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IFRS Update of Interpretations & Standards.

Here’s the article which helps you know the IFRS update of Interpretations and Standards.

International Financial Reporting Standards (IFRS) are growing pretty fast. In this article, we are going to give you the International Accounting Standards Board updates.

New Amendment in the instruments standards:

IFRS 9 allows the companies to apply old standard hedge accounting requirements (IAS 39). Many pre-papers elected this choice among financial institutions. That’s why the amendments apply to both IFRS 9 and IAS 39.

The amendments arose from the interest rate benchmarks. The board of financial stability also encouraged the replacement of current benchmarks with local jurisdictions like IBOR with risk-free rates. Maybe some of the hedge accounting requirements affected by the uncertainties from the reform impact on the future cash flows and the timing. The amendments’ objective is to give temporary exceptions from applying hedge accounting in the period of arising reform. Once the uncertainty is resolved, the exceptions will come to an end.

And then the next.

New Standard for Primary Financial Statements:

General “Disclosure and Presentation” is the primary step of the “Good communication in the project of Financial Reporting”. The proposals are very innovative and have a significant effect on the companies’ practices like performance measures.

The distinction between joint ventures and integral & non-integral associates:

The joint ventures and integral associates do not generate a return individually and are independent of the company’s other assets. The activities are related to the central business activity of the groups. The financial statements of the groups’ impact on both joint ventures and non-integral associates of profit or loss. It also impacts the comprehensive income and financial position of the cash flow.

New Subtotals in the profit or loss statements:

The new standard is always needed for any company to classify the expenses and income into four categories, such as investing, operating, joint ventures, and financing. All the subtotals should be present in these categories.

New requirements in information disaggregation in a better way:

Companies classifying the functions in the P & L needs to be disclosed in a note for the analysis of operating expenses. In the “P & L” category, the unusual expenses and income presented in the “usual” items would be disclosed in a single note. The unusual costs and income are limited to the predicted value. The company doesn’t expect annual reporting periods.

Fewer Options in Cash flow statements:

IAS 7 allows the companies in choosing the paid or received, interest and dividends, are classified. The proposal behind the amendments is to represent both the dividend paid and interests as the cash flows in the investing. The board also proposes in operating the profit as the critical point in the indirect method of cash flows.

More Regulation for the measures in Management Performance:

Most of the companies communicate the measures in Management performance but rarely provide reconciliation with the figures of IFRS. The purpose of the board is to include financial statement measures through a note. The mandatory disclosures include reconciliation between the subtotals of each measure.

These are the IFRS updates.

Conclusion:

The above article gives you the IFRS Update of standards and interpretations. Hope this is useful for you. Still, you have any queries feel free to comment in the below section. Happy Learning!

Simandhar Education:

Simandhar is the official partner of Becker and AICPA – Largest Training provider for US CPA, US CMA , IFRS and EA courses in India with offices in Bangalore, Hyderabad, Delhi, Ahmedabad, Gurgaon, Kerala, Cochin (Kochi), Trivandrum, Kottayam, Kozhikode, Malappuram, Chennai, and Mumbai.

Learn how to use IFRS, from First basics to advanced techniques, with online video tutorials taught by industry Experts. Simandhar Education is best leading IFRS Online Training in Mumbai. Contact us@ 919390785925.

Simandhar Education is tied up with BDO for IFRS live Online Training in India.

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Differences between GAAP and IFRS?

If you are looking for the differences between GAAP and IFRS, you are in the right place.

Nevertheless, let’s move into the topic.

It is essential to know precisely the GAAP and IFRS before going to their differences.

What is GAAP (Generally Accepted Accounting Principles)?

GAAP refers to a common set of standards, procedures and accounting principles which are issued by FASB (Financial Accounting Standards Board). In the US, every public company should follow the rules of GAAP to compile their financial statements. GAAP is a combination of recording information and authoritative standards. These principles improve the consistency, clarity, comparability of the financial information.

GAAP was contrasted with pro forma accounting and helped in governing the accounting rules.

What is IFRS (International Financial Reporting Standards)?

