ifrs compared to june u.s. gaap: an overview...this overview is an abridged version of ifrs compared...

IFRS compared toU.S. GAAP:An overview

May 2008

kpmgifrg.com

InternationalFinancialReporting

Standards

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noverview

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May

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Publication name: IFRS compared to U.S. GAAP: An overview

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Publication date: May 2008

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©2008KPMGLLP,aU.S.limitedliabilitypartnershipandamemberfirmoftheKPMGnetworkofindependentmemberfirmsaffiliatedwithKPMGInternational,aSwisscooperative.Allrightsreserved.

©2008KPMGIFRGLimited,aUKcompany,limitedbyguarantee.Allrightsreserved.

IFRScomparedtoU.S.GAAP:AnoverviewThisoverviewisanabridgedversionofIFRS compared to U.S. GAAP,publishedinMay2008.

ThisoverviewshouldbereadinconjunctionwiththatpublicationinordertounderstandmorefullythedifferencesandsimilaritiesbetweenInternationalFinancialReportingStandards(IFRSs)andU.S.GenerallyAcceptedAccountingPrinciples(U.S.GAAP).

Thisoverview,andtherelatedpublicationIFRS compared to U.S. GAAP,havebeenproducedjointlybytheKPMGInternationalFinancialReportingGroup(partofKPMGIFRGLimited)andtheDepartmentofProfessionalPracticeofKPMGLLPintheU.S.Wewouldliketoacknowledgetheeffortsoftheprojectteamleadersofthispublication,includingJulieSantoroandArnoldSinghoftheKPMGInternationalFinancialReportingGroup,andPaulMunter,KurtKurimskyandLisaWatsonoftheDepartmentofProfessionalPracticeofKPMGLLPintheU.S.

WewouldalsoliketothankothermembersoftheKPMGInternationalFinancialReportingGroupandtheDepartmentofProfessionalPracticeofKPMGLLPintheU.S.,aswellastheKPMGU.S.CapitalMarketsGroup(partofKPMGUSCMGLimited)andtheU.S.AccountingandReportingGroup(partofKPMGLLPintheU.K.),forthetimethattheycommittedtothisproject.

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OntheroadtoconvergenceChangecanbedifficult.Changemakesusnervous.Mostpeopleresistchangeasitmakesusfacetheunknown.Butchangecanbegood.Andeventuallychangebecomesthenorm.Overthepast�0yearswehaveseenarapidlychangingenvironmentintheworldofaccountingandfinancialreporting.Goodprogresshasbeenmadetowardstheestablishmentofasinglesetofhighquality,globallyacceptedaccountingstandards–butwehavenotyetachievedthatgoal.However,wemustalsobecarefulindefiningwhatourultimategoalis.IsitconvergenceofU.S.GenerallyAcceptedAccountingPrinciples(U.S.GAAP)toInternationalFinancialReportingStandards(IFRSs),orconversionfromU.S.GAAPtoIFRSs?Thesearetwodifferentthingsandmaycauseanexpectationgapwhenlookingattheresultsofconvergence.

InthepastyearwehaveseentheresultsofoneofthekeyconvergenceprojectsoftheInternationalAccountingStandardsBoard(IASB)andtheU.S.FinancialAccountingStandardsBoard(FASB).InDecember2007theFASBissuedSFAS�4�RBusiness CombinationsandinJanuary2008theIASBissuedrevisedIFRS3Business Combinations.Thesetwostandardsrepresenta“substantially”convergedstandardontheaccountingforbusinesscombinations.Butyoumaybewonderingwhywerefertothemassubstantiallyconverged.YoualsomaybewonderingwhytheIASBandtheFASBdidnotissueidenticalstandardsastheprojectwascarriedoutasajointprojectwiththegoalofconvergence.Thisunderliesakeyaspectofconvergence.Theprocessofattemptingtodissectandeliminateeverypossibledifferencethatmaybeexperiencedinpracticewouldbeverycostlyandtimeconsuming,ifnotimpossible.Amoreeffectiveapproachfocusesonaligningthegeneralprinciplesandoverallmethodologies.Thisisfurtherillustratedinotherconvergedstandardssuchasassetsheldforsaleanddiscontinuedoperations,operatingsegments,borrowingcosts,andshare-basedpayment.Althoughthegeneralprinciplesandoverallmethodologyofthesestandardsareconverged,wecontinuetoexperiencedifferencesinthedetail,andthereforeshouldavoidafalsesenseofsecuritythatconvergenceeliminatesallsignificantdifferences.

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WhiletheIASBandtheFASBcontinuetoworkonconvergence,theU.S.SecuritiesandExchangeCommission(SEC)hasmadesignificantprogresstoincreasetheacceptanceofIFRSs.TheSEC’sdecisiontoacceptforeignprivateissuers’financialstatementspreparedinaccordancewithIFRSsasissuedbytheIASBwithoutreconciliationtoU.S.GAAPhasdemonstratedtheSEC’swillingnesstocontinuetosupportworktowardsconvergence.Additionally,theSECcurrentlyisconsideringif–orwhen–itwouldallowU.S.domesticfilerstheoptionofapplyingIFRSsasanalternativetoapplyingU.S.GAAP.

Withtheseaccomplishmentsinmind,wearepleasedtopublishourcomparisonofIFRSsandU.S.GAAPasof3�December2008.Wehopethatthispublicationcontinuestoserveasausefulresourceforstandardsetters,preparers,auditorsandfinancialstatementuserswhoareliving,atleastforthemoment,inabilingualaccountingworld.

Mary Tokar Sam RanzillaKPMGIFRGLimited NationalPartner-in-Charge, DepartmentofProfessionalPractice– Audit&AdvisoryKPMGLLPintheU.S.

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Aboutthispublication

ContentThepurposeofthisoverviewistoassistyouinunderstandingthesignificantdifferencesbetweenIFRSsandU.S.GAAPbyprovidingaquickoverviewforeasyreference.However,itisnotdetailedenoughtoallowafullunderstandingofthesignificantdifferences;formoreinformationyoushouldrefertoourMay2008publicationIFRSs compared to U.S. GAAP.

Thisoverviewdoesnotdiscusseverypossibledifference;rather,itisabriefsummaryofthekeyprovisionsofIFRSs,contrastedwiththeparallelrequirementsofU.S.GAAP.Thefocusofthisoverviewisonrecognition,measurementandpresentation,ratherthanondisclosure;thereforedisclosuredifferencesgenerallyarenotdiscussed.However,areasthataredisclosure-based,suchassegmentreporting,areincluded.

ThisoverviewdoesnotincludethespecificviewsthatKPMGhasdevelopedintheabsenceofspecificguidanceunderIFRSsorU.S.GAAP.

ThisoverviewaddressesthetypesofbusinessesandactivitiesthatIFRSsaddress,otherthanIAS26Accounting and Reporting by Retirement Benefit Plans,andfocusesonthepreparationofconsolidatedfinancialstatementspreparedonagoingconcernbasis.Separate(i.e.,unconsolidated)financialstatementsarenotaddressed.

TherequirementsofIFRSsarediscussedonthebasisthattheentityhasadoptedIFRSsalready.ThespecialtransitionalrequirementsthatapplyintheperiodinwhichanentitychangesitsGAAPtoIFRSsarenotdiscussed.InsuchcasesyoushouldrefertoIFRS�First-time Adoption of International Financial Reporting Standards.

EffectivedateGenerallythestandardsandinterpretationsincludedinthispublicationarethosethataremandatoryforanannualreportingdateof3�December2008,

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i.e.,ignoringstandardsandinterpretationsthatmightbeadoptedbeforetheireffectivedates.

Newstandardsandinterpretationspublishedby��May2008,butnoteffectiveforanannualreportingperiodendingon3�December2008,arenotedasforthcomingrequirements.

Thefollowingforthcomingrequirementsarethesubjectofnewchapters:

l 2.2AChangesinequityl 2.�ANon-controllinginterestsl 2.6ABusinesscombinationsl �.2AOperatingsegments.

OtherwaysKPMGmemberfirms’professionalscanhelpWehavearangeofIFRSandU.S.GAAPpublicationsthatcanassistyoufurther,includingInsights into IFRS,Financial instruments accounting,andillustrativefinancialstatementsforinterimandannualreportingunderIFRSs;andtheDerivatives and Hedging Accounting Handbook,Share-Based Payment: An analysis of Statement No. 123RandAccounting for Business Combinations underU.S.GAAP.Technicalinformationisavailableatwww.kpmgifrg.com.

Foraccesstoanextensiverangeofaccounting,auditingandfinancialreportingguidanceandliterature,visitKPMG’sAccountingResearchOnline.ThisWeb-basedsubscriptionservicecanbeavaluabletoolforanyonewhowantstostayinformedintoday’sdynamicenvironment.Forafree��-daytrial,gotowww.aro.kpmg.comandregistertoday.

ForfurtherassistancewiththeanalysisandinterpretationofthedifferencesbetweenIFRSsandU.S.GAAP,pleasegetintouchwithyourusualKPMGcontact.

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Contents1. Background 8�.� Introduction 8�.2 TheFramework �0

2. General issues 122.� Formandcomponentsoffinancialstatements �22.2 Changesinequity �42.2A Changesinequity �62.3 Statementofcashflows �82.4 Basisofaccounting 202.� Consolidation 222.�A Non-controllinginterests 262.6 Businesscombinations 302.6A Businesscombinations 362.7 Foreigncurrencytranslation 422.8 Accountingpolicies,errorsandestimates 462.9 Eventsafterthereportingdate 48

3. Specific balance sheet items 503.� General �03.2 Property,plantandequipment �23.3 Intangibleassetsandgoodwill �63.4 Investmentproperty 603.� Investmentsinassociatesandjointventures

(Equity-methodinvestees) 623.6 Financialinstruments 683.7 Hedgeaccounting 743.8 Inventories 763.9 Biologicalassets 783.�0 Impairment 803.�� Equityandfinancialliabilities 843.�2 Provisions(Recognisedcontingenciesandother“provisions”) 88

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3.�3 Incometaxes 923.�4 Contingentassetsandliabilities(Unrecognisedcontingencies) 98

4. Specific income statement items 1004.� General �004.2 Revenue �024.3 Governmentgrants �064.4 Employeebenefits �084.� Share-basedpayments ��44.6 Financialincomeandexpense �20

5. Special topics 122�.� Leases �22�.2 Segmentreporting �26�.2A Operatingsegments �28�.3 Earningspershare �32�.4 Non-currentassetsheldforsaleanddiscontinuedoperations �36�.� Relatedpartydisclosures �38�.6 Financialinstruments:presentationanddisclosure �40�.7 Non-monetarytransactions �44�.8 Accompanyingfinancialandotherinformation �46�.9 Interimfinancialreporting �48�.�0 Insurancecontracts ��0�.�� Extractiveactivities ��4�.�2 Serviceconcessionarrangements ��6

Appendix 1 160Abbreviationsusedforpronouncements �60

8 OverviewofIFRS



�. Background

�.� Introduction (IASCFoundationConstitution,PrefacetoIFRSs,IAS1,IAS8)

IFRSsisthetermusedtoindicatethewholebodyofIASBauthoritativeliterature.

