Module 6

“REFERENCE TO THE CONCEPTUAL FRAMEWORK – AMENDMENTS TO IFRS 3”

“ONEROUS CONTRACTS-COST OF FULFILLING A CONTRACT-AMENDMENT TO IAS 37”

Provision- liability of uncertain timing or amount

Liability- present obligation from past event. > outflow of benefits
Past event
 legal obligation; obligation that derives from a contract legislation or other operation of law
 constructive obligation; obligation to pay that arises out of conduct and intent rather than a contract

Reference to the Conceptual Framework-Amendments to IFRS 3

Effective for annual periods beginning on or after 1 January 2022
In May 2020, the IASB issued Amendments to IFRS 3 Business Combinations-Reference to the Conceptual Framework.
The amendment are intended to replace a reference to previous version of the IASB’s Conceptual Framework (the 1989
Framework) with a reference to the current version in March 2018 (the Conceptual Framework) without significantly
changing its requirements.
The amendments add an exception to the recognition principle of IFRS 3 to avoid the issue of potential ‘day 2’ gains
or losses arising for liabilities and contingent liabilities that would be within the scope of IAS 37 Provisions, Contingent
Liabilities and Contingent Assets or IFRIC 21 Levies, if incurred separately.
The exception requires entities to apply the criteria in IAS 37 or determine whether a present obligation exists at the
acquisition date.
At the same time, the amendments add a new paragraph to IFRS 3 to clarify that contingent assets do not qualify for
recognition at the acquisition date.

Transition:
The amendments must be applied prospectively. Earlier application is permitted if, at the same time or earlier, an
entity also applies all of the amendments contained in the Amendments to References to the Conceptual Framework in
IFRS Standards (March 2018).

IMPACT
The amendments are intended to update a reference to the Conceptual Framework without significantly changing
requirements of IFRS 3. The amendments will promote consistency in financial reporting and avoid potential confusion
from having more than one version of the Conceptual Framework in use.

Property, Plant and Equipment: Proceeds before intended Use-Amendment to IAS 16

Effective for annual periods beginning on or after 1 January 2022
The amendment prohibits entities from deducting from the cost of an item of property, plant and equipment (PPE),
any proceeds of the sale of items produced while bringing that asset to the location and condition necessary for it to be
capable of operating in the manner intended by management. Instead, an entity recognizes the proceeds from selling
such items, and the costs of producing those items, in profit or loss.

Transition:
The amendment must be applied retrospectively only to items of PPE made available for use on or after the
beginning of the earliest period presented when the entity first applies the amendment.
There is no transition relief for the first-time adopters.

Onerous Contracts – Costs of Fulfilling a Contract Amendments to IAS 37

Effective for annual periods beginning on or after 1 January 2022
In May 2020 the IASB issued amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets to
specify cost an entity needs to include when assessing whether a contract is onerous or loss-making.
The amendment apply a ‘directly related cost approach’. The cost that relate directly to a contract to provide goods
or services include both incremental costs and an allocation of costs directly related to contract activities. General and
administrative costs do not relate directly to a contract and are excluded unless they are explicitly chargeable to the
counterparty under the contract.

Transition:
The amendments must be applied prospectively to contracts for which an entity has not yet fulfilled all of its
obligations at the beginning of the annual reporting period which it first applies the amendments (the date of initial
application). Earlier application is permitted and must be disclosed.

IMPACT
The amendments are intended to provide clarity and help ensure consistent application of the standard. Entities
that previously applied the incremental cost approach will see provisions increase to reflect the inclusion of costs
related directly to contract activities, whilst entities that previously recognized contract loss provisions using the
guidance from the former standard. IAS 11 Construction Contracts, will be required to exclude the allocation of indirect
overheads from their provisions.
Judgement will be required in determining which costs are ‘directly related to contract activities’, but we believe the
guidance in IFRS Revenue from Contracts with Customers will be relevant.