IFRS is a set of standard rules for financial statements so that they can be transparent, consistent, and comparable around the world. IFRS was issued by the IASB (International Accounting Standards Board). IFRS helps the companies in maintaining the reports and transactions with financial impact. The main aim of IFRS is to create a common accounting language to make consistent financial statements.

Here are the differences which you are waiting for.

Differences between GAAP and IFRS:

GAAP is a rule-based system, whereas IFRS is a principles-based system.

The guidelines of IFRS provide less overall detail when compared to GAAP.

The theoretical principles and framework of GAAP leave less interpretation than IFRS accounting.

The intuitive principles of IFRS sound more logical than GAAP.

GAAP allows the rule Last-In-First-Out (LIFO), whereas IFRS banned it.

Both GAAP and IFRS use the First-In-First-Out (FIFO) method.

IFRS permits inventory reversals, whereas GAAP doesn’t.

GAAP rules are used to compile the financial statements and IFRS state the transaction types reported in financial statements.

Still not satisfied?

Okay then look into more.

GAAP vs IFRS:

Generally Accepted Accounting Principles (GAAP)

International Financial Reporting Standards (IFRS)

GAAP is only used in the United States.

IFRS is used in more than 110 countries which includes South American and Asian countries.

It tends to be rule-based. The companies which use GAAP have industry-based guidelines to follow.

It is principles-based. It is used to interpret and judge the financial situation.

Allows both FIFO and LIFO methods.

Allows only FIFO but not LIFO methods.

Earlier write-downs are prohibited.

Allows write-down to be reversed earlier.

GAAP prohibited the revaluation.

IFRS allows revaluation (inventories, intangible assets, property and investments).

Takes a more conservative approach in the reversals of impairment losses.

Takes a less conservative approach in the reversals of impairment losses.

Costs are expensed as incurred with internal software exceptions.

IFRS has no specific guidance for software.

Requires long-lived assets like furniture, buildings and equipment.

Initially, IFRS requires the assets, but later it is reevaluated according to the market value.

GAAP has no separate category in investment.

It has a distinct category of investment.

GAAP has no exceptions in low-value assets.

IFRS allows leases by excluding low-value assets.

Hope you gained the information that you are looking for.

Conclusion:

The above article shows the key differences between IFRS and GAAP. Apart from the differences, there are some similarities in them, such as Auditing standards, revenue from contracts with clients, and so on. GAAP and IFRS play a vital role in the financial growth of the company. Hope you are satisfied with this IFRS vs GAAP article. Happy Learning!

Simandhar Education:

Simandhar is the official partner of Becker and AICPA - Largest Training provider for US CPA, US CMA , IFRS and EA courses in India with offices in Bangalore, Hyderabad, Delhi, Ahmedabad, Gurgaon, Kerala, Cochin (Kochi), Trivandrum, Kottayam, Kozhikode, Malappuram, Chennai, and Mumbai.

Learn how to use IFRS, from First basics to advanced techniques, with online video tutorials taught by industry Experts. Simandhar Education is best leading IFRS Online Training in Hyderabad. Contact us@ 919390785925.

Simandhar Education is tied up with BDO for IFRS live Online Training in India.

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What does it mean IFRS 16? How to get a grip with it?

From 16th January 2020, any company with leased assets portfolio are working through IFRS 16 leases. You are probably wondering what does it mean IFRS 16?

International Financial Reporting Standards 16 (IFRS 16) is the first overhaul of lease accounting and affects most of the companies' reports involving a lease. It creates a substantial impact on financial statements and high-level equipment leases.

Want to know more about IFRS 16?

It was promulgated by IASB (International Accounting Standards Board) and was issued in January 2019. IAS 17 was the earlier leasing standard before IFRS 16.

The new IFRS 16 standard provides needed transparency on liabilities and leases assets on the companies.

You may probably ask "How to get a grip with IFRS 16?"

Here's the solution.

How to get a grip with IFRS16?

If you want to get a grip with IFRS 16, the first step is to make sure all the data has been correctly classified from all the leases (here, no grandfathering is allowed). Also, make sure all the supporting evidence must be filed and collated for the smooth audit process.