IFRSsaredesignedforusebyprofit-orientedentities.

AnyentityclaimingcompliancewithIFRSsmustcomplywithallstandardsandinterpretations,includingdisclosurerequirements,andmustmakeastatementofexplicitandunreservedcompliancewithIFRSs.

Boththebold-andplain-typeparagraphsofIFRSshaveequalauthorityandmustbecompliedwith.

TheoverridingrequirementofIFRSsisforthefinancialstatementstogiveafairpresentation(ortrueandfairview).

AhierarchyofalternativesourcesisspecifiedwhenIFRSsdonotdealwithaparticularissue.Thishierarchyincludesindustrypracticeinsomeinstances.

OverviewofU.S.GAAP 9



�. Background

�.� Introduction (SAS 69)

U.S.GAAPisthetermusedtoindicatethebodyofauthoritativeliteraturethatcomprisesaccountingandreportingstandardsintheUnitedStates.

UnlikeIFRSs,U.S.GAAPisdesignedforusebybothprofit-orientatedandnot-for-profitentities,withadditionalaccountingstandardsthatarespecificallyapplicabletonot-for-profitentities.

LikeIFRSs,anyentityclaimingcompliancewithU.S.GAAPmustcomplywithallstandardsandinterpretations,includingdisclosurerequirements.However,unlikeIFRSs,astatementofexplicitandunreservedcomplianceisnotrequired.

UnlikeIFRSs,U.S.GAAPdoesnotusebold-andplain-typeparagraphs.However,likeIFRSs,allparagraphsofastandardhaveequalauthorityandmustbecompliedwith.

UnlikeIFRSs,theobjectiveoffinancialstatementsisfairpresentationinaccordancewithU.S.GAAP.

LikeIFRSs,ahierarchyofalternativesourcesisspecifiedwhenU.S.GAAPdoesnotdealwithaparticularissue.Thishierarchyincludesindustrypracticeinsomeinstances,likeIFRSs.

�0 OverviewofIFRS



�.2 TheFramework (IASB Framework, IAS 8)

TheIASBusesitsconceptualframeworkasanaidtodraftingneworrevisedIFRSs.

TheFrameworkisapointofreferenceintheabsenceofspecificguidance.

IFRSsdonotapplytoitemsthatare“immaterial”.

Transactionsshouldbeaccountedforinaccordancewiththeirsubstance,ratherthanonlytheirlegalform.

Transactionswithshareholdersintheircapacityasshareholdersarerecogniseddirectlyinequity.

OverviewofU.S.GAAP ��



�.2 TheFramework (CON 1, CON 2, CON 5, CON 6, CON 7, SAB 99, SAB 108)

LikeIFRSs,theFASBConceptsStatements(theFramework)establishtheobjectivesandconceptsthattheFASBusesindevelopingstandards.

UnlikeIFRSs,theFrameworkisnon-authoritativeguidanceandisnotreferredtoroutinely.

LikeIFRSs,U.S.GAAPneednotbeappliedtoitemsthatare“immaterial”.

UnlikeIFRSs,thereisnogeneralprinciplethattransactionsshouldbeaccountedforinaccordancewiththeirsubstance,ratherthanonlytheirlegalform.

LikeIFRSs,transactionswithshareholdersintheircapacityasshareholdersarerecogniseddirectlyinequity.However,thedeterminationofwhenashareholderisactinginthatcapacitydiffersfromIFRSsinsomecases.

�2 OverviewofIFRS



2. Generalissues

2.� Formandcomponentsoffinancialstatements (IAS 1, IAS 27)

Thecomponentsofacompletesetoffinancialstatementsare:balancesheet,incomestatement,statementofrecognisedincomeandexpenseorastatementofallchangesinequity,statementofcashflows,andnotesincludingaccountingpolicies.

WhileIFRSsspecifyminimumdisclosures,theydonotprescribespecificformats.

Comparativeinformationisrequiredfortheprecedingperiodonly,butadditionalperiodsandinformationmaybepresented.

Anentitypresentsconsolidatedfinancialstatementsunlessspecificcriteriaaremet.

OverviewofU.S.GAAP �3



2. Generalissues

2.� Formandcomponentsoffinancialstatements (ARB 43, ARB 51, SFAS 130, Reg S-X, Reg G)

LikeIFRSs,thecomponentsofacompletesetoffinancialstatementsare:balancesheet,incomestatement,comprehensiveincome(recognisedincomeandexpense),statementofcashflows,andnotesincludingaccountingpolicies.UnlikeIFRSs,acombinedstatementofincomeandcomprehensiveincomemaybepresented.

LikeIFRSs,whileminimumdisclosuresarerequired,whichmaydifferfromIFRSs,specificformatsarenotprescribed.UnlikeIFRSs,therearemorespecificformatandlineitemdisclosurerequirementsforSECregistrants.

UnlikeIFRSs,U.S.GAAPdoesnotrequirecomparativeinformation.However,SECregistrantsarerequiredtopresentbalancesheetsasoftheendofthecurrentandpriorreportingperiods,likeIFRSs,andallotherstatementsforthethreemostrecentreportingperiods,unlikeIFRSs.

UnlikeIFRSs,therearenoexemptionsfrompreparingconsolidatedfinancialstatements.

�4 OverviewofIFRS



2.2 Changesinequity (IAS 1, IAS 8)

Anentitymaychoosetopresentasaprimarystatementeitherastatementofrecognisedincomeandexpenseorastatementofallchangesinequity.Ifastatementofrecognisedincomeandexpenseispresented,thenotherchangesinequityaredisclosedinthenotestothefinancialstatements.

Thestatementofrecognisedincomeandexpensepresentsprofitorlosswithallothernon-ownermovementsrecogniseddirectlyinequity.

Thestatementofallchangesinequityincludestheinformationthatwouldbeincludedinastatementofrecognisedincomeandexpense,aswellastransactionswithshareholdersactinginthatcapacity.

Againorlossmayberecogniseddirectlyinequityonlywhenastandardorinterpretationpermitsorrequiresit.

Somegainsorlossesrecogniseddirectlyinequityareneverrecycledtoprofitorloss.




2.2 Changesinequity (APB 12, SFAS 130, SFAS 154)

LikeIFRSs,entitiesarerequiredtopresentallchangesinequityandcomprehensiveincome.However,unlikeIFRSs,astatementofcomprehensiveincomeandastatementofallchangesinequitybothmaybepresentedasprimarystatements.

LikeIFRSs,comprehensiveincomereportsallitemsofrecognisedprofitorlossfromnon-ownertransactionsandevents.However,unlikeIFRSs,acombinedstatementofincomeandcomprehensiveincomemaybepresented.

LikeIFRSs,thestatementofallchangesinequityincludestheinformationthatwouldbeincludedinastatementofcomprehensiveincome,aswellastransactionswithshareholdersactinginthatcapacity.

LikeIFRSs,againorlossmayberecogniseddirectlyinequityonlywhenastandardpermitsorrequiresit.

UnlikeIFRSs,allitemsrecogniseddirectlyinequityasacomponentofaccumulatedothercomprehensiveincomearerecycledtoprofitorloss.

�6 OverviewofIFRS



2.2AChangesinequity (IAS 1 (2007))

Arevisedstandardonthepresentationoffinancialstatementsiseffectiveforannualperiodsbeginningonorafter�January2009;earlierapplicationispermitted.Thenewrequirements,highlightedbelow,applyretrospectively.

Forthcoming requirementsAnentitymustpresentbothastatementofcomprehensiveincomeandastatementofchangesinequityaspartofacompletesetoffinancialstatements.

Anentitypresentseitherasinglestatementofcomprehensiveincome(effectivelycombiningboththeincomestatementandallnon-ownerchangesinequityinasinglestatement),oranincomestatementandaseparatestatementofcomprehensiveincome.

Allowner-relatedchangesinequityarepresentedinthestatementofchangesinequity,separatelyfromnon-ownerchangesinequity.

Anentityisnotpermittedtopresentcomponentsofcomprehensiveincomeinthestatementofchangesinequity.




2.2AChangesinequity (SFAS 130)

UnlikeIFRSs,therehavebeennochangesintherequirementsunderU.S.GAAPrelatedtothepresentationofchangesinequity.Asaconsequence,thefollowingrequirementsarecurrentlyeffectiveunderU.S.GAAP.

Forthcoming requirementsUnlikeIFRSs,anentitymaypresentcomprehensiveincomewithinastatementofchangesinequityaspartofacompletesetoffinancialstatements.

Anentitymaypresentcomprehensiveincomeineitherasinglestatementofcomprehensiveincome,likeIFRSs;anincomestatementandaseparatestatementofcomprehensiveincome,likeIFRSs;orastatementofchangesinequity,unlikeIFRSs.

LikeIFRSs,allowner-relatedchangesinequityarepresentedinthestatementofchangesinequity,separatelyfromnon-ownerchangesinequity.

UnlikeIFRSs,anentityispermittedtopresentcomponentsofcomprehensiveincomeinthestatementofchangesinequity,regardlessofthemethodofpresentingcomprehensiveincome.

�8 OverviewofIFRS



2.3 Statementofcashflows (IAS 7)

Thestatementofcashflowspresentscashflowsduringtheperiodclassifiedintooperating,investingandfinancingactivities.

Theseparatecomponentsofasingletransactioneachareclassifiedasoperating,investingorfinancing.

Netcashflowsfromallthreecategoriesaretotalledtoshowthechangeincashandcashequivalentsduringtheperiod,whichthenisusedtoreconcileopeningandclosingcashandcashequivalents.

Cashincludescertainshort-terminvestments.

Insomecasescashincludesbankoverdrafts.

Cashflowsfromoperatingactivitiesmaybepresentedusingeitherthedirectmethodortheindirectmethod.

Foreigncurrencycashflowsaretranslatedattheexchangeratesatthedatesofthecashflows,orusingaverageswhenappropriate.

Generallyallfinancingandinvestingcashflowsarereportedgross.Cashflowsareoffsetinonlylimitedcircumstances.




2.3 Statementofcashflows (SFAS 95, SFAS 102, SFAS 104)

LikeIFRSs,thestatementofcashflowspresentscashflowsduringtheperiodclassifiedintooperating,investingandfinancingactivities.

UnlikeIFRSs,cashreceiptsandpaymentswithattributesofmorethanoneclassofcashflowsareclassifiedbasedonthepredominantsourceofthecashflowsunlesstheunderlyingtransactionisaccountedforashavingdifferentcomponents.

LikeIFRSs,netcashflowsfromallthreecategoriesaretotalledtoshowthechangeincashandcashequivalentsduringtheperiod,whichthenisusedtoreconcileopeningandclosingcashandcashequivalents.

LikeIFRSs,cashincludescertainshort-terminvestments,althoughnotnecessarilythesameshort-terminvestmentsasunderIFRSs.

UnlikeIFRSs,cashdoesnotincludebankoverdrafts.

LikeIFRSs,cashflowsfromoperatingactivitiesmaybepresentedusingeitherthedirectmethodortheindirectmethod.