Sale or Contributions of Assets between an investor and its Associate or Joint Venture-Amendments to IFRS 10 and
IAS 28
In December 2015, the IASB decided to defer the effective date of the amendments until such time as it has finalized
any amendments that result from its research project on the equity method. Early application of the amendments is still
permitted.
The amendments address the conflict between IFRS 10 Consolidated Financial Statements and IAS 28 Investments in
Associates and Joint Ventures in dealing with the loss of control of a subsidiary that is solid or contributed to an
associate or joint venture.
The amendments clarify that a full gain or loss is recognized when a transfer to an associated or joint venture
involves a business as defined in IFRS 3. Any gain or loss resulting from the sale or contribution of assets that does not
constitute a business, however, is recognized only to the extent of unrelated investor’ interests in the associate or joint
venture.

Transition:
The amendment must be applied prospectively. Early application is permitted and must be disclosed.

IMPACT
The amendments are intended to eliminate diversity in practice and give prepares a consistent set of principles to
apply for such transactions. However, the application of the definition of a business is judgmental and entities need to
consider the definition carefully in such transactions.

Classification of Liabilities as Current or Non-current-Amendments to IAS

Effective for annual periods beginning on or after 1 January 2023
In January 2020, the Board issued amendments to paragraphs 69 to 76 of IAS 1 Presentation of Financial Statements
to specify the

IMPACT
The amendments are intended to eliminate diversity in practice and give prepares a consistent set of principles to
apply for such transactions. However, the application of the definition of a business is judgmental and entities need to
consider the definition carefully in such transactions.

Classification of Liabilities as Current or Non-current-Amendments to IAS

Effective for annual periods beginning on or after 1 January 2023
In January 2020, the Board issued amendments to paragraphs 69 to 76 of IAS 1 Presentation of Financial Statements
to specify the Requirements for classifying liabilities as current or non-current:
The amendments clarify:
  What is meant by a right to defer settlement
 That a right to defer must exist at the of the reporting period.
 That classification is unaffected by the likelihood that an entity will exercise its deferral right.
 That only if an embedded derivative in a convertible liability is itself an equity instrument, would the terms of a
liability not impact its classification.

Right to defer settlement

The Board decided that if an entity’s right to defer settlement of a liability is subject to the entity complying with
specified conditions, the entity has a right to defer settlement of the liability at the end of the reporting period if it
complies with those conditions at that date.

Existence at the end of the reporting period

The amendments also clarify that the requirement for the right to exist at the end of the reporting period applies
regardless of whether the lender tests for compliance at that date or at a later date.

Management expectations
IAS 1.75A has been added to clarify that the ‘classification of a liability is unaffected by the likelihood that the entity
will exercise its right to defer settlement of the liability for at least twelve months after the reporting period. That is,
management’s intention to settle in the short run does not impact the classification. The applies even if settlement has
occurred when the financial statements are authorized for issuance.

Meaning of the term ‘settlement’

The Board adopted two new paragraph (paragraphs 76A and 76B) to IAS 1 to clarify what is meant by ‘settlement’’
of a liability. The Board concluded that it was important to link the settlement of the liability with the outflow of
resources of the entity.
Settlement by way of an entity’s own equity instruments is considered settlement for the purpose of classification of
liabilities as current or non-current, with one exception.
In cases where a conversion option is classified as a liability or part of a liability, the transfer of equity instruments
would constitute settlement of the liability for the purpose of classifying it as current or non-current. Only if the
conversion option itself is classified as an equity instrument would settlement by way of own equity instruments be
disregarded when determining whether the liability is current or non-current.

Transition
Many entities will find themselves already in compliance with the amendments. However, entities need to consider
whether some of the amendments may impact their current practice. Entities need to carefully consider whether there
are any aspects of the amendments that suggest that terms of their existing loan agreements should be renegotiated. In
this context, it is important to highlight that the amendments must be applied retrospectively.

