...changes in asset and liability values over time. The International Accounting Standards Board (IASB) defines fair value as "... an amount at which an asset could be exchanged between knowledgeable and willing parties in an arms length transaction". Under the fair value measurement approach, assets and liabilities are re-measured periodically to reflect changes in their value, with the resulting change impacting either net income or other comprehensive income for the period. The result is a balance sheet that better reflects the current value of assets and liabilities. The cost is greater volatility in periodic reported performance caused by changes in fair value. The notion of fair value accounting is intuitive when applied to quoted investments such as equities, bonds, commodities, etc. that are carried in an entity’s balance sheet at their market value. This form of fair value accounting is often termed mark-to-market accounting. However, while market prices are one aspect of fair value measurement, the term is increasingly being used to describe measurement by other means. For example, accountants often arrive at an estimate of fair value for non-quoted investments based on a model (e.g., a share option valued by applying a specialist option valuation model) or specialist opinion. Such applications of fair value measurement are referred to as mark-to-model accounting. The IASB has followed US standard-setters in dealing with the problem of fair values that do not result from market...
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...Rechnungslegung und Wirtschaftsprüfung IFRS 13 – Kritische Würdigung |Name, Vorname : |Reimers, René | | |Matrikel-Nr: |1677578 | | |Semester: |1. Mastersemester | | | | | | |Adresse: |Josef-Kindshoven Str. 5 | | | |96052 Bamberg | | | |0951 8011252 | | | |rene.reimers84@gmx.de | | |Betreuer: |Andreas Weik, M.Sc. | | | | |Bamberg, 18. November 2011 | Inhaltsverzeichnis Seite Inhaltsverzeichnis I Abkürzungsverzeichnis II 1 Einleitung 1 2 Intention des IFRS 13 sowie Meilensteine in der Entwicklung...
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...IFRS 13 Fair value measurement IFRS 13 Fair value values 21st century real estate measurement Implications for the real estate 21st century real estate values and construction industry Implications for the real estate and construction industries Contents 1. Introduction 2. Principal impacts of the new standard 3. The definition of fair value 4. The concept of ‘highest and best use’ 4.1 Assessment 4.2 Valuing the highest and best use — alternative use and asset modifications 4.3 Highest and best use and impairment testing 5. The valuation premise for property interests 6. Assessing whether an appraisal complies with IFRS 13 7. Appropriate valuation techniques 8. Applying the fair value hierarchy to real estate appraisals 9. Expanded disclosure requirements 10. Final thoughts 2 2 3 3 3 4 4 5 5 6 7 8 9 IFRS 13 Fair value measurement — 21st century real estate values Implications for the real estate and construction industries 1 1. Introduction IFRS 13 Fair Value Measurement has been recently released by the International Accounting Standard Board (IASB). 2. Principal impacts of the new standard For real estate entities, the adoption of IFRS 13 could result in significant changes to processes and procedures for determining fair value and providing the required disclosures. While the requirement to determine fair value by reference to market participants is not new, the definition of fair value in IFRS 13 differs from that proposed by International Valuation Standards (IVS)...
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...IFRS AT A GLANCE IFRS 13 Fair Value Measurement As at 1 January 2014 IFRS 13 Fair Value Measurement Page 1 of 2 Effective Date Periods beginning on or after 1 January 2013 SCOPE AND SCOPE EXEMPTIONS IFRS 13 applies when another IFRS requires or permits fair value measurements (both initial and subsequent) or disclosures about fair value measurements, except as detailed below: Exemption from both measurement and disclosure requirements: Share-based payment transactions within the scope of IFRS 2 Share-based Payment Leasing transactions within the scope of IAS 17 Leases Measurements that have some similarities to fair value, but are not fair value, such as: - Net realisable value in IAS 2 Inventories - Value-in-use in IAS 36 Impairment of Assets. Exemption from disclosure requirements only: Plan assets measured at fair value in accordance with IAS 19 Employee Benefits Retirement benefit plan investments measured at fair value in accordance with IAS 26 Specific quantitative disclosure requirement: Accounting and Reporting by Retirement Benefit Plans Assets for which recoverable amount is fair value less costs of disposal in accordance with IAS 36. DEFINITION OF FAIR VALUE Fair Value: measurement-date price received to sell and asset, or paid to transfer a liability, in an orderly transaction between market participants. Price The price is determined at measurement date under current market conditions (i.e. an exit price). This is regardless of whether...
