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1/13/2015 International Financial Reporting Standards http://www.iasplus.com/en/standards/ifrs 1/2 Contact us About Legal Privacy FAQs Material on this website is © 2015 Deloitte Global Services Limited, or a member firm of Deloitte Touche Tohmatsu Limited, or one of their related entities. See Legal for additional copyright and other legal information. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms. 14 International Financial Reporting Standards Title Date issued Effective Date IFRS 1 — Firsttime Adoption of International Financial Reporting Standards 24 Nov 2008 01 Jul 2009 IFRS 2 — Sharebased Payment 19 Feb 2004 01 Jan 2005 IFRS 3 — Business Combinations 10 Jan 2008 01 Jul 2009 IFRS 4 — Insurance Contracts 31 Mar 2004 01 Jan 2005 IFRS 5 — Noncurrent Assets Held for Sale and Discontinued Operations 31 Mar 2004 01 Jan 2005 IFRS 6 — Exploration for and Evaluation of Mineral Resources 09 Dec 2004 01 Jan 2006 IFRS 7 — Financial Instruments: Disclosures 18 Aug 2005 01 Jan 2007 IFRS 8 — Operating Segments 30 Nov 2006 01 Jan 2009 IFRS 9 — Financial Instruments 24 Jul 2014 01 Jan 2018 IFRS 10 — Consolidated Financial Statements 12 May 2011 01 Jan 2013 IFRS 11 — Joint Arrangements 12 May 2011 01 Jan 2013 IFRS 12 — Disclosure of Interests in Other Entities 12 May 2011 01 Jan 2013 IFRS 13 — Fair Value Measurement 12 May 2011 01 Jan 2013 IFRS 14 — Regulatory Deferral Accounts 30 Jan 2014 01 Jan 2016 IFRS 15 — Revenue from Contracts with Customers 28 May 2014 01 Jan 2017 Note: The table above lists the most recent version(s) of each pronouncement and the date each version was originally issued. Click through to our page for each pronouncement for a full history. This page contains links to our summaries, analysis, history and resources for International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB). 72 Like

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  • 1/13/2015 InternationalFinancialReportingStandards

    http://www.iasplus.com/en/standards/ifrs 1/2

    ContactusAboutLegalPrivacyFAQsMaterialonthiswebsiteis2015DeloitteGlobalServicesLimited,oramemberfirmofDeloitteToucheTohmatsuLimited,oroneoftheirrelatedentities.SeeLegalforadditionalcopyrightandotherlegalinformation.DeloittereferstooneormoreofDeloitteToucheTohmatsuLimited,aUKprivatecompanylimitedbyguarantee(DTTL),itsnetworkofmemberfirms,andtheirrelatedentities.DTTLandeachofitsmemberfirmsarelegallyseparateandindependententities.DTTL(alsoreferredtoasDeloitteGlobal)doesnotprovideservicestoclients.Pleaseseewww.deloitte.com/aboutforamoredetaileddescriptionofDTTLanditsmemberfirms.

    14

    InternationalFinancialReportingStandards

    Title Dateissued

    EffectiveDate

    IFRS1FirsttimeAdoptionofInternationalFinancialReportingStandards

    24Nov2008 01Jul2009

    IFRS2SharebasedPayment 19Feb2004 01Jan2005IFRS3BusinessCombinations 10Jan2008 01Jul2009IFRS4InsuranceContracts 31Mar2004 01Jan2005IFRS5NoncurrentAssetsHeldforSaleandDiscontinuedOperations 31Mar2004 01Jan2005IFRS6ExplorationforandEvaluationofMineralResources 09Dec2004 01Jan2006IFRS7FinancialInstruments:Disclosures 18Aug2005 01Jan2007IFRS8OperatingSegments 30Nov2006 01Jan2009IFRS9FinancialInstruments 24Jul2014 01Jan2018IFRS10ConsolidatedFinancialStatements 12May2011 01Jan2013IFRS11JointArrangements 12May2011 01Jan2013IFRS12DisclosureofInterestsinOtherEntities 12May2011 01Jan2013IFRS13FairValueMeasurement 12May2011 01Jan2013IFRS14RegulatoryDeferralAccounts 30Jan2014 01Jan2016IFRS15RevenuefromContractswithCustomers 28May2014 01Jan2017Note:Thetableaboveliststhemostrecentversion(s)ofeachpronouncementandthedateeachversionwasoriginallyissued.Clickthroughtoourpageforeachpronouncementforafullhistory.

    Thispagecontainslinkstooursummaries,analysis,historyandresourcesforInternationalFinancialReportingStandards(IFRS)issuedbytheInternationalAccountingStandardsBoard(IASB).

    72Like

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  • 1/13/2015 InternationalFinancialReportingStandards

    http://www.iasplus.com/en/standards/ifrs 2/2

  • 1/13/2015 IFRS1FirsttimeAdoptionofInternationalFinancialReportingStandards

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    IFRS1FirsttimeAdoptionofInternationalFinancialReportingStandards

    Overview

    IFRS1FirsttimeAdoptionofInternationalFinancialReportingStandardssetsouttheproceduresthatanentitymustfollowwhenitadoptsIFRSsforthefirsttimeasthebasisforpreparingitsgeneralpurposefinancialstatements.TheIFRSgrantslimitedexemptionsfromthegeneralrequirementtocomplywitheachIFRSeffectiveattheendofitsfirstIFRSreportingperiod.

    ArestructuredversionofIFRS1wasissuedinNovember2008andappliesifanentity'sfirstIFRSfinancialstatementsareforaperiodbeginningonorafter1July2009.

    HistoryofIFRS1

    Date Development Comments

    September2001 ProjectaddedtoIASBagenda Historyoftheproject

    31July2002 ExposureDraftED1FirsttimeApplicationofIFRSspublished

    Commentdeadline31October2002

    June2003 IFRS1FirsttimeAdoptionofIFRSsissued

    EffectiveforthefirstIFRSfinancialstatementsforaperiodbeginningonorafter1January2004

    30June2005 AmendedbyAmendmentstoIFRS1FirsttimeAdoptionofInternationalFinancialReportingStandardsandIFRS6ExplorationforandEvaluationofMineralResources(moreinformation)

    AminoramendmenttoclarifythattheexemptioninrelationtoIFRS6appliestotherecognitionandmeasurementrequirementsofIFRS6,aswellasthedisclosurerequirements.

    22May2008 AmendedbyAmendmentstoIFRS1andIAS27CostofanInvestmentinaSubsidiary,JointlyControlledEntityorAssociate

    Effectiveforannualperiodsbeginningonorafter1January2009

    24November2008 RestructuredversionofIFRS1issued Effectiveifanentity'sfirstIFRSfinancialstatementsareforaperiodbeginningonorafter1July2009

    23July2009 AmendedbyAdditionalExemptionsforFirsttimeAdopters(AmendmentstoIFRS1)(oilandgasassets,leases).Clickformoreinformation.

    Effectiveforannualperiodsbeginningonorafter1January2010

    QuickArticleLinks

    http://www.iasplus.com/en/news/2002/July/news432http://www.iasplus.com/en/news/2005/June/news2140http://www.iasplus.com/en/news/2009/July/news4935http://www.iasplus.com/en/news/2008/November/news4332http://www.iasplus.com/en/news/2003/June/news923http://www.iasplus.com/en/projects/completed/fta/first-time-adoptionhttp://www.iasplus.com/en/news/2008/May/news4275http://www.iasplus.com/en/news/2005/June/news2140

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    29January2010 AmendedbyLimitedExemptionfromComparativeIFRS7DisclosuresforFirsttimeAdopters(AmendmenttoIFRS1).Clickformoreinformation

    Effectivefororannualperiodsbeginningonorafter1July2010

    6May2010 AmendedbyImprovementstoIFRSs(accountingpolicieschanges,revaluationbasisasdeemedcost,rateregulation)

    Effectiveforannualperiodsbeginningonorafter1July2011

    20December2010 AmendedbySevereHyperinflationandRemovalofFixedDatesforFirsttimeAdopters(AmendmenttoIFRS1).Clickformoreinformation

    Effectiveforannualperiodsbeginningonorafter1July2011

    13March2012 AmendedbyGovernmentLoans(AmendmentstoIFRS1).Clickformoreinformation

    Effectiveforannualperiodsbeginningonorafter1January2013

    17May2012 AmendedbyAnnualImprovements20092011Cycle(repeatapplication,borrowingcosts).Clickformoreinformation

    Effectiveforannualperiodsbeginningonorafter1January2013

    12December2013 AmendedbyAnnualImprovementstoIFRSs20112013Cycle(meaningofeffectiveIFRSs).Clickformoreinformation

    Amendmenttobasisforconclusionsonly

    Note:Theabovesummarydoesnotincludedetailsofconsequentialamendmentsmadeastheresultofotherprojects.

    RelatedInterpretationsIFRS1supersedesSIC8FirsttimeApplicationofIASsasthePrimaryBasisofAccounting

    AmendmentsunderconsiderationNonenoted

    DeloitteGuidetoIFRS1(November2009)

    InNovember2009,Deloitte'sIFRSGlobalOfficepublishedarevisedGuidetoIFRS1FirsttimeAdoptionofInternationalFinancialReportingStandards.Theguidewasfirstpublishedin2004withtheaimofprovidingfirsttimeadopterswithhelpfulinsightsfortheapplicationofIFRS1.Thissecondeditionhasthesameobjective.WehaveupdatedthecontenttoreflectthelessonslearnedfromthefirstmajorwaveofIFRSadoptionin2005,aswellasforthechangestoIFRS1since2004.Wehavestructuredtheguidetoprovideuserswithanaccessiblereferencemanual:

    http://www.iasplus.com/en/news/2010/May/news6089http://www.iasplus.com/en/projects/completed/fta/government-loanshttp://www.iasplus.com/en/news/2012/march/iasb-issues-amendment-to-ifrs-1-regarding-government-loanshttp://www.iasplus.com/en/news/2013/12/aip-2011-2013http://www.iasplus.com/en/news/2010/January/news5728http://www.iasplus.com/en/news/2012/may/iasb-concludes-the-2009-2011-annual-improvements-cyclehttp://www.iasplus.com/en/news/2010/December/news5595http://www.iasplus.com/en/projects/completed/aip/annual-improvements-2009-2011http://www.iasplus.com/en/standards/sic/sic-8http://www.iasplus.com/en/projects/completed/aip/annual-improvements-2011-2013http://www.iasplus.com/en/projects/completed/aip/annual-improvements-2008-2010

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    AnexecutivesummaryexplainsthemostimportantfeaturesofIFRS1

    Section2providesanoverviewoftherequirementsoftheStandard

    Sections3and4coverthespecificexceptionsandexemptionsfromIFRS1'sgeneralprincipleofretrospectiveapplicationofIFRSs,focusingonkeyimplementationissues

    Section5addressesothercomponentsoffinancialstatementswhereimplementationissuesfrequentlyariseinpractice

    Section6setsoutQ&Asdealingwithspecificfactpatternsthatusersmayencounterinpracticeand

    Section7discussessomeofthepracticalimplementationdecisionsfacedbyfirsttimeadopters.

    ClicktoDownloadDeloitte'sGuidetoIFRS1(PDF435k)

    SummaryofIFRS1Objective

    IFRS1FirsttimeAdoptionofInternationalFinancialReportingStandardssetsouttheproceduresthatanentitymustfollowwhenitadoptsIFRSsforthefirsttimeasthebasisforpreparingitsgeneralpurposefinancialstatements.

    Note:AnentitythatconductsrateregulatedactivitiesandhasrecognisedamountsinitspreviousGAAPfinancialstatementsthatmeetthedefinitionof'regulatorydeferralaccountbalances'(sometimesreferredto'regulatoryassets'and'regulatoryliabilities')canoptionallyapplyIFRS14RegulatoryDeferralAccountsinadditiontoIFRS1.AnentitythatelectstoapplyIFRS14initsfirstIFRSfinancialstatementsmustcontinuetoapplyitinsubsequentfinancialstatements.

    Definitionoffirsttimeadoption

    Afirsttimeadopterisanentitythat,forthefirsttime,makesanexplicitandunreservedstatementthatitsgeneralpurposefinancialstatementscomplywithIFRSs.[IFRS1.3]

    Anentitymaybeafirsttimeadopterif,intheprecedingyear,itpreparedIFRSfinancialstatementsforinternalmanagementuse,aslongasthoseIFRSfinancialstatementswerenotmadeavailabletoownersorexternalpartiessuchasinvestorsorcreditors.IfasetofIFRSfinancialstatementswas,foranyreason,madeavailabletoownersorexternalpartiesintheprecedingyear,thentheentitywillalreadybeconsideredtobeonIFRSs,andIFRS1doesnotapply.[IFRS1.3]

    Anentitycanalsobeafirsttimeadopterif,intheprecedingyear,itsfinancialstatements:[IFRS1.3]

    assertedcompliancewithsomebutnotallIFRSs,or

    includedonlyareconciliationofselectedfiguresfrompreviousGAAPtoIFRSs.(PreviousGAAPmeanstheGAAPthatanentityfollowedimmediatelybeforeadoptingtoIFRSs.)

