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March 2009

 

IFRS - Are you applying the new standards?

There are a number of new or amended International Financial Reporting Standards which have recently been brought into effect. The changes are to be applied to accounting periods beginning on or after 1st January 2009.

IAS14 which requires a company to identify primary segments and secondary segments has been replaced by IFRS8. This new standard only requires one set of operating segments to be disclosed. Operating segments are simply those which are regularly reviewed by the chief operating decision maker.

IAS23 has been amended so that the borrowing costs on an asset which takes a substantial amount of time to get ready for its intended production or sale must be capitalised. This removes the option to treat them as an expense.

IAS27 has been amended so that a company converting to IFRS need no longer look at previous dividends paid to it by its subsidiaries and establish whether they were paid out of pre-acquisition profits. The old IAS27 required such dividends to be taken out of retained profits which could involve costly restatement exercises going back many years. The new version allows dividends out of pre-acquisition profits to be recognised in full.

IAS40 has been amended so that investment property in the course of construction is treated as an investment property with revaluation gains and losses going to profit or loss. The old version treated such property as ordinary non-investment property.

IAS38 has been amended so that advertising costs must be recognised once the company has the right to use the promotional materials rather than the date when they are actually used.

There are also minor changes to IFRS2 and IAS32. Further changes to IFRS take place in July 2009.


The Essential Guide to International Financial Reporting Standards

The UK Training seminar, The Essential Guide to Internaional Financial Reporting Standards, deals with each standard in turn and provides cross-references to the relevant sections of each Standard. It also refers to the appropriate section of a UK Financial Reporting Standard or the Companies Act where these differ from IFRS. It is wide-ranging, covering all of the major differences between UK GAAP and IFRS. The course will help accountants and their staff recognise the key differences between UK GAAP and IFRS, and also where US GAAP is not in line with IFRS. It will also demonstrate what needs to be done to implement IFRS successfully.


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