accordance with IAS 32 Financial Instruments: presentation of information "and IFRS 9);
recognition of deferred tax assets and deferred tax liabilities that arise on the initial recognition of assets or liabilities (excluding deferred tax liabilities arising on the initial recognition of goodwill);

recognition of goodwill;

testing for impairment of the cash-generating unit to which goodwill has been allocated (at least annually, as required by IAS 36 Impairment of Assets).

2. The principles of IFRS 3 should be applied when forming a joint operation if, in accordance with this standard, the existing business is a contribution of at least one party (the participant in the joint operation).

3. The principles of IFRS 3 do not apply if the participant in a joint operation (the activity of which is a business as defined in IFRS 3) increases its ownership interest and if the participant retains joint control over it.

4. The requirements of IFRS 3 do not apply if the parties to a joint operation are under common control of the same party (s) with ultimate control before and after the acquisition of an interest, and such control is permanent.

In addition, a related amendment was made to IFRS 1. It relates that the exemption from IFRS 3 for past business combinations also applies to past acquisitions of interests in a joint operation where the activity is a business. ...

The amendments to IFRS 11 are applied prospectively. Therefore, they can be used to purchase interests in joint operations that constitute a business as defined in IFRS 3 if the acquisition date is the start date of the first annual reporting period or later (with the reporting period starting 01/01/2016 or later) ... Early adoption is also permitted but should be disclosed in the financial statements.

Clarifications on acceptable depreciation and amortization methods

In 2011, the International Financial Reporting Interpretation Committee (IFRIC) (hereinafter referred to as the IFRIC) received a request for clarification of the meaning of the term "consumption of future economic benefits embodied in an asset" from IAS 38 "Intangible Assets" (hereinafter - IAS 38) if an appropriate method of depreciation is determined. In turn, the IASB amended IAS 16 Property, Plant and Equipment (hereinafter - IAS 16) and IAS 38.

The amendments to IAS 16 clarify that the use of the revenue-based amortization method is not permitted because the revenue generated from the activities in which the asset is utilized generally reflects factors other than the consumption of the economic benefits embodied in the asset. For example, revenue is influenced by:

other resources and processes used;
sales activities;
changes in sales volumes and prices;
inflation.

The amendments to IAS 38 introduce the rebuttable assumption that the use of the revenue-based amortization method for an intangible asset (hereinafter - intangible asset) is not permissible and can be rebutted only in limited cases, namely:

if intangible assets are expressed as an estimate of revenue;
or when it can be demonstrated that the revenue and consumption of economic benefits from intangible assets are highly correlated.

For example, a company may be licensed to collect a bridge toll. In this case, the license allows the collection of fees until the final amount determined by the contract is reached.

As a result of the amendments to IAS 38, guidance is also included that the appropriate depreciation method can be determined based on the “prevailing limiting factor” in the use of the asset. These factors are as follows.

1. A contract term limiting the terms of the right to use an asset (for example, in a contract that establishes the company's rights to use intangible assets, the latter can be expressed as a certain number of years (that is, time), the number of units produced or a fixed total amount of revenue that will be generated by the asset). Determining such a predominant limiting factor can serve as a starting point for determining an acceptable basis for depreciation. However, it is possible to use a different basis if it more clearly reflects the expected pattern of consumption of economic benefits.

2. The number of units that are allowed to be produced.

3. A fixed total amount of revenue that is allowed to be generated. For example, the source of revenue is a production license or a right to operate. In both cases, revenue is capped at a fixed total.

The amendments to both standards are applied prospectively. At the same time, their early application is permitted.

The change in the current depreciation or amortization method resulting from the amendments will be applied to the carrying amounts of assets and the result of the change will be accounted for as a change in accounting estimates in accordance with IAS 8 from the date of initial application (beginning of an annual period beginning on or after 01/01/2016 this date). This would require disclosure of the nature and amount of the change in accounting estimates in accordance with paragraph 39 of IAS 8 or the nature and amount of those changes that are expected to have an effect in future periods, if possible.

