Diploma in IFRS: Your Guide to a Successful Career in Accounting

The following IFRS standards are stated on the official website and are as mentioned below:

As per IFRS 1, the first IFRS financial statements and its interim financial reports for the period covered by the financial statements must contain high-quality and relevant information that is:

• generated at a cost that will not exceed the benefits
• transparent as well as comparable over every period presented
• suitable starting point for accounting in accordance with IFRS

IFRS 2: Share-based Payment

As per IFRS 2, an entity must recognize share-based payment transactions in its financial statements. This includes transactions with employees, other parties to be settled in cash, other assets and equity instruments of the entity. Certain requirements are included for cash-settled and equity-settled share-based payment transactions. It was first applied to the annual periods that begin on or after 1st January 2005.

IFRS 3 — Business Combinations

IFRS 3 is the accounting standard that establishes principles and requirements related to how an acquirer in the business combination will:

• Recognize and measure the assets and liabilities required in its financial statements and any interest in the acquiree held by other parties
• Determine which information will be disclosed so that financial statement users can evaluate the financial effects of the business combination
• Recognize and measure the goodwill acquired and gain from the bargain purchase 

The main principles of IFRS 3 are: 

• An acquirer measures the acquisition cost at the fair value of the consideration paid.
• The acquirer allocates the remaining cost to goodwill and recognizes the excess of assets and liabilities acquired over the consideration period immediately in profit and loss.
• The acquirer discloses information that will enable users to evaluate the nature and financial effects of the acquisition.

IFRS 4: Insurance Contracts

IFRS 4 specifies some aspects of financial reporting related to insurance contracts by any entity which issues these contracts and those entities that have not yet applied IFRS 17. This IFRS standard applies to all insurance and reinsurance contracts issued by any entity except for the contracts specified in other standards. It also does not address accounting by policyholders.

IFRS 5: Non-current Assets Held for Sale and Discontinued Operations

IFRS 5 is an accounting standard that outlines how to account for non-current assets that are held for sale or for distribution to owners. Assets held for sale are not depreciated and are measured at the lower of carrying amount and fair value less costs to sell. IFRS 5 requires:

• The assets that are held for sale are measured at the lower of the carrying amount and fair value less costs to sell.
• An asset should stop depreciating when it is held for sale.
• Disposal group or a non-current asset should be classified as held for sale in case its carrying amount will be recovered principally through a sale transaction instead of through continuing use.
• Separate presentation in the statement of comprehensive income of results of discontinued operations.

IFRS 6: Exploration for and Evaluation of Mineral Assets

IFRS 6 specifies aspects of financial reporting for costs incurred for exploration and evaluation of mineral resources and costs of determination of technical feasibility and commercial viability of mineral resources extraction. 

IFRS 6 requires:

• Permitting an entity for developing an accounting policy for exploration and evaluation of assets without considering the requirements of paragraphs 11 and 12 of IAS 8. An entity adopting IFRS 6 might continue using accounting policies applied immediately before adopting IFRS 6. 
• Recognition of impairment from IAS 36 but measures the impairment in accordance with the standard once impairment is identified.
• Entities recognizing exploration and evaluation assets need to perform an impairment test on those assets when facts and circumstances indicate that the carrying amount of assets may exceed the recoverable amount. 

IFRS 7 Financial Instruments: Disclosures

IFRS 7 requires entities to publish disclosure in the financial statements that allow users to evaluate:

• Significance of financial instruments for the financial position and performance of the entity.
• Nature of risks and their extent arising from financial instruments to which the entity is exposed during the period and at the end of the reporting period. 

IFRS 8: Operating Segments

This IFRS standard requires an entity whose equity or debt securities are publicly traded to disclose information to allow financial statements to evaluate the nature and financial effects of different business activities. It also specifies how an entity should report information about operating segments in annual financial statements and interim financial reports.

IFRS 9: Financial Instruments

IFRS 9 is effective for the annual accounting period from the beginning of 1st January 2018 and further with early application permitted. It specifies how an entity should classify and measure financial liabilities, financial assets and some contracts to buy and sell non-financial items. IFRS 9 requires an entity to recognize a financial asset or financial liability in its statement of financial position when it becomes party to contractual provisions of financial instruments.

