Chapter#1

INTRODUCTION
There has been serious effort from the last four decades to establish a single set of
international standards named IFRS and for that matter the role of the IASB and
International Accounting Standards could not be mitigated. As there is continuous rise
and fall in the capital market so as far as the access to financial information !hich could
reflect the economic position of the financial market !as a necessar" prere#uisite. As far
as the companies of the !hole !orld are concerned !e do see strict compliance in the
corporate sector in gi$ing respect and being consistent in their performance.
There has been enormous effort on the part of the !orld to tackle this issue and the scale
of the effort is e%traordinar" high !ith fe! complications to resol$e the issue. The
abundant use of these scale ha$e some serious negati$e repercussions and !hich resulted
into the amendments in the International Accounting Standards as !ell as in the Financial
Instruments Recognition and its measurement.
In this regard !e do see remarkable de$elopment in &urope and !e do see that in 'une
()))The &uropean Commission published the document *&+ Financial Reporting
Strateg", the -a" For!ard. and it !as desired that all the public listed companies
should prepare their consolidated accounts keeping in $ie! the standards set b" IAS b"
())/.As !e kno! that almost 0))) companies are registered and the" are emplo"ing
IFRS and the" are being assisted in this regard b" the consolidated financial statements.
Furthermore man" member states of the &uropean +nion are pri$ileged to use IFRS for
corporate income ta% statements. 1o! it is e%pected from most &uropean +nion
countries to make reports that fulfill the re#uirements of 2AA3 for the purpose of
ta%ation but it is not necessaril" compulsor" for it to be in compliance !ith the IFRS.
The success of &urope in implementing IFRS is no more hidden but presentl" !e do
see that concerted efforts are re#uired to merge +S !ith international accounting
standards. There are 11))) companies !hose securities are no! registered !ith the +S.
Similarl" there is securit" and e%change commission !hich has membership of 11)) non
+S companies. If !e look at the past histor" of it !e come to kno! that since ())/ non
+S companies ha$e been allo!ed to submit their financial statements to the +.S Securit"
&%change Commission keeping in $ie! the constraints set b" 2AA3 or IFRS. There has
been remarkable change in this regard as in 1o$ember ())4 the +.S S&C $oted to drop
the reconciliation re#uirement for financial statements for the present "ear. This has been
a $ital step in the long process as +.S 2AA3 and IFRS con$erge.
It is said b" Sir 5a$id T!eedie Chairman International Accounting Standards Board
that both standards can be merged till the "ear ()1(. Christopher Co% the Chairperson of
S&C said that *The SECs decision could put a shine on the image of the United States in
the global capital markets system, improve capital-raising opportunities for companies,
and provide better comparability of financial statements for investors.
A consideration change in accounting procedures and policies !as undertaken in Canada
!here Canadian Accounting Standards Board fa$or using IFRS instead of 2AA3 !hich
is +S based. All the companies and business organi6ations !here bound to adopt this
s"stem b" the end of "ear ()11. From the start of "ear ()11 all the public limited
companies need to prepare their interim and final statements in accordance !ith IFRSs. It
is !as allo!ed to pri$ate limited companies and non7profit making concerns that the"
ma" continue !ith the 2AA3 and are not bound to use IFRSs but the" are permitted to
do so. In the same !a" man" countries like Costa Rica 3eru Austrilia 8u!ait Armenia
and South Africa allo!ed the use of IFRS both for public and pri$ate limited companies.
9oreo$er the organi6ations that are operating internationall" and !orking !ith other
organi6ations are also suggested to use IFRS b" International :rgani6ation of Securities
Commissions to a$oid an" kind of differences and discrepancies. There ma" be a merger
of 2AA3 of 'apan and IFRS under the super$ision of IASB.
In order to deal !ith the #ueries and problems !ith reference to stakeholders accounting
professionals should design accounting s"stems of their organi6ations in !a" that it can
allo! changes that occur internationall". It depends on the compan" policies regarding
$ariance anal"sis; reconciliation of ma<or accounts and audit of accounts that ho! eas"
for it to adopt these ne! changes in the accounting standards and procedures.
&conomic gro!th and de$elopment of a countr" is also dependent on the gro!th and
de$elopment of cement industr". At the independence time 3akistan !as ha$ing four
cement plants to produce the cement and their ma%imum production capacit" !as )./
million tons. 2o$ernment initiated some steps to e%pand this sector in the period of 10/=
to 10== ho!e$er the resources !here not enough to meet the re#uirements of the
countr" and 2o$ernment continue to import in till 100/. >o!e$er in order to e%pand this
sector speedil" it !as pri$ati6ed in the "ear 100).