LikeIFRSs,foreigncurrencycashflowsaretranslatedattheexchangeratesatthedatesofthecashflows,orusingaverageswhenappropriate.

LikeIFRSs,cashflowsgenerallyarereportedgross,andareoffsetinonlylimitedcircumstances.

20 OverviewofIFRS



2.4 Basisofaccounting (IAS 1, IAS 21, IAS 29, IFRIC 7)

Financialstatementsarepreparedonamodifiedhistoricalcostbasis,withagrowingemphasisonfairvalue.

Whenanentity’sfunctionalcurrencyishyperinflationary,itsfinancialstatementsareadjustedtostateallitemsinthemeasuringunitcurrentatthereportingdate.

Whenanentity’sfunctionalcurrencybecomeshyperinflationary,itmakesprice-leveladjustmentsretrospectively.

Thefinancialstatementsofaforeignoperationwhosefunctionalcurrencyishyperinflationaryareadjustedbeforebeingtranslatedforconsolidationpurposes.

Anentitydisclosesinformationaboutkeysourcesofestimationuncertaintyandjudgementsmadeinapplyingtheentity’saccountingpolicies.

OverviewofU.S.GAAP 2�



2.4 Basisofaccounting (APB 22, SFAS 52, SFAS 89, SOP 93-3, SOP 94-6)

LikeIFRSs,financialstatementsarepreparedonamodifiedhistoricalcostbasis,withagrowingemphasisonfairvalue.

LikeIFRSs,whenanon-U.S.entitythatpreparesU.S.GAAPfinancialstatementsoperatesinanenvironmentthatishighlyinflationary,itreportsprice-leveladjustedlocalcurrencyfinancialstatements.

UnlikeIFRSs,whenaneconomybecomeshighlyinflationary,anentitymakesprice-leveladjustmentsprospectively.

UnlikeIFRSs,thefinancialstatementsofaforeignoperationwhosefunctionalcurrencyishighlyinflationaryareremeasuredforconsolidationpurposesasiftheparent’sreportingcurrencywereitsfunctionalcurrency.

LikeIFRSs,SECregistrantsdiscloseinformationaboutcriticalaccountingpoliciesandestimates;however,unlikeIFRSs,thisinformationisdisclosedoutsideofthefinancialstatements.LikeIFRSs,entitiesdiscloseinformationaboutestimatesthatarereasonablypossibleofchangingbyamaterialamountinthenearterm.

22 OverviewofIFRS



2.� Consolidation (IAS 27, SIC–12)

Consolidationisbasedonacontrolmodel.

Controlisthepowertogovernthefinancialandoperatingpoliciesofanentitysoastoobtainbenefitsfromitsactivities.

IFRSsarenotclearregardingwhethercontrolshouldbeassessedusingapower-to-controlmodelorade factocontrolmodel.

Potentialvotingrightsthatcurrentlyareexercisableareconsideredinassessingcontrol.

Aspecialpurposeentity(SPE)isanentitycreatedtoaccomplishanarrowandwell-definedobjective.SPEsareconsolidatedbasedoncontrol.ThedeterminationofcontrolincludesananalysisoftherisksandrewardsassociatedwithanSPE.

Allsubsidiariesareconsolidated.

IFRSsdonothaveaconceptofvariableinterestentities(VIEs).

IFRSsdonothaveaconceptofqualifyingSPEs(QSPEs).




2.� Consolidation (ARB 51, SFAS 94, SFAS 140, FIN 46R, SOP 78-9, SOP 93-6, EITF 85-12,

EITF 95-6, EITF 96-16, EITF 97-2, EITF 00-4, EITF 04-5, EITF 06-9, SAB Topic 5-H)

Consolidationisbasedonacontrollingfinancialinterestmodel,whichdiffersincertainrespectsfromIFRSs.

Fornon-variableinterestentities,controlisthecontinuingpowertogovernthefinancialandoperatingpoliciesofanentity,likeIFRSs.However,unlikeIFRSs,thereisnoexplicitlinkagebetweencontrolandownershipbenefits.

UnlikeIFRSs,thereisnode factocontrolmodelunderU.S.GAAP.

UnlikeIFRSs,potentialvotingrightsarenotconsideredinassessingcontrolfornon-variableinterestentities.

AlthoughU.S.GAAPhastheconceptsofvariableinterestentities(VIEs)andqualifyingSPEs(QSPEs),whichmaymeetthedefinitionofanSPEunderIFRSs,thecontrolmodelthatappliestoVIEsandQSPEsdiffersfromthecontrolmodelthatappliestoSPEsunderIFRSs.Additionally,unlikeIFRSs,entitiesareevaluatedasVIEsbasedontheirequityinvestmentatriskandnotonwhethertheyhaveanarrowandwell-definedobjective.

Generallyallsubsidiariesareconsolidated,likeIFRSs.However,unlikeIFRSs,therearelimitedexceptionsincertainspecialisedindustries.

UnlikeIFRSs,aVIEisanyentityinwhichtheequityatriskeither(�)isinsufficienttofinanceitsownoperationswithoutadditionalsubordinatedfinancialsupport;or(2)lackscertaincharacteristicsofacontrollingfinancialinterest.AVIEisassessedforconsolidationbasedonananalysisofeconomicrisksandrewards,andisconsolidatedbythepartythatabsorbsamajorityoftheexpectedlossesorhastherighttoreceiveamajorityofitsexpectedresidualreturns.

UnlikeIFRSs,aQSPEisanentityintowhichfinancialassetshavebeentransferredandwhichmeetscertainstrictcriteria.AQSPEisnotconsolidatedbythetransferor.

24 OverviewofIFRS



Aparentanditssubsidiariesgenerallyusethesamereportingdatewhenconsolidatedfinancialstatementsareprepared.Ifthisisnotpracticable,thenthedifferencebetweenthereportingdateofaparentanditssubsidiarycannotbemorethanthreemonths.Adjustmentsaremadefortheeffectsofsignificanttransactionsandeventsbetweenthetwodates.

Uniformaccountingpoliciesareusedthroughoutthegroup.

Minorityinterestsarerecognisedinitiallybasedontheminority’sshareoftheamountsrecognisedinthepurchaseaccounting,excludinggoodwill.

Theentityrecognisesaliabilityforthepresentvalueofthe(estimated)exercisepriceofputoptionsheldbyminorityinterests,butthereisnodetailedguidanceontheaccountingforsuchputoptions.

Lossesinasubsidiarymaycreateadebitbalanceinminorityinterestsonlyiftheminorityhasanobligationtofundthelosses.

Minorityinterestsinthebalancesheetareclassifiedasequitybutarepresentedseparatelyfromtheparentshareholders’equity.

Minorityinterestsinprofitorlossarepresentedasanallocationofthenetprofitorlossfortheperiod.

Thereisnoguidanceonaccountingforacquisitionsofminorityinterests.

Intra-grouptransactionsareeliminatedinfull.

Thereisnoguidanceondilutionsofaparent’sinterestinasubsidiary.




LikeIFRSs,thedifferencebetweenthereportingdateofaparentanditssubsidiarycannotbemorethanthreemonths.However,unlikeIFRSs,useofthesamereportingdateneednotbeimpracticable,andadjustmentsarenotmadefortheeffectsofsignificanttransactionsandeventsbetweenthesedates,althoughdisclosuresregardingthoseeffectsarerequired.

UnlikeIFRSs,uniformaccountingpolicieswithinthegrouparenotrequired.

UnlikeIFRSs,minorityinterestsinaVIEarerecognisedinitiallyatfairvalue.UnlikeIFRSs,minorityinterestsinnon-VIEsubsidiariesarerecognisedinitiallybasedonthecarryingamountsoftheassetsandliabilitiesinthesubsidiary’sfinancialstatements.

UnlikeIFRSs,thereisspecificguidanceontheaccountingforputoptionsheldbyminorityinterests,whichvariesdependingonthetermsofthearrangement.

LikeIFRSs,lossesinasubsidiarymaycreateadebitbalanceinminorityinterestsonlyiftheminorityhasanobligationtofundthelosses.

UnlikeIFRSs,minorityinterestsinthebalancesheetarepresentedeitherasalong-termliability,orbetweentotalliabilitiesandequity(themezzanine).

LikeIFRSs,minorityinterestsinprofitorlossarepresentedasanallocationofprofitorlossfortheperiod.

UnlikeIFRSs,acquisitionsofminorityinterestsareaccountedforusingpurchaseaccounting.

Generallyintra-grouptransactionsareeliminatedinfull,likeIFRSs.However,incomeorexpensebetweenaprimarybeneficiaryandaconsolidatedVIEisattributedentirelytotheprimarybeneficiary.

UnlikeIFRSs,thetreatmentofdilutionsintheparent’sinterestinasubsidiaryisprescribedforSECregistrants,anddependsonthenatureofthedilution.LikeIFRSs,thereisnoguidancefornon-SECregistrants.

26 OverviewofIFRS



2.�ANon-controllinginterests (IAS 27 (2008))

Anamendedstandardonconsolidatedfinancialstatements,whichchangestheaccountingfornon-controllinginterests,iseffectiveforannualperiodsbeginningonorafter�July2009;theamendmentsmaybeappliedearlyforannualperiodsbeginningonorafter30June2007iftherevisedstandardonbusinesscombinationsalsoisapplied(see2.6A).

Theamendedstandardchangestheaccountingfornon-controllinginterests,transactionswithnon-controllingshareholders,andthelossofcontrol.Thesechangesarehighlightedbelow.

Forthcoming requirements Non-controllinginterestsarerecognisedinitiallyatfairvalue,oratthenon-controllinginterests’shareoftheamountsrecognisedintheacquisitionaccounting,excludinggoodwill.

Theentityrecognisesaliabilityforthepresentvalueofthe(estimated)exercisepriceofputoptionsheldbynon-controllinginterests,butthereisnodetailedguidanceontheaccountingforsuchputoptions.

Lossesapplicabletothenon-controllinginterestsinasubsidiaryareallocatedtothenon-controllinginterestevenifthiscausesthenon-controllingintereststobeinadeficitposition.

Non-controllinginterestsinthebalancesheetareclassifiedasequitybutarepresentedseparatelyfromtheparentshareholders’equity.

Comprehensiveincomeattributabletonon-controllinginterestsispresentedasanallocationofcomprehensiveincomefortheperiod.

Changesinownershipinterestsaftercontrolisobtainedthatdonotresultinalossofcontrolareaccountedforasequitytransactions.




2.�ANon-controllinginterests (SFAS 160)

Anewstandardonnon-controllinginterestsiseffectiveforperiodsbeginningonorafter��December2008;earlierapplicationisprohibited.

LikeIFRSs,thenewstandardchangestheaccountingfornon-controllinginterests,transactionswithnon-controllingshareholders,andthelossofcontrol.Thesechangesarehighlightedbelow.

Forthcoming requirements UnlikeIFRSs,non-controllinginterestsmustberecognisedinitiallyatfairvalue.

UnlikeIFRSs,thereisspecificguidanceontheaccountingforputoptionsheldbyminorityinterests,whichvariesdependingonthetermsofthearrangement.

