Conceptual Framework of Acctg

7/21/2019 Conceptual Framework of Acctg

http://slidepdf.com/reader/full/conceptual-framework-of-acctg 1/12

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4

LECTUREOTES

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-

-

THe

oilcepTuAl

nanewonxp'Accour{Tmc

Or.o

ftnsoil)

.

1. The Conceptual

Framework

deals

with the

conceptsused in the

preparation

and

presentation

f financial

statemenfs

(FS).

t

2.

rfte

COnieptudf

ramework is

not

a

PFRS1;t

does

not

define stadOarits or

any

pirticutar

measurement

or.

disclosure

ssue. Nothing. n

the

Framework

oyerrides

any specific PFRS.

n

case

of

conflict,

PFRS

prbvails

over

the Frarnework.

3.

ihe

prrpose

of

the

Framework

s to:

A) Assist

FRSCa

n

developing

GAAPand

its

review

and

adoption

of exi,stin Internationaf FinrnCial

ReportingStandards

IFRS)

B) Assist

preparers

of

FS iri

applying

FFRS

C) Assist auditors

in

forming

an

opinion

as to

whether

FS

conforrns

o GAAP

D)

Assist

users

n interpreting

he FS

E)

Provide interested

partt'es

with information

cbout

PFRS

iormulation

by FRSC

4.

The scope'of he

Conceptual

Frarnework overc

the fotlowing:

A)

C

APITAL

CONCEPTS:

he concept

of capitd and

capital maintenance

B) q FJECIIVE: the obFive of financial statements

C)

(l

UALITATIVECHARACTERISITICS:

he

gualities

or

attrib.ut€s

h&t make FS

useful

to the users.

D)

E

LEI"IENTS:

be definition,

recogfiition

and'measurement

of

the elem€nts of

FS

5.

]rre

obigqtivo

of FS is

to

provide

information

about

ttre

t?nan</at

Nsitidt3,

pertarmance

arvd

chalrges

n

fimncial

po.siHon

f an erttity

that

13

qseful

to.a

yride

ranlt"

of

users

in

m*king

Gconomic

dcc*s&urs,

The

FS

also

shqirs'the

res4ts

of the stewardshp

of

nrcnagoment

--

ihe

accour*tt*lity'of

rfran{lbrncnt

for

the

resouruts

entrtrited to it; the rnanagrelfl€rt

sf afi

entity has

the

primary

responsibility

for

the

preparattotl

6nd

pf€sertAtion'of

FS,

6.

The fraflt€fvof,k s

concemed with

general-purpx

flnancirat

statements

(lncludlrE

conrolidated financial

sraEmentt) of all

commercial,

industrial

and

Ousiness

eporting

public

or

priveC

kftics

7.

9'

Sp€rra,

g.rp*.frnanciaf

repofts

(e.9.,

prospecttrses

ald

computations

prepail$d

bf

tatatim?tr?oses)

sru' ur*Sld?',t{ie-#,oiffi..&H$l0r{(

rxnr<r

0r

S

Uh.thr

{*d mldr,,t

h

Cdl.

*hn-

Jf

)ecirrat-Aasn

l)+*riqelinircdE;.

i

4;

".

potentifi

Vwestors @, etffi *tt fr*

.

pREs$ff*ffi{

{9.r-**.f:-g.Ttp

(compraoit;*y

'\,{g: icorrsFtency

is-the

meanso achierc

hir

god}

l-

U

+

ttrtttcrgndabillty:

cwnpliarrce is' PFRS

o n+elc flforrfirtidh

qnd€rstmdablc

o'userE

coilrE

r

prin'dry)

{

*r:ji5:ffi

il,

??,ffi

#:"'.,"ffi

W"'"'.m#

Jffi"ffi*

;

srr

eteness

11. ConstralnB ofl rctevant and reliable informationl (1)

On tinrelinef:

if

th€r6

is

undu6

frlay

in

the

r.eporting

of intbnrration, it

may lose its relevance

(2)

On

cast-benefit:

the ben€ffts

de*vbO

from

informdttt"t

sttould.exqecd

ttre ctst d

providlrg

it

(3)'On

eu#/ftttttivi

ctrrnrcfsr?stkg: the

aim

is

to

acttfeve'di tpropriOte baftanccenrong the chractcrBtiG

in

or,Str

to'fiie€t tfte'au,jecfiVri

of FS.

Lz.Informati6n

is nartwial

ff

its

Omissjon

or misstrtement

euuu tnfir*nse

ecortomic

d€cigioftS of users

tak€n on tlie ti&3i3'o#

thc

ffnarcial

statemefits. t4steriality

provides

a threshcild or

crit'off

point

rather

than being a prlmfry qrtHtatlve cfiaracteristic whhh information must have if it is to be useful.

'

13. The

plcmqrtr

of

FS:

.

Cht-frnarrciat

osition:

(1)

Assets

(2)

Liaillit,r;s

(3)

Equity

.

Oh Msr''luficc:

(4)

Incorre

(indudes

revenue

efid

06ifrs)

(5)

fxpenge

{include

losses)

14.

An item

that rf€e'ts

th€ definationof an ekrnent

should

W

rxognized

rf:

A)

FROS*B{-F: t is

prabaile

that any future

economic

bsnefit associated

with

the item will flow to

or

fom

Urc stity,

and

i

B)

MfASURAaLE: te

item

h* I cost

or

vafue that

cbn

*

measu/ed

xith reliabitity. Foar

diffirent

measur€ment

bases are us€d to

rn€asure

he

Qlements.of

F5:

(1),Historireal

ost

(2)

current

cost

(3)

Redizable value

(4)

Presentvalue

aN

otler tade

ctec*torg

(5)

alstor[rs

tG)

15.'Two

ceplH,,conccFtt: 1)

cost'basis).

The

concepl of

(tno6t

coqmon) and

2)

f/rvg&af

cenrept.(gseq.:ctirrrent

prwides

the

llnkage between

th€ concepts

of capital

and

concepts

of

profit

since

it

providesthe point

of referen'ee

by

which

profit,

s rpeasured.

Based n

PAS

.

paragraph

,

the ecm PFRS'

Philippine

inancial

eporting

tandards)

hallbe composedf(a)

ppns

(b)

PhilippineAccounting

Standards

PAS),

and

c)

Interpretations

f PAS

and PFRS.

See

page

0

of

TA

Lecture

Notes)

FRSC

Fin6ncial

Reporting

tandards

ouncil) eplaces

SC

Accounting

tandards ouncil).

FRSC ssues

FRS

while

ASC in tfu

pas

ssued

what

used

o be calledas

"SFAS"

(Stdtements

f Financial

Accounting

Standards);

FAS were

previously

upersededy PAS,which

eventually volved nto PFRS.

PFRS s

now

he mainsource f

GAAP

(Generatly

Accepted

ccountingPrinciples)

tr

he Philippines.

The'financial

osition

f

anentity

s

aft'ectedy the

economicesources

t

controls,ts inancial

tructure.ts

tiquiAity na

Solvency,

nd ts capacity

o adapt hangesn theenvironment

n which

he

entityoperates.

*

*



,

"=TTTre*=l*"

TI-IEORY f

ACCOUNTS

L'.CTIJRHOT'llS

Txe

CoucrpruAL

nnuewonK

oR NANqALeponnrc2010

1.

The

Conceptudt

ramework

or

Financial.Reporting

010

(a.k.a.

"IFRS

Frarnework')

was approved

by

the International

Accounting

tandards

Board

IASB)

n September

2010.

2. The IFRSFramework ddresseshe

following:

C0QE

The

objectivesof

financial

eporting5

.

The reportingentityT

>' .

The

definition,

recognitionand measurem.ent f the elements

rom

which FS

ar€

constructed

r

COSTconstraint.

Financial

epofting imposes

costs;

it is

important that

benefits of

financi-al eporting

should

ustify

those

costs

.

4. GOING CONCERN

ssurnption.

"Going

concern"

presumes

that an entity will,

continue

its operation

indefinitely

or,

if that

presumption

s not valid, disclosure

and a different

basis of

feporting

are required;

"Acciual

ba$s'is

fiientioned n

the

new ramework n the

sectionon'obiectives

of

financial eporting.'

PAS

:

PRESENTATKTIf

F

FnnncntStmgmexrs

1. COTyFONENTS

F

FINANCIAL TATEMEIIITS

FS).

A complete

set

of

FS

s

cbmposedof:

'

VA)

.statern€nt

of

financial

position

(Dalancg,lbgt)

- as

at the end of the

period

/A)

Staternentof

finar

.'z

B)

Statement

of

com incomeE for the

period

,

C) Statement

of

/

D) Statement of

7tt?il'tiboMF.l\ITAl

quattrarive

haracterisrics:

AiJfirj

.

ou::"

l.*elwafice(fngredicntr(p*die&xex8hr,/cenflNnbkxyalue)+/

. t-2

:tr|ourt

F''

,2.

i

it{"i

n

wAi'

;

;?ru;;ffi

;;'"dffi

*'",

ne ertiy,

reeuonf*bnn

"u

n

I

.

Wr#

r

ENHANCfNqualitativecharacteristics,

tuur)

.

f

l.

Conparabiliry

2.

verifiabtlity

3. Timeliness

a.

Unae*ftffifr#i

.9v. rt l tvru.Fr. t l t

-.

r. r. l , tu. rrt t . )/

-r.

, . r. t . . . f tc , t . r

-.

u.u9roawMutt t r,af

'

NOTE: Matsridiry is

an

entlty-spcrci{icaspect of

relevonce based

on

the

nature

and magnitude, or both, of thc items to

which.irfonnrtion refatesn

$*te

ont€xtof an ndividualentity's inancial epor-t.

-

for

the

period

entlbr

appllg; an accounting

poliqy

retrosp,itivetrie

or

makcs

a

retrospective

estatffiTG

i tems in i ts FS.

