Most of the debate on pension accounting is related to alternative recognition methods. Deferred recognition is the accounting model for pensions under pre-2011 IAS 19. The pre-2007 version of IAS 19 adopted an election of immediate recognition in income directly in equity, as opposed to net income. Pre-2011 IAS 19 uses a model that recognizes certain gains and losses in other comprehensive income but with […]

A French foreign private issuer replied to the SEC Staff, in the context of the review of Form 20-F for the fiscal year ended December 31, 2005 containing financial statements prepared for the first time on the basis of IFRSs. The company applied the treatment under FASB Statement No. 130 (based on which prior period adjustments that would affect other comprehensive income must not be […]

For example, on initial recognition a temporary difference may exist if the tax basis of the convertible debt includes the entire amount of the instrument, while split accounting requires the recognition of both a liability and an equity component. An entity must recognize a deferred tax liability at the time of the transaction because the initial recognition of the instrument affects taxable profit or loss […]

Suncor Energy Inc (2011) Notes to the consolidated financial statements [extract] Note 6. First-Time Adoption of IFRS [extract] Explanation of Significant Adjustments [extract] (9) Fair Value as Deemed Cost [extract] The company has applied the IFRS 1 election to record certain assets of property, plant and equipment at fair value on the Transition Date. The exemption has been applied to refinery assets located in Eastern […]

Deemed cost of property, plant and equipment Entity A used to revalue items of property, plant and equipment to fair value under its previous GAAP, but changed its accounting policy on 1 January 2006 when it adopted a different accounting policy. Under that accounting policy, Entity A did not depreciate the asset and only recognized the maintenance costs as an expense. Entity A”s date of […]

Zargon Oil & Gas Ltd. (2011) Notes to Consolidated Financial Statements [extract] 27 Reconciliation of Transition from Canadian GAAP to IFRS [extract] Explanatory notes [extract] (b) The Company elected under IFRS 1 to deem the Canadian GAAP carrying value of its oil and gas assets accounted for under the full cost method as at January 1, 2010 as their deemed cost under IFRS as at […]

If fixed production overhead is over-absorbed in an accounting period, which ONE of the following combinations could have caused this result? Fixed overhead expenditure variance And Fixed overhead volume variance A $4200 (A) $3750 (F) B $3250 (A) $4170 (F) C $2240 (A) $1870 (A) D $2980 (F) $3690 (A)

Deemed cost for assets used in operations subject to rate regulation Entities that hold items of property, plant and equipment or intangible assets that are used, or were previously used, in operations subject to rate regulation might have capitalised, as part of the carrying amount, amounts that do not qualify for capitalisation in accordance with IFRSs. For example, when setting rates, regulators often permit entities […]

QR Limited uses a standard absorption costing system. The following details have been extracted from its budget for April: Fixed production overhead cost £48 000 Production (units) 4 800 In April the fixed production overhead cost was under-absorbed by £8000 and the fixed production overhead expenditure variance was £2000 adverse. The actual number of units produced was: A 3800 B 4000 C 4200 D 5400 […]

IFRS 1 does not include any specific exemption from the retrospective application of IAS 17 Leases and SIC-15 Operating Leases Incentives. Therefore, a first-time adopter is required to classify leases as operating or finance leases under IAS 17 based on the circumstances existing at the inception of the lease and not those existing at the date of transition to IFRSs. [IFRS 1.IG14]. However, if ‘at […]