IFRS for Small and Medium Entities (SMEs): The Complete Manual of Comparison with 'full IFRS'

The introduction of IFRS in more than 120 countries around the world brought a great challenge for accountants, internal and external auditors, tax authorities and users of financial statements of listed entities, financial institutions and insurance companies in the world. The challenge is to precisely understand the key differences in accounting treatment of the various elements of financial statements compared with the local accounting standards , exemptions and accounting policy choices that entities that adopt IFRS can enjoy. Additionally, IFRS brought a lot of prospective financial information, financial risk disclosures and other significant elements that were not considered in accounting practices prior to their adoption. IFRS certainly brought more transparency about these important elements of risk. Consequently, all accounting professionals who are directly involved in the analysis of balance sheets of companies adopting IFRS should be updated and prove that they have knowledge about the basic elements of these standards. The large number of professionals, academics, accountants and financial analysts indicates that professionals must keep up with this new market trend and evolution of IFRS. Updated with the new IFRS developments and includes measurement and disclosure requirements for all IFRS preparers and First-Time Adopters (FTAs) of IFRS. After several years of discussion, the IASB has completed its project in 2009 called "IFRS for Small and Medium Enterprises - SMEs." This comprehensive guide published by Watson provides excellent guidance and clarity for practical applications and understanding of IFRS. This book offers practical application to complex concepts in and IFRS in a variety of situations that may arise in practice. As a result, it simplifies the application of IFRS standards and interpretations specific to real-world situations. Effective and objective comparison between IFRS for SMEs and Full IFRS; - Work as reference for the segment of technical books on IFRS; - Lots of exercises and case studies to illustrate the differences and important elements; - It covers virtually all IFRS standards in a logical order; - Guide includes answers to the exercises; - The book can be used as reference material in an objective and practical way with easy index by theme; - Includes comments for relevant complexities in the adoption of the IFRS for SMEs; and includes other critical elements.

Table of Contents:
1 Introduction 31 2 About the conceptual framework of IFRS 33 2.1 Introduction 33 2.2 Guide for this chapter 33 2.3 The General Purpose of A Financial Statement Prepared in Accordance with Accounting Standards 34 2.4 The Objectives of Accounting Standards 34 2.5 IFRS and Regulatory or National Accounting Standards 34 2.6 Creating IFRS (International Financial Reporting Standards) 35 2.6.1 The International Accounting Standards Committee Foundation (IASCF) 35 2.6.2 The IASCF Trustees 35 2.6.3 The process for developing new standards 35 2.6.4 Preface to International Financial Reporting Standards 36 2.7 What is Financial Reporting? 37 2.7.1 Definition 37 2.7.2 Financial statements 37 2.8 The concepts of the framework 39 2.9 The need of useful information 40 2.9.1 Making economic decisions 40 2.10 The general responsibility of management 42 2.11 Financial position, performance and changes in financial position 42 2.12 The assumptions used in the preparation of the financial statements 44 2.13 Qualitative characteristics of financial statements 44 2.13.1 Understandability 45 2.13.2 Relevance 45 2.13.3 Reliability 45 2.13.4 Comparability 46 2.14 Elements of financial statements 46 2.14.1 Recognition of elements in financial statements 48 2.14.2 Measurement in financial