--------:-

a

While

dre

ConceptualFramework l '2010

(ncw

vc.mion)

was already

overcd in the October'2O12 May 2013 CPA

LicensureExaminaiions, he old

version

of

ConceptualFramewott

indicatedon page I was

still

givcn

in

the

saidexains;

t

is therefioremperative o

have

an

idea

of

both ve*ions.

particularly

on their similarities

and differences.

5

lhg objective

of

financial

reporting

s.to

Brovide

inancial

nformation

about he reponing entity thar is

useful

to,exisling

fid

paJgnlja 'tnvestat;.lbnders

nd othel

credtls

in making

decisions bout

providing

resources

o the

cntity.

u@uW4dim'c'hi t rucier ist icsofusef i r | f inancia| informat ionaredividedintotwo(2)

7

8

,

This

is

a

new tem ihcluded n the

scope

of

t'lre

Cgiceptudl Frailtewdrk'2010,

he details

ofqyhich are

still.pendiry

(i.e.,

work-in-process)

a*d

on an exisringexposuie raft oi thechapter

ti

"&PIi$& g

"

-*

l'he

tenn

Como'rehensive

ncome" efers o all chanses

n

eqirity.exced

thoie re-sultins

rom conhibutions

rom and

-

istributiono owners; ence,

heStalementf CompreFensivencomc

hafl

nclude

wo

(2)

major

categories:

l.

ComooRents

fpro& or /<r.r's hese re

ncome

ndexpcnse ccounts

sually ound n the raditional

nctomc'

tt"t"*"rtAsaniff iEquirertrent,thelineitemstobepresenteclare:1PAS

.par.82)

Y Revenue

j

Financecosts

\F.}

Slare

n

tt$

ihcsfiE

or lossof

associates

nd

oint

venture ccounted

or

using

he

equity

gethocl

y'

Taxexpens

-*/

Post-tax

rofit

trr lms

on discontiEuedperationE

.f

l>rofit

r

loss

2,

Comportentsf

other campreherxivencome theseare nconre

nd expense

cc{xntsnot recognizcd

n

proiit

or k:ss

andareusually equired y PFRS o be

recognized

irectly n

theequity

section f thestatementf financial

xrsition

(tralance

heet). xamplcs

nclude:

PAS

,

par.

7)

{

t]rycali'ed

gain

or

loss-on

ygi.lgu$$r-:TlS

ecurities

PAS

39)iltrtrfffot

y'

Gain

or loss

rom ranslatirfi'iFffi;-i6rcAtettrsnts

fa

foreign

peratibn?PAs

l)

t'

Ctungen

ggvaluatiqrl.qqplus-(PAS

6

and 8)

rX:fi fi fi :'"Tff"::HT[ff,*;r':i:#ri*H,ts"(PAsie)

f

Afiqnfiblgein

of:klqS

n.dcfined enefil

cnsion

lans

PAS

19,phr.9'fA)

r@

An entity as wooptions-of

resenting

orylprehc.nsivc

ncome:

PAS

,

par.

8l)

comprehensive

ncome.

Option

:'l"WOSTA'IEMENTS

i

statement

f

as

shown in

thc

incori lcstatemenf

lus

or

Option l : SINGLE STA'IEMENT

;

i..rl

; ,

r

The

componentsol'pioJit or lossand Cornporientsof lhcr tnmprchensit,e

fi(:omcare

shown

in

a single



2. HEADINGS ND TIfLES.

An

entity

may use other

titJes

or

the statFments

other than those used

in

PFRS

nd shall

present

with

equal

prominence

ll

of

the FS

and

distinguish hem

from

other

information

in

the

same

published

ocument.

In

addition,

he following

nformation

hall be

displayed

rominently:

A) The narneof

reportinqentrfy

.

B)

Whether

he

financial

tatements over he

individual

ntity

or a

group

of entities

.

C)

The

date at

the end of

reporting

period

or

the,

period

covered

Oi-theEt of

financial

statements

D)

The.presentation urrency

as

defined

n PAS

21)

E)

The level

of

rounding

(also

known,as

tru"ncdtion')

used in

presenting

ainounts n the FS

3. GENERAL EATURESn presentingFS.

'.

FAIR PRESENTATION,

inancial statements

shall

present

fairly

the

financial

position,

financial

performance

and cash'flows of an entity.

The

application$f PFRS

s

presumed

to result in

FS that

achieve

a fair

presentation.

FS that

comply.

with PFRS

hould include in

the

notes

to

FS

an explicit

and unreserved

tatementof

such cornptiance.l0

.

GOING

CONCERN.

An entity

shall

prepare

FS

on a

going

concernbasisunless

management

either.

intends

o

liquidate he entity or to cea$e rading, or

has

no

realistic alternative

but to do so.

.

ACCRUAIjASIS

OF ACCOIJNTING. n entitv

ghall

prepare

its FS,

F[ceft

fgr

cEstfloyu- nformation,

-----

sing

he accrualbasisof accounting.

r

.

MATERIALIfi

and AGGREGATION.

n

ent'jy.

slpl trEgse,nt

Xqets €ly

each material chqs of similar

items

and shall

present

separately

tems

of dissimilarnaturb

or fundtionlnlesg-they

re

immate 'ial.

.

oFFSETTING.

An entity strall not

olt$et assets and

fiabintfes

or

inc6ffXffi-n'ffiiEss

offsetting

is required

or

permitted

by PfRS.

'

.

COMPARATIVENFORMATION.

n

entiW

shall

disclose comparative

information

in

respect

of

the' previous period forall

amounts

reported in

the current

period's

FS

and shall

include

comparative

information for narrativ€ artd desfrptive information

when

it'is

relevant

to an understanding he

current

period

FS.

r

FREQUENCY

F REPORTING.

n

entity shall

present

a complete

set of

FS

at

leatt

annually. When

an

entity

prb$ents

FS or

a

period

bnger or silmrter

han one

yser,

an entity

shall

disclose:

(A)

the

period

eoveredby

the

FS

'

(B)

the

reasons for

using a

long€r

or Sfiorter

period,

and

(C)

the

fact

that comparative

amounts

fsr FS

are

not

entirely comparable.

.

CONSISTENCf

Of

PRESENTATION.n

entity

shall

retaln

the

preientation

and classification f items

in

the

FS

rom one'period

o the

next

unless:

(A)

it

Js

ap?arent,

following

a cfxing€ in

the

nature

of

the

entity's

operations or

a

review

of its

.

Fs,-that@e*1t*a;Mttbernorc.4prepiate;

sr

-

r-.

-*

.-

-.

*

(B)

a specific

PFRS eqrrires

a change in

prafcntation.

4. INCOMESTATEMENT RESENTATIOII.Whcn itt'm d ircome and expense are material,

disclose their nature

and

amount

gePr,tteFt.

ln addition,

an entity

shall

present

expenses uSing a

classificatlonbased

on

eitlrer

(L)

nature

of

expnse method

or

expensetl fiethod,

whictever

provides

r.nore eliable

and

releyant

ifrfoffnation.

ReSA

-7ip

Re//ie&Sc/44o(

{

4ca*ttaru1

T[{fiORYof ACCOUN'I'S

.UC"IIJRE

OTtiS

An

entity s-halt lassifyall other

liabilities

as

non-cuirent.

' " . * ,

Page

an entity rhril

*r anatysis of

(2)

furrtton

d

. ..r ,-.

a

5. Ef,'fRAOftDtilARY

TEMS. An

entity shall not

present

any

incorne

ff

exp€fls,e,aE xtraordinary items, in

the

staternent.

of compreherBive income,

or

separate

income

staternent

(if p.reser*e'O).

r

in

the

notes

to the fu|arrcial

stdterfienB.

rit

6.

BALA$fCE

SHEfT

(BS)

PftESENTATION, An

entity elt6t{

pres€nt

current and

noa-current

a$cts,

and,

curreht'and noh-anrrcnf

liabiRies,

except

when

a

pi€sentation

besed

on liquidity

provides

more

retisle

and relevant'infbrmatldn;

When this

ex€€Btfron pfies, all

assets and

llabilities

shalf be

presented

broady

in

order of

ffuictity.

7. CURRENT s: NOfTCURRENTSSfTS. An

erttlty ihttl

cfalsiry an

asset

as

current when:

A)

Tiie

asset

ts

a

9'sh

or caeh equivalent

{u#rla

restricted

for

at

least

12

months

after

BS

date)

B) It

|olds

th€ a6st

pritnarily

or

the

purpose

of

trading

C) It ixpects to paliee th€ asset within 12 mrln*hs after the report+ngpertod (BS date)

D)

It

gxpects

oritgnds

to

realize

or cofi$rfile

it

within

the entity's normal

operating cyclelz

An ertity

ghalt

C*assifralf other assets

as

non:eurrcnt.

8. CURRENT

s. l$Ot{CLTftRtfSTIABILITI€S. An

entity shalt

classiff a

liabifity

as

current

when:

A) The

liabilfty s

due'to

be settled

within

12 months

after the

reporting'period

(BS

date)

B)

It holds'the iability

primarity

or

the

purpose

of trading

C) It'expects to

settle

the

liability

within the

entity's

normal

operating cycte

D) The

entity

gggg^WJ

twelvemonths

fter

.@gq$ Iqllgferjett@t

of the liability

or

at

least

tne

reporung

enoo

t

5

oate).

I

-

lu

*t t

t2

Retrospective pplicationof a chairge

n

accounting

policy

is

coveredby PAS E.

(See

page6 of TA l.,ecture otes)

lnappropriate acCounting

policies

are not rectified

either

bry

disclosure

of

the

accounting

policies

used

;or

by

explanatory.notes.

PAS

l,

par.

l8)

An entiry thal uses

he function of

expensemethod

a.k.a._'cost

f'sales' method)

shall disclose

addirional nformation on

the

Hgj:,gl91lg55,

meludingglepreciatg and

amortization expense

and employeebenelits

expense.

PAS

l.:par

104)

The operating

cye e

of an

entity

is the time between

he

acquisitionof assets

or

processing

nd their realization n

cashor

cash

equivalents.When the

cntity's

qormal

operating

cycle is not

clearly

identifiable,

ts

duration

s

assumed

o bie welye

months.

