IFRS Finance Powerpoint ppt Finance D.pptx

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1. International Financial Reporting Standards Group Members Garima Pawar Aditya Kushwaha Shejal Sarraf Bindu Verma

2. Overview of IFRS IFRS are the set of Accounting rules for the financial statements of public companies that are intended to make them consistent, transparent and easily comparable around the world. IFRS are issued by London based International Accounting standards Board (IASB). Currently used by Public companies based in 168 jurisdictions. IFRS system replaced International AS in 2001 .

3. IFRS Vs GAAP IFRS was designed as Standard based approach while GAAP is Rules based approach. Methodologies- GAAP- (FIFO or LIFO Accepted) IFRS- (LIFO is banned). GAAP- in United States.

4. Benefits of IFRS IFRS specify in detail how companies must maintain their records and report their expenses & incomes. Established to create common accounting language that is understood globally by Investors, Auditors, Govt. regulatories and others. IFRS created to bring consistency & integrity to accounting standards & practices, regardless of company or country.

5. Why Co. needs to shift from Local AS to IFRS? To improve quality of financial reporting. Increase Transparency and integrity. International Investments- Globally. Comparability. Increase Efficiency.

6. IAS 16 Property, Plant & Equipment Recognition Measurement Derecognition

7. Overview of IAS 16 PPE are tangible items that: are held for use in the production or supply of goods/services, for rental to others, or for administrative purposes; and are expected to be used during more than one period. IAS 16 establishes principles for recognizing PPE as assets, measuring their carrying amount, depreciation charges & impairment losses to be recognized in relation to them.

8. Recognition IAS 16 states that the cost of an item of property, plant & equipment shall be recognized as an asset if, and only if: it is probable that future economic benefits associated with the item will flow to the entity, and the cost of the item can be measured reliably.

9. Measurement An item of PPE that qualifies the recognition as an asset shall be measured at its Cost . Initial Measurement Subsequent Measurement

10. Depreciation & Impairment Depreciation is the systematic allocation of the depreciable amount of an asset over its useful life. Depreciation amount Depreciation period Depreciation Method Impairment of assets that prescribes rules for reviewing the carrying amount of assets, determining their recoverable amount & impairment loss, recognizing & revising impairment loss and more.

11. Derecognition Carrying amount of an item of PPE shall be derecognized on disposal; or when no future economic benefits are expected from its use or disposal.

12. Thank You