Professional Documents
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ON
NEED AND OBJECTIVE OF ACCOUNTING STANDARDS AN IFRS.
To develop a single set of high quality, understandable, enforceable and globally accepted International Financial Reporting Standards (IFRSs) through its standard-setting body, the International Accounting Standards Board (IASB); To promote the use and rigorous application of those standards; To take account of the financial reporting needs of emerging economies and small and medium-sized entities (SMEs); and To promote and facilitate adoption of IFRSs, being the standards and interpretations issued by the IASB, through the convergence of national accounting standards and IFRSs.
The governance and oversight of the activities undertaken by the IFRS Foundation and its standard-setting body rests with its Trustees, who are also responsible for safeguarding the independence of the IASB and ensuring the financing of the organization. The Trustees are publicly accountable to a Monitoring Board of public authorities.
There are numerous numbers of accounting standards which lies in International Accounting Standards such as:
N Title Originally issued Effective Fully withdrawn Superseded by
Disclosure of Accounting Policies (1975) IAS 1 Presentation of Financial Statements (1997) Valuation and Presentation of Inventories in the Context of the Historical Cost System (1975) Inventories (1993) IAS 3 IAS 4 IAS 5 IAS 6 Consolidated Financial Statements Depreciation Accounting Information to Be Disclosed in Financial Statements 1976 1976 1976 January 1, 1977 January 1, 1977 January 1, 1977 January 1, 1978 January 1, 1990 July 1, 1999 July 1, 1998 IAS 27 and IAS 28 IAS 36 IAS 1 1975 January 1, 1975
IAS 2
1975
January 1, 1976
Accounting Responses to Changing Prices 1977 Statement of Changes in Financial Position (1977)
IAS 7
Cash Flow Statements (1992) Statement of Cash Flows (2007) Unusual and Prior Period Items and Changes in Accounting Policies (1978) Net Profit or Loss for the Period,
1977
January 1, 1979
IAS 8
Fundamental Errors and Changes in Accounting Policies (1993) Accounting Policies, Changes in Accounting Estimates and Errors (2003)
1978
January 1, 1979
IAS 9
January 1,
July 1, 1999
IAS 38
N Activities
Title
Originally issued
Effective 1980
Fully withdrawn
Superseded by
Contingencies and Events Occurring After the Balance Sheet Date (1978) IAS 10 Events After the Balance Sheet Date (1999) Events after the Reporting Period (2007) Accounting for Construction Contracts (1979) Construction Contracts (1993) Accounting for Taxes on Income (1979) IAS 12 Income Taxes (1996) 1979 1978 January 1, 1980
IAS 11
1979
January 1, 1980
January 1, 1981 January 1, 1981 January 1, 1983 January 1, 1983 January 1, 1983 July 1, 1998 IAS 1
IAS 13
Presentation of Current Assets and Current 1979 Liabilities Reporting Financial Information by Segment (1981) Segment reporting (1997)
IAS 14
1981
IAS 15
Information Reflecting the Effects of Changing Prices Accounting for Property, Plant and Equipment (1982) Property, Plant and Equipment (1993) Accounting for Leases (1982)
1981
IAS 16
1982
IAS 17
1982
IAS 18
Revenue (1993) Accounting for Retirement Benefits in Financial Statements of Employers (1983)
1982
IAS 19
1983
January 1, 1985
IAS 20 IAS 21
Accounting for Government Grants and Disclosure of Government Assistance Accounting for the Effects of Changes in Foreign Exchange Rates (1983)
1983 1983
Title
Originally issued
Effective
Fully withdrawn
Superseded by
The Effects of Changes in Foreign Exchange Rates (1993) Accounting for Business Combinations (1983) Business Combinations (1993) Capitalisation of Borrowing Costs (1984) IAS 23 Borrowing Costs (1993) Related Party Disclosures Accounting for Investments Accounting and Reporting by Retirement Benefit Plans Consolidated Financial Statements and Accounting for Investments in Subsidiaries (1989) IAS 27 Consolidated and Separate Financial Statements (2003) Separate Financial Statements (2011) Accounting for Investments in Associates (1989) IAS 28 Investments in Associates (2003) Investments in Associates and Joint Ventures (2011) IAS 29 IAS 30 Financial Reporting in Hyperinflationary Economies Disclosures in the Financial Statements of Banks and Similar Financial Institutions Financial Reporting of Interests in Joint Ventures (1990) Interests in Joint Ventures (2003) Financial Instruments: Disclosure and Presentation (1995) Financial Instruments: Presentation (2005) 1989 1990 January 1, 1990 January 1, 1991 January 1, 1992 January 1, 2007 IFRS 7 1989 January 1, 1990 1989 January 1, 1990 1984
