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Thread: 22 - Indian Accounting Standard (Ind AS) 34 - Earlier Accounting standard - (25) - Interim Financial Reporting

  1. #21
    IND-AS
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    Thumbs up Illustration - B of Indian Accounting Standard (Ind AS) 34 - Earlier Accounting standard - (25) - Interim Financial Reporting

    Illustration - B of Indian Accounting Standard (Ind AS) 34 - Earlier Accounting standard - (25)

    Interim Financial Reporting

    Appendix - B


    Illustration - B

    Examples of applying the recognition and measurement principles

    This illustration, which accompanies, but is not part of, Ind AS 34, provides examples of applying the general recognition and measurement principles set out in paragraphs 28– 39.


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  2. #22
    IND-AS
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    Thumbs up Illustration - C of Indian Accounting Standard (Ind AS) 34 - Earlier Accounting standard - (25) - Interim Financial Reporting

    Illustration - C of Indian Accounting Standard (Ind AS) 34 - Earlier Accounting standard - (25)

    Interim Financial Reporting

    Appendix - B


    Illustration - C

    Examples of the use of estimates

    This illustration, which accompanies, but is not part of, Ind AS 34, provides examples to illustrate application of the principle in paragraph 41.

    C1. Inventories: Full stock-taking and valuation procedures may not be required for inventories at interim dates, although it may be done at financial year -end. It may be sufficient to make estimates at interim dates based on sales margins.

    C2. Classifications of current and non-current assets and liabilities: Entities may do a more thorough investigation for classifying assets and liabilities as current or non-current at annual reporting dates than at interim dates.

    C3. Provisions: Determination of the appropriate amount of a provision (such as a provision for warranties, environmental costs, and site restoration costs) may be complex and often costly and time-consuming. Entities sometimes engage outside experts to assist in the annual calculations. Making similar estimates at interim dates often entails updating of the prior annual provision rather than the engaging of outside experts to do a new calculation.

    C4. Pensions: Ind AS 19 Employee Benefits requires that an entity determine the present value of defined benefit obligations and the market value of plan assets at the end of each reporting period and encourages an entity to involve a professionally qualified actuary in measurement of the obligations. For interim reporting purposes, reliable measurement is often obtainable by extrapolation of the latest actuarial valuation.

    C5. Income taxes: Entities may calculate income tax expense and deferred income tax liability at annual dates by applying the tax rate for each individual jurisdiction to measures of income for each jurisdiction. Paragraph B14 of Illustration B of Appendix B acknowledges that while that degree of precision is desirable at interim reporting dates as well, it may not be achievable in all cases, and a weighted average of rates across jurisdictions or across categories of income is used if it is a reasonable approximation of the effect of using more specific rates.

    C6. Contingencies: The measurement of contingencies may involve the opinions of legal experts or other advisers. Formal reports from independent experts are sometimes obtained with respect to contingencies. Such opinions about litigation, claims, assessments, and other contingencies and uncertainties may or may not also be needed at interim dates.

    C7. Revaluations and fair value accounting: Ind AS 16 Property, Plant and Equipment allows an entity to choose as its accounting policy the revaluation model whereby items of property, plant and equipment are re valued to fair value. For those measurements, an entity may rely on professionally qualified valuers at annual reporting dates though not at interim reporting dates.

    C8. Intercompany reconciliations: Some intercompany balances that are reconciled on a detailed level in preparing consolidated financial statements at financial year - end might be reconciled at a less detailed level in preparing consolidated financial statements at an interim date.

    C9. Specialised industries: Because of complexity, costliness , and time, interim period measurements in specialised industries might be less precise than at financial year-end. An example would be calculation of insurance reserves by insurance companies.



  3. #23
    IND-AS
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    Thumbs up Appendix - 1 of Indian Accounting Standard (Ind AS) 34 - Earlier Accounting standard - (25) - Interim Financial Reporting

    Appendix - 1 of Indian Accounting Standard (Ind AS) 34 - Earlier Accounting standard - (25)

    Interim Financial Reporting



    Appendix - 1

    Note:
    This appendix is not a part of the Indian Accounting Standard. The purpose of this appendix is only to bring out the differences between Indian Accounting Standard (Ind AS) 34 and the corresponding International Accounting Standard (IAS) 34, Interim Financial Reporting.

    Comparison with IAS 34, Interim Financial Reporting

    1. With regard to preparation of statement of profit and loss, International Accounting Standard (IAS) 34, Interim Financial Reporting, provides option either to follow single statement approach or to follow two statement approaches. But, Ind AS 34 allows only single statement approach on the lines of Ind AS 1, Presentation of Financial Statements which also allows only single statement approach . Paragraphs 8A and 11A of IAS 34 which provides the option are deleted. In order to maintain consistency with paragraph numbers of IAS 34, the paragraph numbers are retained in Ind AS 34

    2. IAS 34 requires preparation of a Statement of Changes in Equity as a separate statement. Ind AS 34 requires the statement of changes in equity to be shown as a part of the balance sheet on the lines of Ind AS 1, Presentation of Financial Statements. Paragraphs 5(c), 8(c) and 20(c) of IAS 34 which requires preparation of a Statement of Changes in Equity as a separate statement are deleted in Ind AS 34. In order to maintain consistency with paragraph numbers of IAS 34, the paragraph numbers are retained in Ind AS 34.

    3. Paragraph 12 of IAS 34 which makes the reference of Implementation Guidance included in IAS 1 has been deleted in Ind AS 34 as Ind AS 1 does not include the Implementation Guidance. In order to maintain consistency with paragraph numbers of IAS 34, the paragraph number is retained in Ind AS 34.

    4. Different terminology is used in Ind AS 34 e.g., the term ‘balance sheet’ is used instead of ‘Statement of financial position’ and ‘Statement of Profit and Loss’ is used instead of ‘Statement of comprehensive income’.

    5. In ‘Examples of the Use of estimates’, the IAS 34 gives reference of IAS 40 for fair value accounting. In Ind AS 34, the reference is deleted as Ind AS 40 permits only cost model.

    6. The following paragraph numbers appear as ‘Deleted ‘in IAS 34. In order to maintain consistency with paragraph numbers of IAS 34, the paragraph numbers are retained in Ind AS 34:

    (i) paragraph 13
    (ii) paragraphs16
    (iii) paragraphs17-18
    (iv) paragraph B 27 of Appendix B


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