Changes in the accounting of fruit crops (agriculture)

Prior to the amendments to IAS 16, bearer crops were to be accounted for in accordance with IAS 41 Agriculture. All biological assets were measured at fair value less costs to sell (unless the assumption that fair value can be measured reliably has been rebutted). The valuation principle was based on the assumption that the transformation of biological assets can best be expressed in terms of fair value.

However, in the course of public discussions, the IASB received inquiries from interested parties about the appropriateness of fair value measurements for mature biological assets. Many panellists insisted that the use of biological assets in a production process is similar to the use of property, plant and equipment and, therefore, for mature biological assets it would be appropriate to apply the amortized cost model from IAS 16. In addition, some companies measure biological assets against Fair value was expensive and difficult to apply as there is no active market for some types of biological assets.

As a result of the amendments, bearer crops should be accounted for in accordance with IAS 16 as property, plant and equipment, namely:

at actual costs;
at a revalued cost.

Thus, the scope of IAS 16 has been expanded. It included fruit crops (as a result, they were excluded from the scope of IAS 41) and added their definition.

According to IAS 16, a fruit crop is a living plant that:

used for the production or receipt of agricultural products;
is expected to bear fruit for more than one (annual) period;
has a remote degree of likelihood of being sold as agricultural produce (with the exception of side sales as waste).

Please note that IAS 41 lists some plants that do not meet the definition of fruit crops and are consumable biological assets:

plants that will be obtained (harvested) as agricultural products (for example, trees grown for the purpose of timber harvesting);
plants grown for the purpose of obtaining (collecting) agricultural products, when the likelihood that the company in the distant future will also be able to receive (collect) and sell plants (in addition to selling waste) is very low;
annual crops (such as corn and wheat).

Before fruit crops can produce agricultural products (that is, before they reach maturity), they will be accounted for as self-created items of property, plant and equipment. At the same time, IAS 16 will not apply to biological assets associated with agricultural activities and to products on fruit crops. Agricultural products remain within the scope of IAS 41 and are measured at fair value.

The amendments to IAS 16 should be applied retrospectively. At the same time, their early application is permitted.

The transitional exemption for the purpose of the first application of IFRS 1 applies to the amendments to IAS 16, namely: the notional cost exemption applies. Companies may use the fair value of bearer crops at the beginning of the earliest period presented in the financial statements as deemed cost at that date. This exemption applies to bearer crops as they are items of property, plant and equipment as defined in IAS 16.

Financial Statements Disclosure Changes

As a result of stakeholder inquiries and the IASB's global project to improve the presentation and disclosure of financial statements, in addition to the revision of the IFRS Conceptual Framework, the Disclosure Initiative (Amendments to IAS 1) was published Presentation of financial statements ")".

The main purpose of the amendments is to induce companies (and other parties involved in the preparation and review of financial statements) to ensure that the requirements for the presentation and disclosure of information in the financial statements are carefully weighed through the use of professional judgment (including taking into account the principles of materiality, understandability and comparability).

The changes are as follows.

1. When aggregating information, it should not be allowed to reduce the clarity of financial statements by veiling material information with immaterial data or by aggregating material items that differ in nature or function. The principle of materiality applies to all four forms of financial statements (statement of financial position at the end of the period, statement of profit, loss and other components of the comprehensive financial result for the period, statement of changes in equity for the period, statement of cash flows for the period) and notes to them.

2. Compliance with a specific disclosure requirement of an IFRS is not required if the disclosed information is not material. These rules should be read in conjunction with the definition of materiality in paragraph 7 of IAS 1, which requires items to be accounted for individually and collectively, as a group of immaterial items could become material if combined.

3. Consideration should be given to the need for additional disclosures if compliance with the specific requirements of IFRS is insufficient for an understanding of the financial statements.

4. If subtotals are presented (in the statement of financial position, the statement of profit, loss and other comprehensive income), such amounts must:

contain items that consist of amounts recognized and measured in accordance with IFRS;
be presented and labeled in such a way that the items making up the subtotal are clear and understandable;
be used consistently from period to period;
and be highlighted in a less conspicuous format than the subtotals and totals to be presented in the statement of financial position under IFRS.