statements 49 2.15 IFRS for SMEs - Summary of significant differences compared to Full IFRS 49 2.16 Exercises 50 3 IAS 1 - Presentation of Financial Statements 53 3.1 Introduction 53 3.2 Guide for this chapter 53 3.3 Scope and definitions 53 3.4 Preparing a complete set of financial statements 56 3.4.1 The statement of financial position 56 3.4.2 The statement of comprehensive income 58 3.4.3 The statement of changes in equity 60 3.4.4 The statement of cash flows 61 3.4.5 Notes 61 3.5 Fair presentation and compliance with IFRS 62 3.5.1 The principles of offsetting 63 3.5.2 The going concern principle 63 3.5.3 Accrual basis of accounting 64 3.5.4 The financial statements have to be consistent 64 3.5.5 Materiality and aggregation 64 3.5.6 Including comparative information 65 3.6 IFRS for SMEs - Summary of significant differences compared to Full IFRS 65 3.7 Exercises 66 4 IAS 7 - Statement of Cash Flows 69 4.1 Introduction 69 4.2 Guide for this chapter 70 4.3 Scope and definitions 70 4.3.1 Scope 70 4.3.2 The definition of cash and cash equivalents? 71 4.3.3 The sections of the Statement of cash flows 71 4.4 Operating Activities 72 4.4.1 The direct method 72 4.4.2 Indirect method 72 4.5 Investing Activities 73 4.6 Financing Activities 73 4.7 Other points of attention 74 4.7.1 Translation of foreign currency cash flows 74 4.7.2 Presentation of non-cash transactions 74 4.7.3 Additional disclosures 74 4.8 IFRS for SMEs - Summary of significant differences compared to Full IFRS 75 4.9 Exercises 75 5 IAS 8 - Accounting policies, changes in accounting estimates and errors 78 5.1 Introduction 78 5.2 Guide for this chapter 78 5.3 Objectives, Scope and Definitions of IAS 8 78 5.4 Accounting Policies 80 5.4.1 Selection and application of accounting policies 80 5.4.2 Consistency of accounting policies 81 5.4.3 Changes in accounting policies 82 5.4.4 Retrospective application 83 5.4.5 Limitations on retrospective application 83 5.5 Changes in Accounting Estimates 84 5.6 Prior Period Errors 85 5.7 IFRS for SMEs - Summary of significant differences compared to Full IFRS 86 5.8 Exercises 87 6 IAS 18 - Revenue 89 6.1 Introduction 89 6.2 Guide for this chapter 89 6.3 Objectives, Scope and Definitions of IAS 18 89 6.4 Revenue measurement 92 6.5 Minimum criteria for revenue recognition for the sale of goods 93 6.6 Minimum criteria for revenue recognition for the rendering of services 94 6.7 Recognition of interest, dividends and royalties 95 6.8 Minimum disclosure requirements 95 6.9 Examples 96 6.10 IFRS for SMEs - Summary of significant differences compared to Full IFRS 98 6.11 Exercises 98 7 IAS 12 - Income taxes 101 7.1 Introduction 101 7.2 Guide for this chapter 101 7.3 Objectives, Scope and Definitions of IAS 12 102 7.4 Measurement of current tax 104 7.4.1 Presentation of taxes in the income statement 104 7.5 Deferred Tax 105 7.6 Measurement and recognition of deferred taxes 106 7.6.1 Book value and definition of tax base 107 7.6.2 Temporary difference 107 7.6.3 Calculating deferred taxes 108 7.6.4 Deferred taxes and Revaluations 108 7.6.5 The expected way of recovery of an asset 109 7.6.6 Annual review 110 7.6.7 Discounting is not permitted 110 7.6.8 Investments and temporary differences 110 7.7 How to account for change in tax Status 111 7.8 Minimum disclosure requirements 111 7.8.1 Principles of offsetting 113 7.9 IFRS for SMEs - Summary of significant differences compared to Full IFRS 114 7.10 Exercises 114 8 IAS 37 - Provisions, contingent liabilities and contingent assets 117 8.1 Introduction 117 8.2 Guide for this chapter 117 8.3 Objectives, Scope and Definitions of IAS 37 117 8.4 Recognition principles 121 8.4.1 Accounting treatment for future operating losses 122 8.4.2 Accounting treatment for onerous contracts 122 8.4.3 Restructuring programmes 123 8.5 Contingent liabilities and contingent