Full Pfrs Vs Pfrs For Smes PDF

Diaz Murillo Dalupan
and Company
Full IFRS vs. PFRS for

SMEs
Atty. Bethuel V. Tanupan
CPA, CMA, DipIFRS,
DipIFRS, MM
Partner for Technical Standards

and Company
Seminar Outline
Full IFRS vs IFRS for SMEs
Accounting Framework and first-time
adoption
Financial Statements
Income and Expenses
Financial Assets & Liabilities
Non-financial assets
Non-financial liabilities and equity
Other Topics
1
and Company
Accounting
Framework and first-
time adoption
IFRS for SMEs Full IFRS
Scope No public Apply to all
accountability entities that issue
general purpose
Small listed FS.
entities not
included.

and Company Accounting
Framework and
first-time adoption
Publicly accountable entities
Files or is in the process of filing FS with SEC
or other regulatory organizations for the
purpose of issuing any class of instrument in a
public market
Holds assets in a fiduciary capacity for a
broad group of outsiders
(banks, insurance companies, securities brokers
and dealers, pension funds.
2
and Company
Accounting
Framework and
first-time adoption
Measure- Usually historical Include historical

ment cost subject to cost, current
bases impairment. cost, realizable
value, present
Fair Value on value.
certain accounts.

and Company
Accounting
Framework and
first-time adoption
Fair Value Measurement
IFRS for SMEs
Certain categories of financial instruments
Investments in associates and joint
ventures
Investment property and agricultural
assets
FULL IFRS
Investment Property, biological assets and
certain categories of financial instruments
3
and Company
Accounting
Framework and
first-time adoption
First time Presents its first Presents its first

adopter annual FS that annual FS that
conform with IFRS conform to IFRS.
for SMEs
regardless of
whether its
previous
framework was full
IFRS.

and Company
Accounting
Framework and
first-time adoption
Date of The beginning of The beginning of

transition the earliest period the earliest
for which full period for which
comparative full comparative
information is information is
presented in presented in
accordance with accordance with
IFRS for SMEs full IFRS.
4
and Company
Accounting
Framework and
first-time adoption
Reconciliation required
Equity reported under its previous financial
reporting framework to its equity under IFRS
for SMEs for both the transition date and end
of the latest period presented in the entitys
most recent annual FS under its previous
financial reporting framework
Profit or loss reported under its previous
financial reporting framework for the latest
period in its most recent annual FS to its profit
or loss under IFRS for SMEs for the same
period.

and Company
Accounting
Framework and
first-time adoption
Mandatory exceptions from retrospective
application (no change in accounting
policy)
Derecognition of financial assets and
liabilities
Hedge accounting
Estimates
Discontinued operations
Measuring non-controlling interests
5
and Company
Accounting
Framework and
first-time adoption
Some optional exemptions from
retrospective application (See IFRS
FOR SMEs 35.10)
FV or revaluation as deemed cost for
PPE, investment property or intangible
assets.
Deferred income tax
Arrangements containing a lease

and Company
Accounting
Framework and
first-time adoption
General exemption from
retrospective application
On the ground of impracticability.
Impracticable is defined as when the entity
cannot apply it after making every
reasonable effort to do so.
6
Financial
and Company
Statements
Combined Allowed if the only Not allowed.

statement changes to equity
of income of an entity are a
and result of profit or
retained loss, payment of
earnings dividends,
correction of prior
period errors or
change in
accounting policy
Income and
and Company
Expenses
Borrowing All borrowing Borrowing costs

costs costs are that are directly
expensed. attributable to the
acquisition,
construction or
production of
qualifying asset
as part of the cost
of that asset are
capitalized.
7
Income and
and Company
Expenses
Actuarial Recognized in May be

Gains and FULL in profit or recognized
Losses loss or in other immediately or
comprehensive amortized into P/L
income (without over a period not
recycling) in the exceeding the
period in which expected
they occur. remaining
working lives of
participating
employees
Income and
and Company
Expenses
Past Recognized in Recognized as an

Service FULL in profit or expense on a SL
Costs loss in the period basis over the
in which they average period
occur until the plan
amendments
vest.
8
Financial Assets
and Company
and Liabilities
Categories Basic and complex FVTPL

financial Held to maturity
instruments investments
Loans and
receivables
Available-for-sale
financial assets
Financial Assets
and Company
and Liabilities
Examples of Basic: Cash, Trade Not applicable

basic and accounts and
more Notes
complex receivable/payable
financial , Loans from
instruments banks/3rd parties,
Commercial
Paper, Bonds
9
Financial Assets
and Company
and Liabilities
Examples of COMPLEX: Not applicable

