1. WEBCAST on IFRS INTRODUCTION TO IFRS
CA MAYUR CHOKSHI
Mumbai, India

2. WHY IFRS - PROCESS Globally accepted language
Most widely spread , accepted and trusted financial reporting language
Based on Economic reality of transaction
Major economies moving towards IFRS
PROCESS OF ISSUE OF STANDARDS
IASB ,
CA Mayur Chokshi : :

3. IAS Standards Development
IAS 1 Disclosure of Accounting Policy
INDIA AS
IAS 2 Val. & Presentation on Inventory 1975
INDIA AS
IAS 7 SOFP
INDIA Chgs in Fin Position 1981
& SO ON . . .
CA Mayur Chokshi : :

4. WHY IFRS – World Wide Recognised
Australia, Canada, France, Germany, Japan, Mexico, Netherlands, USA, UK and Ireland agreed to form IASC in June 1973 Total 130 countries joined.
India joined in 1974
Nigeria, South Africa, Pakistan, Sri Lanka, Italy, China, Japan, Singapore, Hong Kong, Malaysia, New Zealand, …….. More than 130 countries across globe signed the agreement
AS OF NOW :-
41 IAS of which 13 are withdrawn or superseded. Thus effective IAS 28
15 IFRS THUS, Total 43 standards.
IFRIC 21 ( 3 Withdrawn / superseded)
SIC ( 25 Withdrawn / superseded)
CA Mayur Chokshi : :

5. IFRS BOARD, ETC. Process to issue standards by IASB
Constitution of IASB
Subsequent evolution of IFRS
IFRIC
SIC
Revision to Standards
Projects
CA Mayur Chokshi : :

6. GLOSSARY IFRS – International Financial Reporting Standards
IAS – International Accounting Standards
IFRIC – International Financial Reporting Interpretation Committee
SIC – Standing Interpretation Committee
IND AS : INDIAN VERSION OF IFRS
AS - Accounting Standards ( Present - IGAAP)
CA Mayur Chokshi : :

7. Due process Overview Background to IFRSs Requests for information
Discussion papers
Exposure drafts
Finalised pronouncements
Post-implementation reviews
Annual improvements process
Editorial corrections
CA Mayur Chokshi : :

8. APPROACH IN INDIA Convergence and not adoption
Phased Manner to Implement
Two separate AS U/S 211(3C)
Early adoption possible
Clarifications required on various matters
CA Mayur Chokshi : :

9. IFRS ISSUED IFRS 1 IFRS 2 IFRS 3 IFRS 4 IFRS 5 IFRS 6 IFRS 7 IFRS 8#
Name
Issued
IFRS 1
First-time Adoption of International Financial Standards
2008*
IFRS 2
Share-based Payment
2004
IFRS 3
Business Combinations
IFRS 4
Insurance Contracts
IFRS 5
Non-current Assets Held for Sale and Discontinued Operations
IFRS 6
Exploration for and Evaluation of Mineral Assets
IFRS 7
Financial Instruments: Disclosures
2005
IFRS 8
Operating Segments
2006
IFRS 9
Financial Instruments
2013*
IFRS 10
Consolidated Financial Statements
2011
IFRS 11
Joint Arrangements
IFRS 12
Disclosure of Interests in Other Entities
IFRS 13
Fair Value Measurement
IFRS 14
Regulatory Deferral Accounts
2014
IFRS 15
Revenue from Contracts with Customers
CA Mayur Chokshi : :

10. IFRS ISSUED IAS 1 IAS 2 IAS 7 IAS 8 IAS 10 # Name Issued
Presentation of Financial Statements
2007*
IAS 2
Inventories
2005*
IAS 3
Consolidated Financial Statements
1976
Superseded in 1989 by IAS 27 and IAS 28
IAS 4
Depreciation Accounting
Withdrawn in 1999
IAS 5
Information to Be Disclosed in Financial Statements
Superseded by IAS 1 effective 1 July 1998
IAS 6
Accounting Responses to Changing Prices
Superseded by IAS 15, which was withdrawn December 2003
IAS 7
Statement of Cash Flows
1992
IAS 8
Accounting Policies, Changes in Accounting Estimates and Errors
2003
IAS 9
Accounting for Research and Development Activities
Superseded by IAS 38 effective 1 July 1999
IAS 10
Events After the Reporting Period
CA Mayur Chokshi : :