Back ground of IFRS
At first it !as International Accounting Standards Committee ?IASC@ !hich !as
established in the "ear 104A in +8 to regulate the accounting policies and standards;
ho!e$er in the "ear ())) International Accounting Standards Board ?IASB@ !as
established and started !orking <ointl" !ith the committee. >o!e$er in the "ear ())1
both the organi6ations !ere merged as IASB take charge of IASC. Till that time IASB is
a sole authorit" to design International Accounting Standards and International Financial
Reporting Standards and e$aluate implementations on these standards.
The members of this board belong from different parts of the !orld and it is so that the"
can describe the re#uirements of accounting standards in accordance !ith their areas and
business situations o$er there. 9oreo$er there are some other organi6ations also that
pro$ide assistance to IASB like International Financial Reporting Interpretations
Committee ?IFRIC@ !hich is responsible to o$ercome the issues in connection !ith
interpretations of accounting standards. International Financial Reporting Standards are
applicable uni$ersall" that safeguard the interest of all the stakeholders of an"
organi6ation.
The standards de$eloped b" the IASB follo! an e%act process !hich is consist of $arious
Stakeholders accountants users of financial statements and regulators. The process
ensures through public debate e%posure and the $ie!s of the $arious stakeholders are
according to the re#uirements mandated b" the IASB in the form of the final standards.
9an" countries follo! the ob<ecti$e of global *harmoni6ation..
The aim of the IASB is to issue principle based standards that can be applied across the
globe.
In the present age all such standards !hich are related to International Accounting
Standards ?IASs@ and International Financial Reporting Standards ?IFRSs@ !hich are
merel" released b" the IASB are becoming popular da" b" da". The main factor behind
all this success is the increase in the interest of general public regarding the in$estments
in capital market and the" re#uire securit" of their funds !hich depends on these
standards designed b" IASB. There are 1)0 countries across the globe !hich allo!s their
business sector to use the IFRSs as ma<or standards for the purpose of financial reporting.
Report of the Committee on IFRS Compliance
There !ill be no need to maintain t!o sets of financial statements after the migration
to!ards IFRS. 9oreo$er organi6ations !ill be able to reduce their accountanc" e%penses
and can easil" <oin an" of the capital market in the !orld. Furthermore as the IFRS is
become an internationall" acceptable accounting language so it !ill help in reducing the
financial conflicts !ith reference to capital in$estments.
There !ill not be an" need to accumulated in$estments b" e$aluating risks attached to
that in$estments in India as the countr" has adopted IFRS and lea$e using 2AA3 for the
preparation of financial statements. After allo!ing IFRS Indian organ6iations !ill no!
in a position to understand organi6ations that are !orking at the international le$els and
man" other foreign organi6ations !hich !ill effect positi$el" on their business acti$ities.
9oreo$er companies !ill be in a position to set their targets for ne%t "ears being an
international entit" and there !ill be greater chances of gro!th and de$elopment.
So b" adopting International Financial Reporting Standard companies all o$er the !orld
!ill be in a better position to understand the financial statements of each other and there
!ill be positi$e impacts on the in$estments and capital inflo!s in the countries that are
accepting IFRS as standard for accounting purpose. All this is bringing international
uniformit" in respect of accounting standards.
Purpose of the Stud
3urpose of this stud" is primaril" to consider !hether this issue meets the re#uired
criteria of IFRIC agenda. In ans!ering this #uestion the stud" also sho!s !hether the
IFRIC !ill be able to get consensus on the issue in a limited timeframe. To aid the
discussion the paper proposes !a"s through !hich the IFRIC define the scope of its
!ork in order to ma%imi6e the likelihood for getting consensus.
!eneral purpose
9erel" IFRSs are !orkable !ith business entities !ith reference to normal financial
reporting. All the stakeholders of an" organi6ation !hether these are internal like
emplo"ees directors o!ners or e%ternal like customers banks income ta% officials and
pressure groups !ant to see the general purpose financial statements for the interests the"
ha$e in the business of the compan". So in this research researcher !ill focus generall"
on all those standards !hich are helpful in this general purpose financial reporting.
IFRS is essential for listed companies for enhancing the performance of o$erall cement
sector this stud" pla"s an essential role.
Specific purpose
This stud" e%amines that selected cement industries are follo!ing the rules and
regulations made b" IASB or not.