Asset-backed securities and
basic and repurchase agreements.
more Options, rights, warrants,
futures, forward contracts
complex and interest rate swaps that
financial can be settled in cash or by
exchaging another financial
instruments instrument.
Hedging instrument.
Commitments to make a loan
to another entity.
Investments in another
entitys equity instrument.
Investment in covertible
debt.
Financial Assets
and Company
and Liabilities
Initial Transaction price Fair Value plus

measurement (including transaction transaction cost.
costs unless the
instrument is Fair value is normally
measured at FVTPL). the transaction price,
If payment is deferred unless part of the
or is financed by an consideration is for
interest rate that is not something other than
a market rate, PV of a financial instrument
the future payments or the instrument
bears an off-market
interest rate.
10
Financial Assets
and Company
and Liabilities
Subsequent Basic debt instruments Held for trading

are measured at FVTPL
measurement amortized cost using the Held to maturity and
effective interest loans and receivables
method. amortized cost.
Investments in non- Financial liabilities
convertible and non- other than FVTPL
puttable ordinary sahres amortized cost.
or preference shares are Available for sale FV
measured at FVTPL if FV to equity.
can be measured
reliably, otherwise, cost Investment in equity
less impairment. securities whose FV
cannot be measured
Cost less impairment.
Financial Assets
and Company
and Liabilities
Assets Impairment loss is the Impairment loss is

measured at difference between measured as the
the assets carrying difference between
cost less amount and the best the carrying amount
impairment estimate of the amount of the financial asset
that the entity would and the PV of
receive for the asset if estimated future cash
it were to be sold. flows discounted at
the current market
rate of return for a
similar financial
assets.
11
Non-Financial
and Company
Assets
Inventory Borrowing cost is Borrowing costs

other cost an expense. are included in
the cost of
inventories under
limited
circumstances as
identified in IAS
23.
Non-Financial
and Company
Assets
Investment Borrowing costs Borrowing cost

property are recognized as that are directly
initial expense. attributable to the
measurement acquisition,
construction or
production of a
qualifying asset
are to be
capitalized.
12
Non-Financial
and Company
Assets
PPE initial Borrowing cost Borrowing costs

measurement are recognized as that are directly
an expense. attributable to the
acquisition,
construction or
production of a
qualifying asset
are required to be
capitalized as
part of the cost of
that asset
Non-Financial
and Company
Assets
PPE Cost less Cost model or

subsequent accumulated revaluation
measurement depreciation and model.
any impairment
losses (cost
model).
13
Non-Financial
and Company
Assets
PPE Cost of an item of Significant parts

Components PPE is allocated to may have
approach its significant different useful
parts, with each lives.
part depreciated Depreciation is
separately only calculated based
when the parts on each individual
have significantly parts life.
different patterns
of benefit or
consumption.
Non-Financial
and Company
Assets
PPE Review depreciation Review ,

Depreciable method, residual depreciation
amount, value and useful life method, residual
method and if there is an value and useful life
indication of change at least at each
depreciation
since the last annual reporting
period
reporting date and date and amended
amended if if expectations
expectations differ differ from previous
from previous estimates.
estimates.
14
Non-Financial
and Company
Assets
Intangible All research and Research costs are

asset development costs expensed as
research and are recognized as incurred.
development expense. Development costs
are capitalized
costs
when specific
criteria are met.
Non-Financial
and Company
Assets
Intangible Cost model Cost model or

asset Revaluation Model.
measurement
after initial
recognition
15
Non-Financial
and Company
Assets
Intangible Considered to be Either FINITE or

asset useful FINITE. INFINITE
life
Non-Financial
and Company
Assets
Intangible Amortized on a Amortize those with

assets with systematic basis over finite useful life.
the useful life. Review amortization
finite useful
Useful life is presumed method and residual
life to be 10 years if a value at least each
reliable estimate annual reporting
cannot be made. period.
Review basis of
amortization for any
indication of change.
16
Non-Financial
and Company
Assets
Intangible Not applicable. All Not amortized.

assets with intangible assets are Useful life is reviewed
considered to have at each annual
indefinite finite lives. reporting period to
useful life determine whether
events and
circumstances
continue to support
an indefinite useful
life assessment.
Non-Financial
and Company
Assets
Impairment Assets (including The following are

of assets goodwill) are tested tested for impairment
for impairment when irrespective of
annual there is an indication whether there is
assessment that the asset may be indication of
of indicators impaired. impairment:
The existence of 1) Intangible asset
impairment indicaotrs with an indefinite
is assessed at each useful life or an
reporting date. intangible asset not
yet available for use.
2) Goodwill.
17
Non-Financial
and Company
Liabilities and
Equity
Retirement Contribution payable If the contributions to

benefits for a period to the fund a DC Plan do not fall
is recognized as a within 12 months
measurement liability for a DC plan after the end of the
of defined after deducting any period, the future
contribution amount already paid. contributions are
plans. discounted.