11. IFRS ISSUED IAS 11 IAS 12 IAS 14 IAS 15 IAS 16 IAS 17 IAS 18 IAS 19
Construction Contracts
1993
Will be superseded by IFRS 15 as of 1 January 2017
IAS 12
Income Taxes
1996*
IAS 13
Presentation of Current Assets and Current Liabilities
Superseded by IAS 39 effective 1 July 1998
IAS 14
Segment Reporting
1997
Superseded by IFRS 8 effective 1 January 2009
IAS 15
Information Reflecting the Effects of Changing Prices
2003
Withdrawn December 2003
IAS 16
Property, Plant and Equipment
2003*
IAS 17
Leases
IAS 18
Revenue
1993*
IAS 19
Employee Benefits (1998)
1998
Superseded by IAS 19 (2011) effective 1 January 2013
Employee Benefits (2011)
2011*
IAS 20
Accounting for Government Grants and Disclosure of Government Assistance
1983
CA Mayur Chokshi : :

12. IFRS ISSUED CA Mayur Chokshi : mayur@mcnco.in : www.mcnco.in IAS 21
The Effects of Changes in Foreign Exchange Rates
2003*
IAS 22
Business Combinations
1998*
Superseded by IFRS 3 effective 31 March 2004
IAS 23
Borrowing Costs
2007*
IAS 24
Related Party Disclosures
2009*
IAS 25
Accounting for Investments
Superseded by IAS 39 and IAS 40 effective 2001
IAS 26
Accounting and Reporting by Retirement Benefit Plans
1987
IAS 27
Separate Financial Statements (2011)
2011
Consolidated and Separate Financial Statements
2003
Superseded by IFRS 10, IFRS 12 and IAS 27 (2011) effective 1 January 2013
IAS 28
Investments in Associates and Joint Ventures (2011)
Investments in Associates
Superseded by IAS 28 (2011) and IFRS 12 effective 1 January 2013
IAS 29
Financial Reporting in Hyperinflationary Economies
1989
IAS 30
Disclosures in the Financial Statements of Banks and Similar Financial Institutions
1990
Superseded by IFRS 7 effective 1 January 2007
IAS 31
Interests In Joint Ventures
Superseded by IFRS 11 and IFRS 12 effective 1 January 2013
IAS 32
Financial Instruments: Presentation
IAS 33
Earnings Per Share
IAS 34
Interim Financial Reporting
1998
IAS 35
Discontinuing Operations 
Superseded by IFRS 5 effective 1 January 2005
IAS 36
Impairment of Assets
2004*
IAS 37
Provisions, Contingent Liabilities and Contingent Assets
IAS 38
Intangible Assets
IAS 39
Financial Instruments: Recognition and Measurement
Superseded by IFRS 9 where IFRS 9 is applied
IAS 40
Investment Property
IAS 41
Agriculture
2001
CA Mayur Chokshi : :

13. IFRS ISSUED CA Mayur Chokshi : mayur@mcnco.in : www.mcnco.in IFRIC 1#
Name
Issued
IFRIC 1
Changes in Existing Decommissioning, Restoration and Similar Liabilities
2004
IFRIC 2
Members' Shares in Co-operative Entities and Similar Instruments
IFRIC 3
Emission Rights
Withdrawn June 2005
IFRIC 4
Determining Whether an Arrangement Contains a Lease
IFRIC 5
Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds
IFRIC 6
Liabilities Arising from Participating in a Specific Market - Waste Electrical and Electronic Equipment
2005
IFRIC 7
Applying the Restatement Approach under IAS 29 Financial Reporting in Hyperinflationary Economies
IFRIC 8
Scope of IFRS 2
2006
Withdrawn effective 1 January 2010
IFRIC 9
Reassessment of Embedded Derivatives
IFRIC 10
Interim Financial Reporting and Impairment
IFRIC 11
IFRS 2: Group and Treasury Share Transactions
IFRIC 12
Service Concession Arrangements
IFRIC 13
Customer Loyalty Programmes
2007
Will be superseded by IFRS 15 as of 1 January 2017
IFRIC 14
IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction
IFRIC 15
Agreements for the Construction of Real Estate
2008
IFRIC 16
Hedges of a Net Investment in a Foreign Operation
IFRIC 17
Distributions of Non-cash Assets to Owners
IFRIC 18
Transfers of Assets from Customers
2009
IFRIC 19
Extinguishing Financial Liabilities with Equity Instruments
IFRIC 20
Stripping Costs in the Production Phase of a Surface Mine
2011
IFRIC 21
Levies
2013
CA Mayur Chokshi : :