assets 123 8.6 Measurement 124 8.6.1 Best estimate 124 8.6.2 Present value 125 8.6.3 Other measurement points 125 8.7.1 Reimbursements 126 8.7.2 Decommissioning, restoration and environmental funds 126 8.8 Minimum disclosure requirements 127 8.9 IFRS for SMEs - Summary of significant differences compared to Full IFRS 128 8.10 Exercises 129 9 IAS 2 - Inventories 131 9.1 Introduction 131 9.2 Guide for this chapter 132 9.3 Objectives, Scope and Definitions of IAS 2 132 9.4 Measurement of inventories 134 9.4.1 Cost of inventories 135 9.4.2 Cost formulae 136 9.4.3 Net realisable value (NRV) 137 9.5 Disclosure 137 9.6 IFRS for SMEs - Summary of significant differences compared to Full IFRS 138 9.7 IFRS for SMEs - Summary of significant differences compared to Full IFRS 139 10 IAS 16 - Property, plant and equipment 142 10.1 Introduction 142 10.2 Guide for this chapter 143 10.3 Objectives, Scope and Definitions of IAS 16 144 10.3.1 Initial recognition and elements of cost 146 10.3.2 Self-constructed assets 147 10.3.3 Ceasing recognition of costs 147 10.4 Measurement of Cost 148 10.4.1 Subsequent expenditure 148 10.5 Measurement after Initial Recognition 149 10.6 Cost Model and Depreciation 149 10.7 Revaluation Model 151 10.7.1 Upward valuations 152 10.7.2 Downward valuations 152 10.7.3 Depreciation and revalued assets 153 10.8 Impairment of PPE 154 10.9 Derecognition of an Item of PPE 154 10.10 Disclosure Requirements 155 10.11 IFRS for SMEs - Summary of significant differences compared to Full IFRS 156 10.12 Exercises 157 11 IAS 17 - Leases 159 11.1 Introduction 159 11.2 Guide for this chapter 161 11.3 Objectives, Scope and Definitions of IAS 17 162 11.4 The principle of substance over form of the Framework 166 11.5 The difference between finance and operating Leases 167 11.5.1 Analysis of risks and rewards 167 11.5.2 Factors which could indicate the existence of a finance lease 168 11.6 Accounting for Lessees 169 11.6.1 Initial considerations 169 11.7 Finance lease recognition 171 11.7.1 Initial recognition 171 11.7.2 Depreciation 171 11.7.3 Methods of allocating finance charges 172 11.7.4 Actuarial method 172 11.7.5 Sum of digits method 172 11.7.6 Disclosures for finance leases 172 11.8 Accounting for operating leases 173 11.8.1 Lease incentives 174 11.8..2 Disclosures for operating leases 174 11.9 Accounting for lessors 175 11.9.1 Finance leases 175 11.9.2 Disclosure by a lessor for finance leases 176 11.10 Operating leases 177 11.10.1 Disclosure by a lessor for operating leases 177 11.10.2 Lease incentives 178 11.11 Sale and Leaseback 178 11.12 IFRS for SMEs - Summary of significant differences compared to Full IFRS 179 11.13 Exercises 180 12 IAS 20 Government grants 182 12.1 Introduction 182 12. 2 Guide for this chapter 182 12.3 Objectives, Scope and Definitions of IAS 20 182 12.4 Recognition and Measurement 184 12.4.1 Non-monetary government grants 185 12.5 Government Grants Related to Assets and Income-Presentation 186 12.5.1 Grants related to assets 186 12.5.2 Grants related to income 186 12.6 Government Grants - Other Issues 186 12.6.1 Repayment of government grants 186 12.6.2 No specific relation to operating activities 187 12.6.3 Proposed revision of standard 187 12.7 Disclosure 187 12.8 IFRS for SMEs - Summary of significant differences compared to Full IFRS 188 12.9 Exercises 188 13 IAS 23 - Borrowing costs 191 13.1 Introduction 191 13.2 Guide for this chapter 191 13.3 Objectives, Scope and Definitions of IAS 23 191 13.4 Capitalisation of borrowing costs 193 13.4.1 Which costs should be capitalised? 193 13.4.2 When should capitalisation of borrowing costs commence? 