Non-Financial
and Company
Liabilities and
Equity
Defined Net total of: Net total of :

benefit PV of the DB obligation PV of the DB obligation
at the end of the at the end of the
liability reporting period.
reporting period
Plus/minus any
Less that FV at the actuarial gains/losses
reporting date of plan not recognized due to
assets (if any) out of the corridor method.
which the obligations Minus any unrecognized
are to be settled past service cost.
directly. Minus the FV at the
reporting date of the
plan assets out of which
the obligations are to be
settled directly.
18
Diaz Murillo Dalupan Non-Financial
and Company
Liabilities and Equity

Actuarial Projected unit credit Projected unit credit

method is required if the method is required for
Valuation information that is needed calculating DB
Method to make such a calculation obligations.
is already available, or can This method sees each
be obtained without undue period of service as
cost or effort. giving rise to an
If not, an alternative method additional unit of benefit
is permitted in which future entitlement and
salary progression, future measures each unit
service, and possible separately to build up the
mortality during an final obligation.
employees period of
service are not considered.

and Company

Expected No distinction between Expected return on plan

expected and actual assets is based on
return on market expectations at
report on plan assets. All
plan assets changes in the fair value the beginning of the
period for returns over
of plan assets are the entire life of the
recorded in profit or related obligation. It
loss. reflects cahgnes in the
fair value of plan assets
as a result of actual
contributions and
benefits paid. The
difference between
actual and expected
returns on plan assets is
an actuarial gain or loss.
19
and Company

Deferred tax Valuation allowance is The concept of valuation

recognized so that the allowance is not
recognition applicable. Instead, a
net carrying amount of
and the deferred tax asset deferred tax asset is only
measurement recognized to the extent
equals the highest that it is probable that
amount that is more there will be sufficient
likely than not to be future taxable profit to
recovered. enable recovery of the
deferred tax asset. The
net carrying amount of
deferred tax asset is
likely the same, but full
IFRS does not require the
disclosure of a valuation
allowance.

and Company Agriculture
Recognition Measure biological Exemption from

and assets at FV less cost to measurement at FV is
sell where such FV is only allowed if the FV
measurement readily determinable cannot be measured
without undue cost or reliably.
effort.
Where FV is not used,
the entity may use cost
less any accumulated
depreciation and any
accumulated
impairment loss.
20
and Company Agriculture
Recognition The agricultural Exemption from

and produce harvested measurement at FV is
from biological assets is only allowed if the FV
measurement measured at fair value cannot be measured
less estimated cost to reliably.
sell at the point of
harvest.
Gains or losses on
initial recognition and
from change in FV are
recognized in profit or
loss.

and Company
End of presentation.
21

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Diaz Murillo Dalupan

Full IFRS vs. PFRS for

Diaz Murillo Dalupan

Diaz Murillo Dalupan

Measure- Usually historical Include historical

Diaz Murillo Dalupan

First time Presents its first Presents its first

Diaz Murillo Dalupan

Date of The beginning of The beginning of

Diaz Murillo Dalupan

Diaz Murillo Dalupan

Combined Allowed if the only Not allowed.

Borrowing All borrowing Borrowing costs

Actuarial Recognized in May be

Past Recognized in Recognized as an

Categories Basic and complex FVTPL

Examples of Basic: Cash, Trade Not applicable

Examples of COMPLEX: Not applicable

Initial Transaction price Fair Value plus

Subsequent Basic debt instruments Held for trading

Assets Impairment loss is the Impairment loss is

Inventory Borrowing cost is Borrowing costs

Investment Borrowing costs Borrowing cost

PPE initial Borrowing cost Borrowing costs

PPE Cost less Cost model or

PPE Cost of an item of Significant parts

PPE Review depreciation Review ,

Intangible All research and Research costs are

Intangible Cost model Cost model or

Intangible Considered to be Either FINITE or

Intangible Amortized on a Amortize those with

Intangible Not applicable. All Not amortized.

Impairment Assets (including The following are

Retirement Contribution payable If the contributions to

Diaz Murillo Dalupan

Defined Net total of: Net total of :

Liabilities and Equity

Actuarial Projected unit credit Projected unit credit

Diaz Murillo Dalupan Non-Financial

Liabilities and Equity

Expected No distinction between Expected return on plan

Liabilities and Equity

Deferred tax Valuation allowance is The concept of valuation

Diaz Murillo Dalupan

Recognition Measure biological Exemption from

Recognition The agricultural Exemption from

Diaz Murillo Dalupan

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