WORLD ACADEMY OF INFORMATICS AND MANAGEMENT SCIENCES
ISSN : 2278-1315
Changes in the fair value of financial assets and financial
services have been (or will be) received, in which case this
liabilities or their disposal (see Section 11 Basic Financial
section applies (see paragraph 26.17).
Instruments and Section 12 Other Financial Instrument
Cash-settled share-based payment transactions include share
Issues); Changes in the fair value of investment property
appreciation rights. For example, an entity might grant share
(see Section 16 Investment Property); Initial recognition and
appreciation rights to employees as part of their remuneration
changes in the fair value of biological assets related to
package, whereby the employees will become entitled to a
agricultural activity (see Section 34 Specialized Activities);
future cash payment (instead of an equity instrument), based
and Initial recognition of agricultural produce (see Section
on the increase in the entity’s share price from a specified
34).
level over a specified period of time. Or an entity might grant
to its employees a right to receive a future cash payment by
granting to them a right to shares (including shares to be
SECTION 24: GOVERNMENT GRANTS
This section specifies the accounting for all government
issued upon the exercise of share options) that are redeemable,
grants. A government grant is assistance by government in
either mandatorily (for example, upon cessation of
the form of a transfer of resources to an entity in return for
employment) or at the employee’s option.
past or future compliance with certain conditions relating to
the operating activities of the entity. Government grants
SECTION 27: IMPAIRMENT OF ASSETS
exclude those forms of government assistance that cannot
An impairment loss occurs when the carrying amount of an
reasonably have a value placed upon them and transactions
asset exceeds its recoverable amount. This section shall be
with government that cannot be distinguished from the
applied in accounting for the impairment of all assets other
normal trading transactions of the entity. This section does
than the following, for which other sections of this Standard
not cover government assistance that is provided for an
establish impairment requirements:
entity in the form of benefits that are available in
Deferred tax assets (see Section 29 Income Tax);
determining taxable profit or tax loss, or are determined or
Assets arising from employee benefits (see Section 28
limited on the basis of income tax liability. Examples of
Employee Benefits);
such benefits are income tax holidays, investment tax
Financial assets within the scope of Section 11 Basic
credits, accelerated depreciation allowances and reduced
Financial Instruments or Section 12 Other Financial
income tax rates. Section 29 Income Tax covers accounting
Instrument Issues;
for taxes based on income.
Investment property measured at fair value (see Section 16
Investment Property);
SECTION 25: BORROWING COSTS
This section specifies the accounting for borrowing costs.
Biological assets related to agricultural activity measured at
Borrowing costs are interest and other costs that an entity
fair value less estimated costs to sell (see Section 34
incurs in connection with the borrowing of funds.
Specialised Activities); and
Borrowing costs include:
Assets arising from construction contracts (see Section 23
Interest expense calculated using the effective interest
Revenue).
method as described in Section 11 Basic Financial
SECTION 28: EMPLOYEE BENEFITS
Instruments;
Employee benefits are all forms of consideration given by an
Finance charges in respect of finance leases recognized in
entity in exchange for service rendered by employees,
accordance with Section 20 Leases; and
including directors and management. This section applies to
Exchange differences arising from foreign currency
all employee benefits, except for share-based payment
borrowings to the extent that they are regarded as an
transactions, which are covered by Section 26 Share-based
adjustment to interest costs.
Payment. Employee benefits covered by this section will be
one of the following four types:
SECTION 26: SHARE-BASED PAYMENT
This section specifies the accounting for all share-based
Short-term employee benefits, which are employee benefits
payment transactions including those that are equity or cash-
(other than termination benefits) that are wholly due within
settled or those in which the terms of the arrangement
twelve months after the end of the period in which the
provide a choice of whether the entity settles the transaction
employees render the related service;
in cash (or other assets) or by issuing equity instruments.
Post-employment benefits, which are employee benefits (other
A.
A share-based payment transaction may be settled
than termination benefits) that are payable after the
by another group entity (or a shareholder of any group
completion of employment;
entity) on behalf of the entity receiving the goods or
Other long-term employee benefits, which are employee
services. This section also applies to an entity that:
benefits (other than post-employment benefits and termination
Receives goods or services when another entity in the same
benefits) that are not wholly due within twelve months after
group (or a shareholder of any group entity) has the
the end of the period in which the employees render the
obligation to settle the share-based payment transaction; or
related service; and Termination benefits, which are employee
Has an obligation to settle a share-based payment
benefits payable as a result of either:
transaction when another entity in the same group receives
An entity’s decision to terminate an employee’s employment
the goods or services unless the transaction is clearly for a
before the normal retirement date; or
purpose other than the payment for goods or services
An employee’s decision to accept voluntary redundancy in
supplied to the entity receiving them.
exchange for those benefits.
B.
In the absence of specifically identifiable goods or
Employee benefits also include share-based payment
services, other circumstances may indicate that goods or
transactions by which employees receive equity instruments
(such as shares or share options) or cash or other assets of the
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