194 13.4.3 Suspension of capitalisation 195 13.4.4 Ceasing capitalisation 195 13.5 Disclosure 196 13.6 IFRS for SMEs - Summary of significant differences compared to Full IFRS 196 13.7 Exercises 196 14 IAS 36 Impairment 199 14.1 Introduction 199 14.2 Guide for this chapter 199 14.3 Objectives, Scope and Definitions of IAS 36 199 14.4 The Impairment Process 203 14.4.1 Stage 1 - Indicators of impairment 204 14.4.2 Stage 2 - Measuring recoverable amount 204 14.4.3 Stage 3 - Recognising an impairment loss 206 14.5 Reversing an Impairment Loss 207 14.6 Disclosure 208 14.7 IFRS for SMEs - Summary of significant differences compared to Full IFRS 209 14.8 Exercises 210 15 IAS 38 - Intangible assets 212 15.1 Introduction 212 15.2 Guide for this chapter 212 15.3 Objectives, Scope and Definitions of IAS 38 213 15.4 The Definition of Intangible Assets 217 15.4.1 Identifiability 217 15.4.2 Control 218 15.5 Initial Recognition and Measurement 218 15.5.1 Separately acquired intangible assets 219 15.5.2 Exchanges of assets 220 15.5.3 Intangible assets acquired as part of a business combination 220 15.6 Internally Generated Intangible Assets 221 15.6.1 The research phase 221 15.6.2 The development phase 222 15.6.3 The cost of internally generated intangible assets 223 15.6.4 Web site development costs 223 15.6.5 Emission rights 224 15.7 Measurement After Initial Recognition 224 15.8 Disposals of Intangible Assets 226 15.9 Disclosure 226 15.10 IFRS for SMEs - Summary of significant differences compared to Full IFRS 228 15.11 Exercises 229 16. IFRS 5 - Non-current Assets held for sale and discontinued operations 231 16.1 Introduction 231 16.2 Guide for this chapter 231 16. 3 Objectives, Scope and Definitions of IFRS 5 232 16.4 Non-current Assets Held for Sale 234 16.4.1 Changes of plan 235 16.5 Presentation and Disclosure 236 16.6 IFRS for SMEs - Summary of significant differences compared to Full IFRS 237 16.7 Exercises 237 17. Financial instruments - IAS 32 , IAS 39 and IFRS 7 240 17.1 Introduction 240 17.2 Guide for this chapter 240 17.3 The definition of a financial instrument 240 17.4 Objectives and Scope of IAS 32 242 17.5 Debt or equity classification 242 17.5.1 Settlement options 243 17.5.2 Compound financial instruments 244 17.6 Treasury Shares 245 17.7 Interest, Dividends, Losses and Gains 245 17.8 Offsetting 246 17.9 Objectives and Scope of IAS 39 246 17.10 Recognition and Measurement of Financial Instruments 247 17.11 Financial assets 248 17.11.1 Financial asset/liability at fair value through profit or loss 248 17.11.2 Held-to-maturity investments 249 17.11.3 Loans and receivables 251 17.11.4 Available-for-sale financial assets 251 17.11.5 Summary of treatment of financial assets 252 17.12 Financial liabilities 255 17.13 Determining fair value 255 17.14 IFRIC 2 Members' shares in co-operative entities and similar instruments 256 17.15 Reclassifications 256 17.16 Derecognition 258 17.16.1 Financial assets 258 17.16.2 Derecognition in its entirety 259 17.16.3 Continuing involvement after a transfer 260 17.16.4 Financial liabilities 260 17.17 Hedging Transactions 261 17.17.1 Qualifying for hedge accounting 262 17.17.2 Hedge accounting 262 17.18 Embedded Derivatives 264 17.19 Disclosure 265 17.19.1 Objectives and Scope of IFRS 7 265 17.19.2 Statement of financial position 266 17.19.3 Derecognition 267 17.19.4 Collateral 268 17.19.5 Reclassification 268 17.19.6 Defaults and breaches 268 17.19.7 Allowance account for credit losses 268 17.19.8 Multiple embedded derivatives 268 17.19.8 Statement of comprehensive income 269 17.20 Other disclosures 269 17.20.1 Fair value 270 17.20.2 Nature and extent of risks 271 17.21 IFRS for SMEs - Summary of significant differences compared to Full IFRS 272 17.22 Exercises 275 18 IAS 21 - The effects of change in foreign exchange rates 278 18.1 Introduction 278 18.2 Guide for this chapter 279 18.3 Objectives, Scope and Definitions of IAS 21 279 18.4 Key Issues 281 18.4.1 The functional currency 281 18.4.2 The presentation currency 282 18.4.3 Monetary and non-monetary