    However,anentityisnotafirsttimeadopterif,intheprecedingyear,itsfinancialstatementsasserted:

    CompliancewithIFRSseveniftheauditor'sreportcontainedaqualificationwithrespecttoconformitywithIFRSs.

    http://www.iasplus.com/en/standards/ifrs/ifrs14http://www.iasplus.com/en/publications/global/guides/pub2712

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    CompliancewithbothpreviousGAAPandIFRSs.

    AnentitythatappliedIFRSsinapreviousreportingperiod,butwhosemostrecentpreviousannualfinancialstatementsdidnotcontainanexplicitandunreservedstatementofcompliancewithIFRSscanchooseto:

    applytherequirementsofIFRS1(includingthevariouspermittedexemptionstofullretrospectiveapplication),or

    retrospectivelyapplyIFRSsinaccordancewithIAS8AccountingPolicies,ChangesinAccountingEstimatesandErrors,asifitneverstoppedapplyingIFRSs.[IFRS1.4A]

    OverviewforanentitythatadoptsIFRSsforthefirsttimeinitsannualfinancialstatementsfortheyearended31December2014

    Accountingpolicies

    SelectaccountingpoliciesbasedonIFRSseffectiveat31December2014.

    IFRSreportingperiods

    Prepareatleast2014and2013financialstatementsandtheopeningbalancesheet(asof1January2012orbeginningofthefirstperiodforwhichfullcomparativefinancialstatementsarepresented,ifearlier)byapplyingtheIFRSseffectiveat31December2014.[IFRS1.7]

    SinceIAS1requiresthatatleastoneyearofcomparativepriorperiodfinancialinformationbepresented,theopeningbalancesheetwillbe1January2012ifnotearlier.Thiswouldmeanthatanentity'sfirstfinancialstatementsshouldincludeatleast:[IFRS1.21]

    threestatementsoffinancialposition

    twostatementsofprofitorlossandothercomprehensiveincome

    twoseparatestatementsofprofitorloss(ifpresented)

    twostatementsofcashflows

    twostatementsofchangesinequity,and

    relatednotes,includingcomparativeinformation

    Ifa31December2014adopterreportsselectedfinancialdata(butnotfullfinancialstatements)onanIFRSbasisforperiodspriorto2013,inadditiontofullfinancialstatementsfor2014and2013,thatdoesnotchangethefactthatitsopeningIFRSbalancesheetisasof1January2012.

    AdjustmentsrequiredtomovefrompreviousGAAPtoIFRSsatthetimeoffirsttimeadoption

    DerecognitionofsomepreviousGAAPassetsandliabilities

    TheentityshouldeliminatepreviousGAAPassetsandliabilitiesfromtheopeningbalancesheetiftheydonotqualifyforrecognitionunderIFRSs.[IFRS1.10(b)]Forexample:

    IAS38doesnotpermitrecognitionofexpenditureonanyofthefollowingasanintangibleasset:research

    startup,preoperating,andpreopeningcosts

    training

    advertisingandpromotion

    http://www.iasplus.com/en/standards/ias/ias8

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    movingandrelocation

    Iftheentity'spreviousGAAPhadrecognisedtheseasassets,theyareeliminatedintheopeningIFRSbalancesheet

    Iftheentity'spreviousGAAPhadallowedaccrualofliabilitiesfor"generalreserves",restructurings,futureoperatinglosses,ormajoroverhaulsthatdonotmeettheconditionsforrecognitionasaprovisionunderIAS37,theseareeliminatedintheopeningIFRSbalancesheet

    Iftheentity'spreviousGAAPhadallowedrecognitionofcontingentassetsasdefinedinIAS37.10,theseareeliminatedintheopeningIFRSbalancesheet

    RecognitionofsomeassetsandliabilitiesnotrecognisedunderpreviousGAAP

    Conversely,theentityshouldrecogniseallassetsandliabilitiesthatarerequiredtoberecognisedbyIFRSeveniftheywereneverrecognisedunderpreviousGAAP.[IFRS1.10(a)]Forexample:

    IAS39requiresrecognitionofallderivativefinancialassetsandliabilities,includingembeddedderivatives.ThesewerenotrecognisedundermanylocalGAAPs.

    IAS19requiresanemployertorecognisealiabilitywhenanemployeehasprovidedserviceinexchangeforbenefitstobepaidinthefuture.Thesearenotjustpostemploymentbenefits(e.g.,pensionplans)butalsoobligationsformedicalandlifeinsurance,vacations,terminationbenefits,anddeferredcompensation.Inthecaseof'overfunded'definedbenefitplans,thiswouldbeaplanasset.

    IAS37requiresrecognitionofprovisionsasliabilities.Examplescouldincludeanentity'sobligationsforrestructurings,onerouscontracts,decommissioning,remediation,siterestoration,warranties,guarantees,andlitigation.

    DeferredtaxassetsandliabilitieswouldberecognisedinconformitywithIAS12.

    Reclassification

    TheentityshouldreclassifypreviousGAAPopeningbalancesheetitemsintotheappropriateIFRSclassification.[IFRS1.10(c)]Examples:

    IAS10doesnotpermitclassifyingdividendsdeclaredorproposedafterthebalancesheetdateasaliabilityatthebalancesheetdate.IfsuchliabilitywasrecognisedunderpreviousGAAPitwouldbereversedintheopeningIFRSbalancesheet.

    Iftheentity'spreviousGAAPhadallowedtreasurystock(anentity'sownsharesthatithadpurchased)tobereportedasanasset,itwouldbereclassifiedasacomponentofequityunderIFRS.

    ItemsclassifiedasidentifiableintangibleassetsinabusinesscombinationaccountedforunderthepreviousGAAPmayberequiredtobereclassifiedasgoodwillunderIFRS3becausetheydonotmeetthedefinitionofanintangibleassetunderIAS38.Theconversemayalsobetrueinsomecases.

    IAS32hasprinciplesforclassifyingitemsasfinancialliabilitiesorequity.ThusmandatorilyredeemablepreferredsharesthatmayhavebeenclassifiedasequityunderpreviousGAAPwouldbereclassifiedasliabilitiesintheopeningIFRSbalancesheet.NotethatIFRS1makesanexceptionfromthe"splitaccounting"provisionsofIAS32.Iftheliabilitycomponentofacompoundfinancialinstrumentisnolongeroutstandingatthedateofthe

    http://www.iasplus.com/en/standards/ias/ias38http://www.iasplus.com/en/standards/ias/ias10http://www.iasplus.com/en/standards/ias/ias32http://www.iasplus.com/en/standards/ifrs/ifrs3

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    openingIFRSbalancesheet,theentityisnotrequiredtoreclassifyoutofretainedearningsandintootherequitytheoriginalequitycomponentofthecompoundinstrument.

    ThereclassificationprinciplewouldapplyforthepurposeofdefiningreportablesegmentsunderIFRS8.

    Someoffsetting(netting)ofassetsandliabilitiesorofincomeandexpenseitemsthathadbeenacceptableunderpreviousGAAPmaynolongerbeacceptableunderIFRS.

    Measurement

    ThegeneralmeasurementprinciplethereareseveralsignificantexceptionsnotedbelowistoapplyeffectiveIFRSsinmeasuringallrecognisedassetsandliabilities.[IFRS1.10(d)]

    HowtorecogniseadjustmentsrequiredtomovefrompreviousGAAPtoIFRSs

    AdjustmentsrequiredtomovefrompreviousGAAPtoIFRSsatthedateoftransitionshouldberecogniseddirectlyinretainedearningsor,ifappropriate,anothercategoryofequityatthedateoftransitiontoIFRSs.[IFRS1.11]

    Estimates

    InpreparingIFRSestimatesatthedateoftransitiontoIFRSsretrospectively,theentitymustusetheinputsandassumptionsthathadbeenusedtodeterminepreviousGAAPestimatesasofthatdate(afteradjustmentstoreflectanydifferencesinaccountingpolicies).TheentityisnotpermittedtouseinformationthatbecameavailableonlyafterthepreviousGAAPestimatesweremadeexcepttocorrectanerror.[IFRS1.14]

    Changestodisclosures

    Formanyentities,newareasofdisclosurewillbeaddedthatwerenotrequirementsunderthepreviousGAAP(perhapssegmentinformation,earningspershare,discontinuingoperations,contingenciesandfairvaluesofallfinancialinstruments)anddisclosuresthathadbeenrequiredunderpreviousGAAPwillbebroadened(perhapsrelatedpartydisclosures).

    DisclosureofselectedfinancialdataforperiodsbeforethefirstIFRSstatementoffinancialposition(balancesheet)

    IfafirsttimeadopterwantstodiscloseselectedfinancialinformationforperiodsbeforethedateoftheopeningIFRSbalancesheet,itisnotrequiredtoconformthatinformationtoIFRS.ConformingthatearlierselectedfinancialinformationtoIFRSsisoptional.[IFRS1.22]

    IftheentityelectstopresenttheearlierselectedfinancialinformationbasedonitspreviousGAAPratherthanIFRS,itmustprominentlylabelthatearlierinformationasnotcomplyingwithIFRSand,further,itmustdisclosethenatureofthemainadjustmentsthatwouldmakethatinformationcomplywithIFRS.Thislatterdisclosureisnarrativeandnotnecessarilyquantified.[IFRS1.22]

    Disclosuresinthefinancialstatementsofafirsttimeadopter

    IFRS1requiresdisclosuresthatexplainhowthetransitionfrompreviousGAAPtoIFRSaffectedtheentity'sreportedfinancialposition,financialperformanceandcashflows.[IFRS1.23]Thisincludes:

    1. reconciliationsofequityreportedunderpreviousGAAPtoequityunderIFRSboth(a)atthedateoftransitiontoIFRSsand(b)theendofthelastannualperiodreportedunderthepreviousGAAP.[IFRS1.24(a)](ForanentityadoptingIFRSsforthefirsttimeinits31December2014financialstatements,

    http://www.iasplus.com/en/standards/ifrs/ifrs8

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    thereconciliationswouldbeasof1January2012and31December2013.)

    2. reconciliationsoftotalcomprehensiveincomeforthelastannualperiodreportedunderthepreviousGAAPtototalcomprehensiveincomeunderIFRSsforthesameperiod[IFRS1.24(b)]

    3. explanationofmaterialadjustmentsthatweremade,inadoptingIFRSsforthefirsttime,tothestatementoffinancialposition,statementofcomprehensiveincomeandstatementofcashflows(thelatterifpresentedunderpreviousGAAP)[IFRS1.25]

    4. iferrorsinpreviousGAAPfinancialstatementswerediscoveredinthecourseoftransitiontoIFRSs,thosemustbeseparatelydisclosed[IFRS1.26]

    5. iftheentityrecognisedorreversedanyimpairmentlossesinpreparingitsopeningIFRSbalancesheet,thesemustbedisclosed[IFRS1.24(c)]

    6. appropriateexplanationsiftheentityhaselectedtoapplyanyofthespecificrecognitionandmeasurementexemptionspermittedunderIFRS1forinstance,ifitusedfairvaluesasdeemedcost

    Disclosuresininterimfinancialreports

    IfanentityisgoingtoadoptIFRSsforthefirsttimeinitsannualfinancialstatementsfortheyearended31December2014,certaindisclosurearerequiredinitsinterimfinancialstatementspriortothe31December2014statements,butonlyifthoseinterimfinancialstatementspurporttocomplywithIAS34InterimFinancialReporting.ExplanatoryinformationandareconciliationarerequiredintheinterimreportthatimmediatelyprecedesthefirstsetofIFRSannualfinancialstatements.TheinformationincludesreconciliationsbetweenIFRSandpreviousGAAP.[IFRS1.32]

    ExceptionstotheretrospectiveapplicationofotherIFRSs

    Priorto1January2010,therewerethreeexceptionstothegeneralprincipleofretrospectiveapplication.On23July2009,IFRS1wasamended,effective1January2010,toaddtwoadditionalexceptionswiththegoaloffurthersimplifyingthetransitiontoIFRSsforfirsttimeadopters.Thefiveexceptionsare:[IFRS1.AppendixB]

    IAS39Derecognitionoffinancialinstruments

    AfirsttimeadoptershallapplythederecognitionrequirementsinIAS39prospectivelyfortransactionsoccurringonorafter1January2004.However,theentitymayapplythederecognitionrequirementsretrospectivelyprovidedthattheneededinformationwasobtainedatthetimeofinitiallyaccountingforthosetransactions.[IFRS1.B23]

    IAS39Hedgeaccounting

    ThegeneralruleisthattheentityshallnotreflectinitsopeningIFRSbalancesheet(statementoffinancialposition)ahedgingrelationshipofatypethatdoesnotqualifyforhedgeaccountinginaccordancewithIAS39.However,ifanentitydesignatedanetpositionasahedgediteminaccordancewithpreviousGAAP,itmaydesignateanindividualitemwithinthatnetpositionasahedgediteminaccordancewithIFRS,providedthatitdoessonolaterthanthedateoftransitiontoIFRSs.[IFRS1.B5]

    Note:ModifiedrequirementsapplywhenanentityappliesIFRS9FinancialInstruments(2013).