IAS 22
1983
January 1, 1985
April 1, 2004
IFRS 3
January 1, 1986 January 1, 1986 January 1, 1987 January 1, 1988 January 1, 2001 IAS 39 and IAS 40
IAS 31
1990
January 1, 2013
IAS 32
1995
January 1, 1996
Title
Originally issued 1997 1998 1998 1998 1998 1998 1998 2000 2000 2003 2004 2004 2004 2004 2004 2005 2006 2009 2011 2011 2011 2011
Effective January 1, 1999 January 1, 1999 July 1, 1999 July 1, 1999 July 1, 1999 July 1, 1999 January 1, 2001 January 1, 2001 January 1, 2003 January 1, 2004 January 1, 2005 April 1, 2004 January 1, 2005 January 1, 2005 January 1, 2006 January 1, 2007 January 1, 2009 January 1, 2015 January 1, 2013 January 1, 2013 January 1, 2013 January 1, 2013
Fully withdrawn
Superseded by
IAS 33 IAS 34 IAS 35 IAS 36 IAS 37 IAS 38 IAS 39 IAS 40 IAS 41 IFRS 1 IFRS 2 IFRS 3 IFRS 4 IFRS 5 IFRS 6 IFRS 7 IFRS 8 IFRS 9 IFRS 10 IFRS 11 IFRS 12 IFRS 13
Earnings per Share Interim Financial Reporting Discontinuing Operations Impairment of Assets Provisions, Contingent Liabilities and Contingent Assets Intangible Assets Financial Instruments: Recognition and Measurement Investment Property Agriculture First-time Adoption of International Financial Reporting Standards Share-based Payment Business Combinations Insurance Contracts Non-current Assets Held for Sale and Discontinued Operations Exploration for and Evaluation of Mineral Resources Financial Instruments: Disclosures Operating Segments Financial Instruments Consolidated Financial Statements Joint Arrangements Disclosure of Interests in Other Entities Fair Value Measurement
Depreciation Accounting
1. This Standard deals with depreciation accounting and applies to all depreciable assets, except the following items to which special considerations apply: (i) Forests, plantations and similar regenerative natural resources; (ii) Wasting assets including expenditure on the exploration for and extraction of minerals, oils, natural gas and similar non-regenerative resources; (iii) Expenditure on research and development; (iv) Goodwill and other intangible assets; (v) Live stock. This standard also does not apply to land unless it has a limited useful life for the enterprise. 2. Different accounting policies for depreciation are adopted by different enterprises. Disclosure of accounting policies for depreciation followed by an enterprise is necessary to appreciate the view presented in the financial statements of the enterprise.
What is Depreciation?
Depreciation is a measure of the wearing out, consumption or other loss of value of a depreciable asset arising from use, efflux ion of time or obsolescence through technology and market changes. Depreciation is allocated so as to charge a fair proportion of the depreciable amount in each accounting period during the expected useful life of the asset. Depreciation includes amortization of assets whose useful life is predetermined. Types of depreciation calculation methods: Straight line method Written down value method Straight line method: Straight-line depreciation is the simplest and most often used method. In this method, the company estimates the salvage value(scrap value) of the asset at the end of the period during which it will be used to generate revenues (useful life). (The salvage value is an estimate of the value of the asset at the time it will be sold or disposed of; it may be zero or even negative. Salvage value is also known as scrap value or residual value.) The company will then charge the same amount to depreciation each year over that period, until the value shown for the asset has reduced from the original cost to the salvage value.
Written down value method: Suppose a business has an asset with $1,000 original cost, $100 salvage value, and 5 years of useful life. First, the straight-line depreciation rate would be 1/5, i.e. 20% per year. Under the double-declining-balance method, double that rate, i.e. 40% depreciation rate would be used.
A vehicle that depreciates over 5 years is purchased at a cost of 17,000, and will have a salvage value of 2000. Then this vehicle will depreciate at 3,000 per year, i.e. (17-2)/5 = 3. This table illustrates the straight-line method of depreciation. Book value at the beginning of the first year of depreciation is the original cost of the asset. At any time book value equals original cost minus accumulated depreciation. We have calculated the book value with the formula given below, Book value = original cost accumulated depreciation Then, Book value at the end of year becomes book value at the beginning of next year. The asset is depreciated until the book value equals scrap value.