WORLD ACADEMY OF INFORMATICS AND MANAGEMENT SCIENCES
ISSN : 2278-1315
In addition to the requirements of this section, nearly every
This section does not apply to the measurement of inventories
other section of this Standard requires disclosures that are
held by: Producers of agricultural and forest products,
normally presented in the notes.
agricultural produce after harvest, and minerals and mineral
SECTION 9 CONSOLIDATED AND SEPARATE
products, to the extent that they are measured at fair value less
FINANCIAL STATEMENTS
costs to sell through profit or loss; or Commodity brokers and
This section defines the circumstances in which an entity
dealers that measure their inventories at fair value less costs to
applying this Standard presents consolidated financial
sell through profit or loss.
statements and the procedures for preparing those statements
SECTION 14: INVESTMENTS IN ASSOCIATES
in accordance with this Standard. It also includes guidance
This section applies to accounting for associates in
on separate financial statements and combined financial
consolidated financial statements and in the financial
statements if they are prepared in accordance with this
statements of an investor that is not a parent but that has an
Standard. If a parent entity by itself does not have public
investment in one or more associates. Paragraph 9.26
accountability, it may present its separate financial
establishes the requirements for accounting for associates in
statements in accordance with this Standard, even if it
separate financial statements.
presents its consolidated financial statements in accordance
SECTION 15: INVESTMENTS IN JOINT VENTURES
with full IFRS or another set of generally accepted
This section applies to accounting for joint ventures in
accounting principles (GAAP).
consolidated financial statements and in the financial
SECTION 10 ACCOUNTING POLICIES, ESTIMATES
statements of an investor that is not a parent but that has a
AND ERRORS
venturer’s interest in one or more joint ventures. Paragraph
This section provides guidance for selecting and applying
9.26 establishes the requirements for accounting for a
the accounting policies used in preparing financial
venturer’s interest in a joint venture in separate financial
statements. It also covers changes in accounting estimates
statements.
and corrections of errors in prior period financial statements.
SECTION 16: INVESTMENT PROPERTY
This section applies to accounting for investments in land or
SECTION 11 BASIC FINANCIAL INSTRUMENTS
Section 11 and Section 12 Other Financial Instrument Issues
buildings that meet the definition of investment property in
together deal with recognizing, derecognizing, measuring
paragraph 16.2 and some property interests held by a lessee
and disclosing financial instruments (financial assets and
under an operating lease (see paragraph 16.3 of the full
financial liabilities). Section 11 applies to basic financial
document) that are treated like investment property. Only
instruments and is relevant to all entities. Section 12 applies
investment property whose fair value can be measured
to other, more complex financial instruments and
reliably without undue cost or effort on an ongoing basis is
transactions. If an entity enters into only basic financial
accounted for in accordance with this section at fair value
instrument transactions then Section 12 is not applicable.
through profit or loss. All other investment property is
However, even entities with only basic financial instruments
accounted for using the cost model in Section 17 Property,
shall consider the scope of Section 12 to ensure they are
Plant and Equipment and remains within the scope of Section
exempt.
17 unless a reliable measure of fair value becomes available
and it is expected that fair value will be reliably measurable
SECTION 12 OTHER FINANCIAL INSTRUMENT
on an ongoing basis.
ISSUES
Section 11 Basic Financial Instruments and Section 12
SECTION 17: PROPERTY, PLANT AND EQUIPMENT
together deal with recognizing, derecognizing, measuring
This section applies to accounting for property, plant and
and disclosing financial instruments (financial assets and
equipment and accounting for investment property whose fair
financial liabilities). Section 11 applies to basic financial
value cannot be measured reliably without undue cost or effort
instruments and is relevant to all entities. Section 12 applies
on an ongoing basis. Section 16 Investment Property applies
to other, more complex financial instruments and
to investment property whose fair value can be measured
transactions. If an entity enters into only basic financial
reliably without undue cost or effort. Property, plant and
instrument transactions then Section 12 is not applicable.
equipment are tangible assets that: Are held for use in the
However, even entities with only basic financial instruments
production or supply of goods or services, for rental to others,
shall consider the scope of Section 12 to ensure they are
or for administrative purposes; and Are expected to be used
exempt.
during more than one period. Property, plant and equipment
does not include: Biological assets related to agricultural
SECTION 13 INVENTORIES
This section sets out the principles for recognizing and
activity (see Section 34 Specialised Activities); or Mineral
measuring inventories. Inventories are assets: Held for sale
rights and mineral reserves, such as oil, natural gas and
in the ordinary course of business; In the process of
similar non-regenerative resources.
production for such sale; or In the form of materials or
SECTION 18: INTANGIBLE ASSETS OTHER THAN
supplies to be consumed in the production process or in the
GOODWILL
rendering of services. This section applies to all inventories,
This section applies to accounting for all intangible
except: Work in progress arising under construction
assets other
than
goodwill (see Section 19 Business
contracts, including directly related service contracts (see
Combinations and Goodwill) and intangible assets held by an
Section 23 Revenue); Financial instruments (see Section 11
entity for sale in the ordinary course of business (see Section
Basic Financial Instruments and Section 12 Other Financial
13 Inventories and Section 23 Revenue). An intangible asset
Instrument Issues); and Biological assets related to
is an identifiable non-monetary asset without physical
agricultural activity and agricultural produce at the point of
substance. Such an asset is identifiable when:
harvest (see Section 34 Specialized Activities).
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