PAS

I,

par.68)

t



of ACCOUNTS

ECTTJRE

OTES

g.

BALANCE

HEET

INE

1TEMS

As

a minimurn

requirement,

he

face

bf

the staternent

of

financial

positlon

shall

nclude

ine

tems

hat

present

he

following

amounts;

A)

ProPertY,

lant

and

equipment

B)

Irwestment

ProPertY"

-i

Intangible

assets

O)

finaniial

assetsta

excluding mounts

shown

under

E,

H

and

I)

Ei

Investments

accsunted

or using

he

eguity

method

..

Fi Biological ssets

defined

as

"living

animals

or

plants"

under

PAS

41)

G) lnventories

H)

Tiade and

other

receivables

j]

fffj'3:S. :*ffil1i:,?t?incrudine

ssetsr

disposar

roups

erd

orsare

nder

FRs)

K)

Trade

and

other

Payabtes

'

t-j

provisions

defined as

"liabilities

of

uncertain

iming

or amount"

under

PAS

37)

M;

financtal

liabilitiesl5

excludingarnounts

shown

under

K

and

L)

N)

Liabilit ies

nd

assets

or

current

ax

--

_L^, _^ _

Oi

Oeferred

ax

liabilities

and

deferredtax

assets,

not

to

be

presented

as

curent

(PAS

1,

par.

56)

P) Non-contiolling

(minority)

interest,

presented

within

equityt6

e)

Issued

capital

and

reserves

attlibutabfe

to

equity

hoHers

of

the

parent

10.

FINANCIAL

IABILITIES.

An

entity

classifies'its

inancial

liabilities

as currcnt

when they

are

due to

be

settled

within

twelve

months

after

the bdlance

sheet

date,

even if:

----At

ihe originalterm was for a period ongerthbn twelve months; and

L^-:- r-

-^_^,a|:r

,

B)

An agtreem€nt

o

refinance,

or

to

reschedule

payments,

on

a

long-term

basis

is

completed

after

tne

ripOrting

poi"A

tAS

date)

and before

the

FS are authorized

fsr

i8sue17.

11. EFFECTS

F

6REACHLS.

when

an

entity

breaches

a

provision

of a

long-term

loan

agreem€flt

oft'or

before

the

end

of

rcporting

period

(BS

date)

with

the

effect

that the

liabitity becomes

paytble

on

demand,

the

tiability

i

ctassirieo

as

current,

even

if

the

lender has agreed

not

to

demand

payment

as

a

consequence

f the

breachl8.

12. STATEIVtENT

F CHANGES

.eQutw

(SCE).

An entlty shall

present

a S€E

showirqg:

.. .. .

-- -

nl iot"f

-.smpretrensive

inc}me

fbr

the

period,

showlng

separat{*y"the

total

arnounts

attributed

to

,owrlers

of the

parent

and

to

non-controlling

(minority) interest

B)

F;;".h

co1nirbn"nt

of

eguity,

the

efrects

of

retrospective

apptication/restatement

under

PAS 8.

Ci

The

arn-ount

of

transactions

with

owners

in

their'capaclty

as

ownef€'

show'ing

separately

contributions

by and

distributions

o owners'

D) For e"n ao*d."*t cf,.equfty, e-ffGdfFffEtftRt 0f ttte

bGn|Y6e*

tha

carrying

afnount

gt

thc

-'

ueeinnrb

ard'tfre'endof

the

*rrts6;

6ffrs*l|'t'ctt

'd}'ngF

soprratcly'

13.

DIvIDE|6B.

n,ientitv

shall

present'citl€r

in

the

stiternent

of

changes

in equity

or

in the

not'es,

tfic

amount

of

dividends

recognizeA

ds

distributions

to

owners

and

the

refoted amount

per

shar6.

14.

NOiaa'TO

THE

FS.

The

notes

are

normatly

presented

in'the following

ddar,

which

assists

users

in

understanding

the

F5 and

comparin$

them

with

F5 of other

entities:

A)

A

statement

of

compfftance

with

PFRS

gi

A SrJmmary

of significant

accounting

pdictos

apfri€dre,'wtrtch

*hall

iricll#:

> f;1g

pther

accounting

policies

used that

are

relevant to

an understanding

of

the

FS

c)

supgo*rng

inrormation

ror

-ttems

shown

on

the

face of eeich

Fs, in th€

older

in

which each

stadement

6fld

each

line

ttem

is'presentdd

D)

Other

disc{osrtts,

irrclutting:

An investment

roperty s a

property

land

or building)

held

by

the

owner

or

by the

lessee ndet

a finance

ease

o

earn

rentals

or

for capihl

appreciafoon

r

6oin, rather

than

or

use

tr sale.

(PAS

'f0)

A financial

*rit

i..

any asset hat

is cish,

an

equity

mtrument

of another

entity,

p

contractual

ight

to redeive

ash

or

another inancial

asset

om

another

ntity'

(PAS

32)

A financial

iabitity

is rny

liability

that

is-a

contrrctual

obligation

o

deliver

cashor another

inancial

asset

o anotfier

entity.

PAS

32)

Non-conholling

nterests

previouslyknswn

ae

minority

irtelesr)

:EX

h

presentd in the

consolidated

alancri

heet

wlitrinequity,seperatelyfromthe'parentshareholders'eQuity.(PAS27'par,21)

lf an entity

oxpects,

nd

has

the'rliscretion,

o refmance

r

mll over

an obligation

or &t,

east

lvelve

m|-nth|

after

the

uulun.":jn"rtdateunder n exiiting oan,

aciliry,

t classifies

he

obligation

snon-currenl,

ven

f it would

otherwise

e

due

within

a $horter

ericd.

PAS

,

par-73)

The

f ability

is classified

s

nofi-currenr

f

the

ender

agreed

y

the balance

heet ate

o

provide

a,grlce

period end.ing

t

least

12months

after he

balance

heet

ate,

within

which

he

entity

can

ectifu he breach

nd

during

wbich he

tender

cannot

emand

mmediate

ayment.

PAS

.

par.

75)

An

entity

is

required

o disclose

the

udgment^r

hat

management

as

made

1

ttry.

pro€:ss

of applying

the,

mtity's

accountiig

olicies

nd

hat

have

he

most

ignificant

effect

on

theamounts

ecognized

rr

he

FS.

PAl

I'

par.

122\

.Jn

addition,

he

notes

shall

contain

key

assimptionr

conceming

he

future and

other

\e

sourees

f es-limation

hat

will

por*

u significant

isk

qf

causing

a material

adjustment

o the amounl

of asset's nd

iabifities

withih

the

next

period.

n

andother

details

fsuch

assets nd

iabilities.

PAS

,

par.

125)

t3

l4

15

16

l7

18

t9



ReSA

-ik,'Ru*Eat

14

uu,'tarcr1 age

5

THEOI{Y

f

ACCOUNTS ECTURE OTF,S

.,

t

. .

r-

PA'S

:

Accouxnnc

orlcms,xaneesAccounTrnc

snmEres8

nnOhs

.

OBJECTIVE.

he

objective

of

PAS

8

is

to

prescribe

the

criteria

for

selecting and changihg ACCOUNTING

POLICIES,2o hanges

in ACCOUNTING

STIMATES

nd CORRECTION

F ERRORS

o enhance

relevance;

reliability

nil comparability

f

FS

of an entity over time

as well

as

with

FS

of other entities,

.

SELECIION OF

ACCOUNTING

POLICIES.

When a

standard

specifically applies

to a transaction,. the

accounting

policy

applied

to

an affected

account shall be

determined

by

applylng

the standard.

In the

absenceof a standard

hat

applies o

a transaction,

management

shall use its

judgment2l

in

developing

and

applyingaccounting

olicy

hat is

relevant

and

relrable.'

. CONSISTENCY F ACCOUNTING OLICIES.Once selected., ccountingpoliciesmust be applied consistently

for similar transactions,

unless a

standard specifically requires

otherwise. An entity

shall change an

accounting

policy

if

the change

(1)

is required by

a standard,

or

(2)

results in

the

FS

providing

more

relevant

and

reliable inancial nformation.

.

CHANGESN ACCOUNTING

OLICIES.

change n

a'ccounting

olicy

hat is rdquired

by a standardshall

be

applied

'in

accordance

with the transitional

provisions

therein.

If

a standard corttains no

transitional

provisions

or

if

an accounting

policy

s

changed'voluntarily,

he change

shall be applied rettospxtively

(as

if

the

policy

had

always

been

applied) as adjustment to

the opening

balance

of each affected

component of

equity

(e.9.,

retained

earnings) or the earliest

prior

period presented.

For

purposes

of PAS

8, the

following

are

NOT considered

as cfianges

in

accoqtrting

poticies:

tufav

t

l. Application

of accounting

policies

or

differ in

occurnng.

Ev.?ti

|

2. Applicationof a new accounting

policy

or were

immat€rial.

eryrhr,

EXCEPTION

o the RULE.

When

it

is

for

an

retrospectively

(i.e.,

it cannot

determine the

cumu

effect

of applying

the

policy

to all

prior periods),

the entity aBplies he new policy prospectivelyfrom th€ start of the earliest perlod practicablc.

APPLICATION

f NEW STANDARDS.When

an

entity has

not applied

a new

standard that has been

issued

but is

not

yet

effective,

he entity shalt disclose his

fact,

and the

reasonably

estimable nformatbn relevant

to assessing he

possible

mpact

that application of the new

standard will have on tlte entity's FS in

the

period

of initial

application.

CHANGES

n

ESTIMATESz3.

he

effect of a change

in

an accounting

estimate shall be

recognized

prospectively'by

ncluding

t

in

the

profit

or

loss during

the

p€riod

of the

change

(if

the change affects

that

period

ohly) or

the

period

of

the

change and

future

periods (if

the

change affects both).

