IAS

Examples of IAS in the following topics:

• Limitations of the Statement of Cash Flows

  • Under IAS 7, cash flow statement must include changes in both cash and cash equivalents.
  • Bank borrowings (overdraft) in certain countries can be included in cash equivalents under the IAS 7.
  • Interest paid can be included in operating activities or financing activities under the IAS 7.
  • Non-cash investing and financing activities are disclosed in footnotes under IAS 7.
  • This chart illustrates the various important enactments of the International Accounting Standards, including the IAS 7.

• Introduction to IFRS

  • They are occasionally called by the original name of International Accounting Standards (IAS).
  • The IAS were issued between 1973 and 2001 by the Board of the International Accounting Standards Committee (IASC).
  • During its first meeting the new Board adopted existing IAS and Standing Interpretations Committee standards (SICs).
  • In making that judgment, IAS 8.11 requires management to consider the definitions, recognition criteria, and measurement concepts for assets, liabilities, income, and expenses in the Framework.
  • This elevation of the importance of the Framework was added in the 2003 revisions to IAS 8.

• Assessing Control

  • An investor shall discontinue the use of the equity method from the date when it ceases to have significant influence over an associate and shall account for the investment in accordance with IAS 39 from that date, provided the associate does not become a subsidiary or a joint venture as defined in IAS 31.
  • When an investment ceases to be an associate and is accounted for in accordance with IAS 39, the fair value of the investment at the date when it ceases to be an associate shall be regarded as its fair value on initial recognition as a financial asset in accordance with IAS 39.

• Activities of the Business: Financing, Investing, and Operating

  • Interest payments (alternatively, this can be reported under financing activities in IAS 7 and US GAAP)

• Defining the Statement of Cash Flows

  • International Accounting Standard 7 (IAS 7), is the International Accounting Standard that deals with cash flow statements.

• Extraordinary Gains and Losses

  • (IAS 1.87) The amount of each of these gains or losses, net of the income tax effect, is reported separately in the income statement.

• Cost of Equipment

  • Fixed assets, according to International Accounting Standard (IAS) 16, are long range assets whose cost can be measured reliably.

• Advantages of LIFO

  • Due to LIFO's potential to skew inventory value, UK GAAP and IAS have effectively banned LIFO inventory accounting.

• Limitations of the Balance Sheet

  • The International Accounting Standards Board (IASB) offers some guidance (IAS 38) as to how intangible assets should be accounted for in financial statements.

• Indefinite-Life Impairment

  • According to IAS 36, reversal of impairment losses for goodwill are not allowed.