Now, you have to assess the new standard impact, and it should have on your accounts. This is the right time to interact with your stakeholders on the balance sheet, your profits, and KPIs.

Don't underestimate the additional time in collecting extensive disclosures and necessary information. The FRC expects the companies in the expansion of the new standard in annual accounts and reports.

If you understand the consequences of IFRS 16, then it is an opportunity to reflect on the financing strategy of the company for capital expenditure.

You have to update your audit plan for the new IFRS 16 standard to make audits easily. If you are an auditor, you have to approach audit testing, risk assessments, and documentation into account. You have to be more explicit in need for more staff and resources.

But wait. There’s even more about IFRS 16.

More Information on IFRS 16:

How does the lessee accounting model work in a nutshell?

IFRS 16 has introduced liabilities and single lessee accounting model raising from significant lease arrangements. Also, it introduces a "right to use" model to recognize the asset reflecting and lease liability reflecting to make the lease payments. Both the liability and asset will be accepted at the commencement of the lease.

How does the asset and liability model work for lessees?

Initially, the lease liability was calculated at the present lease payments and was discounted at lesser charges. The "right to use" asset value was calculated as:

Before the commencement date, the lease payments.

The initial measurement of the lease liability.

The incarnation of direct cost.

Estimating cost dismantling.

Has the "Lease" definition changed?

Yes, According to IFRS 16, lease conveys right to control the identified asset. An entity must be assessed for the lease throughout the period.

Has anything changed for lessors?

IFRS 16 is carrying the requirements of lesser accounting of IAS 17. That's why the lessor divided into its leases as the finance and operating leases. But, these two are different from one other.

Are there any changes in disclosure requirements for lessees?

There are significant changes occurred in financial performance, financial position, and cash flows.

How the IFRS 16 impacts financial statements of Lesse?

The vital effect of IFRS 16 is to increase the lease liabilities and lease assets which are recognized on balance sheets. Also, it leads to some significant changes in some financial metrics like debt covenants and gearing covenants. It also impacts on the profit & loss reports. The lease accounting doesn't change in excluding tax implications, because the economics doesn't change much. Under IAS 17, many entities are associated with cash outflows, which means the IFRS 16 results in a reduction of cash outflows.

How does IFRS 16 apply retrospectively?

IFRS 16 applies retrospectively to all the leases such as time-consuming and challenging leases. That's why IFRS 16 allows an entity to "grandfather" for its previous assessments. It doesn't mean to stay on the off-balance sheet.

For the lessees, are there any transition reliefs?

Lessees have two kinds of approaches: one is a modified retrospective approach, and the other is a full retrospective application approach. If the modified approach came to existence, then the lessee doesn't restate the comparative amount. That's why the cumulative effect applies to the equity at the initial application date, which is referred to as the annual reporting period.

Will FRS 102 become the updated version of IFRS 16?

In the process of harmonizing FRS with IFRS, the FRS will not incorporate the IFRS principles into FRS 102 at this point of time. There is a need for more analysis and evidence-gathering for the FRS 102 to update.

How does ICAEW help the companies to make the transition to IFRS 16?

The faculty of financial reporting produce the resources through the changes to the members. IFRS 16 fact sheet provides practical tips. Additional guidance will be provided at icaew.com to review further information.

And it doesn't stop here. If you want to learn more about IFRS 16, then start your IFRS certification training from Simandhar.

Let's move into IFRS course details:

About IFRS Online Training:

If you are looking for the best IFRS Training in Hyderabad, you are in the right place. Simandhar Education is here to help you. IFRS certification is becoming a benchmark in the accounting world.

Becker Professional Education is well-known for its world-class teaching. Simandhar is an authorized training partner to Becker.

And the best part?

We provide live IFRS Online Training along with the IFRS course materials and video lectures. 24/7 support from the trainer throughout the training period. Also, provide offline apart from the Becker product in Hyderabad, Bangalore, Delhi, Gurgaon, Chennai, Ahmedabad, Mumbai, and so on.