5. Components of other comprehensive income (excluding associates and joint ventures accounted for using the equity method) should be classified by nature and grouped as those that, in accordance with other IFRSs:

and will subsequently be reclassified to profit or loss if certain conditions are met.

6. Share of other comprehensive income of associates and joint ventures accounted for using the equity method, with a split presentation of the share in items that, in accordance with other IFRSs:

will not be subsequently reclassified to profit or loss;
will be subsequently reclassified to profit or loss if certain conditions are met.

7. Included are examples of the orderly presentation or grouping of notes for the purpose of comprehensibility and comparability of the financial statements.

As a result of the amendments, the examples of disclosure of accounting policies for income taxes and exchange rate differences were removed from paragraph 120 of IAS 1 because it was not clear why the user of financial statements always expects that specific accounting policy to be disclosed.

Due to the amendments, companies may wish to revise:

application of the principle of materiality;
the degree of aggregation of financial statement lines;
use of subtotals;
type of information presentation;
the order of notes to the financial statements;
content and presentation of accounting policies;
the amount of disclosure of information on material transactions, taking into account a satisfactory explanation of the economic nature of the transactions;
what accounting policies are significant to users of financial statements for the purpose of understanding specific transactions.

In addition, firms may consider working with auditors and shareholders to identify material and appropriate disclosures in the financial statements for a particular reporting period.

The amendments can be applied early. However, companies are not required to disclose information under IAS 8 (paragraphs 28-30) in relation to these amendments. However, if an entity chooses to change the order of notes or information presented or disclosed from the prior period in accordance with paragraph 38 of IAS 1, it should also adjust the comparative information to be consistent with the current presentation period, and disclosures in financial statements.

Accounting amendments for investment entities

Paragraph 4 (a) of IFRS 10 Consolidated Financial Statements (hereinafter referred to as IFRS 10) contains an exception to avoid the preparation of consolidated financial statements provided that certain specific criteria of this standard are met. In particular, an investment entity, subject to certain criteria, is not required to present consolidated financial statements if it is required to measure all of its subsidiaries at fair value through profit or loss. The application of this exception raised a number of specific questions from stakeholders.

The amendments made by the IASB clarified some aspects of the application of IFRS 10, IFRS 12 Disclosure of Interests in Other Entities (hereinafter - IFRS 12) and IAS 28 Investments in Associates and Joint enterprises "(hereinafter - IAS 28) related to the exception of a general nature for investment entities. Let's consider these aspects.

1. When preparing consolidated financial statements, how should parent entities apply the general exception of IFRS 10 for investment entities without the need to present consolidated financial statements if the investment entity is the parent?

A clarification was added to IFRS 10 that a parent that is an investment entity does not need to present consolidated financial statements. It should measure all of its subsidiaries at fair value through profit or loss in accordance with IFRS 9 (unless the entity is an investment entity, but the primary purpose of its business is to provide services related to the business of an investment entity investment). Previously, IFRS 10 required an investment entity to consolidate its subsidiaries that provide services related to the investment entity's investment activities, since these activities are only an integral part of the investment entity's own activities. This statement gave rise to complaints from interested parties, as it came into conflict with other requirements of the standard. The amendment to paragraph 32 of IFRS 10 clarifies that an investment entity consolidates only subsidiaries that satisfy two of the criteria at the same time:

the subsidiary is not an investment entity;
the main purpose of the subsidiary is to provide services that relate to the investment activities of the investment organization.

2. How should a non-investment entity account for its interests in associates or joint ventures of investment entities?

In practice, there may be cases where a company that is not an investment entity has an investment in a subsidiary that is an investment entity, and accordingly, this subsidiary in its financial statements measures the interests in its subsidiaries at fair value. IFRS 10 clearly states that a non-investment entity should not consolidate the financial results of its investment entity subsidiary by retaining the fair value measurement of the subsidiaries of the consolidated investment entity. In such circumstances, in preparing its consolidated financial statements, a non-investment entity must consolidate the subsidiaries of its investment subsidiary in the appropriate sequence and then consolidate its investment subsidiary into its financial statements.