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...IFRS 13 Summary: Differences between IFRS 13 and Topic 820 under US GAAP •Largely consistent with Topic 820. •IFRS 13 goes further than US GAAP by requiring a quantitative sensitivity analysis disclosure for Level 3 financial instruments that are measured at fair value •IFRS 13 does not currently provide guidance on Investment Company accounting. Topic 820 provides guidance on investment company accounting •Minor wording and styling differences exist. Goals of issuing IFRS 13 •Dispersed guidance on fair value across IFRS •Perceived inconsistencies of fair value guidance across IFRS •Improved transparency by enhancing disclosures. •Convergence with US GAAP Scope IFRS 13 applies if another IFRS requires or permits the use of fair value IFRS 13 Excludes: •Share based payments •Leases in the scope of IAS 17 •Relief from Disclosures for IAS 19 employee benefits, IAS 36 impairment of assets and IAS 26 Accounting and reporting benefits for retirement benefits and plans Fair Value Measurement of Asset or Liability •Asset or liability measured from the perspective of the market participant. •Measurement of an asset considers characteristics as condition, location and restrictions on its sale or use •Measurement of liability considers Quoted price if available for the liability Or Valuation technique based on observable inputs Valuation Techniques •These are used to estimate the price of an asset or...
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...necessarily representing the actual fair value of an asset, which is likely to diverge from its purchase cost over time. The historical cost concept is clarified by the cost principle, which states that you should only record an asset, liability, or equity investment at its original acquisition cost. Current replacement cost: Is the method of reporting assets /liabilities according to the cost of replacing them at current market price. This is the opposite of historical accounting. This cost can change depending on changes in market value. The replacement cost of an asset may vary from the market value of that specific asset, since the asset that would actually replace it may have a different cost. The replacement asset only has to perform the same functions as the original asset - it does not have to be an exact copy of the original asset. Replacement cost is a common term used in insurance policies to cover damage to a company's assets. 2) Discuss the different levels of fair value determination According to International Finance Reporting Standard 13(IFRS 13) fair value determination is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date The following are the 3 different levels of fair value Level 1: inputs are quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date. [IFRS 13:80] Level one asset can be...
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...Property, plant and equipment |Level |[pic] |Typical coverage of US GAAP: | |US GAAP |Replace slides 2 and|Definition | | |3 with your own |Acquisition of PP&E: | | |material here, or |General | | |throughout as |Self-constructed assets | | |desired |Interest costs during construction | | | |Initial cost of natural resources | | | |Valuation at acquisition: | | | |Exchange of non-monetary assets | | | |Lump-sum purchases | | ...
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...A practical guide to accounting for agricultural assets November 2009 PricewaterhouseCoopers’ IFRS and corporate governance publications and tools 2009 IFRS technical publications Manual of accounting – IFRS 2010 IFRS pocket guide 2009 Global guide to IFRS providing comprehensive practical guidance on how to prepare financial statements in accordance with IFRS. Includes hundreds of worked examples and extracts from company reports. The Manual is a three-volume set comprising: • Manual of accounting – IFRS 2010 • Manual of accounting – Financial instruments 2010 • Illustrative IFRS corporate consolidated financial statements for 2009 year ends Provides a summary of the IFRS recognition and measurement requirements. Including currencies, assets, liabilities, equity, income, expenses, business combinations and interim financial statements. IFRS news A practical guide to capitalisation of borrowing costs Monthly newsletter focusing on the business implications of the IASB’s proposals and new standards. Subscribe by emailing corporatereporting@uk.pwc.com. Guidance in question and answer format addressing the challenges of applying IAS 23R, including how to treat specific versus general borrowings, when to start capitalisation and whether the scope exemptions are mandatory or optional. Illustrative interim financial information for existing preparers A practical guide to new IFRSs for 2009 40-page guide providing high-level outline of the key requirements...