    IAS27Noncontrollinginterest

    IFRS1.B7listsspecificrequirementsofIFRS10ConsolidatedFinancialStatementsthatshallbeapplied

    http://www.iasplus.com/en/standards/ifrs/ifrs10http://www.iasplus.com/en/standards/ifrs/ifrs9

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    prospectively.

    Fullcostoilandgasassets

    EntitiesusingthefullcostmethodmayelectexemptionfromretrospectiveapplicationofIFRSsforoilandgasassets.EntitieselectingthisexemptionwillusethecarryingamountunderitsoldGAAPasthedeemedcostofitsoilandgasassetsatthedateoffirsttimeadoptionofIFRSs.

    Determiningwhetheranarrangementcontainsalease

    IfafirsttimeadopterwithaleasingcontractmadethesametypeofdeterminationofwhetheranarrangementcontainedaleaseinaccordancewithpreviousGAAPasthatrequiredbyIFRIC4DeterminingwhetheranArrangementContainsaLease,butatadateotherthanthatrequiredbyIFRIC4,theamendmentsexempttheentityfromhavingtoapplyIFRIC4whenitadoptsIFRSs.

    OptionalexemptionsfromthebasicmeasurementprincipleinIFRS1

    Therearesomefurtheroptionalexemptionstothegeneralrestatementandmeasurementprinciplessetoutabove.Thefollowingexceptionsareindividuallyoptional.Theyrelateto:

    businesscombinations[IFRS1.AppendixC]

    andanumberofothers[IFRS1.AppendixD]:sharebasedpaymenttransactions

    insurancecontracts

    fairvalue,previouscarryingamount,orrevaluationasdeemedcost

    leases

    cumulativetranslationdifferences

    investmentsinsubsidiaries,jointlycontrolledentities,associatesandjointventures

    assetsandliabilitiesofsubsidiaries,associatedandjointventures

    compoundfinancialinstruments

    designationofpreviouslyrecognisedfinancialinstruments

    fairvaluemeasurementoffinancialassetsorfinancialliabilitiesatinitialrecognition

    decommissioningliabilitiesincludedinthecostofproperty,plantandequipment

    financialassetsorintangibleassetsaccountedforinaccordancewithIFRIC12ServiceConcessionArrangements

    borrowingcosts

    transfersofassetsfromcustomers

    extinguishingfinancialliabilitieswithequityinstruments

    severehyperinflation

    jointarrangements

    strippingcostsintheproductionphaseofasurfacemine

    Some,butnotall,ofthemaredescribedbelow.

    Businesscombinationsthatoccurredbeforeopeningbalancesheetdate

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    IFRS1includesAppendixCexplaininghowafirsttimeadoptershouldaccountforbusinesscombinationsthatoccurredpriortotransitiontoIFRS.

    AnentitymaykeeptheoriginalpreviousGAAPaccounting,thatis,notrestate:

    previousmergersorgoodwillwrittenofffromreserves

    thecarryingamountsofassetsandliabilitiesrecognisedatthedateofacquisitionormerger,or

    howgoodwillwasinitiallydetermined(donotadjustthepurchasepriceallocationonacquisition)

    However,shoulditwishtodoso,anentitycanelecttorestateallbusinesscombinationsstartingfromadateitselectspriortotheopeningbalancesheetdate.

    Inallcases,theentitymustmakeaninitialIAS36impairmenttestofanyremaininggoodwillintheopeningIFRSbalancesheet,afterreclassifying,asappropriate,previousGAAPintangiblestogoodwill.

    Theexemptionforbusinesscombinationsalsoappliestoacquisitionsofinvestmentsinassociates,interestsinjointventuresandinterestsinajointoperationwhentheoperationconstitutesabusiness.

    Deemedcost

    Assetscarriedatcost(e.g.property,plantandequipment)maybemeasuredattheirfairvalueatthedateoftransitiontoIFRSs.Fairvaluebecomesthe'deemedcost'goingforwardundertheIFRScostmodel.Deemedcostisanamountusedasasurrogateforcostordepreciatedcostatagivendate.[IFRS1.D6]

    If,beforethedateofitsfirstIFRSbalancesheet,theentityhadrevaluedanyoftheseassetsunderitspreviousGAAPeithertofairvalueortoapriceindexadjustedcost,thatpreviousGAAPrevaluedamountatthedateoftherevaluationcanbecomethedeemedcostoftheassetunderIFRS.[IFRS1.D6]

    If,beforethedateofitsfirstIFRSbalancesheet,theentityhadmadeaonetimerevaluationofassetsorliabilitiestofairvaluebecauseofaprivatisationorinitialpublicoffering,andtherevaluedamountbecamedeemedcostunderthepreviousGAAP,thatamountwouldcontinuetobedeemedcostaftertheinitialadoptionofIFRS.[IFRS1.D8]

    Thisoptionappliestointangibleassetsonlyifanactivemarketexists.[IFRS1.D7]

    Ifthecarryingamountofproperty,plantandequipmentorintangibleassetsthatareusedinrateregulatedactivitiesincludesamountsunderpreviousGAAPthatdonotqualifyforcapitalisationinaccordancewithIFRSs,afirsttimeadoptermayelecttousethepreviousGAAPcarryingamountofsuchitemsasdeemedcostontheinitialadoptionofIFRSs.[IFRS1.D8B]

    EligibleentitiessubjecttorateregulationmayalsooptionallyapplyIFRS14RegulatoryDeferralAccountsontransitiontoIFRSs,andinsubsequentfinancialstatements.

    IAS19Employeebenefits:actuarialgainsandlosses

    AnentitymayelecttorecogniseallcumulativeactuarialgainsandlossesforalldefinedbenefitplansattheopeningIFRSbalancesheetdate(thatis,resetanycorridorrecognisedunderpreviousGAAPtozero),evenifitelectstousetheIAS19corridorapproachforactuarialgainsandlossesthatariseafter

    http://www.iasplus.com/en/standards/ias/ias36http://www.iasplus.com/en/standards/ifrs/ifrs14

  • 1/13/2015 IFRS1FirsttimeAdoptionofInternationalFinancialReportingStandards

    http://www.iasplus.com/en/standards/ifrs/ifrs1 10/12

    firsttimeadoptionofIFRS.Ifafirsttimeadopterusesthisexemption,itshallapplyittoallplans.[IFRS1.D10]

    Note:ThisexemptionisnotavailablewhereIAS19EmployeeBenefits(2011)isapplied.IAS19(2011)iseffectiveforannualreportingperiodsbeginningonorafter1January2013.

    IAS21Accumulatedtranslationreserves

    AnentitymayelecttorecognisealltranslationadjustmentsarisingonthetranslationofthefinancialstatementsofforeignentitiesinaccumulatedprofitsorlossesattheopeningIFRSbalancesheetdate(thatis,resetthetranslationreserveincludedinequityunderpreviousGAAPtozero).Iftheentityelectsthisexemption,thegainorlossonsubsequentdisposaloftheforeignentitywillbeadjustedonlybythoseaccumulatedtranslationadjustmentsarisingaftertheopeningIFRSbalancesheetdate.[IFRS1.D13]

    IAS27Investmentsinseparatefinancialstatements

    InMay2008,theIASBamendedthestandardtochangethewaythecostofaninvestmentintheseparatefinancialstatementsismeasuredonfirsttimeadoptionofIFRSs.TheamendmentstoIFRS1:

    allowfirsttimeadopterstousea'deemedcost'ofeitherfairvalueorthecarryingamountunderpreviousaccountingpracticetomeasuretheinitialcostofinvestmentsinsubsidiaries,jointlycontrolledentitiesandassociatesintheseparatefinancialstatements

    removethedefinitionofthecostmethodfromIAS27andaddarequirementtopresentdividendsasincomeintheseparatefinancialstatementsoftheinvestor

    requirethat,whenanewparentisformedinareorganisation,thenewparentmustmeasurethecostofitsinvestmentinthepreviousparentatthecarryingamountofitsshareoftheequityitemsofthepreviousparentatthedateofthereorganisation

    Assetsandliabilitiesofsubsidiaries,associatesandjointventures:differentIFRSadoptiondatesofinvestorandinvestee

    Ifasubsidiarybecomesafirsttimeadopterlaterthanitsparent,IFRS1permitsachoicebetweentwomeasurementbasesinthesubsidiary'sseparatefinancialstatements.Inthiscase,asubsidiaryshouldmeasureitsassetsandliabilitiesaseither:[IFRS1.D16]

    thecarryingamountthatwouldbeincludedintheparent'sconsolidatedfinancialstatements,basedontheparent'sdateoftransitiontoIFRSs,ifnoadjustmentsweremadeforconsolidationproceduresandfortheeffectsofthebusinesscombinationinwhichtheparentacquiredthesubsidiaryor

    thecarryingamountsrequiredbyIFRS1basedonthesubsidiary'sdateoftransitiontoIFRSs

    Asimilarelectionisavailabletoanassociateorjointventurethatbecomesafirsttimeadopterlaterthananentitythathassignificantinfluenceorjointcontroloverit.[IFRS1.D16]

    Ifaparentbecomesafirsttimeadopterlaterthanitssubsidiary,theparentshouldinitsconsolidatedfinancialstatements,measuretheassetsandliabilitiesofthesubsidiaryatthesamecarryingamountasintheseparatefinancialstatementsofthesubsidiary,afteradjustingforconsolidationadjustmentsandfortheeffectsofthebusinesscombinationinwhichtheparentacquiredthesubsidiary.Thesameapproachappliesinthecaseofassociatesandjointventures.[IFRS1.D17]

  • 1/13/2015 IFRS1FirsttimeAdoptionofInternationalFinancialReportingStandards

    http://www.iasplus.com/en/standards/ifrs/ifrs1 11/12

    ContactusAboutLegalPrivacyFAQsMaterialonthiswebsiteis2015DeloitteGlobalServicesLimited,oramemberfirmofDeloitteTouche

    5

    July2009:TwoAmendmentstoIFRS1

    On23July2009,theIASBamendedIFRS1to:

    exemptentitiesusingthefullcostmethodfromretrospectiveapplicationofIFRSsforoilandgasassets.

    exemptentitieswithexistingleasingcontractsfromreassessingtheclassificationofthosecontractsinaccordancewithIFRIC4DeterminingwhetheranArrangementcontainsaLeasewhentheapplicationoftheirnationalaccountingrequirementsproducedthesameresult.

    ClickforIASBPressRelease(PDF104k).

    November2009:ProposedLimitedScopeExemptionforIFRS7Disclosures

    On26November2009,theIASBissuedanexposuredraft(ED)proposingtoamendIFRS1tostatethatanentityneednotprovidethecomparativepriorperiodinformationrequiredbytheMarch2009amendmentstoIFRS7ImprovingDisclosuresaboutFinancialInstrumentsforfirsttimeadoptersadoptingbefore1January2010.Asaresult,IFRS1,AppendixE,paragraphE1willbeamendedasfollows:

    E1Afirsttimeadoptermayapplythetransitionalprovisionsinparagraph44GofIFRS7totheextentthattheentity'sfirstIFRSreportingperiodstartsearlierthan1January2010.

    TheproposedlimitedexemptionfromcomparativeIFRS7disclosuresforfirsttimeadoptersisconsistentwiththeexemptionpermittedforearlyadoptersoftheMarch2009amendmentstoIFRS7.DeadlineforcommentsontheEDis29December2009.ClickforIASBPressRelease(PDF101k).

    January2010:IASBamendsIFRS1toprovideIFRS7disclosureexemption

    On28January2010,theIASBamendedIFRS1toexemptfirsttimeadoptersofIFRSsfromprovidingtheadditionaldisclosuresintroducedinMarch2009byImprovingDisclosuresaboutFinancialInstruments(AmendmentstoIFRS7).TheamendmentgivesfirsttimeadoptersthesametransitionprovisionsthatAmendmentstoIFRS7providestocurrentIFRSpreparers.Theamendmentiseffectiveon1July2010,withearlierapplicationpermitted.ClickforIASBPressRelease(PDF100k).

    December2010:TwoAmendmentstoIFRS1

    On20December,theIASBamendedIFRS1to:

    providereliefforfirsttimeadoptersofIFRSsfromhavingtoreconstructtransactionsthatoccurredbeforetheirdateoftransitiontoIFRSs.

    provideguidanceforentitiesemergingfromseverehyperinflationeithertoresumepresentingIFRSfinancialstatementsortopresentIFRSfinancialstatementsforthefirsttime.

