WORLD ACADEMY OF INFORMATICS AND MANAGEMENT SCIENCES
ISSN : 2278-1315
entity in amounts that are based on the price of the entity’s
SECTION 35: TRANSITION TO THE IFRS FOR SMES
shares or other equity instruments of the entity. An entity
This section applies to a first-time adopter of the IFRS for
shall apply Section 26 in accounting for share-based
SMEs, regardless of whether its previous accounting
payment transactions.
framework was full IFRS or another set of generally accepted
accounting principles (GAAP) such as its national accounting
SECTION 29: INCOME TAX
For the purpose of this Standard, income tax includes all
standards or another framework such as the local income tax
domestic and foreign taxes that are based on taxable profit.
basis.
Income tax also includes taxes, such as withholding taxes,
An entity that has applied the IFRS for SMEs in a previous
that are payable by a subsidiary, associate or joint venture
reporting period, but whose most recent previous annual
on distributions to the reporting entity.
financial statements did not contain an explicit and unreserved
This section covers accounting for income tax. It requires an
statement of compliance with the IFRS for SMEs, must either
entity to recognize the current and future tax consequences
apply this section or apply the IFRS for SMEs retrospectively
of transactions and other events that have been recognized in
in accordance with Section 10 Accounting Policies, Estimates
the financial statements. These recognized tax amounts
and Errors as if the entity had never stopped applying the
comprise current tax and deferred tax. Current tax is income
IFRS for SMEs. When such an entity does not elect to apply
tax payable (recoverable) in respect of the taxable profit (tax
this section, it is still required to apply the disclosure
loss) for the current period or past periods. Deferred tax is
requirements in paragraph 35.12A in addition to the disclosure
income tax payable or recoverable in future periods,
requirements in Section 10.
generally as a result of the entity recovering or settling its
assets and liabilities for their current carrying amount, and
CONCLUSION
the tax effect of the carry forward of currently unused tax
The final IFRS for SMEs (together with the basis for
losses and tax credits.
conclusions, illustrative financial statements, and a
This section does not deal with the methods of accounting
presentation and disclosure checklist) can be obtained without
for government grants (see Section 24 Government Grants).
charge from the isab.org/IFRS+for+SMEs or www.ifrs.org.
However, this section does deal with the accounting for
temporary differences that may arise from such grants.
Prepared by:
Orshi Terhemba Ephraim AAT, ACILRM, ACA
SECTION
30:
FOREIGN
CURRENCY
TRANSLATION
An entity can conduct foreign activities in two ways. It may
THE CHANGING ROLE AND MANDATE OF FINANCE
have transactions in foreign currencies or it may have
Peter Simons,
foreign operations. In addition, an entity may present its
Associate Technical Director of Research –
financial statements in a foreign currency. This section
Management Accounting,
prescribes how to include foreign currency transactions and
Head of Future of Finance Research
foreign operations in the financial statements of an entity
Association of International Certified Professional
and how to translate financial statements into a presentation
Accountants (AICPA)
currency. Accounting for financial instruments that derive
their value from the change in a specified foreign exchange
Abstract
rate (for example, foreign currency forward exchange
contracts) and hedge accounting of foreign currency items
This briefing paper will:
are dealt with in Section 12 Other Financial Instrument
i.
Explore the basic activities that are the essential
Issues.
DNA of every finance function. These are the
SECTION 31: HYPERINFLATION
building blocks that make the changing mandate of
This section applies to an entity whose functional currency
finance possible.
is the currency of a hyperinflationary economy. It requires
ii.
Explain the broad roles within the finance function.
such an entity to prepare financial statements that have been
This will enable you to see where your finance
adjusted for the effects of hyperinflation.
function lies in its journey to realizing the changing
SECTION 32: EVENTS AFTER THE END OF THE
mandate.
REPORTING PERIOD
iii.
Explore how the finance function must transform in
This section defines events after the end of the reporting
order to meet the changing mandate.
period and sets out principles for recognizing, measuring
Recognizing the Changing Mandate
and disclosing those events.
Our research shows that the finance function has a mandate to
SECTION 33: RELATED PARTY DISCLOSURES
go beyond its core accounting role. This changing mandate
This section requires an entity to include in its financial
doesn’t discard core accounting; it’s still an essential
statements the disclosures necessary to draw attention to the
foundation of the finance function. However, enabled by new
possibility that its financial position and profit or loss have
technologies, the function is now capable of assessing a
been affected by the existence of related parties and by
broader range of information and becoming a more influential
transactions and outstanding balances with such parties.
player within an organization. It’s time to step up and occupy
SECTION 34: SPECIALIZED ACTIVITIES
the space that senior finance and non-finance people – as
This section provides guidance on financial reporting by
revealed in interviews with us – believe the finance function
SMEs involved in three types of specialized activities;
of the future must own.
agriculture, extractive activities, and service concessions.
www.waims.co.in
ENDEAVOR 2019 | WAIMS ACADMIC PRESS
47 | P a g e