Tentative agenda decision

The IASB staff submitted a paper to the IFRS IC which was discussed at the December 2020 meeting. The paper
discussed three fact patterns with a loan that requires an entity to maintain a particular working capital ratio. In all fact
patterns, the entity is assessing whether it classifies the loan as current or non-current at the end of the reporting
period. The Committee’s Tentative Agenda Decision concluded that the principles and requirements in IFRS provide an
adequate basis for the entity to determine how to classify the loan as current or non-current in three patterns described
in the staff paper and, consequently, decided not to add a standard-setting project to the work plan.

Module 7
“IMPROVEMENTS TO INTERNATIONAL FINANCIAL REPORTING STANDARDS”

The IASB’s annual improvements process deals with non-urgent, but necessary, clarifications and amendments to
IFRS.
2018-2020 cycle (issued in May 2020)
The following is a summary of the amendments from the 2018-2020 annual improvements cycle.
1. IFRS 1 First-time Adoption of IFRS
Subsidiary as a first time-adapter
 The amendment permits a subsidiary that elects to apply paragraph D16(a) of IFRS 1to measure cumulative
translation differences using the amounts reported in the parent’s consolidated financial statements, based on
the parent’s date of transition to IFRS. If no adjustments were made for consolidation procedures and for the
effects of the business combination in which the parent acquired the subsidiary. This amendment is also applied
to an associate or joint venture that elects to apply paragraph D1(a) of IFRS 1
 An entry applies the amendment for annual reporting periods beginning on or after 1 January 2022. Earlier
application is permitted.

2. IFRS 1 First-time Adoption of IFRS

Fees in the ’10 percent test for derecognition of Financial Liabilities
 The amendment clarifies the fees that an entry includes when assessing whether the terms of a new modified
financial liability are substantially different form the terms of the original financial liability. These fees include
only those paid or received between the borrower and the lender, including fees paid or received by either the
borrower or lender on the other’s behalf. There is no similar amendment proposed for IAS 39.
 An entity applies the amendment to financial liabilities that are modified or exchanged on or after the beginning
of the annual reporting period in which the entity first applies the amendment.
 An entity applies the amendment for annual reporting periods beginning on or after 1 January 2022. Earlier
application is permitted.
 incurs an obligation to settle the transaction with the supplier in a share-based payment arrangement when
another group entity receives those goods or services.

3. Illustrative Examples accompanying IFRS 16 Leases

 The amendment removes the illustration of payments from the lessor relating to leasehold improvements in
illustrative Example 13 accompanying IFRS 16. This removes potential confusion regarding the treatment of
lease incentives when

4. IAS 41 Agriculture
Taxation in fair value measurement
 The amendment removes the requirement in paragraph 22 of IAS 41 that entities exclude cash flows for taxation
when measuring the fair value of assets within the scope of IAS 41.
 An entity applies the amendment to fair value measurements on or after the beginning of the first annual
reporting period beginning on or after 1 January 2022. Earlier application is permitted.

Certain items deliberated by IFRS IC within the ‘Interpretations Committee agenda decisions’ section of the IASB’s
IFRIC Update. Agenda decisions are issues that the IFRS IC decides not to add its agenda and include the reasons for not
doing so. For some of the item, the IFRS IC includes further information and explanatory material about how the
standards should be applied. This guidance does not constitute an interpretation, but rathe provides additional
information on the issues raised and the IFRS IC views on how the standards and current interpretations are to be
applied.
The IFRS IC has not published any agenda decisions for the period from ! January 2021. For agenda decisions
published before ! January 2021, refer to previous editions in IFRS Update. All items considered by the IFRS IC during its
meetings, as well as the full text of its conditions, can be found in the IFRIC Update on the IASB’s website..

Disclosure of Accounting Policies-Amendments to IAS 1 and IFRS Practice Statement 2

Effective for annual periods beginning on or after 1 January 2023
In February 2021, the Board issued amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality
Judgements, in which it provides guidance and examples to help entities apply materiality judgements to accounting
policy disclosures.
The amendments aim to help entities provide accounting policy disclosures that are more useful by:
  Replacing the requirement for entities to disclose their significant accounting policies with a requirement to
disclose their material accounting policies.
 Adding guidance on how entities apply the concept of materiality in making decisions about accounting policy
disclosure.