Scope of the Stud
This research stud" !ill help Cement Industr" of 3akistan !ith reference to accounting
policies that these organi6ations ha$e alread" adopted and those la" do!n b" IFRS and
!ill highlight the benefits of using IFRS as a uniform procedure for accounting and
reporting. It !ill become a good addition in the literature of the studies connected !ith
the present issue. All the facts and figures !hich !ill be presented in the financial
statements of these companies under IFRSs !ill become reliable both nationall" and
internationall". 9oreo$er these financial statements !ill enable the users to understand
the true and fair financial positions of the companies.
"ustification
9" topic is logical because e$er" listed compan" follo!s the standards. The
financial statement of the compan" is based upon these standards. The in$estor of
the compan" check the position of the compan" annual financial reports of
compan" assets of the compan" compan" liabilities debtor or creditor of the
compan" and financial position of the compan" then in$est their capital in the
compan".
The stud" also checks that selected cement industries are follo!ing the rules and
regulations made b" IASB or not.
#ssumption
There are si%teen cement companies listed in stock e%change I ha$e selected ten listed
companies and I !ill stud" financial reports of three "ears of these companies in stock
e%change. &$er" ten listed companies follo! same standards for three "ears some
companies applies different standards but I skip these standard I onl" select those
standards that compan"Bs used on regular basis. Follo!ings are these standards,
IAS 1 3resentation of financial statements
IAS ( In$entories
IAS 4 Statement of cash flo!s
IAS 1( Income Ta%es
IAS 1= 3ropert" plant and e#uipment
IAS 1C Re$enue
IAS (1 The effects of changes foreign rates
IAS (D
Related part" disclosures
IAS AA &arning per sher
IAS A4
3ro$isions contingent liabilities and contingent
assets
IAS A= Impairments
IAS AC
Intangile assets
Chapter No$ %
Chapter # (
&iterature Re'ie(
The members of the IASB ?International Accounting Standards Boards@ belong from all
o$er the !orld as Trustee for the organi6ation !hich is independent in its operations
regarding setting benchmarks and standards in the field of accounting and finance. :ther
organi6ation that pla"s a supporting role in respect of techni#ues and long term planning
is Standards Ad$isor" Council !hich pla"s a role of e%ternal stakeholder.
There are some other organi6ations also that pro$ide assistance to IASB like International
Financial Reporting Interpretations Committee ?IFRIC@ !hich is responsible to o$ercome
the issues in connection !ith interpretations of accounting standards. International
Financial Reporting Standards are applicable uni$ersall" that safeguard the interest of all
the stakeholders of an" organi6ation.
All those standards !hich are de$ised b" IASB are based on certain accounting principles
including accounting concepts and con$entions. In the present age all such standards
!hich are related to International Accounting Standards ?IASs@ and International
Financial Reporting Standards ?IFRSs@ !hich are merel" released b" the IASB are
becoming popular da" b" da". The main factor behind all this success is the increase in
the interest of general public regarding the in$estments in capital market and the" re#uire
securit" of their funds !hich depends on these standards designed b" IASB. There are
1)0 countries across the globe !hich allo!s their business sector to use the IFRSs as
ma<or standards for the purpose of financial reporting.
5ue to rapid de$elopment in the informational technolog" more and more organi6ations
are encouraged to target ne! $enues in different parts of the !orld. >o!e$er this
globali6ation had increased the demand for capital in these organi6ations !hich !ant to
e%pand their business globall". 9oreo$er these organi6ations are facing another
challenge that is to fulfill the re#uirements of all the stock e%changes of the countr" in
!hich these are operating so for this purpose IFRs pla" a ke" role and ser$e like a
benchmark.
In 100( on 1o$. (A
rd
Fau<i Cement Compan" !as established b" Fau<i Foundation. In
the ne%t "ear on 9a" ((
nd
Compan" recei$ed its Certificate of commencement of
Business. The main ob<ecti$e behind the formation of compan" !as to get the production
of :rdinar" 3ortland Cement ?:3C@ and to sell it in the market. All the s"stems and
designs of the compan" !ere the result of the efforts of e%perts from inside the countr"
and there !ere some foreigners as !ell !ho assist the !hole process. Eater on
organi6ation made an agreement !ith 3ol"sius !hich !as a 2erman nati$e compan" that
helps in manufacturing and installing cement plant.