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...A practical guide to accounting for agricultural assets November 2009 PricewaterhouseCoopers’ IFRS and corporate governance publications and tools 2009 IFRS technical publications Manual of accounting – IFRS 2010 IFRS pocket guide 2009 Global guide to IFRS providing comprehensive practical guidance on how to prepare financial statements in accordance with IFRS. Includes hundreds of worked examples and extracts from company reports. The Manual is a three-volume set comprising: • Manual of accounting – IFRS 2010 • Manual of accounting – Financial instruments 2010 • Illustrative IFRS corporate consolidated financial statements for 2009 year ends Provides a summary of the IFRS recognition and measurement requirements. Including currencies, assets, liabilities, equity, income, expenses, business combinations and interim financial statements. IFRS news A practical guide to capitalisation of borrowing costs Monthly newsletter focusing on the business implications of the IASB’s proposals and new standards. Subscribe by emailing corporatereporting@uk.pwc.com. Guidance in question and answer format addressing the challenges of applying IAS 23R, including how to treat specific versus general borrowings, when to start capitalisation and whether the scope exemptions are mandatory or optional. Illustrative interim financial information for existing preparers A practical guide to new IFRSs for 2009 40-page guide providing high-level outline of the key requirements...
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...IFRS vs. GAAP ACC/291 June 1, 2015 Judith Bines IFRS vs. GAAP The International Financial Reporting Standards (IFRS) and the Generally Accepted Accounting Principles (GAAP) are rules used to ensure ethical reporting of financial information. During Accounting 291, we have learned how to apply these rules however the differences between the United States GAAP and the IFRS make it difficult to compare companies. Some of these differences appear in the measurement of “fair value”, component depreciation, the revaluation of plant assets, product development expenditures, contingent liabilities, and the accounting for liabilities. Moving to Fair Value Measurement To the average person, the meaning of “fair value” would seem to have one meaning but this is not the case under GAAP and IFRS. “Under IFRS 1-3, the fair value of a financial liability is the cost to transfer it to another market participant in an orderly transaction at the measurement date. This is subtly different to how the fair value of a financial liability is determined under the previous rules in IAS 39 where the fair value of a financial liability is the amount at which it could be settled between knowledgeable, willing parties in an arm's-length transaction” (McCarroll & Khatri, 2012). “The Accounting Standards Update (ASU) provides a converged meaning of "fair value," defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market...
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...Comparison between U.S. GAAP and International Financial Reporting Standards May 2013 © 2013 Grant Thornton LLP All rights reserved U.S. member firm of Grant Thornton International Ltd Comparison between U.S. GAAP and International Financial Reporting Standards 2 Contents 1. Introduction .................................................................................................................................................. 6 International standards and the IASB ............................................................................................................ 6 Financial accounting and reporting in the United States ................................................................................ 6 IFRS and U.S. GAAP comparison ................................................................................................................. 6 Overall financial statement presentation ................................................................................................... 8 General .......................................................................................................................................................... 8 Statement of financial position / balance sheet .............................................................................................. 9 Statement of comprehensive income / income statement ........................................................................... 12 Statement of changes in equity...
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...between IFRS and U.S GAAP Duoyi Zhang (1) | Issue: |Measurement basis of agricultural crops, livestock, orchards, | | |forests. | |1.IFRS IAS 41, Para 10-33 |Fair value with value changes recognized in profit or loss. | |2.U.S GAAP |Historical cost is generally used. However, fair value less | |ASC 905-330-35-3 |costs to sell is used for harvested crops and livestock held | | |for sale. | | |US- inventory of corps and livestock shall be valued the lower| |3. Underlying theoretical difference |of cost or market. | | |IFRS-inventory of corps and livestock shall be valued only at | | |fair market value. | | |This is the biggest objection US companies have to IFRS. ...