Replacement of the term ‘significant’ with ‘material’

In the absence of a definition of the term ‘significant’ in IFRS, the Board decided to replace it with ‘material’ in the
context of disclosing accounting policy information. ‘Material’ is a defined term in IFRS and is widely understood by the
users of financial statements, according to the Board.
In assessing the materiality of accounting policy information, entities need to consider both the size of the
transactions, other events or conditions and the nature of them.
Examples of circumstances in which the entity is likely to consider accounting policy information to be material have
been added.

Disclosure of standard information

Although standardized information is less useful to users than entity-specific accounting policy information, the
Board agreed that, in some circumstances, standardized accounting policy information may be needed for users to
understand other material information in the financial statements. In those situations, standardized accounting policy
information is material and should be disclosed.
The amendments to the PS also provide examples of situations when generic or standardized information
summarizing or duplicating the requirements of IFRS may be considered material accounting policy information.

Transition
The amendments may impact the accounting policy disclosures of entities. Determining whether accounting policies
are material or not requires use of judgement. Therefore, entities are encouraged o revisit their accounting policy
information disclosures to ensure consistency with the amended standard.
Entities should carefully consider whether ‘standardized information or information that only duplicate or
summarizes the requirement of the IFRS is material information and, if not, whether it should be removed from the
accounting policy disclosures to enhance the usefulness of the financial statements.

Module 8
“IASB Key Projects”

The ability to stay current on the IASB’s standard setting activities is critical in a sea of change. It summarizes key
features of selected active projects of the IASB, along with potential implications of the proposed standards. The ‘Key
projects’ are those initiated with the objective of issuing new standards or that involve overarching considerations
across a number of standards. ‘Other projects’ include proposed amendments with narrower applicability. Generally,
only those projects that have reached the exposure draft stage are included, but in selected cases, projects that have not
yet reached the exposure draft stage are also commented on.
STEPS INVOLVED IN THE IASB DUE PROCESS:
 Research Program
 Developing a proposal for publication
 Redeliberation and Finalization
 Post-implementation reviews

KEY PROJECTS
Better communication in financial reporting
The IASB is undertaking a broad-based initiative to explore how disclosures in IFRS financial reporting can be
improved. The Board has identified implementation and research projects that will support better communication.
In December 2014 and January 2016, amendments to IAS 1 and IAS 7 Statement of Cash Flows, respectively, were
issued. Furthermore, the IASB released IFRS Practice Statement 2 Making Materiality Judgement (the PS) in September
2017 and the Definition of Material (Amendments to IAS 1 ad IAS 8) in October 2018. In February 2021, the IASB issued
amendments to IAS 1 and the PS relating to disclosure of accounting policies.
Principles of Disclosure
The objective of this project is to identify and better understand disclosure issues and either develop a set of new
disclosure principles or clarity the existing principles.
The IASB published a Discussion Paper (DP) in March 2017 which focused on the general disclosure requirements in
IAS 1 and the concepts that were being developed in the Conceptual Framework for Financial Reporting.
After considering the feedback received on the DP, the IASB decided that improving the way disclosure
requirements are developed and drafted in the standards is the most effective way to address the disclosure problem.
Therefore, the Board decided to prioritize a standard-level review of certain standards.
The Board has also decided to address research findings relating to accounting policy disclosures, the effect of
technology on financial reporting (as part of the broader subject) and the use of performance measures in financial
statements as part of the primary financial statements as part of the primary financial project.

Targeted standards-level of disclosure

The IASB has added a separate project to develop guidance to help improve the way the Board drafts disclosure
requirements in IFRS standards and perform a targeted standards-level review of disclosure requirements. The draft
guidance developed by the Board relates to IAS 19 Employees Benefits and IFRS 13. The Board published and exposure
draft in March 2021.