14. IFRS ISSUED CA Mayur Chokshi : mayur@mcnco.in : www.mcnco.in SIC-1#
Name
Issued
SIC-1
Consistency – Different Cost Formulas for Inventories
1997
Superseded
SIC-2
Consistency – Capitalisation of Borrowing Costs
SIC-3
Elimination of Unrealised Profits and Losses on Transactions with Associates
SIC-5
Classification of Financial Instruments - Contingent Settlement Provisions
1998
SIC-6
Costs of Modifying Existing Software
SIC-7
Introduction of the Euro
SIC-8
First-Time Application of IASs as the Primary Basis of Accounting 
SIC-9
Business Combinations – Classification either as Acquisitions or Unitings of Interests
SIC-10
Government Assistance – No Specific Relation to Operating Activities
SIC-11
Foreign Exchange – Capitalisation of Losses Resulting from Severe Currency Devaluations 
SIC-12
Consolidation – Special Purpose Entities
Superseded by IFRS 10 and IFRS 12 effective 1 January 2013
SIC-13
Jointly Controlled Entities – Non-Monetary Contributions by Venturers
Superseded by IFRS 11 and IFRS 12, effective for annual periods beginning on or after 1 January 2013
SIC-14
Property, Plant and Equipment – Compensation for the Impairment or Loss of Items
SIC-15
Operating Leases – Incentives
1999
CA Mayur Chokshi : :

15. IFRS ISSUED CA Mayur Chokshi : mayur@mcnco.in : www.mcnco.in SIC-16
Share Capital – Reacquired Own Equity Instruments (Treasury Shares)
1999
Superseded
SIC-17
Equity – Costs of an Equity Transaction
2000
SIC-18
Consistency – Alternative Methods
SIC-19
Reporting Currency – Measurement and Presentation of Financial Statements under IAS 21 and IAS 29
SIC-20
Equity Accounting Method – Recognition of Losses
SIC-21
Income Taxes – Recovery of Revalued Non-Depreciable Assets
Superseded by, and incorporated into, IAS 12 by amendments made by Deferred Tax: Recovery of Underlying Assets, effective for annual periods beginning on or after 1 January 2012
SIC-22
Business Combinations – Subsequent Adjustment of Fair Values and Goodwill Initially Reported
SIC-23
Property, Plant and Equipment – Major Inspection or Overhaul Costs
SIC-24
Earnings Per Share – Financial Instruments and Other Contracts that May Be Settled in Shares
SIC-25
Income Taxes – Changes in the Tax Status of an Enterprise or its Shareholders
SIC-27
Evaluating the Substance of Transactions in the Legal Form of a Lease
SIC-28
Business Combinations – 'Date of Exchange' and Fair Value of Equity Instruments
2001
SIC-29
Disclosure – Service Concession Arrangements
SIC-30
Reporting Currency – Translation from Measurement Currency to Presentation Currency
SIC-31
Revenue – Barter Transactions Involving Advertising Services
Will be superseded by IFRS 15 as of 1 January 2017
SIC-32
Intangible Assets – Web Site Costs
SIC-33
Consolidation and Equity Method – Potential Voting Rights and Allocation of Ownership Interests
CA Mayur Chokshi : :

16. NO AS IN igaap
IAS 26 Accounting and Reporting by Reporting by Retirement Benefits Plans
IAS 29 Financial Reporting in Hyperinflationary Economies
IFRIC 7 Applying the Restatement Approach under IAS 29 Financial Reporting in Hyperinflationary Economies
IAS 40 Investment Property
IAS 41 Agriculture

17. NO AS IN igaap
IFRS 1 First Time Adoption of International Financial Reporting Standards
IFRS 2 Share Based Payment
IFRS 3 Business Combination
IFRS 4 Insurance Contracts
IFRS 5 Non-Current Assets Held for Sale and Discontinuing operations
IFRS 6 Exploration for and Evaluation of Mineral Resources

18. NO AS IN igaap SIC 32 Intangible Assets – Website Costs
IFRS 7 Financial Instruments : Disclosures
IFRS 8 Operating Segments
IFRS 9 Financial Instruments
IFRIC 2 Members’ Share in Co-operative Entities and Similar Instruments
IFRIC 15 Agreements for the Construction of Real Estate
SIC 32 Intangible Assets – Website Costs

19. IFRS Framework Principles & objective based; less voluminous
“Framework” setting out principles – discusses 5 elements – assets, liabilities, equity, income, expenses.
Conceptual Framework applied when no specific guidance in any standards
Substance over form
Sets out the concepts that underlie the preparation & presentation of financial statements
A platform from which standards are developed
The Framework is not an accounting standard and it does not contain detailed requirements

20. PARADIGM SHIFT in the way business is carried out
New types of transactions
Novel agreements
Competitive world
Truly global practices
Thus, required additional standards to make them more understandable and apply it consistently by all entities

21. BASICS OF IFRS Substance over Form Fair Value Oriented
Principle based not rule based
Predominance of Statement of Financial Position

22. IFRS FRAMEWORK Principles & objective based; less voluminous
“Framework” setting out principles – discusses 5 elements – assets, liabilities, equity, income, expenses.
Conceptual Framework applied when no specific guidance in any standards
Substance over form
Sets out the concepts that underlie the preparation & presentation of financial statements
A platform from which standards are developed
The Framework is not an accounting standard and it does not contain detailed requirements