EXAMPLES

f

CHANGES

n

ESTIMATES.Due

to uncertainties

nherent

n

business

ctivities,many items in

FS

cannot

be measured *ith

precision

but

can only be estimated.

Estimation nvolves

udgments

based on

the latest

available,

reliable nformation.

Common examples

of

accounting

estimates nclude:

1. Bad

debts and

iOv€re0ry

ohsole$eoac4-

2.

Falr

value

of

flnancial

assetsor financial iabilities

3.

Useful

ives

of

depreciableassets;

and

4. Provision or warranty obligations

A

change

n

tht measurernent'basis

pplied

is

a change n

an accounting

policy;

and

is

not a

chang€

fi

rn

accountlng

dimate. When

it

is

a change n

an accotmting

policy

from

a

change

n an

accounting

estfmate,

in

accoufltino

estimate.

.

CORRECTIOIIOf ER

errors-,retrospective/y

as an

adjustment'to

the opining babrrces of retairied

earnings

and affecttsd

aeets

anO ti$bitities.

If

comparative

statements'are

presented,

the

FS

of

prior period

shall

be

restatd

to reftect ttre

retrospeefive

applicdion of

the'prlor

paiod

errors. If the error

oca.rred befor€ the

earliest

p€riod

p'r€sented,

heopening'balances

of

assets, liabifities and equity for

the earfiest

period

presented

shall

be restated.

.

MATERIAUTY25.

n

apptyirB

th€ coricept of materidity

Frya:, .

Accounting

poticies

n

tle

pFRSg

need not

be applied when

the ehect of

apptying them

is immaterial.

2. FS

do' not

comply

wlth

PFRSs if

they

contaln material

'errors,

whether due

to ornisslons

of

ed

for

issue

. Material

prtrcr

period

errors should

be

corrected

rctrospectively

in

the firgt

s€t

of

FS

authoriz

after their discovery.

Accounling

policies

arq

the.specific

principles,

bases,

convention,

rules

and

practice

adopted

by an entity in

preparing

and

presentin

fi

narcial

staf,ements.

ln

makingiudgments,

managemant

hall

refer to

the following

sources ndescending

order:

l)

The

requirements

and

guidance

n standards

dealing with

similar

and

reiated ssues

2) The

definition,

reognition criteria

and measurement

oilcepts

set forth

in the

Corceptual Framewnrk.

In

making the

udgment,

management

may also consider

the mostlocent prorouncements

of other standard-setting

bodies

that

use similar conceptual

framework

to

deve.lopaccounting

standiirds,

other

accounting

literature

and

accepted

ndustry

pra0tices,

o

the extent

hat hese'do

not

conflict with PFRS

und tt"

Conceptual

Framewoik.

Applying

a r€quirement is

impracticable when

he entity cannot

apply

it after

tnaking

every reasonable

effort to do

so.

A

chaJrgen

accountingestimates esults

lom

new infbrmation

or

developments

nd, hence,

are

not

correcdionS'ofrrors.

The conceptof 'fundamentalerror' hasbeen eliminated. lnstead.PAS 8 usesand defines erm 'prior period

error.'

prior

period

errors are

omissionsand misstatements

n the F'S

or

one or

more

periods:

hey

are

committed

n

prior

periods

but

are discovered

nly in

the current

period.

Omissions

or

misstateilients

f

items

are mater ial, if

they could,

individually

or collectively,

influence

the eccrnomic

decision3

f users aken on the

basisof the FS.

Materiality

epends

on the

srzeand

natureof

the

omissionor

misstatement

judged

in

the surrounding

ircumstances.

'

7Q\

826

22

23

24



ReSA

- 74e Reil&,

Scte(

$'a+aaa**aae4

'IHEORY

of ACCOUNI"S

EC'IIJRE

OTHS

,"

0..*-

" .j

PFRS

: NoI*.CURRENT

sSErs

leln

FoR ALE

DtSconnlNUED

peRlnOxs

.

NON-CURRENT

SSETS

ELDFOR

SALE.

An

entity

shatt

classify

separately

from other assets

a

non-current

asse:t:

or

disposal

9roup26)

as

hetd

for

sale

if

its carrying

amount

wilt be

recovered

principally

thiough

a salez7

ransaction

rather

than through

cont inuing

se.

The foflowinE

conditions

must be

met for a

non-curt'entasset to be classified

as held

for sale:

1. Management

s committed

o a

plan

o setl he

asset

or disposal

roup.

2.

An

active

program

o

locatea buyer

and complete

he

plan

must have

been

nitiated.

3. The ass€tmust be available or immediatesale'

:e.

The sale

is highly

probable

within

one

year

from the date of claisification

as

held for sale.

5.

The

asset

is f,Cing'actively

marketed

for

gale

at

a

price

that

is reasonable n relation

o

its

fair value.

5.

Actions

required

to complete

the

plan

indicate that

it is

unlikely that

the

plan

will be

significantly

changed

or

withdrawn,

p

An

entity

shatl

measure

a non-current

asset

classified

qq,hg( ".1pgg$

atthe

lawer of

its,carytlg

a or

fair

value /ess

qosti

to

se//28.

Non-currentffitl

ruo@ate

classifred s sucn,

An'entity

shall

present

a

non-currentasset

classifled as

held

for sale separately

from

f

Those

assets

6nd

liabllit ies

ffi

aEEetr-anA

iauititfes ldsslfied

s

held

orsa

sh€etor in the notes.

classifJed

s held for sale

and

the assets

of

a disposal

group

other

assets

in

the balance sheet.

The linllli3i,gg

of

a

disBosal

ted

from

other

liabilities

in

the

balance

sheet.

as

a single

amourtt,

The major

classes of

separately

6'h'tne

face

of

the

balance

o

An entity

shall

measure

non-current

sset

hat

-c?-ases

o be classified s

g .djgt-€g. g

t

the

lqHer

pf-

ts

?e'fd-6fEuFsequent

ecision

ot

to

sell).

.

DISCONTINUEDOPERATIONS.

A

discbntinued

operation

is

a

component

of.

an

enttty3t hat

either

has

been

disposed

of,

or

is

classified

as

held or sale,

and

1.

Represants

a separate

major

line

of businessor

geographical

area

of operations

'

2.

Is

paft

of

,a

singt'6

coordinated

plan

tp

dispose

a separate

major

tine

of business

or

geographical

area of

operations,

r

3^

Is a subsidiary

cquired

exclusively-with

vlqw

to

resell

fbr

resale)

A component

of an entity

is

classified

as

discontinued

operation

at

the date the

entity

has actually dtspocad

of

the operatiqn

or

when

the operatidn

m€ets

the

Cftetls to

be classifled as

held

for sale.

n"

""tit-V

init iOisctosea StruCLE mount32 n fhe faceof incomestatement omprisinghe total'of:

1.

The

post-tax

profit

or

loss of discontinued

operations

and

.

2.

The

post-tax

gain

or

loss

recognized:

A) On

the

measurement o'fair

value esscosts

o sell33'OR

Bi On

the disposal

of

the assetsconstituting

he

discontinued pera

26

A

group

of

assets

pobsibly

o

be

disposed {

by sales

qr

otherwise, ogethetas a

glofip

in

a

single

ansaction,

and

liabilities

direttty associated

ith those

asssts

hat

will be ransferred

n

the ransaction.

2t

j1ft.

^*i"r

Jirp"*f

gr"rpl ru*

uu available

or immediatq

ale n its

present

"ondition

and

he salemust

be highll'

prohahle.'Highly

probrble'msansthatthe

robabrlity

f

ttle

future'sales

high6rtftan'mor€

ikely

thannot,'A,n

entity

.

shall

not

classiS

as

held

or sale

a

non-curentasset

of

diryosal

$roup)

hat

S o

be

bbbndoned

?a If a non-currfilta$s€twithin thescopeof PFRS5 is par.t f a disporial.roup, he measurementequirements f PFRS5

.apply

to the

gronp

as

a

whole,

so

hat he

group

s measuedd

lowcr

of

its

carr,ving

mount

and

air value

ess osts o

sell.

The writp-down

o

fair'value

ess

cost o sell

s

tredted

san'imqafument

ass.

?-e

The

canying

amount

s adjusted ur

depreciation,

rnottizfition r

revaluationshat would

have

been

nocogrtizedad

he

asset ot been

lassified

sheld

or

sale.

30

Recoverable

mount s

tneasured

s he

higherof an asset's

air value

ess

ost

o

sell and

ts

value

n use,'l'his

s well

emphasizedn

PAS36

on mpairment

f

assets..

3l

A component

f

an

entity

may be a

subsidiary,

major line

of

bwiness

or

geographical

egment

whoseoperations nd

cash lows can

be clearly

diltinguished, perationally

nd oi financial

eporting

purposes,

rom the

restof

the

entity.

32N

t'h"

lgsults

of

discogli0ued

peJatiou,

tet

giJgx,

g ou - gshown

4s,a

sirlgle. mou4

in the income

tatem€nt

epaately

grom

the

income

rom

continuing

ireiations.

I'o explain he details

of

this single

emount,

he

following shouldbe

disclosed

n henotes

o the

FS:

L J'heamountof revenue, xpensesnd ncomeor lossattributableo the discontinuedperati<lnuring he curr€nt

period

nd

he

elated

ncomeax.

2. Any

impairment

oss

as

he 'air

value ess ost o

scll of the net

assets

f

the discontinued

peraticrns

s lowerthan

theircarryirigamounts)..Ulhg

grJyi .g

mount

llow

,

tle_expected

ai

is not

recqgnizqd

-qt

nly

disclosed.

I

3. the termination

ost

of enrployees

nd

other osts

lrat

are

directly

ncurred

sa

esultot'thediscontinuance.

4,

Any

gain

or

lnss

i'om

heactual

isposal

f theassets nd

settlcmentf liabilities f

a discontinued

peration,

33

'e

ts.Jo-ieJt's

he ncrcmental

osts

irectlyattributable

o

thedisposal f anasset

or

disposal

roup\.

xciutling,

rnzncg

costs ntl

ncomeax

expense.