IAS 28 does not currently contain similar requirements and, accordingly, the guidance of the standard has been clarified regarding the application of the equity method by a non-investment parent to an investment in an associate or joint venture that is an investment.

The amendments to IAS 28 clarify that if an entity that is not an investment entity has an interest in an associate or joint venture that is an investment entity, then using the equity method to account for its interests in that associate or joint venture may retain the fair value measurement of the subsidiaries of such associate or joint venture (that is, directly from its financial statements).

Thus, for investments by a parent other than an investment entity, adjustments to the financial statements of investment entity subsidiaries, if they have subsidiaries carried at fair value, will be required, and not in the financial statements of the associate or joint venture. will be required.

3. Application of IFRS 12 "Disclosures of Interests in Other Entities" (hereinafter - IFRS 12) by investment entities.

The amendments to IFRS 10 clarify that an investment entity preparing financial statements in which all of its subsidiaries are measured at fair value through profit or loss (in accordance with IFRS 10) must disclose information about investment entities in in accordance with the requirements of IFRS 12. Note that the same requirements are still contained in IAS 27.

Early application of the amendments is permitted. The amendments are applied retrospectively in accordance with IAS 8. However, upon first applying IFRSs, entities are required to present only the amount of the adjustment in accordance with paragraph 28 (f) of IAS 8 for the most recent comparative period, not for the current and all comparative periods.

IFRS: training, methodology and implementation practice for companies and professionals

A joint project of IPI Russia and the magazine “Corporate financial reporting. International standards ".

First adoption of IFRS by companies converting to international standards in 2016

Deputy Head of the Audit Department for International Reporting of AFK-Audit LLC.

When preparing financial statements in accordance with IFRS, the transformation of statements is most often used - the process of preparing financial statements in accordance with international standards by adjusting reporting items and regrouping accounting information prepared according to the rules of RAS.

There is no single algorithm for transforming financial statements, and in each case, specialists use their own methodology that is optimal for the company.

More and more organizations in RAS apply IFRS standards, which is allowed by the requirements of clause 7 of PBU 1/2008 "Accounting policy of the organization". The transition to IFRS for these companies appears to be easier as the number of transformational adjustments will be less.

For reference

The Ministry of Finance of the Russian Federation on the official website on 08/01/2016 published a draft order that amends PBU 1/2008 "Organization's accounting policy":

“An organization that discloses the consolidated financial statements drawn up in accordance with international financial reporting standards or the financial statements of an organization that does not create a group, has the right to be guided by federal accounting standards when forming an accounting policy, taking into account the requirements of international financial reporting standards. If the application of the accounting method established by the federal accounting standard leads to inconsistency of the accounting policy of the specified organization with the requirements of international financial reporting standards, the organization has the right not to apply this method.

If on a specific issue in the federal accounting standards are not established methods of accounting, the organization develops an appropriate method, based on international financial reporting standards. "

For companies adopting international standards for the first time, IFRS 1 “First-time adoption of IFRS” is addressed, which is guided by the first financial statements under IFRS, as well as by interim statements presented for the part of the period covered by the first financial statements under IFRS. In such reporting, the company accepts all IFRS standards and makes a clear and unconditional statement of compliance with IFRS.

In the event that a company decides that it will not apply any IFRS in its first financial statements, these financial statements will not be considered compliant with IFRS. It can be reporting based on IFRS principles, for example, for management purposes. It should be noted that even if the company has applied all international standards, but has not made a statement of compliance with IFRS, such reporting is also not IFRS reporting.

In practice, questions often arise about the need to apply IFRS 1, if the company previously provided information for the preparation of the parent company's consolidated financial statements, but did not issue individual IFRS statements. It is also possible that the company prepared IFRS statements for internal purposes, but did not present them to the owners or third-party users. In both of the above cases, the requirements of IFRS 1 should be followed when preparing the first set of financial statements.