items 282 18.4.4 Summary of the approach of IAS 21 283 18.5 Transactions in the Functional Currency 283 18.5.1 Initial recognition 283 18.5.2 Reporting at the ends of subsequent reporting periods 283 18.5.3 Recognition of exchange differences 284 18.5.4 Net investment in a foreign operation 285 18.5.5 Change in functional currency 286 18.6 Translation into presentation currency 286 18.6.1 Procedures for translation into presentation currency 286 18.6.2 Hyperinflationary economies 287 18.6.3 Translation of a foreign operation 288 18.6.4 Disposal of a foreign operation 289 18.7 Disclosure 289 18.8 Introduction of the Euro 290 18.9 IFRS for SMEs - Summary of significant differences compared to Full IFRS 290 18.10 Exercises 291 19 IAS 19 - Employee benefits 293 19.1 Introduction 293 19.2 Guide for this chapter 294 19.3 Objectives, Scope and Definitions of IAS 19 294 19.4 Short-term Employee Benefits 299 19. 4.1 All short-term benefits 299 19.4.2 Short-term compensated absences 300 19.4.3 Profit-sharing and bonus plans 301 19.5 Post-Employment Benefits - Introduction 301 19.6 Defined Contribution Plans 302 19.6.1 Recognition and measurement 302 19.6.2 Disclosure 302 19.7 Defined Benefit Plans 302 19.7.1 Plan assets - funded plans 304 19.7.2 Defined benefit obligations 305 19.8 Actuarial assumptions 305 19.8.1 The discount rate 306 19.8.2 Movements during the period 306 19.8.3 Variations in actuarial assumptions 308 19.9 Sundry considerations 310 19.9.1 Past service costs 310 19.9.2 Curtailments and settlements 311 19.9.3 Minimum funding requirements and the limit on a defined benefit asset 312 19.10 Disclosure and presentation of defined benefit plans 313 19.11 Sundry Matters Involving Long-term Employment Benefits 314 19.11.1 Multi-employer plans 314 19.11.2 State plans 315 19.12 Other Long-term Employee Benefits 315 19.13 Termination Benefits 315 19.14 IFRS for SMEs - Summary of significant differences compared to Full IFRS 316 19.15 Exercises 317 20 IFRS 2 - Share-based Payments 320 20.1 Objectives 320 20.2 Recognition and measurement 321 20.2.1 Equity-settled share-based payment transactions 321 20.2.2 Cash-settled share-based payment transactions 322 20.2.3 Share-based payment transactions - cash-settled or equity-settled 322 20.2.4 Fair value measurement 322 20.2.5 Special purpose entities 323 20.2.6 Group and treasury share transactions 323 20.3 Disclosure requirements 324 20.4 IFRS for SMEs - Summary of significant differences compared to Full IFRS 325 20.5 Exercises 325 21 IFRS 8 - Operating Segments 328 21.1 Introduction 328 21.2 Guide for this chapter 329 21.3 Objectives, Scope and Definitions of IFRS 8 329 21.4 IFRS 8 - Reporting segments 330 21.4.1 Identifying segments 330 21.4.2 Reportable segments 330 21.4.3 What has to be reported? 332 21.4.4 Additional disclosures 333 21.5 IFRS for SMEs - Summary of significant differences compared to Full IFRS 334 21.6 Exercises 334 22 IAS 33 - Earnings per share 337 22.1 Introduction 337 22.2 Guide for this chapter 337 22.3 Objectives, Scope and Definitions of IAS 33 338 22.4 Basic Earnings Per Share 338 22.4.1 Calculating earnings 339 22.4.2 Calculating the weighted average number of ordinary shares 339 22.5 Diluted Earnings Per Share 341 2.5.1 Calculation of earnings 341 22.5.2 Calculation of the weighted average number of shares 341 22.6 Presentation and Disclosure 342 22.7 IFRS for SMEs - Summary of significant differences compared to Full IFRS 343 22.8 Exercises 344 23 IAS 10 - Events after the reporting period 346 23.1 Introduction 346 23.2 Guide for this chapter 346 23.3 Objectives, Scope and Definitions of IAS 10 347 23.4 Adjusting Events 348 23.5 Non-adjusting Events 349 23.6 Dividends 350 23.7 Going Concern 350 23.8 Additional Disclosure Requirements 350 23.9 IFRS for SMEs - Summary of significant differences compared to