ReSA

-71< Re4a%Scl44l

ol

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I t l t ORY01A(

(

() l

;NTS

F( t Rt :N(I I I IS

PAS 24: RELATED ARTYDTSCLOSURES-

,i

h.tfh

N 'p4

*a*4

d,a

u9.. ,.tle

Ftraah

ar.4ra

4ot

,

.

puRposE.

erated

arty

erarions'r1*y.fr&1"#;""&

t#,x"t" " ;:"#;# ;;,1#[

#,

*",

enter nio

transactionshat

unrelated

art ies

wouldnot. Also,

ransacl ions etween elated

art ies

may nol

be made at the same amounts s between nrelated

art ies. (e.9,,

aa enti ty hat

sel ls

goods

o

its

parent

companyat cost might not sel l on lhose terms lo another

customer).

For

these reasons,

lgltedq-e

of

relaied

party

transactions,

qutstandinq

balances and

gE g : pg

may

affect assessmentsof an

-trty's

perat

ons

by

users

of f inancial

tatements/

ncluding

ssessments

f the

nsks

and opportunrt iesacing

he

enti ty; hence, elated artydisclonrres re necessary

.

RELATEDARTY.

party

s

related o an enti ty f :

A)

Drrect ly,

or

Indrre. r ly

r f . rouqh

ore or

rrore

In lFrmedtales,

the

.

h;s the dbi l ly to

(ont ro l

' ,

is

t ta l lq l :Uy,

o rs Lnde.

wrth, h€

enti ty

( this

ontrolted y,

or is under

party:

,t.

t*

Inc

uoes

parerts,

suDsroralesno elow suDSr0rar.es)

.

has an interest n the enti ty hal

gives

t s iqnifrcant

nfluencers

ver he enti ty

;

hasa

rornt on trolr6 ver he €nt v

Ine party s

an assoc,are I tne enlr ty

fhe

party

is a

9D 9 W+rn

which the

enhty rs a venturer

The

party

rs

a

member

of thel<ey management

personnell

of the enhty or

its parent

The

pafty

6

a

9P'e-E y_ E jPe

r or any individua referred

to in A

or D

The

party

is

an enti t y that is control led,

orntly

controted

or signi l icandy nfluenced

by any

Individual eferred o in D

or

E

The

pa(y

1sa

post-employment

benefit

pla4

for

the benefit

of empioyees

of thc

enttty,

or of

an

enti ty hat s a related artyof the enl i ty.

fif;.I{.f,$ffjff}|y

arrerFD PAPrlES

Unoer

As

/d,

tr-c

ollow'rs

,e

A)

wo

e4Ll e srmply becdLse they hdve

d

(omn

on

d

rcLlor

NOTnecessanlyetated

art ies:

or

other comro

llembe.

of

ley

8)

c)

D)

F)

8)

c)

D)

signif lcant olume

of busrness, erety

by vir tueof

the

resutttng

conomtc eoendence

RELATED

ARTYTRANSACTION. rel. ted party

transacrron

s

a transfer of resour.€s,

9PriTj'i.l "1*991

"i"Jgd

9' '9s'l993rdl@r€ he

a- se-.[ {scg-or, 9 .

lwo

venlurer: srmply

6ecaLse hey shdrF

o'nt

cont .o l over

a

tor i t

venture

Providers

f f inance, rade

untons,

Lrbl ic

tt l i t ies,

overnment

epartment

nd aqencres, tmply

vrr tue

of their norma deal ings

rthan entr ty.

A

customer, supplier,

Eq q[€qr,

g]q Ulor,

or

generat

agent with whom

an en(ry

by

CIOSE

FAI4ILY

MMAERS

OF AN INDIVIDUAL.

tose amrtv

memtiers

of an__indivrdual

memberswho

may be expected o inf luence,

r be inf luFnced

y

lhat

individuat.

n

therr

enti ty-

They

nay nclud€:

A) Ihe Individual 'somestrc artner ndch ldren

B) Ch.ldren r rhe Inorvroua,' i

omiir , i lanne,

C)

Oependents

fthe ndividual

r the indrvrdual 's

omestic

artner

PARENT

SUBslDIARIEs

Relatronships etween

parents

dnd subsidiaries

shalt

be disctosed iES6EZtive-

f

whether

there have been

transactions between

rhose

.etaled

partres.

en eiiilfl-n-iil-iEcto-idE6-iE-mi

or

the enti tys

parent

and, f

dif ferent,

he utnmate

ontroltrng

arty.

coMPENSATIoN*.an

enti ty shal ldiscrose

ev management

ersonnet

ompensatronn totar

and for

each

of Lhe ol lowrng

ategor ies:

A)

Short- tefm

mployee enefi ts

e.9,,

wages, ocrat

ecL.lr i ty

ontnbutions,

ard

eaves,

onuses)

B) Post

employment enefi ts

e

9.,

pensrons,

etirement

enefi ts)

C) Other ong-term

enefi ts

e_9.

ong

servrceeave, ong

erm disabi| l y

enefr ts)

D) Terrninatron

eneftts

f) Fqurty

o.npen\drronerprr(s

KLLArtD

pARry

D15CLO5URE5.

r there have

been

ransactions

etween elated

partres,

n enti tv

shal l

disclose the nature of the retateclpatt rclatianship as well as information about the trafsactrons and

outstanding

alances ecessaryor

the understanding

f the

potential

t fectof

the

relat ionshap

n the FS,

At

the mrnrrrum,

isc,osureshal l nclude:

*

A) The

amount

of the ransactions

I

e) rhe

;m;un-i of@lnqqes

and

.

Their erms;and

ondit ions/

nd whether

hey are

secured

r unsecured

,

Thenature/of

ett lement onsjderatjon,

nd

detaits

f

quarantees

rven

or

recerveo

A) Provlsions

or bad d€bts etated

o the amount

of outstanding

atanc€s

B)

EIp€ SC

recognized n respect

of bad debts

due from retated

partres

'Contft]l

;s the powcr

o

govem

thc financial

nd oterati|lg policies

ol ar

cnrir n) rs ro

oblain benclils fiorn i1s

rctiviries.

( t ,As

7)

'S igni t lcanl

nt fuerre. s

the

fower

$

parr ic ipr te

n

the

inir lci i l

and opcfar ing

ol ic_ ' -

ecis ions t an

enl i ry.bur s nor

control ovcr lhosc policiei. Signiflca t inlllonce

nay he

gaincd

hv

shareo$ncrship.

sratulc, r agrccmcnr.

pAS

t8)

Joi r l (onl ro l

is a conlmcrual l

gr*d

shi r in{

o l conrro lo e. i ln

economic

ct iv i l r -_ ,AS t )

'Ke,v-

managemcnr

pcrsonnel

rettr

ro

lhose

pcrsons

hnving

aurhofit) ar)d

rcsponsibititl

ibr

ptannins.

dircct;ng.

and

conlrol l ing

heact iv i t ics fan cnl i t \ .

d i rect l or indi rcclly.

nd

nchde

di rccto.s

execut iv.

r

orherwise)t lhc cnt i rv.

'Compensarionncludcs l i empk' )ee

benel i ls .

vhich

nclLrde

al l lbmrs

ol considcrar ionaid.

nJ)nhte

^r

lr

, r idcr t

b\ r t re

erui t \ , .

r

on

behal fdf thecnl i t \ . in c\chang. i t r services

enJcrfd o

theLf l i t \ rp

S tq)

d€alrngs

wrth the



ReSA

- ?fu

?eo&n'

Sadoll

a{

&turra'rsl

THEORYof ACCO[INTS ECTURE

NOTES

EX'AMPLESF

RELATED

ARTY RANSACTIONS EQUIRING

DISCLOSURES.

,

The ollowingare examples

of

transactions

hat are

disclosed

f

they

are made

with

a

related

party:

A

B

C

D

-'E

G

H

d) Determination

after

the

8S

date of

the

cost

of asset$

purchased,

or the

proceeds

from

a6sets sold,

before

tt|e

Bs date.

e)

Determination

after the BS date

of the

profit

sharing

or bonus

payrneni

if

the enterprise had

the

present

obligation at the BS date

to

make

such

payment.

f)

The

discoveryof

fraud

or etrors that show

th€ FS

are

incorrect.

An

entity shall adjust

amounts

recognized

n

its FS

to

reflect

adjusting

events after

the

receives infopmation

after

the

BS date

about conditlwrs

that

existed

at the BS

indicative

of condltions

that

notes

to the

FS.

Examples

b) Bankruptcy

of a customer that

occursafter BS date,

confirming

a trade receivable.

c)

gale

of

inventories

fter the BS datg that may

give

evidence

n

date.

that

a

loss

exi*ed at

the BS date on

net realizable

value

(ll&V)

at

the

BS

BS date.

If an

entity

date,

it

shall

upd*

disclosures,$h*t

reldte to those

condltlmt tl|i

m'fi fit'd

tha +lc*.*trOsnAtion.

t . NON-ADJUSI'II{GEVENTSaIafter the balitnce'sneet date (i.e., thsse that are

aro,se

after

the balance sheet date)

are not recognized

but are

disclosed in

the

.

are

(among

others):

a)

J:lgior

btrsiness

cshbinatlon or

disposiqg

of a malor

subsirtiary

after

the BS

date

b) Announcement

of

e

pfan

to discontihue

an

operation

+'

c)

.Uglor

purchase

ard disposaf

of assets,

or

expropriation

of major

assets by

governrnent

d) Destruction

of

maJor

production

ptant

by

a.fire after

the BS

date.

e) Announcement

of al3ejor restructuringo2

f)

Stjgr

ordinary share trbnsactions

and

potential

ordinary

share

transactions

after tsS

datb.

9)

$bnormafi

large

changes after the

BS date in

asspt

prices

or foreign

exchange rates,

h)

Changes ntax ratcs

or

tax

lrys

enacted or announced

after

the 85

date.

i)

Entering nto;$'nificBltcornihitments

or contingent

tiabilities,

or

example,

by

issuing

guafantees.

j)

€ommencingrnalor

litigation

arising

solely from

events

the

occurred

after

the

BS date.