LikeIFRSs,lossesapplicabletothenon-controllinginterestsinasubsidiaryareallocatedtothenon-controllinginterestevenifthiscausesthenon-controllingintereststobeinadeficitposition.

LikeIFRSs,non-controllinginterestsinthebalancesheetareclassifiedasequitybutarepresentedseparatelyfromtheparentshareholders’equity.

LikeIFRSs,comprehensiveincomeattributabletonon-controllinginterestsispresentedasanallocationofcomprehensiveincomefortheperiod.

LikeIFRSs,changesinownershipinterestsaftercontrolisobtainedthatdonotresultinalossofcontrolareaccountedforasequitytransactions.

28 OverviewofIFRS



Whencontrolislost,againorlossisrecognisedinprofitorloss,comprisinga“realised”gainorlossontheinterestdisposedof,andan“unrealised”gainorlossfromremeasurementtofairvalueofanyretainednon-controllingequityinvestmentintheformersubsidiary.




LikeIFRSs,whencontrolislost,againorlossisrecognisedinprofitorloss,comprisinga“realised”gainorlossontheinterestdisposedof(unless,unlikeIFRSs,theportionisdisposedofthroughanon-reciprocaltransfertoowners),andan“unrealised”gainorlossfromremeasurementtofairvalueofanyretainednon-controllingequityinvestmentintheformersubsidiary.

30 OverviewofIFRS



2.6 Businesscombinations (IFRS 3, IAS 38)

Allbusinesscombinationsareaccountedforusingpurchaseaccounting,withlimitedexceptions.

Abusinesscombinationisthebringingtogetherofseparateentitiesorbusinessesintoonereportingentity.

Abusinesscanbeanoperationmanagedforthepurposeofprovidingareturntoinvestorsorlowercosts.Anentityinitsdevelopmentstagecanmeetthedefinitionofabusiness.

Insomecasesthelegalsubsidiaryisidentifiedastheacquirerforaccountingpurposes(“reverseacquisition”).

Thedateofacquisitionisthedateonwhicheffectivecontrolistransferredtotheacquirer.

Thecostofacquisitionistheamountofcashorcashequivalentspaid,plusthefairvalueofotherpurchaseconsiderationgiven,plusanycostsdirectlyattributabletotheacquisition.

Thefairvalueofsecuritiesissuedbytheacquirerisdeterminedatthedateofexchange.

Costsdirectlyattributabletotheacquisitionmaybeinternalcosts,butcannotbegeneraladministrativecosts.Thereisnorequirementfordirectlyattributablecoststobeincremental.




2.6 Businesscombinations (SFAS 109, SFAS 141, SFAS 142, SFAS 147, FIN 4, FIN 48, EITF 95-3,

EITF 95-8, EITF 96-7, EITF 97-15, EITF 98-3, EITF 99-12, EITF 99-15, EITF 02-17, EITF 04-01, EITF D-97)

LikeIFRSs,allbusinesscombinationsareaccountedforusingpurchaseaccounting,withlimitedexceptions.

LikeIFRSs,abusinesscombinationoccurswhenanentityacquiresnetassetsthatconstituteabusiness,oracquiresequityinterestsofoneormoreotherentitiesthattogetherconstituteabusinessandobtainscontroloverthatentityorentities.

UnlikeIFRSs,abusinessmustbemanagedforthepurposeofprovidingareturntoinvestors,andthereisarebuttablepresumptionthatadevelopmentstageentitydoesnotmeetthedefinitionofabusiness.

LikeIFRSs,insomecasesthelegalsubsidiaryisidentifiedastheacquirerforaccountingpurposes(“reverseacquisition”).

LikeIFRSs,thedateofacquisitionisthedateonwhicheffectivecontrolistransferredtotheacquirer.

LikeIFRSs,thecostofacquisitionistheamountofcashorcashequivalentspaid,plusthefairvalueofotherpurchaseconsiderationgiven,plusanydirectcostsofthebusinesscombination.However,directcostsdifferincertainrespectsfromdirectlyattributablecostsunderIFRSs.

UnlikeIFRSs,thefairvalueofequitysecuritiesissuedbytheacquirerisdeterminedbyreferencetotheirmarketpriceforafewdaysbeforeandafterthetermsoftheacquisitionareagreedtoandannounced.

UnlikeIFRSs,directcostsofthebusinesscombinationcannotincludeinternalcosts,andqualifyingdirectcostsmustbeincremental.

32 OverviewofIFRS



Aliabilityforcontingentconsiderationisrecognisedassoonaspaymentbecomesprobableandtheamountcanbemeasuredreliably.

Theassetsacquiredandliabilitiesandcontingentliabilitiesassumedgenerallyarerecognisedatfairvalue.

Whilethereisgeneralguidanceonmeasuringfairvalues,thereisnodetailedguidanceonvaluationmethodologies.

Acquirednon-currentassets(disposalgroups)classifiedasheldforsalearerecognisedatfairvaluelesscoststosell.

Anintangibleassetisrecognisedseparatelyfromgoodwillwhenitisidentifiable,theentityhascontroloverit,anditsfairvaluecanbemeasuredreliably.

Arestructuringprovisionisrecognisedonlywhenitisanexistingliabilityoftheacquireeattheacquisitiondate.

Anychangeintheacquirer’sdeferredtaxassetsasaresultofthebusinesscombinationisnotrecognisedaspartofthepurchaseaccounting.

Exceptinrespectofgoodwill,deferredtaxisrecognisedonfairvalueadjustmentsrecognisedaspartofthepurchaseaccounting.

Subjecttolimitedexceptions,adjustmentstogoodwillcanbemadeonlywithin�2monthsoftheacquisition.




UnlikeIFRSs,aliabilityforcontingentconsiderationisrecognisedonlywhenthecontingencyisresolvedandconsiderationbecomespayable.

LikeIFRSs,theassetsacquiredandliabilitiesassumedgenerallyarerecognisedatfairvalueina�00percentacquisition.However,unlikeIFRSs,liabilitiesthatwouldbecontingentliabilitiesunderIFRSsarenotrecognised.UnlikeIFRSs,whentheacquirer’sinterestintheacquireeislessthan�00percent,assetsandliabilitiesareadjustedtoreflectfairvaluesonlytotheextentoftheacquirer’sinterestintheacquiree.

UnlikeIFRSs,thegeneralguidanceonmeasuringfairvaluesissupportedbysomedetailedguidanceonvaluationmethodologies.

LikeIFRSs,acquirednon-currentassets(disposalgroups)classifiedasheldforsalearerecognisedatfairvaluelesscoststosell.

LikeIFRSs,anintangibleassetisrecognisedseparatelyfromgoodwillwhenitisidentifiableandtheentityhascontroloverit.However,unlikeIFRSs,thereisnominimumreliabilitythresholdinrespectofestimatingfairvalue.

UnlikeIFRSs,certaincostsofrestructuringtheacquireearetreatedasliabilitiesassumedeventhoughtheyarenotaliabilityoftheacquireeattheacquisitiondate.

UnlikeIFRSs,anychangeintheacquirer’sdeferredtaxassetsasaresultofthebusinesscombinationisrecognisedaspartofthepurchaseaccounting.

UnlikeIFRSs,nodeferredtaxisrecognisedinrespectofin-processresearchanddevelopmentrecognisedaspartofthepurchaseaccounting.LikeIFRSs,deferredtaxisrecognisedonallotherfairvalueadjustments,butnotongoodwill.

LikeIFRSs,subjecttolimitedexceptions,adjustmentstogoodwillcanbemadeonlywithin�2monthsoftheacquisition.However,thoseexceptionsdifferincertainrespectsfromIFRSs.

34 OverviewofIFRS



Ifadditionaldeferredtaxassetsoftheacquireethatwerenotrecognisedatthedateofacquisitionarerealisedsubsequently,thentheadjustmentisrecognisedinprofitorloss,andgoodwillisadjustedwithacorrespondingamountrecognisedinprofitorloss.

Whentheacquirer’sinterestinthenetfairvalueoftheassetsacquiredandliabilitiesandcontingentliabilitiesassumedexceedsthecostofacquisition(negativegoodwill),anyexcessisrecognisedinprofitorlossimmediatelyafterreassessingtheidentificationandmeasurementoftheassetsacquired.

Whenanacquisitionisachievedinsuccessivesharepurchases,theassetsacquiredandliabilitiesandcontingentliabilitiesassumedarerecognisedatfullfairvaluewhencontrolisobtained,i.e.,theshareoftheidentifiableassets,liabilitiesandcontingentliabilitiesacquiredinprevioustransactionsisrevalued.Eachexchangetransactionisconsideredseparatelyindetermininggoodwill.

“Pushdown”accounting,wherebyfairvalueadjustmentsarerecognisedinthefinancialstatementsoftheacquiree,isnotpermittedunderIFRSs.

Thereisnoguidanceonaccountingforcommoncontroltransactions.

Thereisnoguidanceonaccountingforcombinationsbycontractaloneorforcombinationsinvolvingtwoormoremutualentities.




UnlikeIFRSs,ifadditionaldeferredtaxassetsoftheacquireethatwerenotrecognisedatthedateofacquisitionarerealisedsubsequently,thentheadjustmentisrecognisedfirstagainstgoodwill,thenagainstothernon-currentintangibleassets,beforebeingrecognisedinprofitorloss.

UnlikeIFRSs,whentheacquirer’sinterestinthenetfairvalueoftheassetsacquiredandliabilitiesassumedexceedsthecostofacquisition(negativegoodwill),theexcessamountfirstisdeductedproportionallyfromthepurchasepriceallocatedtocertainacquirednon-currentassetsuntiltheircarryingamountsarereducedtozero,andanyremainingnegativegoodwillisrecognisedasanextraordinarygaininprofitorloss.However,unlikeIFRSs,anyremainingnegativegoodwillisnotrecognisedinprofitorlosstotheextentthatcontingentconsiderationbasedonearningsmaybecomepayable.

UnlikeIFRSs,whenanacquisitionisachievedinsuccessivesharepurchases,theassetsacquiredandliabilitiesassumedarenotremeasuredtofullfairvaluewhencontrolisobtained.LikeIFRSs,eachexchangetransactionisconsideredseparatelyindetermininggoodwill.

UnlikeIFRSs,“pushdown”accounting,wherebyfairvalueadjustmentsarerecognisedinthefinancialstatementsoftheacquiree,isrequiredforSECregistrantsincertaincircumstances.

UnlikeIFRSs,commoncontroltransactionsareaccountedforbythereceivingentitybasedonthecarryingamountsintheconsolidatedfinancialstatementsoftheparentatthedateoftransfer;comparativesarerevised.

LikeIFRSs,thereisnoguidanceonaccountingforcombinationsbycontractaloneorforcombinationsinvolvingtwoormoremutualentities.

36 OverviewofIFRS



2.6ABusinesscombinations (IFRS 3 (2008), IAS 38)

Arevisedstandardonbusinesscombinationsiseffectiveforbusinesscombinationsinannualperiodsbeginningonorafter�July2009;earlierapplicationispermittedforannualperiodsbeginningonorafter30June2007iftheamendedstandardonconsolidatedfinancialstatementsalsoisapplied(see2.�A).Thenewrequirements,highlightedbelow,applyprospectively.