It also often happens that a company previously prepared financial statements in accordance with IFRS, but then stopped for some time. In this case, one should proceed from an analysis of the costs of preparing financial statements: either issue financial statements as if the company did not allow a break, or reapply IFRS 1. When the standard is reapplied, the statements are prepared ignoring the effect of accounting policies applied in previous periods ...

When applying IFRS for the first time, it is important to understand what the transition date is and what period IFRS 1 recognizes as the first reporting period.

Figure: 1. Date of transition to IFRS

Algorithm for preparing the first IFRS statements for 2016

Throughout the transition period, a unified accounting policy should be applied (in the example, the transition period is three years: 2014, 2015, 2016).

When preparing the first set of financial statements, certain steps must be taken step by step.

Step 1. All standards that are in effect on the first reporting date should be used. This means that if the transition date is 12/31/2014, and the reporting is prepared on 12/31/2016, then it is necessary to apply the standards that are in effect exactly on 12/31/2016. At the same time, it is possible to use standards issued, but not yet effective, the early application of which is permitted at the first reporting date.

For example, IFRS 15 “Revenue” is effective from 01.01.2018, with early adoption permitted. It is advisable to prepare the first set of reports, based on its requirements, so that later, when the new standard comes into effect, to avoid adjustments.

In practice, most companies apply the new standards ahead of schedule (it should be remembered that not all new standards can be applied early).

Step 2. Determine the standards to be applied prior to the reporting date. For example, if the company had leasing in 2015, but not in 2016.

Step 3. Determine the exceptions to be applied.

The general requirement of IFRS is to apply the requirements of all applicable IFRSs at the reporting date retrospectively. IFRS 1 allows two types of exemptions from retrospective application:

mandatory exceptions;
voluntary exceptions.

For reference

Mandatory exceptions are required for all first-time adopters of IFRS. The essence of voluntary exclusions is the right to choose whether or not to apply these exclusions. They relate to the retrospective application of IFRS (that is, from the date of the transaction, as if the company had always applied IFRS).

Example of voluntary exemption: IFRS 1 allows a first-time adopter to measure an asset in the opening IFRS balance sheet using deemed cost for property, plant and equipment, investment property (using the cost model) and intangible assets (provided active market).

IFRS 1 requires an entity to use estimates for IFRS purposes that are consistent with the estimates adopted when national accounting standards were applied at that date. If there is objective evidence that these estimates were erroneous, estimates that differ from those used in RAS are used for IFRS purposes. An example is the change in the useful life of property, plant and equipment (in particular, when income is generated from the operation of fully depreciated equipment).

For reference

Errors are omissions and misstatements in the financial statements that arise from the failure to use or misuse reliable information, including the consequences of inaccuracies in calculations, misstatements in the application of accounting policies, underestimations or misinterpretations of facts, and fraud.

Case study

IFRS 1 allows you to change estimates in the transition period (in the example - from 01/01/2015 to 12/31/2016). Thus, it is possible to change the useful lives of fixed assets and the depreciation method. The accounting model for fixed assets, established in the accounting policy under IFRS, remains unchanged: at initial or at revalued cost [p. 29 IAS 16]. In practice, it is better to change the timing and method of depreciation at the transition date.

Step 4. Build (organize) the preparation process and make it optimal. This will require regulating a set of measures:

determine the perimeter of consolidation (when preparing consolidated financial statements, the composition and structure of ownership are analyzed, direct, effective shares of ownership and shares of non-controlling shareholders are determined);
develop an accounting policy in accordance with IFRS (each organization included in the established perimeter of consolidation when preparing consolidated financial statements must use a unified accounting policy in accordance with IFRS);
analyze assets and liabilities at the date of transition to IFRS with a view to their recognition for IFRS purposes;
develop a methodology for transformation (or conducting parallel or combined accounting) and consolidation (when drawing up consolidated reporting), data collection packages, transformation models; it is first necessary to analyze the scope of the company, determine the main differences in reporting items between RAS and IFRS, create a list of major adjustments.

Case study

During the transition to IFRS of industrial enterprises, a situation often emerges when assets in RAS are fully depreciated, but continue to be used, and their number is significant. Since the company benefits from the operation of the asset, it is desirable for the purposes of IFRS to change the useful lives of the assets.