*k) Decline in market vafue of investments between the 8S date and the date when the FS are

authorized

or issue.

r

DIVIDENDS.

Divideflds.

on

eguity

shares

declared

after the

balance

sheet

date

should.not

be

recognized

as a

liability

at

the

balance

sheet

date.

Such

dividends

are

disclosed

n

the notes

to the FS

(i.e.,

a non-adjusting

subsequent

vent).

'

GOINGCONCERN.

CitCiio-ratidn

n

operating. esutts

and financial

position

after the

balance

sheet

date may

indicate

a

need

to

consider whether

tlre

going

conceifr'"iS

tilt

aiipiopriate;

an entity

shoutd not

prepare

its

financial

statements

on a

going

concern

basis f

mahagernent

determines

after

the bafance

sheet

date

either

that

it intend5

o

liquiclate

he entity

iir

cease

r5efingi

ctr

hat it

has

nb realistic

alternative

but

to

do so.

f rs

40

4t

This

s

previously

alled

as subseQuent

vents'.

Subsequenl

vents,

sdefined reviously,

re

eventshathappened

fter

the

BS

dateuntrl the,dq ,g /' S

it

.

r r thavetheDorry€rtoamendtheFSafter issue, theent i tysha| |disc iose, th is fa it .The

process

nvolved

in

authorizing

he FS for

issue will

vary

depending

upon

the

management

trucfure,

statutory

requirements

nd

procedures

ollowed

n

preparing

nd

inalizing

he

F'S.

An

entity shalldisclose

he ol{owing or

each

materiaffiitegory

f.qgn-adjusting

vent

atter he

BS date:

.

The-lature

f theevent

',

',

.

An

estimate

f its financial

ffect. r

a statement

hat

such n

estimdte

annot

e made.

a

A

,estructuring

is a

program,

planned

and

controlled

by management.

hat

materiallv

changes

either the

scope

of

a

h ci -o " nnAa* L a k an- ' t- ^ i - - i r l ' ' 1 ' ^ r1 ^rL ^i - -- ----r- - -r rr^<

Page

furchasesor

salesof

goods finished

or unfjnished)

Purchases r

sales

of

property

and

other assets

Rendering r

receiving

of services

Leases

Transfersof

reiearch

and development

Transfersof licenseagreements

Transfers

nder

inancearrangements

including

oans

and equity

contributions

n

cashor in kind)

Provisicin

f

guarantees

or collateral

I)

Settlement of

liabilities

on behalf of

the

entity or by

the

entity on behalf of another

party

Items

of similar

nature may be disclosed n aggregate

except

when

separate

disclosure

g neceEgaryor

an

understandingof the effects

of related

party

transactions

on

the

FS

of the entity.

PAS

0:

Evenrsrren

HE

ALANcE

HEETrrr

(Evexrs

rrenxe

Reponrrue

enno)

.

EVENTS

FfER THE

BALANCE HEETDATE3S

re

favorable

and

unfavorable

events

that

occur

betwem

the

balance

sheet

date

and

the

date

when

the FS

are

authorized

for

issue; FS

shall dlsclose

the date when the

FS were authorized or issue,

and

who

gave

that

authorizationao.

.

ADIIiSTING

EVENTSafter the balance sheet date

(i.e.,

those that

provide

evidence of conditions

that

existed

at

the

balance

sheet

date)

should be

rqcognized

tl

the FS.

Examples

are

(among

others):

a) Resolution or settlernent after BS date of a court case that confirrm that the entity lad a present

obligation

at

the

BS

date,

---l-



ReSA

=762

Peraen,

€net

a(Awc'ta'ry

Page

THEORY

ofACCOUNTS

LECTURE

NOTES

PAS37:Pnoustgxs,Coxttt.|oemLngunes&Gorw[regxIAssETs

1.

PROVISTONSre

liabilities

of

ylcgGrirtllqjlrg

or amount.

A

provision

should

be recognized

when:

seftle the

obligation,

and

Provisircnsshoutd not, be recognized for future operating loisesr If an enterprise has a contract that is

*

onetaus43,he

present

obligation

under the

contract should be recognizedas

a

provision.

2. An OBLIGATION

EVENT

s

an event

that creates

a

legal

or,

constructive

obligation

that

results

in an

entity having

no realistic alternative

but to settle the obligation created

by

the event.

3. A

TEGAL

OBLIGATION

s an obligation that

is

derived

from

a contract" legislation, or other

operation

of

law.

4.

AgOIfSTRUCTIVE

OBLIGATION

s an obligat-ionhat derives

rom

an entdrprise'sactions where:

A)

The enterprise

has

indicated

o other:parties hat

it

will accept

certain rcsponsibilities,

and

.

.

B)

The

enterprise

has created,a

valid

expectation on the

part

of other

parties

that

it

will discharge

'certain

responsibif ties

5.

A

CONTINGENT

IABIUW'is either:

>

A

Bossib/e

oQ-ligatiorthat arises

from

past

events and whose

existence will be confirmed only

by

the occurrertce

or non-occurrenceof one or more

uncertain

lrturc

events not wholly within

the

control

of the

entity,

gB

,

@F5tr'ffit6oatflow

of resourtes

erhbodying economfc

ber€tfrs

will

be

required

to

'

obligation

or the

amount

of the obfigationcannotbe measurd

with

sufficient

eliatt'tity.

Hence, an enterprise shoulfot

recognize

a

continEent.llg_bility

n

the face

of

FS, A contiogent

liability

rs required o bg dr'ffiTtffi6e-FffidE;ffi

benefits

is remoE.

6.

A

CONTINGENT

ASSET is

a

posslble

asset

that arises

from

pdst

events and

whose

existcnce will

be

confirmed only by the occurrence or

non-occurence

of one or more urrcertain future events not wholly

within the

control

of the entity.

Hence, an ehterprise should

not recognize a contingent

asset.

A

contingent asset is required to

be

disclosi4

in

tlre

notes to

the

FS, where

an

infiow

of economic

benefits

is

prcbable.

Horriever, when the

realization

of

irrcome s

yirtlraily certai , then

the related

asset is not

a

contingent

asset and

ir

:

(esstrffiifid"tfie

atnonnt6'

#ft

rneasrifd

ren*ffV)'

of

PBCII/ISIOI{,The

amount

recognized

as

a

prwision

F----------------

h

ttre

oEST

ESTIMATE f

be reimbunsed

y

anoth€r

Farty,

. *,

is not

settle

the expendilure

reguired

to srittle

th€

present

obfignlion

at the

balarrcc sheet date,

takfng:into accourtt

the

nsks and uncertalntres surrounding

the circumstances

that relate

to the

provlsion.

.

Where

the

provision

hing

measured

involves

a

large

population

of items, the

obligation

is

estimated by weighing

all

posSible

outcomes by their

associated

probabltlti€s.

This

statistical

mettrod of estimation

s known

as the EXPECTEDALUE.

'

-$lh-€re

herc,is

a

continuous

ralge ol-poSsitile outcom€s, and

each

point

wfthin the range

is

as

likely

as

any

oth€r,

the

MID-POINTof the

range

is used.

.-

.

Where the

effegt of thFtlme

vatuc

of

money is

materlal,

the amount of a

provision

should be

theJnESENT VALUEof the expenditures upected to be required to settle the obligation.n

*rt

8,

REII"IBURS€MENT.Where sirme

or

all

of

the expendftures required In

s€,ttfing a

pro-vBion

s

expecfed

to

e

reimbunsed

y

another

party,JElSlgqu.rsemS

should

be

recognized"as

'ieparate

a'sset

when t is

iftuaily

Certain hat

reimbursementwill

be

teceived f

the

entity s€ttles an obligation. The

amount

tmnily ce.ryatnmat

relmDursem€nt wilt

D€

receMeo fr

tRe

ennty s€ttles an oDlrgatlon.

.lne

amount

recoqnized for the reimbursement should

not

exceed the amount of

the

Drovision.

In

the

income

statement,

the iloense rclatinq to a

orovrgon

marr

be

oresintfficoonrzeo fror atat€ment,

he eiFnsr relating o

a

provision

may

be

presented

net-ofTl}e

affiuEFrecognized

or

a

9.

reimbursem'gn1.

t&.

*ati../rryeo

ryn;ua*.

RESTRUCTURINGfS.

provibion

or restrircturingcosts is recognlz€d

only

when

the

general

criteria

for

a

prcvision

are met

(see

item no. 1). A restnrcturing

rovision

should not

be associated

with

oilgoing a'ctivitiesof the

enterprise and should

not

include

costs

such as

retraining'

or

lblOcating

continuing

taff,

marketing

r

investmentn new

systems'and

istribution etworks.

45

An onerous ontraets a contractn which he unavoidableostsof meetinghe obligations nder hecontractexcecdhe

economic enefi;s o be

received

nder

t. The erm

onerous'

iterally.meanylyrdensone.

The

discount

ate shoulda

pre-tax

ate

hat

reflectscurrentmarket

assessments

f the time valueof

tnoney

and

the

rl*s

specific o ttre iability. The

discount ateshouldnot reflect isks or which

futurecash low est imates avebeen

adjusted.

(PAS

37,

pu

47)

A

restructuriflg s

a

prgeralp,

planned

and controlledby management,

hat materially

changes

ithcr the scope

of a

business

ndertaken y an enterprise

r the

manner

n which

hatbusinesss

conducted.

CONTI'TGEIIIT IABI LITY

a er<



THEORY

of ACCOLTNTSECTURE

NOTES

,

1

,.

t.

'*

" ' ' ;

5t f t

'

Excenprs

N

PHlurpptt{EccouilTANcy

cr or 2fi}4's

hrrplememtG

ttrEsAilDREGUlATpils

lRR)

HISTORICAL ACKGROUND.