Forthcoming requirements Allbusinesscombinationsareaccountedforusingacquisitionaccounting,withlimitedexceptions.

Abusinesscombinationisatransactionorothereventinwhichanacquirerobtainscontrolofoneormorebusinesses.

Abusinessisanoperationthatiscapableofbeingconductedandmanagedforthepurposeofprovidingareturntoinvestors(orotherowners,membersorparticipants)bywayofdividends,lowercosts,orothereconomicbenefits.Anentityinitsdevelopmentstagecanmeetthedefinitionofabusiness.

Insomecasesthelegalacquireeisidentifiedastheacquirerforaccountingpurposes(“reverseacquisition”).

Thedateofacquisitionisthedateonwhichcontrolistransferredtotheacquirer.

Considerationtransferredisthesumofthefairvaluesoftheassetstransferred,liabilitiesincurredtothepreviousownersoftheacquiree,equityinterestsissued,andanycontingentconsideration.

Thefairvalueofsecuritiesissuedbytheacquirerisdeterminedatthedateofacquisition.




2.6ABusinesscombinations (SFAS 141R, SFAS 142, EITF 02-5, EITF D-97, SAB Topic 5-J)

Arevisedstandardonbusinesscombinationsiseffectiveforbusinesscombinationsinannualperiodsbeginningonorafter��December2008;earlierapplicationisprohibited.Thenewrequirements,highlightedbelow,applyprospectively.

Forthcoming requirements LikeIFRSs,allbusinesscombinationsareaccountedforusingacquisitionaccounting,withlimitedexceptions.

LikeIFRSs,abusinesscombinationisatransactionorothereventinwhichanacquirerobtainscontrolofoneormorebusinesses.

LikeIFRSs,abusinessisanoperationthatiscapableofbeingconductedandmanagedforthepurposeofprovidingareturntoinvestors(orotherowners,membersorparticipants)bywayofdividends,lowercosts,orothereconomicbenefits.Anentityinitsdevelopmentstagecanmeetthedefinitionofabusiness,likeIFRSs.

LikeIFRSs,insomecasesthelegalacquireeisidentifiedastheacquirerforaccountingpurposes(“reverseacquisition”).

LikeIFRSs,thedateofacquisitionisthedateonwhichcontrolistransferredtotheacquirer.

LikeIFRSs,considerationtransferredisthesumofthefairvaluesoftheassetstransferred,liabilitiesincurredtothepreviousownersoftheacquiree,equityinterestsissued,andanycontingentconsideration.

LikeIFRSs,thefairvalueofsecuritiesissuedbytheacquirerisdeterminedatthedateofacquisition.

38 OverviewofIFRS



Considerationtransferreddoesnotincludeacquisition-relatedcosts.

Contingentconsiderationisrecognisedinitiallyatfairvalueaspartoftheconsiderationtransferred.Subsequentchangesinthefairvalueofcontingentconsiderationclassifiedasanassetorliabilitygenerallyarerecognisedinprofitorloss.Contingentconsiderationclassifiedasequityisnotremeasured.

Anintangibleassetisrecognisedseparatelyfromgoodwillwhenitisidentifiable.Anintangibleassetisidentifiableifitmeetseithertheseparabilitycriterion,orthecontractual-legalcriterion.

Arestructuringprovisionisrecognisedonlywhenitisanexistingliabilityoftheacquireeattheacquisitiondate.

Anychangeintheassessmentoftherecoverabilityoftheacquirer’sdeferredtaxassetsasaresultofthebusinesscombinationisrecognisedinprofitorloss.

Ifadditionaldeferredtaxassetsoftheacquireethatwerenotrecognisedatthedateofacquisitionarerealisedsubsequently,thentheadjustmentisrecognisedinprofitorloss.

Themeasurementprincipleinaccountingfortheidentifiableassetsacquiredandliabilitiesassumedisfullfairvalue,withlimitedexceptions.

WhilethereisgeneralguidanceonmeasuringfairvaluesinIFRSs,thereisnodetailedguidanceonvaluationmethodologies.

Acquirednon-currentassets(disposalgroups)classifiedasheldforsalearerecognisedatfairvaluelesscoststosell.




LikeIFRSs,considerationtransferreddoesnotincludeacquisition-relatedcosts.

LikeIFRSs,contingentconsiderationisrecognisedinitiallyatfairvalueaspartoftheconsiderationtransferred.LikeIFRSs,subsequentchangesinthefairvalueofcontingentconsiderationclassifiedasanassetorliabilityarerecognisedinprofitorloss.LikeIFRSs,contingentconsiderationclassifiedasequityisnotremeasured.However,unlikeIFRSs,theclassificationofcontingentconsiderationasequity,orasanassetorliabilityunderU.S.GAAPmaydifferfromIFRSs.

LikeIFRSs,anintangibleassetisrecognisedseparatelyfromgoodwillwhenitisidentifiable.LikeIFRSs,anintangibleassetisidentifiableifitmeetseithertheseparabilitycriterion,orthecontractual-legalcriterion.

LikeIFRSs,arestructuringprovisionisrecognisedonlywhenitisanexistingliabilityoftheacquireeattheacquisitiondate.

LikeIFRSs,anychangeintheassessmentoftherecoverabilityoftheacquirer’sdeferredtaxassetsasaresultofthebusinesscombinationisrecognisedinprofitorloss.

LikeIFRSs,ifadditionaldeferredtaxassetsoftheacquireethatwerenotrecognisedatthedateofacquisitionarerealisedsubsequently,thentheadjustmentisrecognisedinprofitorloss.

LikeIFRSs,themeasurementprincipleinaccountingfortheidentifiableassetsacquiredandliabilitiesassumedisfullfairvalue,withlimitedexceptions.

UnlikeIFRSs,U.S.GAAPdefinesfairvaluemeasurementasanexitvalue,providesafairvaluehierarchy,andprovidesgeneralvaluationguidanceanddisclosurerequirements.

LikeIFRSs,acquirednon-currentassets(disposalgroups)classifiedasheldforsalearerecognisedatfairvaluelesscoststosell.

40 OverviewofIFRS



Attheacquisitiondatetheacquirermeasuresanynon-controllinginterestsatfairvalue,oratitsproportionateinterestinthevaluesassignedtotheidentifiableassetsacquiredandliabilitiesassumedintheacquisitionaccounting.

Whenthesumofthefairvalueoftheconsiderationtransferred,thefairvalueofanypreviouslyheldequityinterestintheacquiree,andtherecognisedamountofnon-controllinginterestsexceedsthefairvalueoftheidentifiableassetsacquiredandliabilitiesassumed,theexcessisrecognisedasgoodwill.Anydeficitisabargainpurchase,whichisrecognisedinprofitorlossimmediatelyafterreassessingtheidentificationandmeasurementoftheaboveitems.

Adjustmentstoprovisionallydeterminedamountsinabusinesscombinationcanbemadeonlywithinthemeasurementperiod,whichcannotexceed�2monthsfromtheacquisitiondate.Adjustmentsaremaderetrospectivelyandcomparativesarerevised.

Whenanacquisitionisachievedinstages(stepacquisition),theidentifiableassetsandliabilitiesarerecognisedatfullfairvaluewhencontrolisobtained,andagainorlossisrecognisedinprofitorlossforthedifferencebetweenthefairvalueandthecarryingamountofthepreviouslyheldequityinterestintheacquiree.

“Pushdown”accounting,wherebyfairvalueadjustmentsarerecognisedinthefinancialstatementsoftheacquiree,isnotpermittedunderIFRSs.

Thereisnoguidanceonaccountingforcommoncontroltransactions.




UnlikeIFRSs,attheacquisitiondatetheacquirermeasuresanynon-controllinginterestsatfairvalue.

LikeIFRSs,whenthesumofthefairvalueoftheconsiderationtransferred,thefairvalueofanypreviouslyheldequityinterestintheacquiree,andtherecognisedamountofnon-controllinginterests(fairvalueunderU.S.GAAP)exceedsthefairvalueoftheidentifiableassetsacquiredandliabilitiesassumed,theexcessisrecognisedasgoodwill.Anydeficitisabargainpurchase,whichisrecognisedinprofitorlossimmediatelyafterreassessingtheidentificationandmeasurementoftheaboveitems,likeIFRSs.

LikeIFRSs,adjustmentstoprovisionallydeterminedamountsinabusinesscombinationcanbemadeonlywithinthemeasurementperiod,whichcannotexceed�2monthsfromtheacquisitiondate.LikeIFRSs,adjustmentsaremaderetrospectivelyandcomparativesarerevised.

LikeIFRSs,whenanacquisitionisachievedinstages(stepacquisition),theidentifiableassetsandliabilitiesarerecognisedatfullfairvaluewhencontrolisobtained,andagainorlossisrecognisedinprofitorlossforthedifferencebetweenthefairvalueandthecarryingamountofthepreviouslyheldequityinterestintheacquiree.

UnlikeIFRSs,“pushdown”accounting,wherebyfairvalueadjustmentsarerecognisedinthefinancialstatementsoftheacquiree,isrequiredforSECregistrantsincertaincircumstances.

UnlikeIFRSs,commoncontroltransactionsareaccountedforbythereceivingentitybasedonthecarryingamountsintheconsolidatedfinancialstatementsoftheparentatthedateoftransfer;comparativesarerevised.

42 OverviewofIFRS



2.7 Foreigncurrencytranslation (IAS 21, IAS 29)

Anentitymeasuresitsassets,liabilities,revenuesandexpensesinitsfunctionalcurrency,whichisthecurrencyoftheprimaryeconomicenvironmentinwhichitoperates.

Anentitymaypresentitsfinancialstatementsinacurrencyotherthanitsfunctionalcurrency(presentationcurrency).

Anentitymayhavemorethanonepresentationcurrency.

Alltransactionsthatarenotdenominatedinanentity’sfunctionalcurrencyareforeigncurrencytransactions;exchangedifferencesarisingfromforeigncurrencytransactionsgenerallyarerecognisedinprofitorloss.

Thefinancialstatementsofforeignoperationsaretranslatedasfollows:assetsandliabilitiesattheclosingrate,revenuesandexpensesatactualratesorappropriateaverages,andequitycomponentsathistoricrates.

Ifthefunctionalcurrencyofaforeignoperationishyperinflationary,thencurrentpurchasingpoweradjustmentsaremadetoitsfinancialstatementspriortotranslation.Thefinancialstatementsthenaretranslatedattheclosingrateattheendofthecurrentperiod.

Whenaninvestmentinaforeignoperationisdisposedof,thecumulativeexchangedifferencesrecognisedpreviouslydirectlyinequityarerecognisedinprofitorloss.

Whenfinancialstatementsaretranslatedintoapresentationcurrencyotherthantheentity’sfunctionalcurrency,theentityusesthesamemethodasfortranslatingthefinancialstatementsofaforeignoperation.




2.7 Foreigncurrencytranslation (SFAS 52, FIN 37, EITF 01-5)

LikeIFRSs,anentitymeasuresitsassets,liabilities,revenuesandexpensesinitsfunctionalcurrency,whichisthecurrencyoftheprimaryeconomicenvironmentinwhichitoperates.