We have a good reputation from the students who took IFRS coaching from Simandhar earlier. After completion of IFRS training in Simandhar, one can easily place in the leading MNC companies with an excellent package.

You're probably wondering.

Simandhar with Becker training ensures quality education for the students in cracking the IFRS exam.

About Simandhar Education:

Simandhar is the official partner of Becker and AICPA - Largest Training provider for US CPA Online Training, US CMA, EA and IFRS Online Training in Hyderabad, Bangalore, Delhi, Ahmedabad, Gurgaon, Kerala, Cochin (Kochi), Trivandrum, Kottayam, Kozhikode, Malappuram, Chennai, and Mumbai. Contact us@ 919390785925.

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International Financial Reporting Standards (IFRS)

IFRS is short for International Financial Reporting Standards. IFRS is the universal bookkeeping structure inside which to appropriately arrange and report money related data. It is gotten from the declarations of the London-based International Accounting Standards Board (IASB). It is right now the necessary bookkeeping system in excess of 120 nations. IFRS expects organizations to report their money related outcomes and monetary position utilizing similar standards; this implies, notwithstanding any deceitful control, there is extensive consistency in the budgetary announcing of all organizations utilizing IFRS, which makes it simpler to investigate their money related outcomes.

IFRS is utilized basically by organizations revealing their money related outcomes anyplace on the planet aside from the United States. Sound accounting guidelines, or GAAP, is the bookkeeping system utilized in the United States. GAAP is substantially more principles based than IFRS. IFRS concentrates more on general standards than GAAP, which makes the IFRS group of work a lot littler, cleaner, and clearer than GAAP.

The objective of IFRS is to give a worldwide structure to how open organizations plan and unveil their budget summaries. IFRS gives general direction to the arrangement of fiscal summaries, instead of setting rules for industry-explicit detailing.

Having a universal standard is particularly significant for enormous organizations that have backups in various nations. Embracing a solitary arrangement of overall guidelines will streamline bookkeeping techniques by permitting an organization to utilize one detailing language all through. A solitary standard will likewise furnish financial specialists and inspectors with a firm perspective on funds.

As of now, more than 100 nations allow or require IFRS for open organizations, with more nations expected to change to IFRS by 2015. Defenders of IFRS as a global standard keep up that the expense of executing IFRS could be counterbalanced by the potential for consistence to improve FICO scores.

IFRS is once in a while mistaken for IAS (International Accounting Standards), which are more seasoned models that IFRS has supplanted.

IFRS covers an expansive exhibit of subjects, including:

Presentation of financial statements

Revenue recognition

Employee benefits

Borrowing costs

Income taxes

Investment in associates

Inventories

Fixed assets

Intangible assets

Leases

Retirement benefit plans

Business combinations

Foreign exchange rates

Operating segments

Subsequent events

Industry-specific accounting, such as mineral resources and agriculture

There are a few working gatherings that are continuously lessening the contrasts between the GAAP and IFRS bookkeeping systems, so in the end there ought to be minor contrasts in the revealed aftereffects of a business in the event that it switches between the two structures. There is an expressed aim to inevitably consolidate GAAP into IFRS, yet this has not yet happened.

There will be a diminished expense for organizations once the two bookkeeping systems are all the more firmly adjusted, since they won't need to pay to have their fiscal reports repeated to show results under the other structure in situations where they have to report their outcomes in areas where the other structure is required.

Simandhar Education:

Simandhar is the official partner of Becker and AICPA - Largest Training provider for US CPA, US CMA , IFRS and EA courses in India with offices in Bangalore, Hyderabad, Delhi, Ahmedabad, Gurgaon, Kerala, Cochin (Kochi), Trivandrum, Kottayam, Kozhikode, Malappuram, Chennai, and Mumbai.

Learn how to use IFRS, from First basics to advanced techniques, with online video tutorials taught by industry Experts. Simandhar Education is best leading IFRS Online Training. Contact us@ 919390785925.

Simandhar Education is tied up with BDO for IFRS live Online Training in India.