    ClickforIASBPressRelease(PDF33k).

    60Like

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  • 1/13/2015 IFRS1FirsttimeAdoptionofInternationalFinancialReportingStandards

    http://www.iasplus.com/en/standards/ifrs/ifrs1 12/12

    TohmatsuLimited,oroneoftheirrelatedentities.SeeLegalforadditionalcopyrightandotherlegalinformation.DeloittereferstooneormoreofDeloitteToucheTohmatsuLimited,aUKprivatecompanylimitedbyguarantee(DTTL),itsnetworkofmemberfirms,andtheirrelatedentities.DTTLandeachofitsmemberfirmsarelegallyseparateandindependententities.DTTL(alsoreferredtoasDeloitteGlobal)doesnotprovideservicestoclients.Pleaseseewww.deloitte.com/aboutforamoredetaileddescriptionofDTTLanditsmemberfirms.

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  • 1/13/2015 IFRS2SharebasedPayment

    http://www.iasplus.com/en/standards/ifrs/ifrs2 1/10

    IFRS2SharebasedPayment

    Overview

    IFRS2SharebasedPaymentrequiresanentitytorecognisesharebasedpaymenttransactions(suchasgrantedshares,shareoptions,orshareappreciationrights)initsfinancialstatements,includingtransactionswithemployeesorotherpartiestobesettledincash,otherassets,orequityinstrumentsoftheentity.Specificrequirementsareincludedforequitysettledandcashsettledsharebasedpaymenttransactions,aswellasthosewheretheentityorsupplierhasachoiceofcashorequityinstruments.

    IFRS2wasoriginallyissuedinFebruary2004andfirstappliedtoannualperiodsbeginningonorafter1January2005.

    HistoryofIFRS2Date Development CommentsJuly2000 G4+1DiscussionPaperAccountingforShare

    BasedPaymentspublishedCommentdeadline31October2000

    July2001 ProjectaddedtoIASBagenda Historyoftheproject20September2001IASBinvitescommentsonG4+1DiscussionPaper

    AccountingforShareBasedPaymentsCommentdeadline15December2001

    7November2002 ExposureDraftED2ShareBasedPaymentpublished

    Commentdeadline7March2003

    19February2004 IFRS2SharebasedPaymentissued Effectiveforannualperiodsbeginningonorafter1January2005

    2February2006 ExposureDraftVestingConditionsandCancellationspublished

    Commentdeadline2June2006

    17January2008 AmendedbyVestingConditionsandCancellations(AmendmentstoIFRS2)

    Effectiveforannualperiodsbeginningonorafter1January2009

    16April2009 AmendedbyImprovementstoIFRSs(scopeofIFRS2andrevisedIFRS3)

    Effectiveforannualperiodsbeginningonorafter1July2009

    18June2009 AmendedbyGroupCashsettledSharebasedPaymentTransactions

    Effectiveforannualperiodsbeginningonorafter1January2010

    12December2013 AmendedbyAnnualImprovementstoIFRSs20102012Cycle(definitionofvestingcondition)

    Effectiveforannualperiodsbeginningonorafter1July2014

    RelatedInterpretationsNone

    AmendmentsunderconsiderationIFRS2Clarificationsofclassificationandmeasurementofsharebasedpaymenttransactions

    QuickArticleLinks

    http://www.iasplus.com/en/news/2009/June/news5018http://www.iasplus.com/en/projects/narrow-scope/ifrs-2-classification-measurementhttp://www.iasplus.com/en/news/2006/February/news2676http://www.iasplus.com/en/projects/completed/aip/annual-improvements-2007-2009http://www.iasplus.com/en/news/2013/12/aip-2010-2012http://www.iasplus.com/en/news/2009/April/news4603http://www.iasplus.com/en/news/2004/February/news1316http://www.iasplus.com/en/news/2002/November/news615http://www.iasplus.com/en/projects/completed/aip/annual-improvements-2010-2012http://www.iasplus.com/en/news/2008/January/news4064http://www.iasplus.com/en/news/2001/September/news283

  • 1/13/2015 IFRS2SharebasedPayment

    http://www.iasplus.com/en/standards/ifrs/ifrs2 2/10

    ResearchprojectSharebasedpayments

    SummaryofIFRS2

    InJune2007,theDeloitteIFRSGlobalOfficepublishedanupdatedversionofourIASPlusGuidetoIFRS2SharebasedPayment2007(PDF748k,128pages).TheguidenotonlyexplainsthedetailedprovisionsofIFRS2butalsodealswithitsapplicationinmanypracticalsituations.Becauseofthecomplexityandvarietyofsharebasedpaymentawardsinpractice,itisnotalwayspossibletobedefinitiveastowhatisthe'right'answer.However,inthisguideDeloitteshareswithyouourapproachtofindingsolutionsthatwebelieveareinaccordancewiththeobjectiveoftheStandard.

    SpecialeditionofourIASPlusnewsletter

    YouwillfindafourpagesummaryofIFRS2inaspecialeditionofourIASPlusnewsletter(PDF49k).

    Definitionofsharebasedpayment

    Asharebasedpaymentisatransactioninwhichtheentityreceivesgoodsorserviceseitherasconsiderationforitsequityinstrumentsorbyincurringliabilitiesforamountsbasedonthepriceoftheentity'ssharesorotherequityinstrumentsoftheentity.Theaccountingrequirementsforthesharebasedpaymentdependonhowthetransactionwillbesettled,thatis,bytheissuanceof(a)equity,(b)cash,or(c)equityorcash.

    Scope

    Theconceptofsharebasedpaymentsisbroaderthanemployeeshareoptions.IFRS2encompassestheissuanceofshares,orrightstoshares,inreturnforservicesandgoods.ExamplesofitemsincludedinthescopeofIFRS2areshareappreciationrights,employeesharepurchaseplans,employeeshareownershipplans,shareoptionplansandplanswheretheissuanceofshares(orrightstoshares)maydependonmarketornonmarketrelatedconditions.

    IFRS2appliestoallentities.Thereisnoexemptionforprivateorsmallerentities.Furthermore,subsidiariesusingtheirparent'sorfellowsubsidiary'sequityasconsiderationforgoodsorservicesarewithinthescopeoftheStandard.

    Therearetwoexemptionstothegeneralscopeprinciple:

    First,theissuanceofsharesinabusinesscombinationshouldbeaccountedforunderIFRS3BusinessCombinations.However,careshouldbetakentodistinguishsharebasedpaymentsrelatedtotheacquisitionfromthoserelatedtocontinuingemployeeservices

    Second,IFRS2doesnotaddresssharebasedpaymentswithinthescopeofparagraphs810ofIAS32FinancialInstruments:Presentation,orparagraphs57ofIAS39FinancialInstruments:RecognitionandMeasurement.Therefore,IAS32andIAS39shouldbeappliedforcommoditybasedderivativecontractsthatmaybesettledinsharesorrightstoshares.

    IFRS2doesnotapplytosharebasedpaymenttransactionsotherthanfortheacquisitionofgoodsandservices.Sharedividends,thepurchaseoftreasuryshares,andtheissuanceofadditionalsharesarethereforeoutsideitsscope.

    http://www.iasplus.com/en/standards/ifrs/ifrs3http://www.iasplus.com/en/publications/global/guides/pub1349http://www.iasplus.com/en/projects/research/long-term/ifrs-2-researchhttp://www.iasplus.com/en/publications/global/ifrs-in-focus/2004/ifrs-2http://www.iasplus.com/en/standards/ias/ias32http://www.iasplus.com/en/standards/ias/ias39

  • 1/13/2015 IFRS2SharebasedPayment

    http://www.iasplus.com/en/standards/ifrs/ifrs2 3/10

    Recognitionandmeasurement

    Theissuanceofsharesorrightstosharesrequiresanincreaseinacomponentofequity.IFRS2requirestheoffsettingdebitentrytobeexpensedwhenthepaymentforgoodsorservicesdoesnotrepresentanasset.Theexpenseshouldberecognisedasthegoodsorservicesareconsumed.Forexample,theissuanceofsharesorrightstosharestopurchaseinventorywouldbepresentedasanincreaseininventoryandwouldbeexpensedonlyoncetheinventoryissoldorimpaired.

    Theissuanceoffullyvestedshares,orrightstoshares,ispresumedtorelatetopastservice,requiringthefullamountofthegrantdatefairvaluetobeexpensedimmediately.Theissuanceofsharestoemployeeswith,say,athreeyearvestingperiodisconsideredtorelatetoservicesoverthevestingperiod.Therefore,thefairvalueofthesharebasedpayment,determinedatthegrantdate,shouldbeexpensedoverthevestingperiod.

    Asageneralprinciple,thetotalexpenserelatedtoequitysettledsharebasedpaymentswillequalthemultipleofthetotalinstrumentsthatvestandthegrantdatefairvalueofthoseinstruments.Inshort,thereistruinguptoreflectwhathappensduringthevestingperiod.However,iftheequitysettledsharebasedpaymenthasamarketrelatedperformancecondition,theexpensewouldstillberecognisedifallothervestingconditionsaremet.Thefollowingexampleprovidesanillustrationofatypicalequitysettledsharebasedpayment.

    IllustrationRecognitionofemployeeshareoptiongrant

    Companygrantsatotalof100shareoptionsto10membersofitsexecutivemanagementteam(10optionseach)on1January20X5.Theseoptionsvestattheendofathreeyearperiod.Thecompanyhasdeterminedthateachoptionhasafairvalueatthedateofgrantequalto15.Thecompanyexpectsthatall100optionswillvestandthereforerecordsthefollowingentryat30June20X5theendofitsfirstsixmonthinterimreportingperiod.

    Dr.Shareoptionexpense 250Cr.Equity 250[(10015)6periods]=250perperiod

    Ifall100sharesvest,theaboveentrywouldbemadeattheendofeach6monthreportingperiod.However,ifonememberoftheexecutivemanagementteamleavesduringthesecondhalfof20X6,thereforeforfeitingtheentireamountof10options,thefollowingentryat31December20X6wouldbemade:

    Dr.Shareoptionexpense 150Cr.Equity 150[(9015)6periods=225perperiod.[2254][250+250+250]=150

    Measurementguidance

    Dependingonthetypeofsharebasedpayment,fairvaluemaybedeterminedbythevalueofthesharesorrightstosharesgivenup,orbythevalueofthegoodsorservicesreceived:

    Generalfairvaluemeasurementprinciple.Inprinciple,transactionsinwhichgoodsorservicesarereceivedasconsiderationforequityinstrumentsoftheentityshouldbemeasuredatthefairvalueofthegoodsorservicesreceived.Onlyifthefairvalueofthegoodsorservicescannotbemeasuredreliablywouldthefairvalueoftheequityinstrumentsgrantedbeused.

  • 1/13/2015 IFRS2SharebasedPayment

    http://www.iasplus.com/en/standards/ifrs/ifrs2 4/10

    Measuringemployeeshareoptions.Fortransactionswithemployeesandothersprovidingsimilarservices,theentityisrequiredtomeasurethefairvalueoftheequityinstrumentsgranted,becauseitistypicallynotpossibletoestimatereliablythefairvalueofemployeeservicesreceived.

    Whentomeasurefairvalueoptions.Fortransactionsmeasuredatthefairvalueoftheequityinstrumentsgranted(suchastransactionswithemployees),fairvalueshouldbeestimatedatgrantdate.

    Whentomeasurefairvaluegoodsandservices.Fortransactionsmeasuredatthefairvalueofthegoodsorservicesreceived,fairvalueshouldbeestimatedatthedateofreceiptofthosegoodsorservices.

    Measurementguidance.Forgoodsorservicesmeasuredbyreferencetothefairvalueoftheequityinstrumentsgranted,IFRS2specifiesthat,ingeneral,vestingconditionsarenottakenintoaccountwhenestimatingthefairvalueofthesharesoroptionsattherelevantmeasurementdate(asspecifiedabove).Instead,vestingconditionsaretakenintoaccountbyadjustingthenumberofequityinstrumentsincludedinthemeasurementofthetransactionamountsothat,ultimately,theamountrecognisedforgoodsorservicesreceivedasconsiderationfortheequityinstrumentsgrantedisbasedonthenumberofequityinstrumentsthateventuallyvest.

    Moremeasurementguidance.IFRS2requiresthefairvalueofequityinstrumentsgrantedtobebasedonmarketprices,ifavailable,andtotakeintoaccountthetermsandconditionsuponwhichthoseequityinstrumentsweregranted.Intheabsenceofmarketprices,fairvalueisestimatedusingavaluationtechniquetoestimatewhatthepriceofthoseequityinstrumentswouldhavebeenonthemeasurementdateinanarm'slengthtransactionbetweenknowledgeable,willingparties.Thestandarddoesnotspecifywhichparticularmodelshouldbeused.

