1. 1 International Financial Reporting Standards IFRS for SMEs IFRS Foundation-World Bank 18–20 October 2011 Sarajevo, Bosnia and Herzegovina Copyright © 2010 IFRS Foundation. All rights reserved.

2. 2 The IFRS for SMEs Topic 4.6 Quiz and Discussion Section 34 Specialised Activities Michael Wells

3. 3 Questions about Section 34 Specialised Activities

4. 4 Section 34 – Discussion questions Question 1: If the fair value of a biological asset is readily determinable without undue cost or effort, the entity: a.applies the fair value model b.applies either the fair value model or the cost model (free choice) c.applies the cost model

5. 5 Section 34 – Discussion questions Question 1: If the fair value of a biological asset is readily determinable without undue cost or effort, the entity: a.applies the fair value model b.applies either the fair value model or the cost model (free choice) c.applies the cost model

6. 6 Section 34 – Discussion questions Question 2: Before the point of harvest, a fruit tree and the fruit it bears are accounted for: a.as two separate items (ie the tree as a biological asset and the fruit it bears as inventory) b.as two separate biological assets c.as a single biological asset

7. 7 Section 34 – Discussion questions Question 2: Before the point of harvest, a fruit tree and the fruit it bears are accounted for: a.as two separate items (ie the tree as a biological asset and the fruit it bears as inventory) b.as two separate biological assets c.as a single biological asset

8. 8 Section 34 – Discussion questions Question 3: At harvest, the fruit harvested from the tree is measured: a.at fair value b.at fair value less costs to sell c.at cost less costs to sell

9. 9 Section 34 – Discussion questions Question 3: At harvest, the fruit harvested from the tree is measured: a.at fair value b.at fair value less costs to sell c.at cost less costs to sell

10. 10 Section 34 – Discussion questions Question 4: An entity that is engaged in extractive activities must account for expenditure on the acquisition or development of tangible or intangible assets for use in extractive activities by applying: a.IFRS 6 Exploration for and Evaluation of Mineral Resources b.Section 17 Property, Plant and Equipment c.Section 18 Intangible Assets other than Goodwill d.both (b) and (c)

11. 11 Section 34 – Discussion questions Question 4: An entity that is engaged in extractive activities must account for expenditure on the acquisition or development of tangible or intangible assets for use in extractive activities by applying: a.IFRS 6 Exploration for and Evaluation of Mineral Resources b.Section 17 Property, Plant and Equipment c.Section 18 Intangible Assets other than Goodwill d.both (b) and (c)

12. 12 Section 34 – Discussion questions Question 5: When an entity undertaking extractive activities has a decommissioning, restoration or similar obligation, such obligation and costs are accounted for: a.in accordance with Section 17 Property, Plant and Equipment b.in accordance with Section 21 Provisions and Contingencies c.no obligation is recognised, costs are recognised in statement of comprehensive income when incurred d.both (a) and (b)

13. 13 Section 34 – Discussion questions Question 5: When an entity undertaking extractive activities has a decommissioning, restoration or similar obligation, such obligation and costs are accounted for: a.in accordance with Section 17 Property, Plant and Equipment b.in accordance with Section 21 Provisions and Contingencies c.no obligation is recognised, costs are recognised in statement of comprehensive income when incurred d.both (a) and (b)

14. 14 Section 34 – Discussion questions Question 6: An entity enters into an arrangement with the local government. The terms of the arrangement require constructing a hospital within 3 years and maintaining and operating the hospital for an unlimited number of years. The terms of the arrangement allow the entity to obtain income from its patients. This operator accounts for this service concession arrangement as: See choices on the next slide...

15. 15 Section 34 – Discussion questions Question 6, continued: a.an intangible asset b.a financial asset c.This arrangement is not a service concession arrangement. The hospital will be accounted for as property, plant and equipment.

16. 16 Section 34 – Discussion questions Question 6, continued: a.an intangible asset b.a financial asset c.This arrangement is not a service concession arrangement. The hospital will be accounted for as property, plant and equipment.

17. 17 Section 34 – Discussion questions Question 7: An entity is the operator in a service concession arrangement. The terms of the arrangement require the operator to construct a hospital within 3 years and to maintain and operate the hospital for 47 years. The terms of the arrangement allow the operator to be partially paid by charging fees to the hospital patients. In addition, the grantor pays the operator CU95,000. See choices on the next slide...

18. 18 Section 34 – Discussion questions Question 7, continued: The operator recognises: a. an intangible asset b. a financial asset c. both an intangible and a financial asset

19. 19 Section 34 – Discussion questions Question 7, continued: The operator recognises: a. an intangible asset b. a financial asset c. both an intangible and a financial asset

20. © 2011 IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK | www.ifrs.org 20 Questions or comments? Expressions of individual views by members of the IASB and its staff are encouraged. The views expressed in this presentation are those of the presenter. Official positions of the IASB on accounting matters are determined only after extensive due process and deliberation.

21. 21 This presentation may be modified from time to time. The latest version may be downloaded from: http://www.ifrs.org/Conferences+and+Workshops/IFRS+for+SMEs+Train+ the+trainer+workshops.htm The accounting requirements applicable to small and medium ‑ sized entities (SMEs) are set out in the International Financial Reporting Standard (IFRS) for SMEs, which was issued by the IASB in July 2009. The IFRS Foundation, the authors, the presenters and the publishers do not accept responsibility for loss caused to any person who acts or refrains from acting in reliance on the material in this PowerPoint presentation, whether such loss is caused by negligence or otherwise.