Another compan" that is engaged in the same business Attock Cement 3akistan
Eimited is a listed compan" at 8S& ?8arachi Stock &%change@. Cement !ith the
name Falcon is produced b" AC3E moreo$er organi6ation also manufactures
:rdianr" 3ortland Cement 3ortland Blast Furnace Slag Cement and Sulphate
Resistant Cements.
There are t!o Fones in !hich the cement companies of 3akistan are operating one
is in the South of 3akistan and other is in the 1orth. Balochistan and Tehsil >ub
are the areas in South Fone !here Attock is a part of this area and AC3E is
operating in that part of 3akistan. Compan" has a ma%imum capacit" to produce 1.4
million tons of cement and clinker. A group !ith the name of 3haraon 2roup that is
engaged in generation of po!er in 3akistan also has close association !ith the
AC3E.
1i shat 2r oup of compani es i s deal i ng di f f er ent ki nd of bus i nes s
act i $i t i es and one of t hes e busi ness act i $i t i es i s t he f or mat i on of 5. 2
8han Cement Compan" Ei mi t ed ? 528CC@ . 528CC can pr oduce / /))
t ons of cl i nker on dai l " basi s and can be consi der ed as a ma< or
suppl i er i n t hi s connect i on. The compan" i s pr oduci ng #ual i t "
pr oduct s !hi ch ar e f amous not onl " !i t h i n t he count r " but i t i s a
r eput ed br and i n t he i nt er nat i onal mar ket as !el l . 9or eo$er i t i s t he
cement manuf act ur i ng compan" t hat i s l i s t ed i n al l t he st ock
e%changes of 3aki s t an. I n 104C St at e Cement Cor por at i on 3aki st an
? SCC3@ st ar t ed i t s oper at i ons !hi ch !as l at er on t ur ned t o 528CC. I n
10C= compan" s t ar t ed i t s oper at i ons i n t he mont h of Apr i l !i t h a
pr oduct i on capaci t " of ())) t ons of cl i nker on dai l " bas i s . +B&
i ndus t r " ' apan !as t he suppl i er of al l t he machi ner i es and pl ans
oper at i onal i n compan".
In 100( !hen man" other 2o$ernment organi6ations !ere pri$ati6ed 528CC !as also
purchased on 1ishat 2roup of Compan". The ma<or focus on the ne! management of the
compan" !as to increase its production capacit" and ma%imum utili6ation of resource
merel" plans and machineries. Till the "ear 100A organi6ation production capacit" !as
increased b" A)) tons on dail" basis.
Before 10C1 there !as an association !ho created 9:1:3:EG in the cement
sector because of no close competitor in such industr". So to break that association and
to offer cement to the public Cherat Cement factor" !as founded. Cherat cement is not
onl" one of the best #ualities cements in 3akistan but in the entire region because of its
natural fa$or Hthe limestoneH !hich is one of the best #ualit" reser$e in the !orld. Cherat
Cement Compan" limited is one of the largest companies of 2hulam Faru#ue
group. It started its production on 1) 'anuar"10C/ after its inauguration b" the
go$ernor of 1-F3 Et. 2en. Fa6l7e7>a#. The plant !as built b" a French firm
named Creuot Eoire to enterprises abbre$iated as CE&. It !as the first cement
factor" in pr i $at e s ect or . 5ue t o i t s i mpor t ance t he go$er nment of
1-F3 bui l t r oad and po!er l i nes f or t he factor".
)ain su*+ect
There are considerable changes in the accounting procedures !hich appears after the
introduction of IFRSs ho!e$er there are still some fla!s in these standards as these
ha$e some problems !ith reference to socio7economic influence of IFRS :%ford
+ni$ersit" had conducted a research that is helpful in this connection. 3rof. 'a"pal 'ain
and 5r. Tomo Su6uki of :%ford +ni$ersit" had conducted this research regarding the
socio7economic aspects of IFRS under the title of *Socio7&conomic Impacts of IFRS on
-ider Stakeholders in India. and presented it to The Institute of Chartered Accountants
of India ?ICAI@. -ith reference to this stud" both the researchers adopt inter$ie!ing
techni#ue to collect data for their research and there !ere A41 participants and the main
ob<ect !as to e$aluate the influence of IFRS on different stakeholders in India.
Researchers tried their best to maintain the international standards to make their research
process transparent and unbiased. Findings of this research !ere that there is a need of
con$ergence in case of globali6ation and IFRS has negati$e impact on foreign
in$estments in the countr".
