cfas pfrs

• the first annual financial statements in which an entity adopts pfrs, by an explicit and unreserved statements of compliance with pfrs.

  first pfrs financial statements
• an entity presenting its first pfrs financial statements is called a first-time adopter
• pfrs 1 requires an entity to prepare and present an

  opening pfrs statements of financial position
• the beginning of the earliest period for which an entity present full comparative information under pfrs in its first pfrs financial statements

  the date to transition to pfrs
• under pfrs 1, the early application of pfrs that have not yet become effective as of the current reporting period

  is permitted, but not required.
• retrospective application of accounting policies means

  as if pfrs have been used all along
• pfrs 1 provides numerous other exemptions from retrospective application>

  1. derecognition of financial instruments
  2. hedge accounting
  3. business combinations
  4. fair value or revaluation amount as deemed cost
  5. cumulative translation differences
  6. compound translation differences
• reconciliations of equity reported under previous GAAP to equity under pfrs both (a) at the date of transition to pfrs and (b) the end of the last annual period reported under the previous GAAP
• reconciliation of total comprehensive income for the last annual period reported under the previous GAAP to total comprehensive income under pfrs for the same period.
• disclosure of impairment and losses an reversals of impairment losses recognized when the opening statement of financial position was prepared.
• disclosures of errors discovered in the course of transition to pfrs.
• material adjustments made to restate the financial statement to pfrs.
• a transaction in which the entity acquires goods or services and pays for them by issuing its own equity instruments or cash based on the value of its own equity instruments.

  share-based payment transaction
• equity-settled share-based payment transaction - one in which the entity receives goods or services and pays for them by issuing its shares of stocks or share options
• cash-settled share-based payment transaction - one in which the entity receives goods or services and incurs an obligation to pay cash at an amount that is based on the fair value of its own equity instruments.
• choice between equity-settled and cash-settled - one in which the entity receives goods or services and either the entity or the counterparty is given a choice of settlement in the form of equity instruments or cash based on the fair value of equity instruments.
• equity instruments - a contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.
• the entity recognizes increase in equity if the goods or services are received in an equity-settled share-based payment transaction
• the entity recognizes liability if the goods or services are acquired in a cash-settled share-based payment transaction.
• grant date - the date at which the entity and the counterparty agree to, and have shared understanding of the terms and conditions of a shared-based payment arrangement.
• intrinsic value- the difference between the fair value of the shares which the counterparty has the right has the right to subscribe or receive and the subscription price.
• share-based compensation plan - an arrangement whereby, in exchange for services, an employee is compensated in the form of (or based on) the entity's equity instrument.
• share option - contact that gives the holder the right, but not the obligation to subscribe to the entity's shares at a fixed or determinable price for a specified period of time.
• service condition - to be entitled to receive or subscribe to the shares embodied in the share options, the employee needs to remain in the entity's employ for a specified period of time.
• adjustments for employees leaving the entity's employ before the share options vest are accounted for prospectively.
• one whereby an entity acquires goods or services and incurs an obligation to pay cash ay an amount that is based on the fair value of its equity instruments.

  cash-settled share based payment transaction
• the goods or services received, and the related liability are measured at the fair value of the liability.
• the related liability is measured to fair value at the end of each reporting period and on the settlement date. the fair value changes are recognized in profit or loss.
• the most common form of a cash-settled share-based payment transaction is share appreciation rights (sars) granted to an employee.
• share appreciation rights - form of compensation given to an employee whereby the employee is entitled to future cash payment, based on the increase in the entity's share price from a specified level over a specified period of time.
• of the counterpart has the right to choose settlement between cash (or other asset) or equity instruments, the entity has granted a compound instrument.
• the date on which the acquirer obtains control of the acquiree

  the acquisition date
• business combination - when one company acquires another or when two or more companies merge into one. after the combination, one company gains control over the other.
• business combination - a transaction or other event in which an acquirer obtains control of one or more businesses.
• acquired group - the set of entities controlled by the acquirer at the acquisition date.
• acquirer - the party that obtains control of the acquired group as part of a business combination.
• acquirer - the parent that controls the acquired group at the acquisition date.
• business - an integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing goods or services to customers, generating investment income or generating other income from ordinary activities.
• three elements of a business:

  • input
  • process
  • output
• input - any economic resource that result to an output when one or more processes are applied to it.