LikeIFRSs,anentitymaypresentitsfinancialstatementsinacurrencyotherthanitsfunctionalcurrency(reportingcurrency).

UnlikeIFRSs,anentitymaynothavemorethanonereportingcurrency.

LikeIFRSs,transactionsthatarenotdenominatedinanentity’sfunctionalcurrencyareforeigncurrencytransactions,andexchangedifferencesarisingfromforeigncurrencytransactionsgenerallyarerecognisedinprofitorloss.

LikeIFRSs,thefinancialstatementsofforeignoperationsaretranslatedasfollows:assetsandliabilitiesattheclosingrate,revenuesandexpensesatactualratesorappropriateaverages,andequitycomponentsathistoricrates.

UnlikeIFRSs,thefinancialstatementsofaforeignoperationinahighlyinflationaryeconomyareremeasuredasiftheparent’sreportingcurrencywereitsfunctionalcurrency.

LikeIFRSs,whenaninvestmentinaforeignoperationisdisposedof,thecumulativeexchangedifferencesrecognisedpreviouslydirectlyinequityarerecognisedinprofitorloss.

LikeIFRSs,whenfinancialstatementsaretranslatedintoareportingcurrencyotherthantheentity’sfunctionalcurrency,theentityusesthesamemethodasfortranslatingthefinancialstatementsofaforeignoperation.

44 OverviewofIFRS



Anentitymaypresentsupplementaryfinancialinformationinacurrencyotherthanitspresentationcurrency(currencies)ifcertaindisclosuresaremade.




LikeIFRSs,anSECregistrantmaypresentsupplementaryfinancialinformationinacurrencyotherthanitsreportingcurrency;however,theSECregulationsaremoreprescriptivethanIFRSs.

46 OverviewofIFRS



2.8 Accountingpolicies,errorsandestimates (IAS 1, IAS 8)

Anaccountingpolicyischangedinresponsetoaneworrevisedstandardorinterpretation,oronavoluntarybasisifthenewpolicyismoreappropriate.

Generallyaccountingpolicychangesandcorrectionsofpriorperioderrorsareaccountedforretrospectivelybyadjustingopeningequityandcomparatives,unlessimpracticable.

Changesinaccountingestimatesareaccountedforprospectively.

Whenitisdifficulttodeterminewhetherachangeisachangeinaccountingpolicyorachangeinestimate,itistreatedasachangeinestimate.

Comparativesareadjusted,unlessimpracticable,iftheclassificationorpresentationofitemsinthefinancialstatementsischanged.




2.8 Accountingpolicies,errorsandestimates (APB 9, SFAS 16, SFAS 154)

LikeIFRSs,anaccountingprinciple(policy)ischangedinresponsetoaneworrevisedstandardorinterpretation,oronavoluntarybasisifthenewprincipleispreferable.

LikeIFRSs,accountingprinciplechangesgenerallyaremadebyadjustingopeningequityandcomparatives,unlessimpracticable.UnlikeIFRSs,errorsmustbecorrectedbyrestatingopeningequityandcomparatives,withnoimpracticalityexemption.

LikeIFRSs,changesinaccountingestimatesareaccountedforprospectively.

LikeIFRSs,whenitisdifficulttodeterminewhetherachangeisachangeinaccountingprincipleorachangeinestimate,itistreatedasachangeinestimate.

LikeIFRSs,comparativesareadjusted,unlessimpracticable,iftheclassificationorpresentationofitemsinthefinancialstatementsischanged.

48 OverviewofIFRS



2.9 Eventsafterthereportingdate (IAS 1, IAS 10)

Thefinancialstatementsareadjustedtoreflecteventsthatoccurafterthereportingdate,butbeforethefinancialstatementsareauthorisedforissue,ifthoseeventsprovideevidenceofconditionsthatexistedatthereportingdate.

Financialstatementsarenotadjustedforeventsthatareindicativeofconditionsthataroseafterthereportingdateexceptwhenthegoingconcernassumptionnolongerisappropriate.

Liabilitiesgenerallyareclassifiedascurrentornon-currentbasedoncircumstancesatthereportingdate.

Dividendsdeclaredafterthereportingdatearenotrecognisedasaliability.




2.9 Eventsafterthereportingdate (SFAS 6, SFAS 78, SFAS 128, FIN 8, FIN 48, FTB 79-3, EITF 86-30,

EITF 95-22, SAB Topic 4-C, SAS 59, AU 560, AU 561)

LikeIFRSs,thefinancialstatementsareadjustedtoreflecteventsthatoccurafterthereportingdateifthoseeventsprovideevidenceofconditionsthatexistedatthereportingdate.However,unlikeIFRSs,theperiodtoconsidergoesbeyondthedateofauthorisationofthefinancialstatementstothedatethatthestatementsareissued,andtaxuncertaintiesareneveradjustedforsubsequentevents.

LikeIFRSs,generallyfinancialstatementsarenotadjustedforeventsthatareindicativeofconditionsthataroseafterthereportingdate.However,unlikeIFRSs,thereisnoexceptionwhenthegoingconcernassumptionnolongerisappropriate.AlsounlikeIFRSs,SECregistrantsadjustthebalancesheetforasharedividend,sharesplitorreversesharesplitoccurringafterthereportingdate.

LikeIFRSs,generallytheclassificationofliabilitiesascurrentornon-currentreflectscircumstancesatthereportingdate.However,unlikeIFRSs,post-reportingdaterefinancingsareconsideredindeterminingtheclassificationofdebtatthereportingdate.AlsounlikeIFRSs,liabilitiespayableondemandatthereportingdateduetocovenantviolationsareclassifiedasnon-currentincertaincircumstances.

LikeIFRSs,dividendsdeclaredafterthereportingdatearenotrecognisedasaliability.

�0 OverviewofIFRS



3. Specificbalancesheetitems

3.� General (IAS 1, IAS 32)

Generallyanentitymustpresentitsbalancesheetclassifiedbetweencurrentandnon-current.Anunclassifiedbalancesheetbasedontheorderofliquidityisacceptableonlywhenitprovidesreliableandmorerelevantinformation.

WhileIFRSsrequirecertainitemstobepresentedonthefaceofthebalancesheet,thereisnoprescribedformat.

Aliabilitythatispayableondemandbecausecertainconditionsarebreachedisclassifiedascurrentevenifthelenderhasagreed,afterthereportingdatebutbeforethefinancialstatementsareauthorisedforissue,nottodemandrepayment.

Assetsandliabilitiesthatareexpectedtobesettledwithintheentity’snormaloperatingcycle,whichmaybelongerthan�2monthsafterthereportingdate,areclassifiedascurrent.




3. Specificbalancesheetitems

3.� General (ARB 43, SFAS 6, SFAS 78, FIN 8, FIN 39, EITF D-43, FSP FIN 39-1,

Reg S-X)

UnlikeIFRSs,U.S.GAAPdoesnotcontainarequirementtopresentaclassifiedbalancesheet.UnlikeIFRSs,thereisnorestrictiononwhenanunclassifiedbalancesheetbasedontheorderofliquiditycanbepresented.

UnlikeIFRSs,SECregulationsprescribetheformatandcertainminimumlineitemdisclosuresforSECregistrants.Fornon-SECregistrants,thereislimitedguidanceonthepresentationofthebalancesheet,likeIFRSs.

LikeIFRSs,generallyobligationsthatarepayableondemandareclassifiedascurrent.However,unlikeIFRSs,aliabilityisnotclassifiedascurrentwhenitisrefinancedsubsequenttothereportingdatebutpriortothefinancialstatementsbeingissued,orwhenthelenderhaswaivedafterthereportingdateitsrighttodemandrepaymentformorethan�2monthsfromthereportingdate.

LikeIFRSs,assetsandliabilitiesthatareexpectedtobesettledwithintheentity’snormaloperatingcycle,whichmaybelongerthan�2monthsafterthereportingdate,areclassifiedascurrent.

�2 OverviewofIFRS



3.2 Property,plantandequipment (IAS 16, IAS 23, IFRIC 1)

Property,plantandequipmentisrecognisedinitiallyatcost.

Costincludesallexpendituredirectlyattributabletobringingtheassettothelocationandworkingconditionforitsintendeduse.

Costincludesthecostofdismantlingandremovingtheassetandrestoringthesite.

Changestoanexistingdecommissioningorrestorationobligationgenerallyareaddedtoordeductedfromthecostoftherelatedassetanddepreciatedprospectivelyoveritsremainingusefullife.

Property,plantandequipmentisdepreciatedoveritsusefullife.

Anitemofproperty,plantandequipmentisdepreciatedevenifitisidle,butnotifitisheldforsale.

Estimatesofusefullifeandresidualvalue,andthemethodofdepreciation,arereviewedatleastateachannualreportingdate.Anychangesareaccountedforprospectivelyasachangeinestimate.

Whenanitemofproperty,plantandequipmentcomprisesindividualcomponentsforwhichdifferentdepreciationmethodsorratesareappropriate,eachcomponentisdepreciatedseparately.

Subsequentexpenditureiscapitalisedonlywhenitisprobablethatitwillgiverisetofutureeconomicbenefits.




3.2 Property,plantandequipment (ARB 43, APB 21, APB 29, SFAS 34, SFAS 143, SFAS 153, SFAS 154,

FIN 30, FIN 47, FSP FAS 143-1, SOP 98-5, TPA 2210.28)

LikeIFRSs,property,plantandequipmentisrecognisedinitiallyatcost.

LikeIFRSs,costincludesallexpendituredirectlyattributabletobringingtheassettothelocationandworkingconditionforitsintendeduse.

LikeIFRSs,costincludesthecostofdismantlingandremovingtheassetandrestoringthesite.

LikeIFRSs,changestoanexistingdecommissioningorrestorationobligationgenerallyareaddedtoordeductedfromthecostoftherelatedassetanddepreciatedprospectivelyoveritsremainingusefullife.

LikeIFRSs,property,plantandequipmentisdepreciatedoveritsusefullife.

LikeIFRSs,anitemofproperty,plantandequipmentisdepreciatedevenifitisidle,butnotifitisheldforsale.

UnlikeIFRSs,estimatesofusefullifeandresidualvalue,andthemethodofdepreciation,arereviewedonlywheneventsorchangesincircumstancesindicatethatthecurrentestimatesordepreciationmethodnolongerareappropriate.LikeIFRSs,anychangesareaccountedforprospectivelyasachangeinestimate.

UnlikeIFRSs,componentaccountingispermittedbutnotrequired.

LikeIFRSs,subsequentexpenditureiscapitalisedonlywhenitisprobablethatitwillgiverisetofutureeconomicbenefits.

�4 OverviewofIFRS



Property,plantandequipmentmayberevaluedtofairvalueiffairvaluecanbemeasuredreliably.Allitemsinthesameclassarerevaluedatthesametimeandtherevaluationsarekeptuptodate.

Compensationforlossorimpairmentcannotbeoffsetagainstthecarryingamountoftheassetlostorimpaired.

Thegainorlossondisposalisthedifferencebetweenthenetproceedsreceivedandthecarryingamountoftheasset.