Chapter No$ ,
Chapter # A
Strateg
:ur stud" is based on secondar" data; content anal"sis is used as research tool. -e
collect data from these sources !hich are as follo!,
Internet
Books
9aga6ines
Articles
Research )ethodolog
There are si%teen cement companies listed in stock e%change. I ha$e selected ten listed
companies and !ill stud" financial reports of three "ears of these companies. &$er" ten
listed compan" follo! same standards for three "ears some companies are using
different standards but I ha$e skipped those standards. I onl" select those standards !hich
are used b" companies on regular basis. I ha$e selected these t!el$e IAS that companies
are used.
Common I#S disclosure chart
sr no 5isclosure
I#S
1. >ere there !ould be re$elation of $ital accounting practices !hich are conduci$e
for chalking out strateg" for making financial statements and !hich are helpful in
comprehending those financial statements also.
(. -hat so e$er entit" is in application it is essential for that entit" to emplo"
measurement basis !hich are mostl" emplo"ed !hile making financial
statements. -e ha$e to keep follo!ing things in consideration such as current
cost historical cost fair $alue as !ell as reco$erable amount as these are the
re#uirements for making financial statements. Similarl" !hen an entit" has its
<urisdiction o$er more than one measurement basis in the case of financial
statements it !ould be ad$isable for us to disclose their nature that either the" are
liabilities or assets o$er !hich !e need to appl" the measurement.
A. As far as taking decision in disclosing accounting polic" is concerned
management thinks that either the disclosure !ould be beneficial for them or not
and !ould it be beneficial to re$ie! its financial position and financial
performance. -hen !e disclose some of our accounting policies !e take the
alternati$e $ie! !orkable under IFRS. -hile appl"ing conser$atism con$ention it
is suggested to sho! some assets like in$estments and in$entories on either their
market $alue or cost $alue !hich e$er" is less ?see IAS D) !nvestment "roperty@.
Full disclosure con$ention also re#uire management to disclose all the methods
and accounting procedures !hich are compan" adopted !hile financial reporting.
For instance the grounds on !hich assets like plans machineries and e#uipments
is e$aluated need to be disclosed under IAS 1=.
D. Considering the nature of the business all the organi6ations need to disclose all
those factors !hich are e%pected to ha$e interest for their stakeholders. For
instance stakeholders like income ta% department ma" re#uire organi6ation to
disclose its policies and procedures that compan" adopted for the calculation of
income ta%.
/. -hether or not some accounting figures related to current accounting period or
pre$ious has an" significance organi6ation need to clearl" disclose its polic" and
all such facts. 9oreo$er there is a need to highlight those accounting policies
!hich are not used under the International Financial Report Standards but are in
accordance !ith IAS C.
=. There is a need to highlight procedures adopted for some calculations ?see
paragraph 1(/@ !hich are base of certain figures !hich are reflected in the
financial statements of the entit".
4. There are some e$aluations that are undertaken b" the management of an" entit"
!ith reference to the accounting policies and their application and can influence
the $alues presented in the financial statements of the entit".
C. There is a need of some different IFRSs in con<unction !ith paragraph 1(( for the
disclosure purpose. For instance IFRS 1( #isclosure of !nterests in $ther
Entities entit" to disclose the <udgments it has made in determining !hether it
controls another entit".
Follo(ings are the facts that an entit need to disclose in the notes to accounts
All the facts and figures and amounts in respect of announcement of di$idend !hich are
proposed to be distributed but not decided to be distributed should be mentioned in the
notes to the accounts.
There is a need to highlight that entit" belongs to !hich part of the !orld along !ith
comprehensi$e details that !hether entit" is a sole o!nership partnership or <oint stock
compan" or other. 9oreo$er there is a need to mention address of entit"Bs head offices
and other regional and sub7offices. Furthermore there is a need to highlight the kind of
business operations and acti$ities in !hich entit" is engaged.
Follo(ings are the facts that need to *e disclosed * the financial statements of an
organ-iation$
I#S %
a@ All the calculations and policies that are adopted for the e$aluation of stock
b@ The amount of total stock !ith its di$ision in accordance !ith the nature of
business that entit" is doing.
c@ It is need to be mentioned that !hether entit" sho!n its in$entories on cost
$alues or market $alues in accordance !ith the conser$atism con$ention;
d@ The $alue of stock the benefit of !hich is utili6ed during the accounting
period and need to be considered as re$enue e%penditure.
e@ An" !ritten do!n amount !ith reference to the facts described in paragraph
AD;
f@ According to the same paragraph AD there can be some ad<ustments in the
$alue of stock !ith reference to the amount that has been !ritten do!n
pre$iousl";
g@ The situation in !hich such re$erse entries !ere passed in respect of !ritten
do!n amount from the in$entories;
h@ The $alue of stock that has been pledged as a securit".