Adjustment for objects, the cost of which is less than the limit established in the RBSU for accounting for fixed assets [in the general case - up to 40 thousand rubles. inclusive (clause 5 PBU 6/01)], in practice it is carried out if it is material. These objects in RAS are written off when they are put into operation as expenses of the current period, in IFRS they are included in fixed assets. In IFRS there is no cost criterion for classifying assets as fixed assets, but in the accounting policies of a number of Western companies such a criterion exists. When preparing reports, it is necessary to strike a balance between the costs of this preparation and the usefulness of the information.

For reference

An adjustment is a change in the amount of lines in the statement of financial position and in the statement of comprehensive income with a change in the financial result of the current period.

Types of adjustments

Reclassification (reclassification) does not affect the profit or loss of the reporting period - accordingly, it simultaneously affects only IFRS balance sheet accounts or only IFRS profit / loss accounts.

Reclassifications arise as a result of differences in the recognition of elements of financial statements under RAS and IFRS, they transfer the same amount from the line item under RAS to the line item under IFRS. Examples of reclassifications are:

reclassification of advances issued for fixed assets from accounts receivable and other non-current assets according to RAS to construction in progress according to IFRS (to fixed assets);
reclassification of investment property items from fixed assets to investment property;
reclassification of deposits and highly liquid investments with a maturity of less than three months to cash and cash equivalents;
reclassification of general business expenses from prime cost to administrative expenses.

Correction (amendment) affects the net profit of the period and capital items - accordingly, it simultaneously affects both balance sheet accounts, and profit / loss accounts, and capital accounts.

Examples of adjustments (amendments) are:

registration of objects received under a lease agreement;
write-off of intangible assets that do not meet the recognition criteria of IAS 38;
accrual of impairment loss for property, plant and equipment and construction in progress in accordance with IFRS;
exclusion of general business expenses from the balances of work in progress and their transfer to the accounts of administrative expenses.

Step 5. Perform transformational and consolidation adjustments.

When generating an incoming (opening) statement of financial position in accordance with IFRS as of the date of transition, the following adjustments must be made:

recognize all assets and liabilities that are subject to recognition in accordance with IFRS (for example, finance leases, obligations to dismantle property, plant and equipment);
exclude assets and liabilities that are not subject to recognition in accordance with IFRS;
reclassify items of assets, liabilities and equity in the balance sheet in accordance with the requirements of IFRS;
assess all assets and liabilities in accordance with IFRS - to analyze how assets and liabilities meet the criteria for recognizing assets and liabilities in IFRS, whether their value is correctly formed (for example, it is necessary to devalue materials that have been inactive for a long time, non-working equipment).

At each date, estimates should be applied based on the information available at that date. If in 2015 there were doubts about the likelihood of repayment of receivables, and in 2016 the financial condition of the debtor improved, then when preparing reports for 2015 it is necessary to devalue the receivables, in 2016 - to restore.

Step 6. Prepare reporting in accordance with IFRS.

The composition of the first set of financial statements under IFRS is determined by the requirements of IFRS 1:

three balance sheets (on the date of transition, beginning of the reporting period, end of the reporting period);
two statements of comprehensive income (for example, 2016, 2015 as comparative information);
two cash flow statements;
two statements of changes in equity;
notes, including comparative information, in accordance with all disclosure requirements.

IFRS 1 does not provide for exemptions from the presentation and disclosure requirements in other IFRSs.

In its first financial statements, the company explains how the transition from RAS to IFRS affected its financial position, financial results of operations and cash flows. It should reflect the clarification of the provisions of the transition to IFRS, as well as provide a reconciliation of items "Capital" and "Total comprehensive income". The reconciliation should include information that details the amounts of the adjustments for Equity and Profit. In the following periods, this reconciliation is not required.

To facilitate the process of preparing the first set of financial statements and to minimize the number of errors, companies often hire consultants who are competent and experienced enough to help in the preparation of the first financial statements under IFRS.

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For reference

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For reference

For reference

Case study

Case study

For reference

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