    Iffairvaluecannotbereliablymeasured.IFRS2requiresthesharebasedpaymenttransactiontobemeasuredatfairvalueforbothlistedandunlistedentities.IFRS2permitstheuseofintrinsicvalue(thatis,fairvalueoftheshareslessexerciseprice)inthose"rarecases"inwhichthefairvalueoftheequityinstrumentscannotbereliablymeasured.Howeverthisisnotsimplymeasuredatthedateofgrant.Anentitywouldhavetoremeasureintrinsicvalueateachreportingdateuntilfinalsettlement.

    Performanceconditions.IFRS2makesadistinctionbetweenthehandlingofmarketbasedperformanceconditionsfromnonmarketperformanceconditions.Marketconditionsarethoserelatedtothemarketpriceofanentity'sequity,suchasachievingaspecifiedsharepriceoraspecifiedtargetbasedonacomparisonoftheentity'ssharepricewithanindexofsharepricesofotherentities.Marketbasedperformanceconditionsareincludedinthegrantdatefairvaluemeasurement(similarly,nonvestingconditionsaretakenintoaccountinthemeasurement).However,thefairvalueoftheequityinstrumentsisnotadjustedtotakeintoconsiderationnonmarketbasedperformancefeaturestheseareinsteadtakenintoaccountbyadjustingthenumberofequityinstrumentsincludedinthemeasurementofthesharebasedpaymenttransaction,andareadjustedeachperioduntilsuchtimeastheequityinstrumentsvest.

    Note:AnnualImprovementstoIFRSs20102012Cycleamendsthedefinitionsof'vestingcondition'and'marketcondition'andaddsdefinitionsfor'performancecondition'and'servicecondition'(whichwerepreviouslypartofthedefinitionof'vestingcondition').Theamendmentsareeffectiveforannualperiodsbeginningonorafter1July2014.

    http://www.iasplus.com/en/projects/completed/aip/annual-improvements-2010-2012

  • 1/13/2015 IFRS2SharebasedPayment

    http://www.iasplus.com/en/standards/ifrs/ifrs2 5/10

    Modifications,cancellations,andsettlements

    Thedeterminationofwhetherachangeintermsandconditionshasaneffectontheamountrecogniseddependsonwhetherthefairvalueofthenewinstrumentsisgreaterthanthefairvalueoftheoriginalinstruments(bothdeterminedatthemodificationdate).

    Modificationofthetermsonwhichequityinstrumentsweregrantedmayhaveaneffectontheexpensethatwillberecorded.IFRS2clarifiesthattheguidanceonmodificationsalsoappliestoinstrumentsmodifiedaftertheirvestingdate.Ifthefairvalueofthenewinstrumentsismorethanthefairvalueoftheoldinstruments(e.g.byreductionoftheexercisepriceorissuanceofadditionalinstruments),theincrementalamountisrecognisedovertheremainingvestingperiodinamannersimilartotheoriginalamount.Ifthemodificationoccursafterthevestingperiod,theincrementalamountisrecognisedimmediately.Ifthefairvalueofthenewinstrumentsislessthanthefairvalueoftheoldinstruments,theoriginalfairvalueoftheequityinstrumentsgrantedshouldbeexpensedasifthemodificationneveroccurred.

    Thecancellationorsettlementofequityinstrumentsisaccountedforasanaccelerationofthevestingperiodandthereforeanyamountunrecognisedthatwouldotherwisehavebeenchargedshouldberecognisedimmediately.Anypaymentsmadewiththecancellationorsettlement(uptothefairvalueoftheequityinstruments)shouldbeaccountedforastherepurchaseofanequityinterest.Anypaymentinexcessofthefairvalueoftheequityinstrumentsgrantedisrecognisedasanexpense

    Newequityinstrumentsgrantedmaybeidentifiedasareplacementofcancelledequityinstruments.Inthosecases,thereplacementequityinstrumentsareaccountedforasamodification.Thefairvalueofthereplacementequityinstrumentsisdeterminedatgrantdate,whilethefairvalueofthecancelledinstrumentsisdeterminedatthedateofcancellation,lessanycashpaymentsoncancellationthatisaccountedforasadeductionfromequity.

    Disclosure

    Requireddisclosuresinclude:

    thenatureandextentofsharebasedpaymentarrangementsthatexistedduringtheperiod

    howthefairvalueofthegoodsorservicesreceived,orthefairvalueoftheequityinstrumentsgranted,duringtheperiodwasdetermined

    theeffectofsharebasedpaymenttransactionsontheentity'sprofitorlossfortheperiodandonitsfinancialposition.

    Effectivedate

    IFRS2iseffectiveforannualperiodsbeginningonorafter1January2005.Earlierapplicationisencouraged.

    Transition

    Allequitysettledsharebasedpaymentsgrantedafter7November2002,thatarenotyetvestedattheeffectivedateofIFRS2shallbeaccountedforusingtheprovisionsofIFRS2.Entitiesareallowedandencouraged,butnotrequired,toapplythisIFRStoothergrantsofequityinstrumentsif(andonlyif)theentityhaspreviouslydisclosedpubliclythefairvalueofthoseequityinstrumentsdeterminedinaccordancewithIFRS2.

    ThecomparativeinformationpresentedinaccordancewithIAS1shallberestatedforallgrantsofequity

  • 1/13/2015 IFRS2SharebasedPayment

    http://www.iasplus.com/en/standards/ifrs/ifrs2 6/10

    instrumentstowhichtherequirementsofIFRS2areapplied.Theadjustmenttoreflectthischangeispresentedintheopeningbalanceofretainedearningsfortheearliestperiodpresented.

    IFRS2amendsparagraph13ofIFRS1FirsttimeAdoptionofInternationalFinancialReportingStandardstoaddanexemptionforsharebasedpaymenttransactions.SimilartoentitiesalreadyapplyingIFRS,firsttimeadopterswillhavetoapplyIFRS2forsharebasedpaymenttransactionsonorafter7November2002.Additionally,afirsttimeadopterisnotrequiredtoapplyIFRS2tosharebasedpaymentsgrantedafter7November2002thatvestedbeforethelaterof(a)thedateoftransitiontoIFRSand(b)1January2005.AfirsttimeadoptermayelecttoapplyIFRS2earlieronlyifithaspubliclydisclosedthefairvalueofthesharebasedpaymentsdeterminedatthemeasurementdateinaccordancewithIFRS2.

    DifferenceswithFASBStatement123Revised2004

    InDecember2004,theUSFASBpublishedFASBStatement123(revised2004)ShareBasedPayment.Statement123(R)requiresthatthecompensationcostrelatingtosharebasedpaymenttransactionsberecognisedinfinancialstatements.ClickforFASBPressRelease(PDF17k).Deloitte(USA)haspublishedaspecialissueofitsHeadsUpnewslettersummarisingthekeyconceptsofFASBStatementNo.123(R).ClicktodownloadtheHeadsUpNewsletter(PDF292k).WhileStatement123(R)islargelyconsistentwithIFRS2,somedifferencesremain,asdescribedinaQ&AdocumentFASBissuedalongwiththenewStatement:

    Q22.IstheStatementconvergentwithInternationalFinancialReportingStandards?

    TheStatementislargelyconvergentwithInternationalFinancialReportingStandard(IFRS)2,SharebasedPayment.TheStatementandIFRS2havethepotentialtodifferinonlyafewareas.Themoresignificantareasarebrieflydescribedbelow.

    IFRS2requirestheuseofthemodifiedgrantdatemethodforsharebasedpaymentarrangementswithnonemployees.Incontrast,Issue9618requiresthatgrantsofshareoptionsandotherequityinstrumentstononemployeesbemeasuredattheearlierof(1)thedateatwhichacommitmentforperformancebythecounterpartytoearntheequityinstrumentsisreachedor(2)thedateatwhichthecounterparty'sperformanceiscomplete.

    IFRS2containsmorestringentcriteriafordeterminingwhetheranemployeesharepurchaseplaniscompensatoryornot.Asaresult,someemployeesharepurchaseplansforwhichIFRS2requiresrecognitionofcompensationcostwillnotbeconsideredtogiverisetocompensationcostundertheStatement.

    IFRS2appliesthesamemeasurementrequirementstoemployeeshareoptionsregardlessofwhethertheissuerisapublicoranonpublicentity.TheStatementrequiresthatanonpublicentityaccountforitsoptionsandsimilarequityinstrumentsbasedontheirfairvalueunlessitisnotpracticabletoestimatetheexpectedvolatilityoftheentity'sshareprice.Inthatsituation,theentityisrequiredtomeasureitsequityshareoptionsandsimilarinstrumentsatavalueusingthehistoricalvolatilityofanappropriateindustrysectorindex.

    IntaxjurisdictionssuchastheUnitedStates,wherethetimevalueofshareoptionsgenerallyisnotdeductiblefortaxpurposes,IFRS2requiresthatnodeferredtaxassetberecognizedforthecompensationcostrelatedtothetimevaluecomponentofthefairvalueofanaward.Adeferredtaxassetisrecognizedonlyifandwhentheshareoptionshaveintrinsicvaluethatcouldbedeductiblefortaxpurposes.Therefore,anentitythatgrantsanatthemoneyshareoptiontoan

    http://www.iasplus.com/en/binary/usa/headsup/headsup11-10.pdfhttp://www.iasplus.com/en/binary/usa/0412fasbprfas123r.pdf

  • 1/13/2015 IFRS2SharebasedPayment

    http://www.iasplus.com/en/standards/ifrs/ifrs2 7/10

    employeeinexchangeforserviceswillnotrecognizetaxeffectsuntilthatawardisinthemoney.Incontrast,theStatementrequiresrecognitionofadeferredtaxassetbasedonthegrantdatefairvalueoftheaward.Theeffectsofsubsequentdecreasesintheshareprice(orlackofanincrease)arenotreflectedinaccountingforthedeferredtaxassetuntiltherelatedcompensationcostisrecognizedfortaxpurposes.Theeffectsofsubsequentincreasesthatgenerateexcesstaxbenefitsarerecognizedwhentheyaffecttaxespayable.

    TheStatementrequiresaportfolioapproachindeterminingexcesstaxbenefitsofequityawardsinpaidincapitalavailabletooffsetwriteoffsofdeferredtaxassets,whereasIFRS2requiresanindividualinstrumentapproach.Thus,somewriteoffsofdeferredtaxassetsthatwillberecognizedinpaidincapitalundertheStatementwillberecognizedindeterminingnetincomeunderIFRS2.

    DifferencesbetweentheStatementandIFRS2maybefurtherreducedinthefuturewhentheIASBandFASBconsiderwhethertoundertakeadditionalworktofurtherconvergetheirrespectiveaccountingstandardsonsharebasedpayment.

    March2005:SECStaffAccountingBulletin107

    On29March2005,thestaffoftheUSSecuritiesandExchangeCommissionissuedStaffAccountingBulletin107dealingwithvaluationsandotheraccountingissuesforsharebasedpaymentarrangementsbypubliccompaniesunderFASBStatement123RShareBasedPayment.Forpubliccompanies,valuationsunderStatement123RaresimilartothoseunderIFRS2SharebasedPayment.SAB107providesguidancerelatedtosharebasedpaymenttransactionswithnonemployees,thetransitionfromnonpublictopublicentitystatus,valuationmethods(includingassumptionssuchasexpectedvolatilityandexpectedterm),theaccountingforcertainredeemablefinancialinstrumentsissuedundersharebasedpaymentarrangements,theclassificationofcompensationexpense,nonGAAPfinancialmeasures,firsttimeadoptionofStatement123Rinaninterimperiod,capitalisationofcompensationcostrelatedtosharebasedpaymentarrangements,accountingfortheincometaxeffectsofsharebasedpaymentarrangementsonadoptionofStatement123R,themodificationofemployeeshareoptionspriortoadoptionofStatement123R,anddisclosuresinManagement'sDiscussionandAnalysis(MD&A)subsequenttoadoptionofStatement123R.OneoftheinterpretationsinSAB107iswhethertherearedifferencesbetweenStatement123RandIFRS2thatwouldresultinareconcilingitem:

    Question:DoesthestaffbelievetherearedifferencesinthemeasurementprovisionsforsharebasedpaymentarrangementswithemployeesunderInternationalAccountingStandardsBoardInternationalFinancialReportingStandard2,SharebasedPayment('IFRS2')andStatement123RthatwouldresultinareconcilingitemunderItem17or18ofForm20F?