Subsidiaries that are SMEs

In January 2020, the Board decided to move the Subsidiaries that are SMEs project from the research program to
the standard-setting program. The Board is developing a reduced disclosure IFRS standard that would apply on a
voluntary basis to subsidiaries that do not have public accountability. The Board plans to publish an exposure draft in Q3
2021.

Primary Financial Statements

The project aims to improve the structure and content of the primary financial statements, with a focus on the
statements of financial performance. The project also includes requirements for management performance measures.
The Board published an exposure draft in December 2019 and the comment letter period ended on September 2020.
Currently, the Board is redeliberating the proposals in light of the comment letters received.

Management commentary
The Board is working on a project to update IFRS Practice Statement 1 Management Commentary. As part of this
project, the Board is considering how broader financial reporting could complement and support IFRS financial
statements. The Board plans to publish and exposure draft in May 2021.

IFRS taxonomy
The Better Communication in Financial Reporting initiative will also consider the IFRS taxonomy. The Taxonomy
enables tagging of electronic financial information and allows computers to identify, read and extract the information.
This facilitates analysis and comparison. Users may create tailored reports to meet their information needs.

Impact
Several of the measures being considered by the Board are behavioral in nature, and, thus the impact may not be
easily predicted. However, the different projects have the potential to provide clarifications and guidance that will help
entities prepare more tailored and effective primary financial statements and disclosures.

Module 9
“Updated List of IFRS and IAS”

The following were the IFRS (International Financial Reporting Standards) issued by International Accounting
Standards Board (IASB). And the International Accounting Standards (IAS) were issued by the predecessor body
International Accounting Standard Council (IASC) between the years 1973 and 2001, to converge Generally Accepted
Accounting Principles (GAAP) with International Financial Accounting Standards. Both IFRS and IAS continue to for a
force.

IFRS 1 – First-time Adoption of IFRS

It sets out the procedures that an entity must follow when it adopts IFRS for the first time as the basis for preparing
its general purpose financial statements. This IFRS grants limited exemptions from the general requirement to comply
with each IFRS effective at the end of its first FRS reporting period. There are many benefits of implementing IFRS in
India in terms of economy, industry, and investors.

IFRS 2- Share-Based Payment

It requires an entity to recognize share-based payment transactions in its financial statements, also including
transactions with employees or other parties to be settled in cash, other assets, or equity instruments of the entity.
Specific requirements are included for equity-settled and cash-settled share-based payment transactions, where entity
or supplier has choice of cash or equity instruments.

IFRS 3 – Business Combinations

It outlines the accounting when an acquirer obtains control of a business. Such combinations are accounted for
using the ‘acquisition method’, which generally requires assets acquired and liabilities assumed to be measured at their
fair values at the acquisition date. The main advantage of IFRS is, it facilitates the easy comparison of different
companies, as data is presented on the same basis.

IFRS 4 – Insurance Contracts

It applies with limited exceptions, to all insurance contracts that an entity issues and to reinsurance contracts that it
holds. In light of the International Accounting Standards Board’s comprehensive project on insurance contracts, the
standard provides a temporary exemption from the requirements of some other IFRS, including the requirement to
consider International Accounting Standard 8 Accounting Policies, Changes in Accounting Estimates and Errors when
selecting accounting policies for insurance.

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

It outlines how to account for non-current assets held for sale. In general terms, assets held for sale are not
depreciated, are measured at a lower of carrying amount and fair value fewer costs to sell, and are presented separately
in the statement of financial position. Specific disclosures are required for discontinued operations and disposals of non-
current assets.

IFRS 6 – Exploration for and Evaluation of Mineral Resources

It adopt the standard for the first time to use accounting policies for exploration and evaluation of assets that were
applied before adopting IFRS. It also modifies impairment testing of exploration and evaluation assets by introducing
different impairment indicators and allowing the carrying amount to be tested at an aggregate level.

IFRS 7 – Financial Instruments: Disclosures

It requires disclosure of information about the significance of financial instruments to an entity, and the nature and
extent of risks arising from those financial instruments, both in qualitative and quantitative terms. Specific disclosures
are required in relation to transferred financial assets and a number of other matters.