23. Objective of Financial Reports
Providing information about the financial position, performance and changes in financial position
Providing information enabling user to take economic decisions
Providing results of stewardship of management and accountability of management for resources entrusted.
Components of financial statements
- SOFP ( BS), SOCI(PLA) , OCI, Cash Flows, Notes,Disclosures, Explanatory statemets etc. BUT NOT Directors Report, MDA
Various USERS OF FINANCIAL STATEMENTS

24. Framework - qualitative characteristics of IFRS
SUBSTANCE OVER FORM
Economic Reality rather than its legal form
NEUTRALITY
PRUDENCE ( Conservatism)
COMPLETENESS
CONSTRAINTS
Timeliness, Balance between Cost and Benefit, Balance Qualitative characteristics, True and Fair

25. Framework – Definitions
Asset : A resource controlled by an entity as a result of past events and from which future economic benefits are expected to flow to the entity. Liability ; A present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow of the entity’s resources Equity ; The residual interest in an entity’s assets after deducting all its liabilities Income : Increases in economic benefits not resulting from contributions made by equity holders. Expenses : Decreases in economic benefits not resulting from distributions to equity holders.

26. Framework – Recognition
An item is classed as 'recognised' when it is included in the financial statements.
An item should be recognised if it is probable that there will be an inflow or outflow of economic benefits associated with the asset or liability and the asset or liability can be measured reliably.
Revenue should be earned before it is recognised in the income statement.
Expenses are recognised when there is a decrease in an asset or an increase in a liability.

27. Framework – Measurement
The measurement bases referred to in the IASB Framework and commonly used are:
Historical cost. Assets are recorded at their original cost. Liabilities are recorded at their original amount received or the cash expected to be paid out to settle them;
Current cost. Assets are recorded at the amount that would have to be paid out at the balance sheet date for an equivalent asset. Liabilities are recorded at the value that they could be settled for at the balance sheet date;
Realisable or settlement value. Assets are recorded at the amount that they could be sold for now and similarly liabilities are recorded at the amount expected to be paid out; and
Present value. This measurement basis involves discounting future cash flows to take account of the time value of money.
Although the IASB Framework includes an explanation of the different measurement options, IFRS are primarily based on historical cost and present value (though later standards move towards fair value approach)

28. BASIC TECHNIQUES EMBEDDED IN IFRS
Substance over the Form
Fair Value, and Present Value
Cash and Cash Equivalent
Policy V/S Estimates
Depreciation is Estimates
Investment Property
Combining and Segmenting Transactions
OVERALL PRINCIPLE BASED AND NOT RULE BASED
UNDERSTAND THE ECONOMIC REALITY OF THE TRANSACTIONS
LOGICAL CONCLUSION APPLYING FRAMEWORK PRINCIPLES

29. CONCEPTS – FAIR VALUE
The PRICE that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at measurement date i.e. Exit Price
Price : At the Principle mkt ( or most advantageous market under current market conditions)
Asset or Liability : stand alone or group (CGU); Highest and best use
Transaction : in a principal or most advantageous mkt
Mkt Participants : Buyers and sellers in principal mkt, are Independent of each other , knowledge abt asset or liability, willing to enter into transaction
THUS MAKT BASED AND NOT ENTITY SPECIFIC MEASUREMENT

30. FEW TRANSACTIONS – Clarity Requires
Preference Share Capital – Is it Capital ?
Zero % Debentures / Loans – Is it a reality ?
Proposed Dividend – Liability arises when ?
Convertible Debenture – Value of Option ?
Decommissioning Cost -When to Account?
Reversal of Impairment Loss / NRV of Inventory in subsequent period

31. NEW WAY IFRIC 15 ; Agreements for the Construction of Real Estate
Vehicle with Additional Warranty – Segmenting
Goods sold and repurchase at a later date - Combining
SIC 15 – Operating Lease - Incentives
IFRIC 4 : Determining whether an arrangement contains lease
IFRIC 13 – Customer Loyalty Program
IFRIC18 – Transfer of Assets from Customers
IFRIC 15 ; Agreements for the Construction of Real Estate

32. PPE – Definition of Cost , Replacement of Major Part, Decommissioning Cost
Depreciation to reflect the pattern in which asset’s economic benefits are consumed
Life of the Assets is a entity specific and not be confused with the economic life of the PPE
IFRIC 12 : Service Concession Arrangement

33. Any questions?? CA MAYUR CHOKSHI Mumbai , India m_isa@rediffmail.com
By:
CA MAYUR CHOKSHI
Mumbai , India