    InterpretiveResponse:ThestaffbelievesthatapplicationoftheguidanceprovidedbyIFRS2regardingthemeasurementofemployeeshareoptionswouldgenerallyresultinafairvaluemeasurementthatisconsistentwiththefairvalueobjectivestatedinStatement123R.Accordingly,thestaffbelievesthatapplicationofStatement123R'smeasurementguidancewouldnotgenerallyresultinareconcilingitemrequiredtobereportedunderItem17or18ofForm20FforaforeignprivateissuerthathascompliedwiththeprovisionsofIFRS2forsharebasedpaymenttransactionswithemployees.However,thestaffremindsforeignprivateissuersthattherearecertaindifferencesbetweentheguidanceinIFRS2andStatement123Rthatmayresultinreconcilingitems.[Footnotesomitted]

    Clicktodownload:

  • 1/13/2015 IFRS2SharebasedPayment

    http://www.iasplus.com/en/standards/ifrs/ifrs2 8/10

    SECPressRelease(PDF30k)

    StaffAccountingBulletin107(PDF362k)

    March2005:Bear,StearnsStudyonImpactofExpensingStockOptionsintheUnitedStates

    IfUSpubliccompanieshadbeenrequiredtoexpenseemployeestockoptionsin2004,aswillberequiredunderFASBStatement123RShareBasedPaymentstartinginthirdquarter2005:

    thereported2004posttaxnetincomefromcontinuingoperationsoftheS&P500companieswouldhavebeenreducedby5%,and

    2004NASDAQ100posttaxnetincomefromcontinuingoperationswouldhavebeenreducedby22%.

    ThosearekeyfindingsofastudyconductedbytheEquityResearchgroupatBear,Stearns&Co.Inc.Thepurposeofthestudyistohelpinvestorsgaugetheimpactthatexpensingemployeestockoptionswillhaveonthe2005earningsofUSpubliccompanies.TheBear,Stearnsanalysiswasbasedonthe2004stockoptiondisclosuresinthemostrecentlyfiled10KsofcompaniesthatwereS&P500andNASDAQ100constituentsasof31December2004.Exhibitstothestudypresenttheresultsbycompany,bysector,andbyindustry.VisitorstoIASPlusarelikelytofindthestudyofinterestbecausetherequirementsofFAS123RforpubliccompaniesareverysimilartothoseofIFRS2.WearegratefultoBear,StearnsforgivinguspermissiontopostthestudyonIASPlus.ThereportremainscopyrightBear,Stears&Co.Inc.,allrightsreserved.Clicktodownload2004EarningsImpactofStockOptionsontheS&P500&NASDAQ100Earnings(PDF486k).

    November2005:Standard&Poor'sStudyonImpactofExpensingStockOptions

    InNovember2005Standard&Poor'spublishedareportoftheimpactofexpensingstockoptionsontheS&P500companies.FAS123(R)requiresexpensingofstockoptions(mandatoryformostSECregistrantsin2006).IFRS2isnearlyidenticaltoFAS123(R).S&Pfound:

    OptionexpensewillreduceS&P500earningsby4.2%.InformationTechnologyisaffectedthemost,reducingearningsby18%....P/Eratiosforallsectorswillbeincreased,butwillremainbelowhistoricalaverages.

    TheimpactofoptionexpensingontheStandard&Poor's500willbenoticeable,butinanenvironmentofrecordearnings,highmarginsandhistoricallylowoperatingpricetoearningsratios,theindexisinitsbestpositionindecadestoabsorbtheadditionalexpense.

    S&Ptakesissuewiththosecompaniesthattrytoemphasiseearningsbeforedeductingstockoptionexpenseandwiththoseanalystswhoignoreoptionexpensing.Thereportemphasisesthat:

    Standard&Poor'swillincludeandreportoptionexpenseinallofitsearningsvalues,acrossallofitsbusinesslines.ThisincludesOperating,AsReportedandCore,andappliestoitsanalyticalworkintheS&PDomesticIndices,StockReports,aswellasitsforwardestimates.Itincludesallofitselectronicproducts....Theinvestmentcommunitybenefitswhenithasclearandconsistentinformationandanalyses.Aconsistentearningsmethodologythatbuildsonacceptedaccountingstandardsandproceduresisavitalcomponentofinvesting.Bysupportingthisdefinition,Standard&Poor'siscontributingtoamorereliableinvestmentenvironment.

    Thecurrentdebateastothepresentationbycompaniesofearningsthatexcludeoptionexpense,generallybeingreferredtoasnonGAAPearnings,speakstotheheartofcorporategovernance.Addition

    http://www.iasplus.com/en/binary/usa/0503secpr.pdfhttp://www.iasplus.com/en/binary/usa/0503sab107.pdfhttp://www.iasplus.com/en/binary/resource/0503bearstearns.pdf

  • 1/13/2015 IFRS2SharebasedPayment

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    ally,manyequityanalystsarebeingencouragedtobasetheirestimatesonnonGAAPearnings.WhilewedonotexpectarepeatoftheEBBS(EarningsBeforeBadStuff)proformaearningsof2001,theabilitytocompareissuesandsectorsdependsonanacceptedsetofaccountingrulesobservedbyall.Inordertomakeinformedinvestmentdecisions,theinvestingcommunityrequiresdatathatconformtoacceptedaccountingprocedures.Ofevenmoreconcernistheimpactthatsuchalternativepresentationandcalculationscouldhaveonthereducedleveloffaithandtrustinvestorsputintocompanyreporting.Thecorporategovernanceeventsofthelasttwoyearshaveerodedthetrustofmanyinvestors,trustthatwilltakeyearstoearnback.Inaneraofinstantaccessandcarefullyscriptedinvestorreleases,trustisnowamajorissue.

    January2008:AmendmentofIFRS2toclarifyvestingconditionsandcancellations

    On17January2008,theIASBpublishedfinalamendmentstoIFRS2SharebasedPaymenttoclarifytheterms'vestingconditions'and'cancellations'asfollows:

    Vestingconditionsareserviceconditionsandperformanceconditionsonly.Otherfeaturesofasharebasedpaymentarenotvestingconditions.UnderIFRS2,featuresofasharebasedpaymentthatarenotvestingconditionsshouldbeincludedinthegrantdatefairvalueofthesharebasedpayment.Thefairvaluealsoincludesmarketrelatedvestingconditions.

    Allcancellations,whetherbytheentityorbyotherparties,shouldreceivethesameaccountingtreatment.UnderIFRS2,acancellationofequityinstrumentsisaccountedforasanaccelerationofthevestingperiod.Thereforeanyamountunrecognisedthatwouldotherwisehavebeenchargedisrecognisedimmediately.Anypaymentsmadewiththecancellation(uptothefairvalueoftheequityinstruments)isaccountedforastherepurchaseofanequityinterest.Anypaymentinexcessofthefairvalueoftheequityinstrumentsgrantedisrecognisedasanexpense.

    TheBoardhadproposedtheamendmentinanexposuredrafton2February2006.Theamendmentiseffectiveforannualperiodsbeginningonorafter1January2009,withearlierapplicationpermitted.

    ClickforPressRelease(PDF47k).

    DeloittehaspublishedaSpecialEditionofourIASPlusNewsletterexplainingtheamendmentstoIFRS2forvestingconditionsandcancellations(PDF126k).

    June2009:IASBamendsIFRS2forgroupcashsettledsharebasedpaymenttransactions,withdrawsIFRICs8and11

    On18June2009,theIASBissuedamendmentstoIFRS2SharebasedPaymentthatclarifytheaccountingforgroupcashsettledsharebasedpaymenttransactions.Theamendmentsclarifyhowanindividualsubsidiaryinagroupshouldaccountforsomesharebasedpaymentarrangementsinitsownfinancialstatements.Inthesearrangements,thesubsidiaryreceivesgoodsorservicesfromemployeesorsuppliersbutitsparentoranotherentityinthegroupmustpaythosesuppliers.Theamendmentsmakeclearthat:

    Anentitythatreceivesgoodsorservicesinasharebasedpaymentarrangementmustaccountforthosegoodsorservicesnomatterwhichentityinthegroupsettlesthetransaction,andnomatterwhetherthetransactionissettledinsharesorcash.

    InIFRS2a'group'hasthesamemeaningasinIAS27ConsolidatedandSeparateFinancialStatements,thatis,itincludesonlyaparentanditssubsidiaries.

    http://www.iasplus.com/en/binary/pressrel/0801ifrs2vesting.pdfhttp://www.iasplus.com/en/binary/iasplus/0801ifrs2vesting.pdf

  • 1/13/2015 IFRS2SharebasedPayment

    http://www.iasplus.com/en/standards/ifrs/ifrs2 10/10

    ContactusAboutLegalPrivacyFAQsMaterialonthiswebsiteis2015DeloitteGlobalServicesLimited,oramemberfirmofDeloitteToucheTohmatsuLimited,oroneoftheirrelatedentities.SeeLegalforadditionalcopyrightandotherlegalinformation.DeloittereferstooneormoreofDeloitteToucheTohmatsuLimited,aUKprivatecompanylimitedbyguarantee(DTTL),itsnetworkofmemberfirms,andtheirrelatedentities.DTTLandeachofitsmemberfirmsarelegallyseparateandindependententities.DTTL(alsoreferredtoasDeloitteGlobal)doesnotprovideservicestoclients.Pleaseseewww.deloitte.com/aboutforamoredetaileddescriptionofDTTLanditsmemberfirms.

    7

    TheamendmentstoIFRS2alsoincorporateguidancepreviouslyincludedinIFRIC8ScopeofIFRS2andIFRIC11IFRS2GroupandTreasuryShareTransactions.Asaresult,theIASBhaswithdrawnIFRIC8andIFRIC11.Theamendmentsareeffectiveforannualperiodsbeginningonorafter1January2010andmustbeappliedretrospectively.Earlierapplicationispermitted.ClickforIASBpressrelease(PDF103k).

    32Like

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  • 1/13/2015 IFRS3BusinessCombinations

    http://www.iasplus.com/en/standards/ifrs/ifrs3 1/12

    IFRS3BusinessCombinations

    Overview

    IFRS3BusinessCombinationsoutlinestheaccountingwhenanacquirerobtainscontrolofabusiness(e.g.anacquisitionormerger).Suchbusinesscombinationsareaccountedforusingthe'acquisitionmethod',whichgenerallyrequiresassetsacquiredandliabilitiesassumedtobemeasuredattheirfairvaluesattheacquisitiondate.

    ArevisedversionofIFRS3wasissuedinJanuary2008andappliestobusinesscombinationsoccurringinanentity'sfirstannualperiodbeginningonorafter1July2009.

    HistoryofIFRS3Date Development CommentsJuly2001 ProjectaddedtoIASBagenda

    (carriedoverfromtheoldIASC)Historyoftheproject

    5December2002 ExposureDraftED3BusinessCombinationsandrelatedexposuredraftsproposingamendmentstoIAS36andIAS38published

    Commentdeadline4April2003

    31March2004 IFRS3BusinessCombinations(2004)andrelatedamendedversionsofIAS36andIAS38issued(IFRS3supersedesIAS22)

    Effectiveforbusinesscombinationsforwhichtheagreementdateisonorafter31March2004

    29April2004 ExposureDraftCombinationsbyContractAloneorInvolvingMutualEntitiespublished(Theseproposalswerenotfinalised,butinsteadconsideredaspartoftheJune2005exposuredraft)

    Commentdeadline31July2004

    30June2005 ExposureDraftProposedAmendmentstoIFRS3published

    Commentdeadline28October2005

    10January2008 IFRS3BusinessCombinations(2008)issued Appliestobusinesscombinationsforwhichtheacquisitiondateisonorafterthebeginningofthefirstannualreportingperiodbeginningonorafter1July2009

    6May2010 AmendedbyAnnualImprovementstoIFRSs2010(measurementofnoncontrollinginterests,replacedsharebasedpaymentawards,transitionalarrangementsforcontingentconsideration)

    Effectiveforannualperiodsbeginningonorafter1July2010

    12December2013AmendedbyAnnualImprovementstoIFRSs20102012Cycle(contingentconsideration)

    Applicableforbusinesscombinationsforwhichtheacquisitiondateisonorafter1July2014

    QuickArticleLinks

    http://www.iasplus.com/en/news/2010/May/news6089http://www.iasplus.com/en/projects/completed/aip/annual-improvements-2008-2010http://www.iasplus.com/en/projects/completed/aip/annual-improvements-2010-2012http://www.iasplus.com/en/news/2004/March/news1518http://www.iasplus.com/en/standards/ias/ias36http://www.iasplus.com/en/projects/completed/consol/business-combinations-phase-1http://www.iasplus.com/en/standards/ias/ias22http://www.iasplus.com/en/standards/ias/ias38http://www.iasplus.com/en/news/2008/January/news4088http://www.iasplus.com/en/news/2002/December/news369http://www.iasplus.com/en/news/2004/April/news1146http://www.iasplus.com/en/news/2013/12/aip-2010-2012http://www.iasplus.com/en/news/2005/June/news2139

  • 1/13/2015 IFRS3BusinessCombinations

    http://www.iasplus.com/en/standards/ifrs/ifrs3 2/12

    12December2013AmendedbyAnnualImprovementstoIFRSs20112013Cycle(scopeexceptionforjointventures)

    Effectiveforannualperiodsbeginningonorafter1July2014

    RelatedInterpretationsNone

    AmendmentsunderconsiderationbytheIASBCommoncontroltransactions

    PostimplementationreviewIFRS3

    SummaryofIFRS3Background

    IFRS3(2008)seekstoenhancetherelevance,reliabilityandcomparabilityofinformationprovidedaboutbusinesscombinations(e.g.acquisitionsandmergers)andtheireffects.Itsetsouttheprinciplesontherecognitionandmeasurementofacquiredassetsandliabilities,thedeterminationofgoodwillandthenecessarydisclosures.