IFRS 8 – Operating Segments

It requires particular lasses of entities to disclose information about their operating segments, products and services,
the geographical areas in which they operate, and their major customers. Information is based on internal management
reports, both in the identification of operating segments and measurement of disclosed segment information.

IFRS 9 – Financial Instruments

It is the International Accounting Standard Board’s replacement of International Accounting Standards 39 Financial
Instruments: Recognition Measurement. It includes requirements for recognition and measurement, general hedge
accounting.
IFRS 10 – Consolidated Financial Statements
It outlines the requirements for the preparation and presentation of consolidated financial statements, requiring
entities to consolidate entities it controls. Control requires exposure or rights to variable returns and the ability to affect
those returns through power over an investee.

IFRS 11 – Joint Arrangements

It outlines the accounting by entities that jointly control an arrangement. Joint control involves the contractually
agreed sharing of control and arrangements subject to joint control are classified as either a joint venture; representing
a share of net assets and equity accounted or a joint operation; representing rights to assets and obligations for
liabilities, accounted for accordingly.

IFRS 12 – Disclosure of Interests in Other Entities

It is a consolidated disclosure standard requiring a wide range of disclosures about an entity’s interests in
subsidiaries, joint arrangements, associates and unconsolidated structured entities. Disclosures are presented as a series
of objectives, with detailed guidance on satisfying those objectives.

IFRS 13 – Fair Value Measurement

It applies to IFRS that require a permit fair value measurements or disclosures and provides a single IFRS Framework
for measuring fair value and requires disclosures about fair value measurement. The Standard defines fair market value
on the basis of an exit price notion and uses a fair value hierarchy, which results in a market-based rather than entity-
specific measurement.

IFRS 14 – Regulatory Deferral Accounts

It permits an entity which is a first-time adopter of International Financial Reporting Standards to continue to
account, with some limited changes, for regulatory deferral account balances in accordance with its previous GAAP,
both on initial adoption of IFRS and in subsequent financial statements. Regulatory deferral account balances, and
movements in them, are presented separately in the statement of financial position and statement of profit or loss and
other comprehensive income, and specific disclosures are required.

IFRS 15 – Revenue from Contract

It specifies how and when and IFRS reporter will recognize revenue as well as requiring such entities to provide users
of financial statements with more informative, relevant disclosures. The standard provides a single, principles-based
five-step model to be applied to all contracts with customers. It applies to an annual period beginning on or after 1
January 2018.

IFRS 16 – Lease Accounting

It specifies how an IFRS reporter will recognize, measure, present, and disclose leases. The standard provides a
single lessee accounting model, requiring lessees to recognize assets and liabilities for all leases unless the lease term is
12 months or less or the underlying asset has a low value. Lessors continue to classify leases as operating or finance,
with IFRS 16 approach to lessor accounting substantially unchanged from its predecessor, International Accounting
Standard 17. It applies to annual reporting periods beginning on or after 1 January 2019.

IFRS 17 – Insurance Contract

IFRS 17 is applicable for yearly reporting periods starting on or after 1st January 2021. This must be accommodated
with IFRS 9 and IFRS 15 for the list of IFRS standards, permitted application earlier. The insurance contract consists of
both a service and a financial instrument contracts. Many such insurance contracts will ultimately generate cash flow
with considerable variability over a long span.

IAS 1– Presentation of Financial Statements

IAS 1 is about the overall requirements for the arrangement of the structure of financial statements, guidelines, and
the minimum requirements for their content. The elements consist of presenting the complete set of financial
statements yearly and incorporating the amounts for the preceding year. This is another addition to the list of IFRS
standards and IAS standards.

IAS 2 – Inventories
The second IAS in the IAS and IFRS list is about the guidance for the determination of the cost formulas of
inventories and subsequent recognizing the cost as an expense. This can include any write-down to any other realizable
value.

IAS 7– Statement of Cash Flows

In the list of IFRS standards and IAS standards, the guidelines of how to present data in cash flow statement are
described in the IAS 7. The information about the cash flow is the unit cash and cash equivalents altered during this
period.