I#S .
Organi-ation need to disclose all the facts related to cash amounts and its
e/ui'alents like *ank *alance and other a*solute li/uid assets
The $alue of loans that are being applied but not "et a$ailed but can
be utili6e for the future acti$ities of the entit" moreo$er there is a
need to identif" an" restrictions in this connection;
IdeletedJ
The total $alue of cash flo!s that sho!s increment in operational
abilit" !ith distinction from the cash flo!s that are needed for the
smooth flo! of operating acti$ities; and
A report sho!ing flo! of cash !ith respect to operational financial
and in$estment acti$ities of the concern under separate heads ?see
IFRS C perating Segments@.
There is a need to highlight the difference bet!een cash flo!s that
organi6ation is using for the increments in operational abilities and
those !hich it is using in respect of maintenance of these operational
abilities as the users of accounting information !ould like to check
the compan"Bs policies in this connection and their application.
0#S 0%
There is a need to sho( calculations of ta1 e1penses 2re'enue3 (ith clear difference4
Follo!ings are the ma<or ta% e%pense ?re$enue@ components,
a@ Ta% e%pense ?re$enue@ of the present accounting period
b@ -hether there is a need ad<ust present ta% figure !ith reference to an"
ta% paid in ad$ance or still pa"able b" the concern;
c@ The ad<ustments in connection of ta% e%penses ?re$enues@ that has been
deferred;
d@ The change in the $alue of ta% e%penses ?re$enues@ that arise due to
changes in the rate of ta%ation;
e@ The difference bet!een an" $alues of ta% that cause benefit and that arise
due to an" kind of loss in respect of ta% ta% paid in ad$ance or an" kind
of difference that is for the time being and relate to pre$ious periods;
f@ In the light of paragraph /= an" amount of deferred ta% that re#uire
ad<ustments in respect of pre$iousl" !ritten do!n amounts or an" kind of
re$ersals; and
g@ The $alue of ta% e%penses ?re$enues@ !hich are related to the changes in
the accounting practices and mistakes and cause an" increase or decrease
in the figure of profit.
I#S 5
As all these could not ha$e retrospecti$e accounting.
Followings are some items that require separate disclusure:
the aggregate current and deferred ta% relating to items that are
charged or credited directl" to e#uit" ?see paragraph =(A@; ae@ the
amount of income ta% relating to each component of other
comprehensi$e income ?see paragraph =( and IAS 1 ?as re$ised in
())4@@;
[deleted];
5escribe the link bet!een profit or loss stated b" the entit" and ta%
e%pense ?re$enue@ in this connection being e$aluated,
I#S 06
#ll the properties (hich are under o(nership of the entit like plant7
machiner and e/uipment need to *e disclosed$
a. The basis of e$alulations in respect of gross amount that is carried
far!ord;
b. 9ethod of depreciation that has been charged;
c. &%pected life of asset for !hich it !ill remain useable for the business and
rate of depreciation that !ill be charged;
d. the gross carr"ing amount and the accumulated depreciation ?aggregated
!ith accumulated impairment losses@ at the beginning and end of the
period; and
e. a reconciliation of the carr"ing amount at the beginning and end of the
period sho!ing,
i. addition
ii. to meet the re#uirements of IFRS / there is need to highlight separatel" all
those assets !hich are to be sold or disposed off;
iii. assets that are being ac#uired due to merger or combination of business;
i$. an" kind of changes in the $alue of these assets that are caused b"
re$aluation in accordance !ith paragraphs A1 A0 and D) and an" kind of
re$ersing entries and ad<ustments !ith reference to IAS A=;
$. +nder IAS A= all those losses !hich are impaired !ith reference to an"
kind of profit or loss;
$i. impairment losses re$ersed in profit or loss in accordance !ith IAS A=;
$ii. depreciation;
I#S 05
Follo(ings are some additional facts that entit re/uire to disclose$
!hat are the policies of concern !ith to recogni6e an" amount as
re$enue and the methods !hich could re$eal that a transaction is
complete or not;
all the classification of re$enues that business is earning from
different sources like;
b" selling goods;
pro$iding ser$ices;
recei$ing interest;
5i$idends recei$ed;
Ro"alties recei$ed; and
The $alue of income that is generated from the e%change of goods
and ser$ices along !ith the classification.