    IFRS3(2008)resultedfromajointprojectwiththeUSFinancialAccountingStandardsBoard(FASB)andreplacedIFRS3(2004).FASBissuedasimilarstandardinDecember2007(SFAS141(R)).TherevisionsresultinahighdegreeofconvergencebetweenIFRSsandUSGAAPintheaccountingforbusinesscombinations,althoughsomepotentiallysignificantdifferencesremain.

    Keydefinitions

    [IFRS3,AppendixA]

    businesscombinationAtransactionorothereventinwhichanacquirerobtainscontrolofoneormorebusinesses.Transactionssometimesreferredtoas'truemergers'or'mergersofequals'arealsobusinesscombinationsasthattermisusedin[IFRS3]businessAnintegratedsetofactivitiesandassetsthatiscapableofbeingconductedandmanagedforthepurposeofprovidingareturnintheformofdividends,lowercostsorothereconomicbenefitsdirectlytoinvestorsorotherowners,membersorparticipantsacquisitiondateThedateonwhichtheacquirerobtainscontroloftheacquireeacquirerTheentitythatobtainscontroloftheacquireeacquireeThebusinessorbusinessesthattheacquirerobtainscontrolofinabusinesscombinationScope

    IFRS3mustbeappliedwhenaccountingforbusinesscombinations,butdoesnotapplyto:

    Theformationofajointventure*[IFRS3.2(a)]

    Theacquisitionofanassetorgroupofassetsthatisnotabusiness,althoughgeneralguidanceisprovidedonhowsuchtransactionsshouldbeaccountedfor[IFRS3.2(b)]

    http://www.iasplus.com/en/projects/pir/ifrs-3-pirhttp://www.iasplus.com/en/projects/research/short-term/common-controlhttp://www.iasplus.com/en/projects/completed/aip/annual-improvements-2011-2013http://www.iasplus.com/en/news/2013/12/aip-2011-2013http://www.iasplus.com/en/projects/completed/consol/business-combinations-phase-2

  • 1/13/2015 IFRS3BusinessCombinations

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    Combinationsofentitiesorbusinessesundercommoncontrol(theIASBhasaseparateagendaprojectoncommoncontroltransactions)[IFRS3.2(c)]

    AcquisitionsbyaninvestmententityofasubsidiarythatisrequiredtobemeasuredatfairvaluethroughprofitorlossunderIFRS10ConsolidatedFinancialStatements.[IFRS3.2A]

    *AnnualImprovementstoIFRSs20112013Cycle,effectiveforannualperiodsbeginningonorafter1July2014,amendsthisscopeexclusiontoclarifythatisappliestotheaccountingfortheformationofajointarrangementinthefinancialstatementsofthejointarrangementitself.

    Determiningwhetheratransactionisabusinesscombination

    IFRS3providesadditionalguidanceondeterminingwhetheratransactionmeetsthedefinitionofabusinesscombination,andsoaccountedforinaccordancewithitsrequirements.Thisguidanceincludes:

    Businesscombinationscanoccurinvariousways,suchasbytransferringcash,incurringliabilities,issuingequityinstruments(oranycombinationthereof),orbynotissuingconsiderationatall(i.e.bycontractalone)[IFRS3.B5]

    Businesscombinationscanbestructuredinvariouswaystosatisfylegal,taxationorotherobjectives,includingoneentitybecomingasubsidiaryofanother,thetransferofnetassetsfromoneentitytoanotherortoanewentity[IFRS3.B6]

    Thebusinesscombinationmustinvolvetheacquisitionofabusiness,whichgenerallyhasthreeelements:[IFRS3.B7]

    Inputsaneconomicresource(e.g.noncurrentassets,intellectualproperty)thatcreatesoutputswhenoneormoreprocessesareappliedtoit

    Processasystem,standard,protocol,conventionorrulethatwhenappliedtoaninputorinputs,createsoutputs(e.g.strategicmanagement,operationalprocesses,resourcemanagement)

    Outputtheresultofinputsandprocessesappliedtothoseinputs.

    MethodofaccountingforbusinesscombinationsAcquisitionmethod

    Theacquisitionmethod(calledthe'purchasemethod'inthe2004versionofIFRS3)isusedforallbusinesscombinations.[IFRS3.4]

    Stepsinapplyingtheacquisitionmethodare:[IFRS3.5]

    1. Identificationofthe'acquirer'

    2. Determinationofthe'acquisitiondate'

    3. Recognitionandmeasurementoftheidentifiableassetsacquired,theliabilitiesassumedandanynoncontrollinginterest(NCI,formerlycalledminorityinterest)intheacquiree

    4. Recognitionandmeasurementofgoodwilloragainfromabargainpurchase

    Identifyinganacquirer

    TheguidanceinIFRS10ConsolidatedFinancialStatementsisusedtoidentifyanacquirerinabusinesscombination,i.e.theentitythatobtains'control'oftheacquiree.[IFRS3.7]

    IftheguidanceinIFRS10doesnotclearlyindicatewhichofthecombiningentitiesisanacquirer,IFRS3providesadditionalguidancewhichisthenconsidered:

    http://www.iasplus.com/en/standards/ifrs/ifrs10http://www.iasplus.com/en/standards/ifrs/ifrs10http://www.iasplus.com/en/projects/research/short-term/common-control

  • 1/13/2015 IFRS3BusinessCombinations

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    Theacquirerisusuallytheentitythattransferscashorotherassetswherethebusinesscombinationiseffectedinthismanner[IFRS3.B14]

    Theacquirerisusually,butnotalways,theentityissuingequityinterestswherethetransactioniseffectedinthismanner,howevertheentityalsoconsidersotherpertinentfactsandcircumstancesincluding:[IFRS3.B15]

    relativevotingrightsinthecombinedentityafterthebusinesscombination

    theexistenceofanylargeminorityinterestifnootherownerorgroupofownershasasignificantvotinginterest

    thecompositionofthegoverningbodyandseniormanagementofthecombinedentity

    thetermsonwhichequityinterestsareexchanged

    Theacquirerisusuallytheentitywiththelargestrelativesize(assets,revenuesorprofit)[IFRS3.B16]

    Forbusinesscombinationsinvolvingmultipleentities,considerationisgiventotheentityinitiatingthecombination,andtherelativesizesofthecombiningentities.[IFRS3.B17]

    Acquisitiondate

    Anacquirerconsidersallpertinentfactsandcircumstanceswhendeterminingtheacquisitiondate,i.e.thedateonwhichitobtainscontroloftheacquiree.Theacquisitiondatemaybeadatethatisearlierorlaterthantheclosingdate.[IFRS3.89]

    IFRS3doesnotprovidedetailedguidanceonthedeterminationoftheacquisitiondateandthedateidentifiedshouldreflectallrelevantfactsandcircumstances.Considerationsmightinclude,amongothers,thedateapublicofferbecomesunconditional(withacontrollinginterestacquired),whentheacquirercaneffectchangeintheboardofdirectorsoftheacquiree,thedateofacceptanceofanunconditionaloffer,whentheacquirerstartsdirectingtheacquiree'soperatingandfinancingpolicies,orthedatecompetitionorotherauthoritiesprovidenecessarilyclearances.

    Acquiredassetsandliabilities

    IFRS3establishesthefollowingprinciplesinrelationtotherecognitionandmeasurementofitemsarisinginabusinesscombination:

    Recognitionprinciple.Identifiableassetsacquired,liabilitiesassumed,andnoncontrollinginterestsintheacquiree,arerecognisedseparatelyfromgoodwill[IFRS3.10]

    Measurementprinciple.Allassetsacquiredandliabilitiesassumedinabusinesscombinationaremeasuredatacquisitiondatefairvalue.[IFRS3.18]

    Exceptionstotherecognitionandmeasurementprinciples

    Thefollowingexceptionstotheaboveprinciplesapply:

    ContingentliabilitiestherequirementsofIAS37Provisions,ContingentLiabilitiesandContingentAssetsdonotapplytotherecognitionofcontingentliabilitiesarisinginabusinesscombination[IFRS3.2223]

    IncometaxestherecognitionandmeasurementofincometaxesisinaccordancewithIAS12IncomeTaxes[IFRS3.2425]

    Employeebenefitsassetsandliabilitiesarisingfromanacquiree'semployeebenefitsarrange

    http://www.iasplus.com/en/standards/ias/ias37http://www.iasplus.com/en/standards/ias/ias12

  • 1/13/2015 IFRS3BusinessCombinations

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    mentsarerecognisedandmeasuredinaccordancewithIAS19EmployeeBenefits(2011)[IFRS2.26]

    Indemnificationassetsanacquirerrecognisesindemnificationassetsatthesametimeandonthesamebasisastheindemnifieditem[IFRS3.2728]

    Reacquiredrightsthemeasurementofreacquiredrightsisbyreferencetotheremainingcontractualtermwithoutrenewals[IFRS3.29]

    SharebasedpaymenttransactionsthesearemeasuredbyreferencetothemethodinIFRS2SharebasedPayment

    AssetsheldforsaleIFRS5NoncurrentAssetsHeldforSaleandDiscontinuedOperationsisappliedinmeasuringacquirednoncurrentassetsanddisposalgroupsclassifiedasheldforsaleattheacquisitiondate.

    Inapplyingtheprinciples,anacquirerclassifiesanddesignatesassetsacquiredandliabilitiesassumedonthebasisofthecontractualterms,economicconditions,operatingandaccountingpoliciesandotherpertinentconditionsexistingattheacquisitiondate.Forexample,thismightincludetheidentificationofderivativefinancialinstrumentsashedginginstruments,ortheseparationofembeddedderivativesfromhostcontracts.[IFRS3.15]However,exceptionsaremadeforleaseclassification(betweenoperatingandfinanceleases)andtheclassificationofcontractsasinsurancecontracts,whichareclassifiedonthebasisofconditionsinplaceattheinceptionofthecontract.[IFRS3.17]

    Acquiredintangibleassetsmustberecognisedandmeasuredatfairvalueinaccordancewiththeprinciplesifitisseparableorarisesfromothercontractualrights,irrespectiveofwhethertheacquireehadrecognisedtheassetpriortothebusinesscombinationoccurring.Thisisbecausethereisalwayssufficientinformationtoreliablymeasurethefairvalueoftheseassets.[IAS38.3337]Thereisno'reliablemeasurement'exceptionforsuchassets,aswaspresentunderIFRS3(2004).

    Goodwill

    Goodwillismeasuredasthedifferencebetween:

    theaggregateof(i)thevalueoftheconsiderationtransferred(generallyatfairvalue),(ii)theamountofanynoncontrollinginterest(NCI,seebelow),and(iii)inabusinesscombinationachievedinstages(seebelow),theacquisitiondatefairvalueoftheacquirer'spreviouslyheldequityinterestintheacquiree,and

    thenetoftheacquisitiondateamountsoftheidentifiableassetsacquiredandtheliabilitiesassumed(measuredinaccordancewithIFRS3).[IFRS3.32]

    Thiscanbewritteninsimplifiedequationformasfollows:

    Goodwill = Considerationtransferred

    + Amountofnoncontrollinginterests

    + Fairvalueofpreviousequity

    interests

    Netassetsrecognised

    http://www.iasplus.com/en/standards/ifrs/ifrs2http://www.iasplus.com/en/standards/ifrs/ifrs5http://www.iasplus.com/en/standards/ias/ias19

  • 1/13/2015 IFRS3BusinessCombinations

    http://www.iasplus.com/en/standards/ifrs/ifrs3 6/12

    Ifthedifferenceaboveisnegative,theresultinggainisabargainpurchaseinprofitorloss,whichmayariseincircumstancessuchasaforcedselleractingundercompulsion.[IFRS3.3435]However,beforeanybargainpurchasegainisrecognisedinprofitorloss,theacquirerisrequiredtoundertakeareviewtoensuretheidentificationofassetsandliabilitiesiscomplete,andthatmeasurementsappropriatelyreflectconsiderationofallavailableinformation.[IFRS3.36]

    Choiceinthemeasurementofnoncontrollinginterests(NCI)

    IFRS3allowsanaccountingpolicychoice,availableonatransactionbytransactionbasis,tomeasurenoncontrollinginterests(NCI)eitherat:[IFRS3.19]

    fairvalue(sometimescalledthefullgoodwillmethod),or

    theNCI'sproportionateshareofnetassetsoftheacquiree.