Repubfc Act

No. 9298 or otherwise

known

qs

The Phitippine

Accountancy

ftlt

of

2OO4

repeals Presidential

Decree

No.

692

or otherwise

known as The ReuisedAccountancy Law. The new Act was

passed

during

the

3'd regular session'of he

12tl'PhilippineCongress

rorn

the consolidationof Senate

Sill No.

2748

(passed

6

February 2004) and

House

Bill

No.

6678

(passed

7 February

2004). Former

President

Gloria Arroyo signed

and approved

t on

13 May 2004, he

day

the

consolidated il l becamea law..

MTIONALE.

The Philippine

Accountancy

Act

provides

for

the set of

rules

governing

the

practlce

of aceountancy n

the

Philippines.

The

Professional

Regulatory Board

of Accountancy

(BoA),

one of the

profeisional

bbtrds,under

the

Ftofessional

Regulation Commission

(PRC),

s mandated

by the Act to

promulgete

rules

peitaining

to

"the

supervislon;

controt ahd

reEulatioil

of the.practice

of accountancy n the Philippines." In &ovember

2004, BoA issued and apgroved

a

set of rules and regulations

implementing RA 9298, norv known

as

Implem€ntingRulesand

Regulations

IRR).

FINANCIALREPORTING TANDARDS OUNCIL.

UTE

Within

90

dqys

from

the effectivity

of

the

IRR for

the

Phitipptne

Accoufitancy Act of

2004,

the Ffnanclal

Reporting

Standards

Council

(FRSC)

shall

be

created,

The

FRSC eplaces

he

ASC

and evaluates

he IAS

ang{FRS that shall be

adopted in the Philippines.

Other than the

chaiiman6, the

FRSC

ahall

be

composed

ofQ4gg*bers

representing he

foltowlng

organlzatlons

Z

,l*t

u1

ProfessionalRegulatory

Board

of Accountancy

(BoA)

1

member--

,

securities

and

Exchange

Commissircn

SEC)

|

membey-

,"

':':

Bangko Sentral ng

Pilipinas

BSP)

1 nrembeg,.-*,

--l--

Bureau of

lriternal Revenue

(BlF.)ftr*

ia&*Hta

nael4f;c)

1

member

A major organizationcomposedof fS preparersandusers 1 mernber

Commission on

Audit

(CoA)

(ao(

tiaud

e

Ne)

*

Accredited

Frofessional

Orcanfzation

(,tPO)

l member

8 members*4

4

a,2&*b

*

The 8

tr$re$entat$ves from

Accredited

Professional

Organization

(APO)

halt

b€

egually

dlvided among the

accounting s€Etots:

puBllc practice

(2

mernbers),

commer,ce

and

industry

(2

mc+nbers),

educdion

(2

members),

Eov€rftrn€nt'(2

mernbers),

At

pr€s?nt,

BoA,taognizes'PICPA'Is

ttrc

xcredited

profiessional

organization

ApO)

of

CPAs n the

Phffippifies.

ACCOUf{IrNG

STANDARDS

OUNCTL

ASC).

ASO

The ASC

wEs th€

'authol' of rrrh*

uscd to be knorn

as SfAS

(Statranents

of

Finrrrclal Accq4tirtg

Standards).

Fotmed

to establish the

generarlly

acccpted

accounting

principles

in

the

Philippines,

tl|€ ifgic

fr*

perfonned

its function since

Novernber

1981 tir{fi

t'r.s

rcdaced

by the finarldal Reportirlg

Strr$

Council,

punruartt

o the IRR of tfte ntfv atcountantry |fr. ASC

was composgd

dgight

rrfcfilterls,

nofitfna:|

by the

ottowing

rganizations:

1nnDq1$

r*titute of certilied

Public

Accountants

4 members* fw

,

Fg$ie_s

a1n.|-

Fxcfianse

ommi$ebn r mewr${

iffi-

Ban'gko entral

ng Pilipinas

1 membcp/

Sosrd

of Aceountancy

1 memhe/

Finrid$i€reqrtivei,InbtituteofthcPhilippfner

tmer+*,i r

In

i997, tne As

trirde

a

decslon

to

harmonlze

accoufing'stendanls

lft

tfre

pftifippines

wfth

Intat'fiaflonal

Accounting

Stardirds

(149),

brhkfi later

evohred

nto

International

Financd

nbporting

Standards

IFRS)a;'.

Conseguefttly,'tFfisbrroft€stlE 6as}sof

the'fttfipptne

Financial

RepoftifiE

$rnOards

ipfns)48.

''

'

.

PHIUPPINENTERPRFTATIONSOTIII'IITTEE

PIC).

JT

The FRSC

orrnd

nc

miUppiil rntergebtions.Cornrnittee

(PIC)

in

August

,?096

to assist the FSSC

**

47

:.

48

standards'in

ttrn-anqral

epgrting

stardards in

the Philippines.The role

of

the

PIC

rs

The PIC

members'are

appoint* by

the

FRSC

and

pfactice,

the academe and regulatory

bodies and

users of

frnancial

statements.

t . f f i

,. Hc

The

FRSC

Chairfian,

*ki hab

beenor

presently

senioraccounting

ractitionei

n

any scope f accounting

ractice,

hall

b" bppsintud

bfi

tbaPRC

epon

he recennmendationf BoA

in

coordfuidisr

with PtCPAras he

mcrtditli

professional

organizations.The

Chairinan

and

members

f FRSCshall

have aierrn

of

three

(tr)

ye.ors

arrewableof'another

erm.

IFRSs

are sEndards

ssucd

by the

Iniernationgl

ccountingStanduds

Bmrd

(lAS);

the IASS

replaced

he International

Accounting

Sfanderds

ommittee

IAS€)

in

200 .

Based n

paragtaph

of PAS l.

the

erm

PFRS'

shallbe

composcd f

(a)

PFRS

b)

Philippine ccountipg tandards

c)

Interpretationq. PFRS s€ts out the recognition, me{Nwemefl4presentation

and disclosure requirements

dealing,with

ffansactions

nd bvents

hat are important n

general

purpose

FS. A

PFRS s

developed hrough a due

process'that

normally nvolves he following:

r

,

(a)

Considerationf the

pronouncerhent

f

IASB.

(b)

Formation f

a

task u-rce, hendeerned ecessary,

o

give

advice o FRSC.

(A)

tssuing;frr

csrohent'ad

exposure raft approved

y

ar teast

eight

(8)

FRSCmembers; omm€nt

eriod

will be at

<t

leastSgllays,-gnleqsshorterperiod not

ess

han{0

days) s

considered ppropriate

y FRSC.

--

(d)

Consideration

f

all comments

eceivedwithin

the cornment

period

and, when appropriate,

reparing

he

comment

€tter o the IASB

l

(e)

ABprovalof

a standardUy-gglgast $llQ ofthe

FRSC members

-

:

r'

***

ffiozs



ReSA

-

?k

R44

SctA

rtr

*rr"rrd""rq

Page 11

THEORY

of

ACCOUNTS

ECTURE

OTES

.-,

n','"'-*'

PAS 4:

weRlu

epoRnnc

.

ENTITIES

OVERED

Y

NTERIM

REPORTING

TANDARDS.

1. Certain companies

required

by Securities

anl ExchangeCommission

SEC)

& the

Philippine

Stock

Exchange

(pSE)

to

puOiisn

nferim

73es.-

&ad

ftt

t+<ittt

ttt

N

ab

ebe

.

gaah.e

do ot rry.;rc.

2. Certain companies

hat

elect to

publish

an

interim

financial report.

.

INTERIM

FINANCIAL

REPORT.

An interim financial report means a financial rbport containing either a complete set of FS or" a set of

condensed

FS or

an

interim

periodso.

As a minimum

requirement,

an interim financial

report

should

include

the

following

components:

1.

Condensed

alance

heet/

2.

Condensed

ncome statement

t-

tt&'ng

bEf'r

2

0g6'tqat"/'tft/

erfe

3.

Condensed

taternent

showing either

changes

n

equity or compreherrive

incorte,

4.

Condensed

cash

flo.W tatement

/

\

5. Selected

explanatory

notgs

_

Baeic

and

diluted

earn-ings

er

share

should

be

presented

on the face of an income statemcnt,

coffiplet€

or

condensed,

or an

interim

Period.

.

SELECTED

XPIANATORY

OTESSI'

An enterprise

shoutd

indude the

following

information, as a

minimum; in the

notes

to

its interirh

FS, if

rnaterialand'if

not disclosed

elsewhere

nthe

interim fnarrcial rcport:

1. A statement that the same accounting

policies

and

methods of computation

arc

folloryved

n

the

interim

FS as compared

with the

most recent

annual FS or,

if

thos€

policles

or methods

have been changed,

a

description

ofthe

nature

and

effect

of

the

change.

-

2. Explanatory

comments about

the seasonality

or cyclicality

of

Interim

opQrations

3.

The

nature and amount

of

items afieCttfrg assets,'lia0illtie3,

'eq{rity,

net

incsme or

caCr

fiows that are

unusuaf

becAuse

of

th'eir

niture, size

or incidence'

4. The nature

and

amount of

changes

In estimates of ornounts

reported

in

prior

interim

perbds

of

the

-

current

financial

year

or changes

in the esfimates

of amounts

ieported

in

prior

?nancial

yeus

if

those

changes

have

a

material

effect

in the

curcnt

interitn

period.

5. Issuances,

epurchase

and

repayments

of dcbt

and equity

securities

6.

Diyidend

paid (aggregate

or

per

share)

separately

for ordinary shares

and otlrer shares

Z.

tsegment

Fevenue

and segment

result'for business

segments

or

geographical

segments,

whichever

is

the.primary

basls of

segrnent

repofting

g.

Material wgtlts

srfi6cqir€rrt,to-ttre"enAof't+ie

*i*ffl

pcrtwttrutt|tte

notOeen

tellcctctf

in

tffa

tg

ff

the irtterim periotl

g.

