ICAB AL Corporate Reporting cheat sheet

IFRS Conceptual Framework: an asset is a present economic resource controlled by the entity as a result of past events; a liability is a present obligation to transfer an economic resource; recognition requires relevance and faithful representation.

IAS 1 requires a complete set of financial statements: statement of financial position, statement of profit or loss and OCI, statement of changes in equity, statement of cash flows, and notes, with comparative information for the prior period.

IAS 1 structure: current/non-current split unless a liquidity presentation is more relevant; an item is current if realised or settled within 12 months, held for trading, or cash without restriction.

IAS 8 hierarchy: apply IFRSs dealing with the transaction, then the Conceptual Framework, then the most recent pronouncements of other standard setters and accepted industry practice, to the extent they do not conflict.

IAS 8 prospective treatment: changes in accounting estimate are applied prospectively; changes in accounting policy and prior period errors are applied retrospectively with restatement, subject to impracticability exemptions.

Materiality (IAS 1/IAS 8): information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions; materiality is entity-specific and assessed both quantitatively and qualitatively.

Fair presentation and true and fair view: IAS 1 requires fair presentation; departure from a standard is permitted only in the extremely rare case where compliance would be so misleading that it conflicts with the objective of financial statements, with full disclosure.

Five measurement bases in the Conceptual Framework: historical cost, fair value, value in use/fulfilment value, current cost, and (for liabilities) cost accumulation; IFRS 13 defines fair value as the price received to sell an asset or paid to transfer a liability in an orderly transaction.

Going concern (IAS 1): management assesses the entity's ability to continue for at least 12 months from the reporting date; material uncertainties must be disclosed, and departure from going concern requires disclosure of the basis used.

IFRS 10 control test: power over the investee, exposure or rights to variable returns, and ability to use power to affect those returns; control is reassessed when facts and circumstances change.

IFRS 3 acquisition method: identify the acquirer, determine the acquisition date, recognise and measure identifiable assets acquired and liabilities assumed at fair value, and recognise goodwill or a gain on a bargain purchase.

Goodwill formula: consideration transferred + non-controlling interest + previously held equity interest − net fair value of identifiable net assets acquired; goodwill is not amortised but tested annually for impairment (IAS 36).

NCI measurement choice (IFRS 3): either proportionate share of net identifiable assets or full fair value including goodwill attributable to NCI; the election is made per business combination, not per transaction.

Consolidation adjustments: eliminate intragroup balances, income and expenses, dividends and unrealised profits; apply uniform accounting policies; adjust for the parent's reporting date where the subsidiary's date differs by more than three months.

Intragroup profit elimination: unrealised profit on inventory is eliminated in full against the seller's profit, with the NCI share of the buyer's/seller's adjustment allocated where the transaction is upstream (subsidiary to parent).

Non-controlling interest in the statement of financial position: presented within equity, separately from equity attributable to owners of the parent; profit and OCI are attributed to owners and NCI.

Step acquisition (IFRS 3): a previously held interest is remeasured to fair value at the acquisition date, with the resulting gain or loss recognised in profit or loss.

IFRS 11 joint arrangements: a joint arrangement is either a joint operation (parties have rights to assets and obligations for liabilities, recognising their share) or a joint venture (rights to net assets, accounted for using the equity method).

IFRS 15 five-step model: identify the contract with a customer; identify performance obligations; determine the transaction price; allocate the price to performance obligations; recognise revenue when (or as) each obligation is satisfied.

IFRS 15 transaction price: variable consideration is estimated using the expected value or most likely amount and constrained to the amount for which a significant revenue reversal is not highly probable; significant financing components are adjusted.

IFRS 15 over-time recognition criteria (any one): the customer simultaneously receives and consumes benefits; the entity's performance creates or enhances an asset the customer controls; the performance does not create an asset with an alternative use and the entity has an enforceable right to payment for performance to date.

IFRS 15 contract costs: incremental costs of obtaining a contract are capitalised if recoverable (practical expedient if amortisation period is one year or less); costs to fulfil a contract are capitalised if they relate directly to the contract, generate resources, and are expected to be recovered.

IFRS 16 lessee: recognise a right-of-use asset and a lease liability at the present value of lease payments using the interest rate implicit in the lease or, if not readily determinable, the lessee's incremental borrowing rate; exemptions for short-term and low-value leases.

IFRS 16 lessor: classified as finance lease if substantially all risks and rewards of ownership transfer; otherwise operating lease; a manufacturer or dealer lessor recognises selling profit at commencement.

IFRS 9 classification: amortised cost if the business model is hold to collect and cash flows are solely payments of principal and interest (SPPI); fair value through OCI if hold to collect and sell plus SPPI; otherwise FVTPL.

IFRS 9 expected credit loss: 12-month ECL at initial recognition; lifetime ECL when credit risk has increased significantly since initial recognition; simplified approach (lifetime ECL) for trade receivables.

IAS 36 impairment: an asset is impaired if carrying amount exceeds recoverable amount, defined as the higher of fair value less costs of disposal and value in use; goodwill and indefinite-life intangibles are tested annually.