UnlikeIFRSs,therevaluationofproperty,plantandequipmentisnotpermitted.

LikeIFRSs,compensationforlossorimpairmentcannotbeoffsetagainstthecarryingamountoftheassetlostorimpaired.

LikeIFRSs,thegainorlossondisposalisthedifferencebetweenthenetproceedsreceivedandthecarryingamountoftheasset.

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3.3 Intangibleassetsandgoodwill (IFRS 3, IAS 36, IAS 38, SIC–32)

Anintangibleassetisanidentifiablenon-monetaryassetwithoutphysicalsubstance.

Anintangibleassetisidentifiableifitisseparableorarisesfromcontractualorlegalrights.

Intangibleassetsgenerallyarerecognisedinitiallyatcost,whichisthefairvalueoftheconsiderationgiven.

Goodwillisrecognisedonlyinabusinesscombinationandismeasuredasaresidual.

Acquiredgoodwillandotherintangibleassetswithindefiniteusefullivesarenotamortised,butinsteadaresubjecttoimpairmenttestingatleastannually.

Intangibleassetswithfiniteusefullivesareamortisedovertheirexpectedusefullives.

Subsequentexpenditureonanintangibleassetiscapitalisedonlyifthedefinitionofanintangibleassetandtherecognitioncriteriaaremet.

Intangibleassetsmayberevaluedtofairvalueonlyifthereisanactivemarket.

Internalresearchexpenditureisexpensedasincurred.Internaldevelopmentexpenditureiscapitalisedifspecificcriteriaaremet.Thesecapitalisationcriteriaareappliedtoallinternallydevelopedintangibleassets.




3.3 Intangibleassetsandgoodwill (SFAS 2, SFAS 68, SFAS 86, SFAS 142, SFAS 144, FIN 4, EITF 95-3,

EITF 00-2, EITF 02-17, EITF 03-9, EITF D-100, EITF D-101, SOP 93-7, SOP 98-1, SOP 98-5)

LikeIFRSs,anintangibleassetisanasset,notincludingafinancialasset,thatlacksphysicalsubstance.

IFRSs,anintangibleassetisidentifiableifitisseparableorarisesfromcontractualorlegalrights.

LikeIFRSs,direct-responseadvertising,softwaredevelopedforinternaluse,andsoftwaredevelopedforsaletothirdpartiesarerecognisedinitiallyatcost.Otherintangibleassetsgenerallyarerecognisedatfairvalue,whichusuallyequalsthefairvalueoftheconsiderationgiven,likeIFRSs.

LikeIFRSs,goodwillisrecognisedonlyinabusinesscombinationandismeasuredasaresidual.

IFRSs,acquiredgoodwillandotherintangibleassetswithindefinitelivesarenotamortised,butinsteadaresubjecttoimpairmenttestingatleastannually.

LikeIFRSs,intangibleassetswithfinitelivesareamortisedovertheirexpectedusefullives.

Subsequentexpenditureonanintangibleassetisnotcapitalisedunlessitcanbedemonstratedthattheexpenditureincreasestheutilityoftheasset,whichbroadlyislikeIFRSs.

UnlikeIFRSs,intangibleassetscannotberevalued.

UnlikeIFRSs,bothinternalresearchanddevelopmentexpenditureisexpensedasincurred.Specialcapitalisationcriteriaapplytodirect-responseadvertising,softwaredevelopedforinternaluse,andsoftwaredevelopedforsaletothirdparties,whichdifferfromthegeneralcriteriaunderIFRSs.

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Advertisingandpromotionalexpenditureisexpensedasincurred.

Expenditureonrelocationorreorganisationisexpensedasincurred.

Thefollowingcostscannotbecapitalisedasintangibleassets:internallygeneratedgoodwill,coststodevelopcustomerlists,start-upcostsandtrainingcosts.




UnlikeIFRSs,direct-responseadvertisingexpenditureiscapitalisedifspecificcriteriaaremet.Otheradvertisingandpromotionalexpenditureisexpensedasincurred,likeIFRSs.

IFRSs,certainrelocationcostsfollowingabusinesscombinationarecapitalised.Otherrelocationorreorganisationexpendituresareexpensedasincurred,likeIFRSs.

LikeIFRSs,thefollowingcostscannotbecapitalisedasintangibleassets:internallygeneratedgoodwill,coststodevelopcustomerlists,start-upcostsandtrainingcosts.

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3.4 Investmentproperty (IAS 40, IAS 17)

Investmentpropertyispropertyheldtoearnrentalincomeorforcapitalappreciationorboth.

Propertyheldbyalesseeunderanoperatingleasemaybeclassifiedasinvestmentpropertyifthedefinitionofinvestmentpropertyotherwiseismetandthelesseemeasuresinvestmentpropertyatfairvalue.

Aportionofadual-usepropertyisclassifiedasinvestmentpropertyonlyiftheportioncouldbesoldorleasedoutunderafinancelease.Otherwisetheentirepropertyisclassifiedasproperty,plantandequipmentunlessonlyan“insignificant”portionisheldforownuse.

Whenalessorprovidesancillaryservices,apropertyisclassifiedasinvestmentpropertyifsuchservicesarea“relativelyinsignificant”componentofthearrangementasawhole.

Investmentpropertyisrecognisedinitiallyatcost.

Subsequenttoinitialrecognition,allinvestmentpropertyismeasuredusingeitherthefairvaluemodelorthecostmodel.Whenthefairvaluemodelischosen,changesinfairvaluearerecognisedinprofitorloss.

Disclosureofthefairvalueofallinvestmentpropertyisrequired,regardlessofthemeasurementmodelused.

Subsequentexpenditureiscapitalisedonlywhenitisprobablethatitwillgiverisetofutureeconomicbenefits.

Transferstoorfrominvestmentpropertycanbemadeonlywhentherehasbeenachangeintheactualuseoftheproperty;changesinintentionarenotrelevant.




3.4 Investmentproperty (ARB 43, SFAS 13, SFAS 66, SFAS 67, SFAS 144, CON 6)

UnlikeIFRSs,thereisnospecificdefinitionofinvestmentproperty;suchpropertyisaccountedforasproperty,plantandequipmentunlessitmeetsthecriteriatobeclassifiedas“heldforsale”.

UnlikeIFRSs,propertyheldbyalesseeunderanoperatingleasecannotberecognisedinthebalancesheet.

UnlikeIFRSs,thereisnoguidanceonhowtoclassifydual-useproperty.Instead,theentirepropertyisaccountedforasproperty,plantandequipment.

UnlikeIFRSs,ancillaryservicesprovidedbyalessordonotaffectthetreatmentofapropertyasproperty,plantandequipment.

LikeIFRSs,investmentpropertyisrecognisedinitiallyatcost.

UnlikeIFRSs,subsequenttoinitialrecognitionallinvestmentpropertyismeasuredusingthecostmodel.

UnlikeIFRSs,thereisnorequirementtodisclosethefairvalueofinvestmentproperty.

LikeIFRSs,subsequentexpenditureiscapitalisedwhenitisprobablethatitwillgiverisetofutureeconomicbenefits.

UnlikeIFRSs,investmentpropertyisaccountedforasproperty,plantandequipment,andtherearenotransferstoorfroman“investmentproperty”category.

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3.� Investmentsinassociatesandjointventures (IAS 28, IAS 31, SIC–13)

Thedefinitionofanassociateisbasedonsignificantinfluence,whichisthepowertoexercisesignificantinfluenceoverthefinancialandoperatingpoliciesofanentity.

Thereisarebuttablepresumptionofsignificantinfluenceifanentityholds20to�0percentofthevotingrightsofanotherentity.

Potentialvotingrightsthatcurrentlyareexercisableareconsideredinassessingsignificantinfluence.

Ajointventureisanentity,assetoroperationthatissubjecttocontractuallyestablishedjointcontrol.

Associatesgenerallyareaccountedforusingtheequitymethod.

Jointlycontrolledentitiesmaybeaccountedforeitherbyproportionateconsolidationorusingtheequitymethod.

Anassociate’sorjointlycontrolledentity’saccountingpoliciesmustbeconsistentwiththoseofitsinvestor.

Thereportingdateofanassociateorjointlycontrolledentitymaynotdifferfromtheinvestor’sbymorethanthreemonths.Adjustmentsaremadefortheeffectsofsignificanteventsandtransactionsbetweenthetwodates.




3.� Equity-methodinvestees (APB 18, FIN 35, SOP 78-9, EITF 98-6, EITF 98-13, EITF 99-10, EITF 00-1,

EITF 02-14, EITF 02-18, EITF 03-16, EITF 04-5, EITF D-46, EITF D-68, EITF D-84, AIN-APB 18, Reg S-X, SAB Topic 5-H, SAB Topic 5-M)

LikeIFRSs,significantinfluenceistheabilitytosignificantlyinfluencetheoperatingandfinancialpoliciesofaninvestee.Theterm“equity-methodinvestee”isusedtodescribewhatwouldbeanassociateunderIFRSs.

LikeIFRSs,thereisarebuttablepresumptionofsignificantinfluenceifanentityholds20to�0percentofthevotingrightsofanotherentity.UnlikeIFRSs,thereareadditionalrequirementsinrespectofpartnershipsandsimilarentities.

LikeIFRSs,potentialvotingrightsthatareexercisablecurrentlyandinvestmentsinothersecuritiesoftheinvestee(e.g.,preferredshares,bonds)areconsideredinassessingwhethersignificantinfluenceexists.

UnlikeIFRSs,U.S.GAAPdoesnotdefineajointventureotherthanacorporatejointventure.

Equity-methodinvesteesareaccountedforusingtheequitymethod,likeIFRSs,orthefairvalueoption,unlikeIFRSs.

UnlikeIFRSs,generallyjointlycontrolledentitiesareaccountedforusingtheequitymethod.Proportionateconsolidationisallowedonlyincertainindustriesforunincorporatedventures.

UnlikeIFRSs,anequity-methodinvestee’sorjointlycontrolledentity’saccountingpoliciesneednotbeconsistentwiththoseofitsinvestor.

LikeIFRSs,thereportingdateofanequity-methodinvesteeorjointlycontrolledentitymaynotdifferfromtheinvestor’sbymorethanthreemonths.However,unlikeIFRSs,adjustmentsarenotmadefortheeffectsofsignificanteventsandtransactionsbetweenthetwodates.

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Whenanequityaccountedinvesteeincurslosses,thecarryingamountoftheinvestor’sinterestisreducedtozero.Furtherlossesarerecognisedbytheinvestoronlytotheextentthattheinvestorhasanobligationtofundlosses.

Unrealisedprofitsorlossesontransactionswithassociatesorjointlycontrolledentitiesareeliminatedtotheextentoftheinvestor’sinterestintheinvestee.

Gainsandlossesonnon-monetarycontributionsinreturnforanequityinterestinajointlycontrolledentityarerecognisedtotheextentoftheotherinvestors’interestsintheinvestee.Insomecasesnogainorlossisrecognised.

Anequityaccountedinvestmentiswrittendownifitscarryingamountisimpaired.

Forjointlycontrolledassets,theinvestoraccountsforitsshareofthejointlycontrolledassets,theliabilitiesandexpensesitincurs,anditsshareofanyincomeoroutput.