The efre-ct of

chang,es

n composition

of the

caErprig€

dwing the

interim

period,

including bueancg

cembinationS,

acquisltlon

or disposal

of

srtsidlsfies

and

long-terrn

investments,

restructurFr* rnd

d

scontinued

operati6ns

10.

ChangBg

n

contingeril

lh#ll{fiw

or

contingent

ssscts

sinec

the

lact annud

B'S

dst

.

.

PERIODS'ior

wn*ich

NTERI|Ti

FS

are'RE$JIRED

to be

PRESEfi|TED.

Interirn

rcports siioirra

inci"gelntJim

F3 ror

periods

es

fidlows:

'q'

1.

Balance

She€t

as of

ttre end

of the

currett

intedrn

period

and a

comparative

95

as.of

tie

end

of the

imrnildlttefy

p'feccdtng

financlat

laear.

z.

IncoilE statJ;;ts";ilil;;#*it;irtterirn

pcriod

and cumulatively

for the

cument

financial

year

to

date,

wlth compfftttue

incom€ Stetprnents

for

thrc

comparabb

interim

periods (current

and

year'to-

date)

of the

immedately

prcceding

finmcial

year'

3. Statement

strowirE

c#^g"s

irs

€quity

eumut*tivef

for

the

curre,r*

financi6l

year

,to

dat-e,

witl

compardive

stnter;ent

foi ttre comparable

year-to-date period

of

the

immediatety

preceding

financial

4. [33tn'

O"* st*ement

cumufatively

for the

current

fins*rcial

year

to date,

with a

comparative

statement

for the bortrpaiabte

4*rf-to-d*e

period

of

the

immediatcly

preceding

financial

year.

fi"

@

aPat

'

4s

The

Wasd.I$E

requireGfr-panies

overed

y

he

eportorial

cquirernerts

f.Revised ecurkies

ct to file

quarterly

inte.ifr-fi*ffid

,frft-glthii$

4Eyr

after

he

end

of

each

f

the,lntJhree,qgtres:.

Also,

heSEC

equires

ompanies

covered

y the

Rrrtison

fiiifreffiii-Papers

and

Financing

ct to file

quarterly

inandial

eports

within

45

days

aftereach

year-end.

so

'An

interim

period is

a financial

reporting

period

shorter

than

a full financial

year.

Interim

financial

reports may be

presented

onthly,

quarterly

r semiannually.

sl.

,An

example

f kinds

of disctosures

s

equired

y

PAS,34,

ar

l7 areas

ollows:.

.

, qa; write-ao-wnf inventories,toetrealizable alue.andhereversal f sucha wlite-down

iUj

r"cognition

of

a lcss

lom,the

mpairment

f PFE

and ntangibles

nd

he reversal

f such

an

mpairment

oss

(c)

reversal

f any

provision or thecosts

of restructuring

(d)

acquisitions

nd

disposals

f

items f

PPE

G)

commifinents

or the

purchase f PPE

(f)

litigation

eftlements

tgl

"oiurtions

of

fundamental

rrors

n

previously

eported

tnancial

data

(h)

any

debt

default

r'breach

fa debt

covenant

hat

has

not

be€n

orrectedubsequently

(i)

related

party

ratoactione.

.:

.ano. Bzf



ReSA

*74e

Rq&it

Stul

a{

t

THEORY

of ACCOUNTS

ECI'I RE

NOTES

,

,

*.

PFRS

:

OeennnNc

EGMENTs

.

RATIONALE.

An

entity

shall

disclose

nformation

to enables

users

of

FS o evaluate he

nature and

financial effects

of

the

business

activities

n

which

it

engages

and

the

economic

enuironments

n

which

it operates.

.

:t

ENTITIES

OVERED

Y

OPERATING

EGMENT

TANDARDS.

1'

Entities

whos;l

d'

tnrrtltr

2.

Entities

hat

are in'the

process

of

.lpsuing

equity

or de.b

s€curitie@

Inthecaseofgro.FTE;n_Faniesl i 'e ' , -p;Ff f ian-dsubsidiu. i" 'o4.

finahcial

tatements

of

the

group

only'

'

OPEMTING

SEGMENTS.

An

oper.ating

egment

s

a

cohponent

of

an entity:

A)

inat

engagis

in business

activities

from

which

it may earn

revenues

and

incur

expenses

(inclucting

revenues

and

,expenses

:elating

o

transactions

with other c0mponents,of

he

sarhe

entity).

B) Whose

operating

esultsare

idgubily

reviewed

by the

entity's.ghief

peratino

decision

maket'2 o

make

decisions

boutlesources

o be

allocated

o the segment

and assess

ts

performance,

nd

C)

For

which. iscrete

inancial

nfolmation

s available.

c

REPORTABLE

EGMENTS.

nh entitv

shall

report

separately

information

about

an operating

segment

that

meets

any

of the

following

quantitative

thresholds:

i

nl

Its

reported

revenue?

ncluding

both

sales

o external

customers

and

intersegn€nt

sales

or

transfers,

is

LOo/o

r

more of the'Combined

evenu€,

nternal and

external,

of

all operatirE

segments.

B) ifiAafiiolute amount of its reported Brsfrtor loss s 10o/o 1 more.of the great€r, in absoluteamount, of

(1)

combined

reported

proftt'of

all operating

segrnarits

hat did

not report

a

loss and

(2)

combined

c) ffi:*lJl.,'"T'Xl:HX'ilffiflS1ff':l3:Tgff:'"""i}",'tins

esme\y:

Y

":'

to

DnLeat

tf tne

total

external

evenue

eported

by'optirating

segments

s less han

75olo

f

the

entity's

revenue,

aOJttionat

perating

ejments

snould.beiidentifled

s

reportable

egments,

ven

f they

do

not

meet he

10o/o

hresholds,

ntilat

least7$o/o f entity's

eveRue

s includedn

repoftable egments.

.

AGGREGATION

F

OPERAT1NG

EGMENTS.

Two

or *or"

op r"I;;

il;;t5

iiay oe

aggregated

nto a singfeop€rating

segment

f

the

segments

have

similar

economic

haracteristics

nd'are

simitar'in

each

of the following

espects:

A) the

gglggg-of he

;

pioOuas

ana

services,

i) the

natureof

the

production

rogs.sges,

)

tlegpgg:ta?:

?rry

for their

ffis,

o)

ttte

methodrus.i:to

distribumFioducts

or

dffieTe-ir'-.servi.ces,

E)

and

if

appticable,

he,nblurF

f.rlqulglq"yjrylrylPlTj:

jgljtmple,

banking,

nsurance

r

puolrc

trrEres'

. DISCLOSUREO-PERATING EGMENTNFffiMATIOTI.

An

entity

shall

dlsclose

_he

otlowing

or

each

period

or

whichan

income

tatement

s

presented:

A)

freneral

nformations3

bout he

operatirq

segm€nt'

.

qq

B)

Information

bout

seoment

orofit

or

losFs{, egment

ssetsss

nd

segment

iabilities'

ci Eb-.on.ili"tioni

or

The

totats

of

iegment

revenuc,

segrnent

profit

or

loss,

segrnent

asiets,

segment

*,ff iotr 'ermate.iatsegmeit i temstocorrespondingentityamounts.

f

,

ENTITY-wIDE

IscLosuREs.

&titV-w.iap

ig;i-q.Firet

re

addltional

nfonflatlon

hat

is required

o

be discloied-by

"l."qttitf"

informalon

is-i&Trovided

as

part

of

the

reportable

segrnent

information.

An entity

shall

information

atoui-

ri

pioouds

ani

seryices,

2)

geographical

reas

and 3)

MAIoR

cusToMERSs6.

Thechief

opeitating

lecision

maker

dentifies

fimctioni

not nec€ssfirily

manager

with

a specific

itle.

'l'hat

function

s

t. allocaieu*ourcu to andass€sshe

perforniaflcc f the

opercting

egments

f

an

enti8'

(PFRS

E'

par'

7)

An

entity

shall

disclose

he

ollowing

general nformation

bout

an operating

egmont:

PFRS

8,

pay

7,2)

L Faciors

qsed

o.idfitit

tlre

re$rtable.segnents,

ncluding

he basisof

organization.

e,g''

whether

management

as

,chosen

to

organize

he

enfry

dognd

diffeiences

n

productS

nd

services,

eographical

reas.

egulatory

nvimnment,

or

a combinition

of

factQrq, nd

whether

perating

egments

avebeen

aggregated')

2.

T'ypes

f

products

nd,servjces

rom

which

each

eportable

ogrnent

erives

ts

revenue'

Rn entliy

shirli

disclosethe

ollowing

if

included

n

themeasure

f

profit

or

loss:

PFRS

S,

par' 23)

(a)

RevEnues

rom

external

ustomirs

and

ransactions

ith

other

ope'rating

egtnents

fthe

saneentity

(b)

Interest

evenue

nd

nterest

xpense

(c)

Depreciation

nd

amortization

iil

rrn":,.ii"iit"r.:orio"ome.and

expenses

nd

mateYial

oncash

tems

other

han

depreciation

ndamortization

i;i

ffiili"

ritont

ot'r"ss

of

associates

nd

oint

venture

ccr:unted

or

by the eq*ity

method

(0

lncome

ax

expense

An entitvshalldisclosehe ollowingabouteach eportableegmentf thespecified mounts re ncludedn t{temeasure

of

sesment

ss€ts

eviewed

y

chief

operating

fficer:

PFRS

.

par.24)

i;i i'hilffi#

oiinu"u*"nrs

in associates

nd

oint

venture

accounted

or by the equity

method'

and

[i

il;;;;r";i;;];j;ilr;;n-"unrn,

assers

ttrer

han

inartcial

nstruments.

eferred

ax assets.

ost-employment

,

benefit

assets

nd

ights

arising

under

nsurance

ontracts'

i

If

revenues

rom

transaiions

with*a

single

extemal

ustomer

amount

o

10%or

more

of,

an

entlty's

evenue,

he

entity

if such

repoft

'u

Conceptual Framework of Acctg

Documents