Full IFRS 351 23.10 Exercises 351 24 IAS 24 - Related party disclosures 354 24.1 Introduction 354 24.2 Guide for this chapter 355 24.3 Objectives, Scope and Definition of IAS 24 355 24.3.1 Objectives 355 24.3.2 Scope 356 24.3.3 Related parties 356 24.4 Substance over Form 357 24.5 Related Party Transactions 358 24.6 Disclosures 358 24.7 IFRS for SMEs - Summary of significant differences compared to Full IFRS 360 24.8 Exercises 360 25 IAS 11- Constructions contracts 363 25.1 Introduction 363 25.2 Guide for this chapter 363 25.3 Objectives, Scope and Definitions of IAS 11 364 25.4 Contract revenue and contract costs 366 25.4.1 Contract revenue 366 25.4.2 Contract costs 366 25.5 Recognition of contract revenue and costs 367 25.5.1 Stage of completion 367 25.5.2 Reliable measurement 368 25.6 Disclosure 368 25.7 IFRS for SMEs - Summary of significant differences compared to Full IFRS 369 25.8 Exercises 369 26 IAS 40 - Investment property 372 26.1 Introduction 372 26.2 Guide for this chapter 372 26.3 Objectives, Scope and Definitions of IAS 40 373 26.3.1 Nature of investment properties 373 26.3.2 Scope 374 26.4 Recognition and Measurement 374 26.4.1 Initial recognition 374 26.4.2 Measurement after recognition 375 26.4.3 The fair value model 375 26.5 Transfers Following a Change in Usage 376 26.6 Disposal of investment properties 377 26.7 Disclosure 378 26.7.1 Applicable to both the fair value model and the cost model 378 26.7.2 The fair value model 379 26.7.3 The cost model 379 26.8 IFRS for SMEs - Summary of significant differences compared to Full IFRS 380 26.9 Exercises 380 27 IAS 41 - Agriculture 383 27.1 Introduction 383 27.2 Guide for this chapter 383 27.3 Objectives, Scope and Definitions of IAS 41 383 27.4 Recognition and Measurement 384 27.5 Gains and losses 386 27.6 Government Grants 386 27.7 Disclosure 387 27.8 IFRS for SMEs - Summary of significant differences compared to Full IFRS 389 27.9 Exercises 389 28 IFRS 4 - Insurance contracts 391 28.1 Introduction 391 28.2 Guide for this chapter 391 28.3 Objectives, Scope and Definitions of IFRS 4 391 28.3.1 What is an insurance contract? 393 28.4 Recognition and measurement 394 28.5 Changing Accounting Policies 396 28.6 Disclosures 397 28.7 IFRS for SMEs - Summary of significant differences compared to Full IFRS 397 28.8 Exercises 398 29 IFRS 6 - Exploration for and evaluation of mineral resources 400 29.1 Introduction 400 29.2 Guide for this chapter 400 29.3 Objectives, Scope and Definitions of IFRS 6 401 29.4 Recognition and Measurement 401 29.5 Impairment 403 29.6 Disclosure 405 29.7 IFRS for SMEs - Summary of significant differences compared to Full IFRS 406 29.8 Exercises 406 30 IFRS 3 - Business combinations 409 30.1 Introduction 409 30.2 Guide for this chapter 409 30.3 Objectives, Scope and Definitions of IFRS 3 409 30.3.1 Identifying a business combination 411 30.3.2 Acquisition method of accounting 412 30.4 Identifying the Acquirer 412 30.5 Determining the Acquisition Date 413 30.6 Consideration Transferred in a Business Combination 414 30.6.1 General principle 414 30.6.2 Specific issues 414 30.6.3 A business combination achieved in stages 415 30.6.4 Subsequent accounting for contingent consideration 415 30.7 Recognition and Measurement of the Identifiable Net Assets Acquired 416 30.7.1 Introduction 416 30.7.2 Classifying and measuring the identifiable net assets acquired 417 30.7.3 Initial recognition and subsequent adjustments 419 30.7.4 Subsequent measurement 420 30.8 Goodwill and Gains on Bargain Purchases 420 30.8.1 Recognition and measurement of goodwill 421 30.8.2 Gain on bargain purchase 421 30.8.3 Adjustments to provisional values 422 30.9 Disclosures 422 30.10 IFRS for SMEs - Summary of significant differences compared to Full IFRS 424 30.11 Exercises 426 31 IAS 28 - Investments in Associates 428 31.1 Introduction 