I#S %0
In paragraphs 8, and 8898. references to :functional currenc; appl7
in the case of a group7 to the functional currenc of the parent4
An entit" shall disclose,
a@ the amount of e%change differences recogni6ed in profit or loss e%cept for those
arising on financial instruments measured at fair $alue through profit or loss in
accordance !ith IFRS 0; and
b@ 1et e%change differences recogni6ed in other comprehensi$e income and
accumulated in a separate component of e#uit" and a reconciliation of the
amount of such e%change differences at the beginning and end of the period.
-hen the presentation currenc" is different from the functional currenc" that fact
shall be stated together !ith disclosure of the functional currenc" and the reason for
using a different presentation currenc".
-hen there is a change in the functional currenc" of either the reporting entit" or a
significant foreign operation that fact and the reason for the change in functional
currenc" shall be disclosed.
-hen an entit" presents its financial statements in a currenc" that is different from
its functional currenc" it shall describe the financial statements as compl"ing !ith IFRSs
onl" if the" compl" !ith all the re#uirements of IFRSs including the translation method
set out in paragraphs A0 and D(.
-hen an entit" displa"s its financial statements or other financial information in
currenc" that is different from either its functional currenc" or its presentation
currenc" and the re#uirements of paragraph // are not met it shall,
disclose the currenc" in !hich the supplementar" information is
displa"ed;
5isclose the entit"Bs functional currenc" and the method of
translation used to determine the supplementar" information.
I#S %<
Relationships *et(een parents and su*sidiaries4
Regardless of !hether there ha$e been transactions bet!een a parent and a subsidiar" an
entit" must disclose the name of its parent and if different the ultimate controlling part".
If neither the entit"Ks parent nor the ultimate controlling part" produces financial
statements a$ailable for public use the name of the ne%t most senior parent that does so
must also be disclosed. IIAS (D.1=J
)anagement compensation4
5isclose ke" management personnel compensation in total and for each of the follo!ing
categories, IIAS (D.14J
short7term emplo"ee benefits
post7emplo"ment benefits
other long7term benefits
termination benefits
share7based pa"ment benefits
8e" management personnel are those persons ha$ing authorit" and responsibilit" for
planning directing and controlling the acti$ities of the entit" directl" or indirectl"
including an" directors ?!hether e%ecuti$e or other!ise@ of the entit". IIAS (D.0J
Related part transactions4
If there ha$e been transactions bet!een related parties disclose the nature of the related
part" relationship as !ell as information about the transactions and outstanding balances
necessar" for an understanding of the potential effect of the relationship on the financial
statements. These disclosure !ould be made separatel" for each categor" of related
parties and !ould include, IIAS (D.1C710J
the amount of the transactions
the amount of outstanding balances including terms and conditions and
guarantees
pro$isions for doubtful debts related to the amount of outstanding balances
e%pense recognised during the period in respect of bad or doubtful debts due from
related parties
=1amples of the kinds of transactions that are disclosed if the are (ith a related
part
purchases or sales of goods
purchases or sales of propert" and other assets
rendering or recei$ing of ser$ices
leases
transfers of research and de$elopment
transfers under license agreements
transfers under finance arrangements ?including loans and e#uit" contributions in
cash or in kind@
pro$ision of guarantees or collateral
commitments to do something if a particular e$ent occurs or does not occur in the
future including e%ecutor" contracts ?recogni6ed and unrecogni6ed@
settlement of liabilities on behalf of the entit" or b" the entit" on behalf of another
part"
A statement that related part" transactions !ere made on terms e#ui$alent to those that
pre$ail in armKs length transactions should be made onl" if such terms can be