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...Valuation. IFRS requires that inventory is carried at the lower of cost or net realizable value. Cost of the certain finished goods that are purchased for resale in relation to semiconductor repair services cannot be determined using the LIFO because the IFRS does not permit the use of LIFO. b. Impairment. IFRS requires reversal of inventory impairments in the period in which an impairment condition reverses (with the reversal limited to the amount of the original write-down). 3. Property, Plant, and Equipment a. Cost. After initial recognition, IFRS permits two measurement alternatives: at cost less accumulated depreciation; or, if fair value can be measured reliably, at a revalued amount that equals its fair value at the date of the revaluation less any subsequent accumulated depreciation. An entity must make an accounting policy choice to use either the cost model (that would be consistent with U.S. GAAP) or the revaluation model to measure each class of PP&E. The accounting policy that is selected must be applied to the entire class of PP&E. b. Depreciation. IFRS requires that each part of an item of PP&E with a cost that is significant in relation to the total cost of the item shall be depreciated separately. c. Impairment. IFRS requires that an impairment loss is calculated as the excess of the asset’s carrying amount over its recoverable amount. The recoverable amount is the higher of the asset’s (1) fair value less costs to sell and (2) value in use. U...
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...You can buy the this complete file at http://testbanksfor.com TEST BANK CHAPTER 1 Intercorporate Investments: An Overview MULTIPLE CHOICE Use the following information on a company’s investments in equity securities to answer questions 1 4 below. The company’s accounting year ends December 31. Investment Ajax Company stock Bril Corporation stock Coy Company stock 1. Date of acquisition 6/20/13 5/1/13 8/2/13 Cost $40,000 20,000 16,000 Fair value 12/31/13 $35,000 N/A 16,500 Date sold 2/10/14 11/15/13 1/17/14 Selling price $32,000 26,000 23,000 Topic: Accounting for trading securities LO 1 If the above investments are categorized as trading securities, what amount is reported for gain or loss on securities, on the 2013 income statement? a. b. c. d. $1,500 gain $6,000 gain no gain or loss $4,500 loss ANS: a 2. Topic: Accounting for trading securities LO 1 If the above investments are categorized as trading securities, what amount is reported for gain or loss on securities, on the 2014 income statement? a. b. c. d. $1,000 loss $4,000 loss $3,500 gain $6,000 loss ANS: c You can buy the this complete file at http://testbanksfor.com 3. Topic: Accounting for AFS securities LO 1 If the above investments are categorized as availableforsale securities, what amount is reported for gain or loss on securities, on the 2013 income statement? a. b. c. d. $1,500 gain ...
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...5/6/2015 Salient differences between IAS 39 and IFRS 9 | Accounting For Investments Accounting For Investments Web site resources for the book 'Accounting for Investments' by R. Venkata Subramani Home Accounting Standards I F R S Indian Standards (AS) US GAAP BookVolume1 00 – Introduction Chapter Arrangement Foreword Preface Reviews 01 – Financial Instruments 02 – Trading – FVPL 03 – Available for Sale 04 – Transfer of Categories 05 – Derivatives Theory 06 – Index Futures 07 – Stock Futures 08 – Call Options 09 – Put Options 10 – Hedge Accounting 11 – Contract for Difference 12 – Short Selling 13 – ADR/GDR 14 – Disclosures BookVolume2 02 – Fixed Income Securities – FVPL News Americas Hedge Funds India Private Equity Subprime crisis Online Courses Accounting Standards Courses Financial Products Related Books Tutorials Credit Default Swaps Equity Shares Indian Income Tax Options Videos Subscribe http://accountingforinvestments.com/salientdifferencesbetweenias39andifrs9/ 1/5 5/6/2015 Salient differences between IAS 39 and IFRS 9 | Accounting For Investments Salient differences between IAS 39 and IFRS 9 by R. Venkata Subramani On 12 November 2009, the International Accounting Standards Board (IASB) issued IFRS 9 Financial Instruments. Salient differences between IAS 39 and IFRS 9 Parameter IAS 39 IFRS 9 Name Financial Instruments: Recognition and Measurement Financial Instruments ...
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