428 31.2 Guide for this chapter 428 31.3 Objectives, Scope and Definitions of IAS 28 429 31.4 Equity method of accounting 430 31.4.1 Procedures to be used 431 31.4.2 Impairment losses 433 31.5 Separate Financial Statements 433 31.6 Disclosures 433 31.7 IFRS for SMEs - Summary of significant differences compared to Full IFRS 434 31.8 Exercises 435 32 IAS 31 - Interest in joint ventures 437 32.1 Introduction 437 32.2 Guide for this chapter 437 32.3 Objectives, Scope and Definitions of IAS 31 438 32.4 The Three Forms of Joint Venture 439 32.4.1 Jointly controlled operations 439 32.4.2 Jointly controlled assets 440 32.4.3 Jointly controlled entities 440 32.4.4 Proportionate consolidation 441 32.4.5 Equity method 442 32.5 Other points in IAS 31 443 32.5.1 Investor's separate financial statements 443 32.5.2 Transactions between a venturer and a joint venture 443 32.5.3 Operators of joint ventures 443 32.5.4 Investors of a joint venture 444 32.5.5 Non-monetary Contributions by Venturers 444 32.6 Disclosures 445 32.7 IFRS for SMEs - Summary of significant differences compared to Full IFRS 445 32.8 Exercises 446 33 IAS 27 - Consolidated and separate financial statements 448 33.1 Introduction 448 33.2 Guide for this chapter 448 33.3 Objectives, Scope and Definitions of IAS 27 448 33.4 Consolidated Financial Statements 450 33.4.1 Presentation 450 33.4.2 Scope of consolidated financial statements 450 33.4.3 Special purpose entities 451 33.5 Consolidation procedures 452 33. 5.1 Basic approach 452 33.5.2 Adjustments 453 33.5.3 Other requirements - Reporting dates and consistent accounting policies 454 33.5.4 Other requirements - Ceasing to be a subsidiary 455 33.6 Investor's Separate Financial Statements 456 33.7 Disclosures 456 33.8 IFRS for SMEs - Summary of significant differences compared to Full IFRS 457 33.9 Exercises 458 34 IAS 34 - Interim financial reports 461 34.1 Introduction 461 34.2 Guide for this chapter 461 34.3 Objectives, Scope and Definitions of IAS 34 462 34.4 Contents and Form 462 34. 4.1 Contents 462 34.4.2 Form 463 34.4.3 Selected explanatory notes 464 34.5 Reporting Periods 466 34.6 Recognition and Measurement 467 34.6.1 Impairment in the interim period 468 34.7 Use of Estimates 469 34.8 IFRS for SMEs - Summary of significant differences compared to Full IFRS 470 34.9 Exercises 470 35 IAS 26 - Accounting and reporting by retirement benefit plans 472 35.1 Introduction 472 35.2 Guide for this chapter 472 35.3 Objectives, Scope and Definitions of IAS 26 473 35.3.1 Key concepts 474 35.4 Defined contribution plans 475 35.5 Defined benefit plans 476 35.6 All retirement plans 477 35. 6.1 Valuation of assets 477 35.6.2 Disclosure 477 35.7 IFRS for SMEs - Summary of significant differences compared to Full IFRS 478 36 IAS 29 - Financial reporting in hyperinflationary Economies 480 36.1 Introduction 480 36.2 Guide for this chapter 480 37.3 Objectives, Scope and Definitions of IAS 29 481 37.4 The restatement of financial statements 482 37.4.1 Introduction 482 37.4.2 Restatement of historical cost financial statements 482 36.4.3 Restatement of current cost financial statements 484 36.4.4 Statement of cash flows 484 36.5 Economies ceasing to be hyperinflationary 485 36.6 IFRS for SMEs - Summary of significant differences compared to Full IFRS 486 36.7 Exercises 486 37 IFRS 1 - First-time adoption of IFRS 488 37.1 Introduction 488 37.2 Guide for this chapter 488 37.3 Objectives, Scope and Definitions of IFRS 1 489 37.4 Recognition and Measurement 489 37.4.1 Reporting requirements in the year of adoption 489 37.4.2 Exemptions 491 37.4.3 Estimates 493 37.5 Presentation and disclosure 493 37.5.1 Comparative information 493 37.5.2 Explanation of transition 494 37.6 IFRS for SMEs - Summary of significant differences compared to Full IFRS 495 37.7 Exercises 495 38 Answers for exercises 497