substantiated. IIAS (D.(1
IAS 33
If &3S is presented the follo!ing disclosures are re#uired, IIAS AA.4)J
the amounts used as the numerators in calculating basic and diluted &3S and a
reconciliation of those amounts to profit or loss attributable to the parent entit" for
the period
the !eighted a$erage number of ordinar" shares used as the denominator in
calculating basic and diluted &3S and a reconciliation of these denominators to
each other
A description of those ordinar" share transactions or potential ordinar" share transactions
that occur after the balance sheet date and that !ould ha$e changed significantl" the
number of ordinar" shares or potential ordinar" shares
Chapter No: 4
Chapter # 4
Data analsis
I selected ten listed cement industries in the stock e%change and also stud" financial
reports of last three "ears. I ha$e selected t!el$e standards !hich are used b" companies
on regular basis for three "ears and compare these standards to check the compliance of
standards through follo!ing chart;
C!A"# $F C%&%N# IND'S#I%S
Sr no #ttock Cherat De(an D4! kh F#U"I &uck )aple
leaf
&afarge Danot pioneer
IAS 1 Ges Ges Ges Ges Ges Ges Ges Ges Ges Ges
IAS ( Ges Ges Ges Ges Ges Ges Ges Ges Ges Ges
IAS 4 Ges Ges Ges Ges Ges Ges Ges Ges Ges Ges
IAS
1(
Ges Ges Ges Ges Ges Ges Ges Ges Ges Ges
IAS
1=
Ges Ges Ges Ges Ges Ges Ges Ges Ges Ges
IAS
1C
Ges Ges Ges Ges Ges Ges Ges Ges Ges Ges
IAS
(1
Ges Ges Ges Ges Ges Ges Ges Ges Ges Ges
IAS
(D
Ges Ges Ges Ges "es "es "es "es "es Ges
IAS
AA
Ges Ges "es "es "es "es "es "es "es 1o
IAS
A=
1o 1o 1o 1o 1o 1o 1o 1o 1o 1o
IAS
A4
Ges Ges Ges Ges Ges Ges Ges Ges Ges Ges
IAS
AC
1o Ges 1: 1: 1: Ges Ges Ges 1o Ges
Interpretation
I anal"sis data of different cement industries in 3akistan. The" are using different
standards. I calculate the percentage of standards of ten different cement industries that
ha$e compliance on standards.
Attoct cement industr" CA.AAL
Cherat cement industr" CA.AAL
5e!an cement induste" CA.AAL
5.2 8han cement industr" CA.AAL
Fuli cement industr" CA.AAL
Eouck cement industr" 01.==L
9aple leafe cement induste" 01.==L
Eafarge cement industr" 01==L
5anot cement industr" CA.AAL
3ianeer cement industr" CA.AAL
Chapter No$ 8
Chapter > 8
Findings
1. Attoct cement industr" CA.AAL
(. Cherat cement industr" CA.AAL
A. 5e!an cement induste" CA.AAL
D. 5.2 8han cement industr" CA.AAL
/. Fuli cement industr" CA.AAL
=. Eouck cement industr" 01.==L
4. 9aple leafe cement induste" 01.==L
C. Eafarge cement industr" 01==L
0. 5anot cement industr" CA.AAL
1). 3ianeer cement industr" CA.AAL
According to abo$e data I selected 1) cement industries of stock e%change and also
stud" their annual reports of at least last three "ears. I ha$e studied each and e$er"thing
of these companies also stud" assets liabilities debtors creditors of the compan" and
check the companies financial statements in order to get an idea that companies are
follo!ing standards or not that are made b" IASB. I ha$e anal"6ed through chart that
most of the companies are follo!ing CA.AAL and some are follo!ing 01.==L of
standards.
References
5r Tomo Su6uki 3rof 'a"pal 'ain of Said Business School +ni$ersit" of :%ford
Fair Malue Accounting Su6uki7'ain Report
http,NN!!!.paksearch.comNAnnualNAnnual)1N3CE.htm
http,NN!!!.fccl.com.pkNmainNinde%7(.html
http,NN!!!.brecorder.comNbrief7recordingsN),N1(1()D(, attock
---. IAS3E+S.com
!!!.scribd.comN...NFinancial7Anal"sis7of7 D! 7?han 7Cement 7Factor"
!!!.scribd.comNdocNA(A=(D1/N Cherat 7Cement 7Compan"
%anaging the Transition to !nternational &inancial 'eporting Standards "age ()
!!!.ssrn.com
Act ?())A@ Act on Accounting. *dkon c. +,-.)//, Sb., o licetnictvi
?Trade Einks translation@.
Ale%ander 5. ?100A@ A &uropean true and fair $ie!O European
0ccounting 'evie1, (?1@ pp. /07C).
Ale%ander 5. ?100=@ Truer and fairer, unin$ited comments on
in$ited comments European 0ccounting 'evie1, /?A@ pp. DCA7
D0A.
Ale%ander 5. ?1000@ A benchmark for the ade#uac" of
published financial statements.
0ccounting and 2usiness 'esearch, (0?A@ pp. (A07(/A.
Ale%ander 5. and Archer S. ?()))@ :n the Km"thK of Anglo7Sa%on financial
accounting
!nternational 3ournal of 0ccounting, A/?D@ pp. /A07//4.