IFRS 10: Consolidated Financial Statements

This IFRS standard outlines the requirements for the preparation and presentation of the consolidated financial statements. Entities need to consolidate entities that they control. For this control, exposure or right to variable returns is required along with the ability to affect those returns by holding power over the investee. It applies to annual periods from 1st January 2013 and thereafter.

IFRS 11: Joint Arrangements

This standard establishes the principles for financial reporting by entities that hold an interest in arrangements controlled jointly (also known as joint agreements). A joint agreement refers to an agreement where two or more parties have joint control. This IFRS standard applies to annual reporting periods beginning on or after 1st January 2013. 

IFRS 12: Disclosure of Interests in Other Entities 

This standard has replaced the disclosure requirements in IAS 27, IAS 28 and IAS 31. IFRS 12 is a consolidated disclosure standard that requires several disclosures about entity's interests in subsidiaries, joint arrangements, associates as well as unconsolidated 'structured entities'. These disclosures are presented as a series of objectives with detailed guidance on satisfying those objectives. It was applicable to annual periods starting from and after 1st January 2013.

IFRS 13 — Fair Value Measurement

It applies to those IFRS standards that require or allow fair value measurements or disclosures and provide a single IFRS framework to measure fair value and require disclosures related to fair value measurement. IFRS 13 defines fair value on the basis of an 'exit price' notion and uses a 'fair value hierarchy'.

IFRS 14: Regulatory Deferral Accounts

This standard prescribes the special accounting for the effects of rate regulation which is a legal framework to establish the price that a similar entity can charge to customers for regulated goods and services. IFRS 14 standard is a first-time adopter within its scope to account for regulatory deferral account balance in IFRS financial statements in accordance with previous GAAP when it adopts IFRS Standards.

IFRS 15: Revenue from Contracts with Customers

This reporting standard establishes the principle that an entity applies when reporting information related to the nature, timing, amount as well as uncertainty of revenue of cash flows from contract with a customer. By applying IFRS 15, an entity will recognize revenue to depict the transfer of promised goods and services to the customer in an amount that reflects the consideration to which an entity expects to be entitled in exchange for goods and services. 

IFRS 16: Leases

There are two objectives of IFRS 16 as mentioned below:

• Faithfully represent a lease transaction
• Provide a basis for the financial statement users so that they can assess the amount, timing and uncertainty of cash flow that arises from leases

To meet the objectives, a lessee needs to recognise assets and liabilities that arise from a lease. IFRS 16 has introduced a single lessee accounting model which requires lessee to recognize assets and liabilities for all leases with a time period of more than 12 months unless the underlying asset holds low value.

IFRS 17: Insurance Contracts

IFRS 17 combines the current measurement of future cash flows with profit recognition over the period that services are provided within the contract. It presents insurance service results separately from insurance finance income or expenses. IFRS 17 divides contracts into groups that it will recognize and measure. The entity discloses the information to enable financial statement users to assess the effect of contracts on financial position. Here those contracts are considered that come within the scope of IFRS 

IFRS 18: Presentation and Disclosure in Financial Statements

IFRS 18 includes all the requirements for all entities applying IFRS for the disclosure and presentation of information in financial statements. IFRS 18 applied to an annual reporting period from 1st January 2027 and beyond.

IFRS 19 Subsidiaries without Public Accountability: Disclosures

This standard simplifies reporting systems and process for companies which reduces the cost of preparing financial statements of eligible subsidiaries. The usefulness of the financial statements for the users must be maintained.

IAS 20 Accounting for Government Grants and Disclosure of Government Assistance

It explains how to account for government grants and other assistance. The company does not record the complete grant as income right away. Rather, it spreads the recognition of the money over time to match whenever the related expenses occur. If the grant is for buying an asset, the company will have two choices. Either it can set the grant up as deferred income and realize it later on or it can subtract the grant amount from asset's value in the books.