    Thechoiceinaccountingpolicyappliesonlytopresentownershipinterestsintheacquireethatentitleholderstoaproportionateshareoftheentity'snetassetsintheeventofaliquidation(e.g.outsideholdingsofanacquiree'sordinaryshares).OthercomponentsofnoncontrollinginterestsatmustbemeasuredatacquisitiondatefairvaluesorinaccordancewithotherapplicableIFRSs(e.g.sharebasedpaymenttransactionsaccountedforunderIFRS2SharebasedPayment).[IFRS3.19]

    Example

    Ppays800toacquirean80%interestintheordinarysharesofS.Theaggregatedfairvalueof100%ofS'sidentifiableassetsandliabilities(determinedinaccordancewiththerequirementsofIFRS3)is600,andthefairvalueofthenoncontrollinginterest(theremaining20%holdingofordinaryshares)is185.

    Themeasurementofthenoncontrollinginterest,anditsresultantimpactsonthedeterminationofgoodwill,undereachoptionisillustratedbelow:

    NCIbasedonfairvalue

    NCIbasedonnetassets

    Considerationtransferred 800 800Noncontrollinginterest 185 120

    985 920Netassets (600) (600)Goodwill 385 320

    (1)Thefairvalueofthe20%noncontrollinginterestinSwillnotnecessarilybeproportionatetothepricepaidbyPforits80%interest,primarilyduetoanycontrolpremiumordiscount[IFRS3.B45]

    (2)Calculatedas20%ofthefairvalueofthenetassetsof600.

    Businesscombinationachievedinstages(stepacquisitions)

    Priortocontrolbeingobtained,anacquireraccountsforitsinvestmentintheequityinterestsofanacquireeinaccordancewiththenatureoftheinvestmentbyapplyingtherelevantstandard,e.g.IAS28InvestmentsinAssociatesandJointVentures(2011),IFRS11JointArrangements,IAS39FinancialIn

    (1) (2)

    http://www.iasplus.com/en/standards/ifrs/ifrs2http://www.iasplus.com/en/standards/ifrs/ifrs11http://www.iasplus.com/en/standards/ias/ias39http://www.iasplus.com/en/standards/ias/ias28-2011

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    struments:RecognitionandMeasurementorIFRS9FinancialInstruments.Aspartofaccountingforthebusinesscombination,theacquirerremeasuresanypreviouslyheldinterestatfairvalueandtakesthisamountintoaccountinthedeterminationofgoodwillasnotedabove[IFRS3.32]Anyresultantgainorlossisrecognisedinprofitorlossorothercomprehensiveincomeasappropriate.[IFRS3.42]

    Theaccountingtreatmentofanentity'sprecombinationinterestinanacquireeisconsistentwiththeviewthattheobtainingofcontrolisasignificanteconomiceventthattriggersaremeasurement.Consistentwiththisview,alloftheassetsandliabilitiesoftheacquireearefullyremeasuredinaccordancewiththerequirementsofIFRS3(generallyatfairvalue).Accordingly,thedeterminationofgoodwilloccursonlyattheacquisitiondate.ThisisdifferenttotheaccountingforstepacquisitionsunderIFRS3(2004).

    Measurementperiod

    Iftheinitialaccountingforabusinesscombinationcanbedeterminedonlyprovisionallybytheendofthefirstreportingperiod,thebusinesscombinationisaccountedforusingprovisionalamounts.Adjustmentstoprovisionalamounts,andtherecognitionofnewlyidentifiedassetandliabilities,mustbemadewithinthe'measurementperiod'wheretheyreflectnewinformationobtainedaboutfactsandcircumstancesthatwereinexistenceattheacquisitiondate.[IFRS3.45]ThemeasurementperiodcannotexceedoneyearfromtheacquisitiondateandnoadjustmentsarepermittedafteroneyearexcepttocorrectanerrorinaccordancewithIAS8.[IFRS3.50]

    RelatedtransactionsandsubsequentaccountingGeneralprinciples

    Ingeneral:

    transactionsthatarenotpartofwhattheacquirerandacquiree(oritsformerowners)exchangedinthebusinesscombinationareidentifiedandaccountedforseparatelyfrombusinesscombination

    therecognitionandmeasurementofassetsandliabilitiesarisinginabusinesscombinationaftertheinitialaccountingforthebusinesscombinationisdealtwithunderotherrelevantstandards,e.g.acquiredinventoryissubsequentlyaccountedunderIAS2Inventories.[IFRS3.54]

    Whendeterminingwhetheraparticularitemispartoftheexchangefortheacquireeorwhetheritisseparatefromthebusinesscombination,anacquirerconsidersthereasonforthetransaction,whoinitiatedthetransactionandthetimingofthetransaction.[IFRS3.B50]

    Contingentconsideration

    Contingentconsiderationmustbemeasuredatfairvalueatthetimeofthebusinesscombinationandistakenintoaccountinthedeterminationofgoodwill.Iftheamountofcontingentconsiderationchangesasaresultofapostacquisitionevent(suchasmeetinganearningstarget),accountingforthechangeinconsiderationdependsonwhethertheadditionalconsiderationisclassifiedasanequityinstrumentoranassetorliability:[IFRS3.58]

    Ifthecontingentconsiderationisclassifiedasanequityinstrument,theoriginalamountisnotremeasured

    Iftheadditionalconsiderationisclassifiedasanassetorliabilitythatisafinancialinstrument,thecontingentconsiderationismeasuredatfairvalueandgainsandlossesarerecognisedineither

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    profitorlossorothercomprehensiveincomeinaccordancewithIFRS9FinancialInstrumentsorIAS39FinancialInstruments:RecognitionandMeasurement

    IftheadditionalconsiderationisnotwithinthescopeofIFRS9(orIAS39),itisaccountedforinaccordancewithIAS37Provisions,ContingentLiabilitiesandContingentAssetsorotherIFRSsasappropriate.

    Note:AnnualImprovementstoIFRSs20102012Cyclechangestheserequirementsforbusinesscombinationsforwhichtheacquisitiondateisonorafter1July2014.Undertheamendedrequirements,contingentconsiderationthatisclassifiedasanassetorliabilityismeasuredatfairvalueateachreportingdateandchangesinfairvaluearerecognisedinprofitorloss,bothforcontingentconsiderationthatiswithinthescopeofIFRS9/IAS39orotherwise.

    Whereachangeinthefairvalueofcontingentconsiderationistheresultofadditionalinformationaboutfactsandcircumstancesthatexistedattheacquisitiondate,thesechangesareaccountedforasmeasurementperiodadjustmentsiftheyariseduringthemeasurementperiod(seeabove).[IFRS3.58]

    Acquisitioncosts

    CostsofissuingdebtorequityinstrumentsareaccountedforunderIAS32FinancialInstruments:PresentationandIAS39FinancialInstruments:RecognitionandMeasurement/IFRS9FinancialInstruments.Allothercostsassociatedwithanacquisitionmustbeexpensed,includingreimbursementstotheacquireeforbearingsomeoftheacquisitioncosts.Examplesofcoststobeexpensedincludefinder'sfeesadvisory,legal,accounting,valuationandotherprofessionalorconsultingfeesandgeneraladministrativecosts,includingthecostsofmaintaininganinternalacquisitionsdepartment.[IFRS3.53]

    Preexistingrelationshipsandreacquiredrights

    Iftheacquirerandacquireewerepartiestoapreexistingrelationship(forinstance,theacquirerhadgrantedtheacquireearighttouseitsintellectualproperty),thismustmustbeaccountedforseparatelyfromthebusinesscombination.Inmostcases,thiswillleadtotherecognitionofagainorlossfortheamountoftheconsiderationtransferredtothevendorwhicheffectivelyrepresentsa'settlement'ofthepreexistingrelationship.Theamountofthegainorlossismeasuredasfollows:

    forpreexistingnoncontractualrelationships(forexample,alawsuit):byreferencetofairvalue

    forpreexistingcontractualrelationships:atthelesserof(a)thefavourable/unfavourablecontractpositionand(b)anystatedsettlementprovisionsinthecontractavailabletothecounterpartytowhomthecontractisunfavourable.[IFRS3.B5153]

    However,wherethetransactioneffectivelyrepresentsareacquiredright,anintangibleassetisrecognisedandmeasuredonthebasisoftheremainingcontractualtermoftherelatedcontractexcludinganyrenewals.Theassetisthensubsequentlyamortisedovertheremainingcontractualterm,againexcludinganyrenewals.[IFRS3.55]

    Contingentliabilities

    Untilacontingentliabilityissettled,cancelledorexpired,acontingentliabilitythatwasrecognisedintheinitialaccountingforabusinesscombinationismeasuredatthehigheroftheamounttheliabilitywouldberecognisedunderIAS37Provisions,ContingentLiabilitiesandContingentAssets,andtheamountlessaccumulatedamortisationunderIAS18Revenue.[IFRS3.56]

    Contingentpaymentstoemployeesandshareholders

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    Aspartofabusinesscombination,anacquirermayenterintoarrangementswithsellingshareholdersoremployees.Indeterminingwhethersucharrangementsarepartofthebusinesscombinationoraccountedforseparately,theacquirerconsidersanumberoffactors,includingwhetherthearrangementrequirescontinuingemployment(andifso,itsterm),thelevelorremunerationcomparedtootheremployees,whetherpaymentstoshareholderemployeesareincrementaltononemployeeshareholders,therelativenumberofsharesowns,linkagestovaluationoftheacquiree,howtheconsiderationiscalculated,andotheragreementsandissues.[IFRS3.B55]

    Wheresharebasedpaymentarrangementsoftheacquireeexistandarereplaced,thevalueofsuchawardsmustbeapportionedbetweenprecombinationandpostcombinationserviceandaccountedforaccordingly.[IFRS3.B56B62B]

    Indemnificationassets

    Indemnificationassetsrecognisedattheacquisitiondate(undertheexceptionstothegeneralrecognitionandmeasurementprinciplesnotedabove)aresubsequentlymeasuredonthesamebasisoftheindemnifiedliabilityorasset,subjecttocontractualimpactsandcollectibility.Indemnificationassetsareonlyderecognisedwhencollected,soldorwhenrightstoitarelost.[IFRS3.57]

    Otherissues

    Inaddition,IFRS3providesguidanceonsomespecificaspectsofbusinesscombinationsincluding:

    businesscombinationsachievedwithoutthetransferofconsideration,e.g.'duallisted'and'stapled'arrangements[IFRS3.4344]

    reverseacquisitions[IFRS3.B19]

    identifyingintangibleassetsacquired[IFRS3.B3134]

    DisclosureDisclosureofinformationaboutcurrentbusinesscombinations

    Anacquirerisrequiredtodiscloseinformationthatenablesusersofitsfinancialstatementstoevaluatethenatureandfinancialeffectofabusinesscombinationthatoccurseitherduringthecurrentreportingperiodoraftertheendoftheperiodbutbeforethefinancialstatementsareauthorisedforissue.[IFRS3.59]

    Amongthedisclosuresrequiredtomeettheforegoingobjectivearethefollowing:[IFRS3.B64B66]

    nameandadescriptionoftheacquiree

    acquisitiondate

    percentageofvotingequityinterestsacquired

    primaryreasonsforthebusinesscombinationandadescriptionofhowtheacquirerobtainedcontroloftheacquiree

    descriptionofthefactorsthatmakeupthegoodwillrecognised

    qualitativedescriptionofthefactorsthatmakeupthegoodwillrecognised,suchasexpectedsynergiesfromcombiningoperations,intangibleassetsthatdonotqualifyforseparaterecognition

    acquisitiondatefairvalueofthetotalconsiderationtransferredandtheacquisitiondatefairvalueofeachmajorclassofconsideration

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    detailsofcontingentconsiderationarrangementsandindemnificationassets

    detailsofacquiredreceivables

    theamountsrecognisedasoftheacquisitiondateforeachmajorclassofassetsacquiredandliabilitiesassumed

    detailsofcontingentliabilitiesrecognised

    totalamountofgoodwillthatisexpectedtobedeductiblefortaxpurposes

    detailsaboutanytransactionsthatarerecognisedseparatelyfromtheacquisitionofassetsandassumptionofliabilitiesinthebusinesscombination

    informationaboutabargainpurchase

    informationaboutthemeasurementofnoncontrollinginterests

    detailsaboutabusinesscombinationachievedinstages

    informationabouttheacquiree'srevenueandprofitorloss

    informationaboutabusinesscombinationwhoseacquisitiondateisaftertheendofthereportingperiodbutbeforethefinancialstatementsareauthorisedforissue

    Disclosureofinformationaboutadjustmentsofpastbusinesscombinations

    Anacquirerisrequiredtodiscloseinformationthatenablesusersofitsfinancialstatementstoevaluatethefinancialeffectsofadjustmentsrecognisedinthecurrentreportingperiodthatrelatetobusinesscombinationsthatoccurredintheperiodorpreviousreportingperiods.[IFRS3.61]

    Amongthedisclosuresrequiredtomeettheforegoingobjectivearethefollowing:[IFRS3.B67]

    detailswhentheinitialaccountingforabusinesscombinationisincompleteforparticularassets,liabilities,noncontrollinginterestsoritemsofconsiderat