IAS 8 – The Accounting Policies, Changes in Accounting Estimates and Errors.

The IAS 8 consists of the criteria for choosing and changing accounting policies along with the accounting treatment,
changes in the estimates of the accounting, the disclosure of alterations in the accounting policies, and the correction of
errors. So when an International Financial Reporting Standards interpretation specifically refers to a transaction, other
event or condition, then an entity must use that standard.

IAS 10– Events after the Reporting Period

The IAS 10 in the list of IFRS standards suggest the situations when an enterprise should adjust its financial
statements for after the reporting period events. And the other guideline as per IAS 10 is the disclosure the entity should
provide about the time when the financial statements were authorized for issue and also about the events post
reporting time.

IAS 11 – Construction Contracts

In the list of IFRS standards, the IAS 11 suggests about the accounting regarding revenue treatment and the costs
associated with construction contracts. The IAS 11 requires the outcome of a construction contract , reliable estimation,
and the contract expenses about the stage of completion at the end of reporting time.

IAS 12– Income Taxes

The IAS 12 in the IFRS list prescribes the accounting solutions for income taxes that include all domestic and
foreign taxes, which can be based on taxable profits. IAS 12 requirements include the step for an entity to recognize a
deferred tax liability or a deferred tax asset for temporary differences with some exceptions.

IAS 16 –Property, Plant, and Equipment

In the list of IFRS standards, the IAS 16 establishes principles about the recognition of property, plant, and
equipment as assets of an entity to measure the carrying amounts and the measuring of the depreciation charges and
impairment losses related to them

IAS 17– Leases

IAS 16 is superseded by IFRS 15 from the list of IFRS standards. The IAS 17 is classified into two types, a finance lease
and an operating lease. The Finance lease is for if the contract transfers considerably, then all the risks and rewards are
to be incidental to ownership. And the Operating lease is for if lease does not transfer significantly, then also all the risks
and rewards are incidental to ownership.

IAS 18 –Revenue
The IAS 18 is superseded by IFRS 15 of the International Financial Reporting Standards list. IAS 18 addresses the right
moment and how to recognize and measure revenue. Revenue is the gross inflow of economic benefits acquired by
ordinary activities of an entity during and estimated period. IAS 18 applies to the revenues from the events of sales of
goods, the rendering of services, and the use of entity assets yielding interests, royalties, dividends by others.

IAS 19– Employee Benefits

 In the list of IFRS standards and IAS standards, the IAS 19 applies for all types of employee benefits except for share-
based payment type, for IFRS 2 applies to share-based payment types of employee benefits. IAS 19 in the list of IFRS
standards requires the enterprise to recognize a contract when an employee has provided services in trade for future
employee benefits and the recognition for an expense when the entity acquires economic benefits arising for the
services offered by the employees in exchange for employees perks.

IAS 20–Accounting for Government grants and the Disclosure Government Assistance
The IAS 20 in the IAS and IFRS list is about grants provided by the government, which are transfers of resources
given to an enterprise in return for past or future agreement with specific conditions relating to the operating activities
of the enterprise. The economic benefit specifically provided to an entity or range of entities qualifying under specific
criteria is called government support.

IAS 21–Effects of Changes in Foreign Exchange Rates

The IAS 21 prescribes how an entity should carry on foreign activities in two ways. This may consist of transactions
using foreign currencies, or it may include some international business operations. The principles issued by the IAS 21 in
the IFRS standards list are used by the exchange rates to report the effects of the changes in it for financial statements.

IAS 23–Borrowing Costs

In the IAS and IFRS list, IAS 23 provides guidance on the process for the enterprises to measure borrowing costs,
particularly the cost of acquisition and construction or production that are funded by an entity’s general borrowings.

IASB’S OBJECTIVES:
Under the IFRS Foundation Constitution, the objectives of the IASB are to develop in the public interest, a single set
of high quality, understandable, enforceable and globally accepted financial reporting standards based upon clearly
articulated principles.