Forjointlycontrolledoperations,theinvestoraccountsfortheassetsitcontrols,theliabilitiesandexpensesitincurs,anditsshareoftheincomefromthejointoperation.

Equityaccountingorproportionateconsolidationisnotappliedtoaninvesteethatisacquiredwithaviewtoitssubsequentdisposalifthecriteriaaremetforclassificationasheldforsale.




LikeIFRSs,whenanequity-methodinvesteeincurslosses,thecarryingamountoftheinvestor’sinterestisreducedtozero.LikeIFRSs,furtherlossesarerecognisedbytheinvestoronlytotheextentthattheinvestorhasanobligationtofundlosses.However,unlikeIFRSs,furtherlossesalsoarerecognisediftheinvesteeisexpectedtoreturntoprofitabilityimminently,orifasubsequentfurtherinvestmentintheinvesteeis,insubstance,thefundingofsuchlosses.

LikeIFRSs,unrealisedprofitsorlossesontransactionswithequity-methodinvesteesorjointlycontrolledentitiesareeliminatedtotheextentoftheinvestor’sinterestintheinvestee.

LikeIFRSs,generallygainsandlossesonnon-monetarycontributionsinreturnforanequityinterestinajointventurearerecognisedtotheextentoftheotherinvestors’interestsintheinvestee.However,unlikeIFRSs,whenabusinessiscontributedtoajointventurebyanSECregistrant,theinvestorrecognisesthegainorlossinfull.

UnlikeIFRSs,anequityaccountedinvestmentiswrittendownifitscarryingamountisimpairedonlyifthatimpairmentisconsideredtobeotherthantemporary.

UnlikeIFRSs,jointlycontrolledassetsareaccountedforusingtheequitymethodifalegalentityexists.

LikeIFRSs,forjointlycontrolledoperationstheinvestoraccountsfortheassetsitcontrols,theliabilitiesandexpensesitincurs,anditsshareoftheincomefromthejointoperation.

UnlikeIFRSs,thereisnoexemptionfromuseoftheequitymethodforequity-methodinvesteesorjointventuresthatisacquiredwithaviewtosubsequentsale.

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Venturecapitalorganisations,mutualfunds,unittrustsandsimilarentitiesmayelecttoaccountforinvestmentsinassociatesandjointlycontrolledentitiesasfinancialassets.




UnlikeIFRSs,thereisnoelectionavailabletoventurecapitalorganisations,mutualfundsandunittruststoaccountforinvestmentsinassociatesandjointlycontrolledentitiesasfinancialassets.However,investmentcompaniesmustaccountforinvestmentsinequity-methodinvesteesandjointlycontrolledentitiesasfinancialassetsatfairvaluethroughprofitorloss,unlikeIFRSs.

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3.6 Financialinstruments (IAS 39, IAS 21, IFRIC 9, IFRIC 10)

Aderivativeisafinancialinstrument:● thevalueofwhichchangesinresponsetoanunderlyingvariable;● thathasaninitialnetinvestmentsmallerthanwouldberequiredforother

instrumentswithasimilarresponsetothevariable;and● thatwillbesettledatafuturedate.

Embeddedderivativesaretermsofacontractorinstrumentthatbehavelikeaderivative.

Derivativesembeddedinhostcontractsgenerallyareaccountedforseparatelywhentheireconomiccharacteristicsarenotcloselyrelatedtothoseofthehostcontract.

Financialinstrumentsareclassifiedinoneofthefollowingcategoriesoninitialrecognition:● atfairvaluethroughprofitorloss;● held-to-maturityinvestments;● loansandreceivables;● available-for-salefinancialassets;or● otherliabilities.

Afinancialinstrumentmaybedesignateduponinitialrecognitionatfairvaluethroughprofitorlossonlyifcertaincriteriaaremet.




3.6 Financialinstruments (APB 21, SFAS 5, SFAS 15, SFAS 52, SFAS 91, SFAS 114, SFAS 115,

SFAS 118, SFAS 133, SFAS 138, SFAS 140, SFAS 149, SFAS 150, SFAS 155, SFAS 156, SFAS 159, FIN 45, SOP 01-6, EITF 96-19, EITF 06-6, EITF D-80, SAB Topic 5-M, SAB Topic 6-L)

Aderivativeisafinancialinstrument:● thevalueofwhichchangesinresponsetoanunderlyingvariable,likeIFRSs;● thathasaninitialnetinvestmentsmallerthanwouldberequiredforother

instrumentswithasimilarresponsetothevariable,likeIFRSs;and● that,unlikeIFRSs:

– requiresorpermitsnetsettlement;– isreadilysettleablethroughamarketmechanismoutsidethecontract;or– providesfordeliveryofanassetthatisreadilyconvertibletocash.

LikeIFRSs,embeddedderivativesaretermsofacontractorinstrumentthatbehavelikeaderivative.

LikeIFRSs,derivativesembeddedinhostcontractsgenerallyareaccountedforseparatelyiftheyarenotclearlyandcloselyrelatedtothehostcontract.However,“clearlyandcloselyrelated”differsfrom“closelyrelated”underIFRSsincertainrespects.

UnlikeIFRSs,theclassificationoffinancialinstrumentsgenerallyisnotspecifiedotherthanfordebtandmarketableequitysecurities,whichareclassifiedas:● trading;● held-to-maturity;or● available-for-sale.

UnlikeIFRSs,entitieshaveafreechoicetodesignatemostfinancialinstruments,onaninstrument-by-instrumentbasis,uponinitialrecognitionatfairvaluethroughprofitorloss.

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Allfinancialinstrumentsaremeasuredinitiallyatfairvalue.

Financialinstrumentsatfairvaluethroughprofitorlossaremeasuredatfairvalueandallchangesthereinarerecognisedimmediatelyinprofitorloss.

Loansandreceivablesandheld-to-maturityinvestmentsaremeasuredatamortisedcost.Allotherfinancialassetsaremeasuredatfairvalue,withlimitedexceptions.

Allfreestandingderivativesandsomeembeddedderivativesarerecognisedinthebalancesheetandmeasuredatfairvalue.Unlesstheyqualifyashedginginstrumentsinacashflowornetinvestmenthedge,allchangesinfairvaluearerecognisedimmediatelyinprofitorloss.

Changesinthefairvalueofavailable-for-saleassetsarerecogniseddirectlyinequity,exceptthatforeignexchangegainsandlossesonavailable-for-salemonetaryitemsarerecognisedinprofitorloss.

Financialliabilities,otherthanthoseheldfortradingordesignatedatfairvaluethroughprofitorloss,aremeasuredatamortisedcost.

Anentityisconsideredtohavetransferredafinancialasset,orapartthereof,ifittransfersitsrightstoreceivethecashflowsfromtheasset;orifitretainstherightstoreceivethecashflows,butassumesacontractualobligationtopaythecashflowstooneormorerecipients.




Derivatives,securitiesclassifiedastradingoravailable-for-sale,andinstrumentsforwhichthefairvalueoptionthroughprofitorlosshasbeenelectedaremeasuredinitiallyatfairvalue,likeIFRSs.UnlikeIFRSs,otherfinancialinstrumentsaremeasuredinitiallyatcost.

LikeIFRSs,financialinstrumentsatfairvaluethroughprofitorlossaremeasuredatfairvalueandallchangesthereinarerecognisedimmediatelyinprofitorloss.

LikeIFRSs,loansandreceivablesandheld-to-maturityinvestmentsaremeasuredatamortisedcost.However,unlikeIFRSs,loansheldforsalearemeasuredatthelowerofcostandmarket.UnlikeIFRSs,otherfinancialassetsandliabilitiesgenerallyaremeasuredatcostoramortisedcost.LikeIFRSs,tradingandavailable-for-salesecuritiesaremeasuredatfairvaluealthough,unlikeIFRSs,thiscategoryappliesonlytoinvestmentsinsecurities.

LikeIFRSs,allfreestandingderivativesandsomeembeddedderivativesarerecognisedinthebalancesheetandmeasuredatfairvalue.Unlesstheyqualifyashedginginstrumentsinacashflowornetinvestmenthedge,allchangesinfairvaluearerecognisedimmediatelyinprofitorloss,likeIFRSs.

LikeIFRSs,changesinthefairvalueofavailable-for-salesecuritiesarerecogniseddirectlyinequity;however,unlikeIFRSs,theamountrecogniseddirectlyinequityincludesforeignexchangegainsandlosses.

LikeIFRSs,financialliabilitiesotherthanderivativeliabilitiesandshorttradingpositionsaremeasuredatamortisedcostunlesstheyaredesignatedatfairvaluethroughprofitorloss.

Atransferisdefinedastheconveyanceofanon-cashfinancialassetbyandtosomeoneotherthantheissuerofthatfinancialasset,likeIFRSs.

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Evaluatingwhetheratransferofafinancialassetqualifiesforderecognitionrequiresconsiderationofwhethersubstantiverisksandrewardsand,incertaincircumstancescontrol,istransferred.

Ifanentityretainscontrolofafinancialassetforwhichsomebutnotsubstantiallyallrisksandrewardshavebeentransferred,thentheentitycontinuestorecognisethefinancialassettotheextentofitscontinuinginvolvementinthefinancialasset.

Afinancialliabilityisderecognisedwhenitisextinguished.

Whenthereisobjectiveevidencethatafinancialassetmeasuredatamortisedcost,oratfairvaluewithchangesrecognisedinequity,maybeimpaired,theamountofanyimpairmentlossmustbecalculatedandrecognisedinprofitorloss.Someimpairmentlossescanbereversed.




UnlikeIFRSs,thederecognitionmodelfortransfersoffinancialassetsfocusesonsurrenderingcontroloverthetransferredassets;thetransferorhassurrenderedcontrolovertransferredassetsonlyifcertainconditionsaremet.

UnlikeIFRSs,risksandrewardsisnotanexplicitconsiderationwhentestingatransferforderecognition,butratherderecognitionisbasedonwhetherlegal,actualandeffectivecontrolhasbeenachieved.However,afteratransferofafinancialasset,oraportionthereof,anentitycontinuestorecognisethefinancialandservicingassetsitcontrolsandderecognisesthefinancialassets(orportionsthereof)forwhichcontrolhasbeensurrendered,likeIFRSs.

LikeIFRSs,afinancialliabilityisderecognisedwhenitisextinguished.

UnlikeIFRSs,animpairmentlossisrecognisedonlyifitisotherthantemporaryevenifthereisobjectiveevidencethatanitemmaybeimpaired.Iftheimpairmentisotherthantemporary,thenanyimpairmentlossisrecognisedinprofitorloss,likeIFRSs.UnlikeIFRSs,impairmentslossescannotbereversed.

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3.7 Hedgeaccounting (IAS 39)

Thehedgeaccountingmodelapplieddependsonwhetherthehedgedexposureisafairvalueexposure,acashflowexposure,oracurrencyexposureonanetinvestmentinaforeignoperation.

Hedgeaccountingispermittedonlywhenstrictdocumentationandeffectivenesstestingrequirementsaremet.

Thehedgeditemistheunderlyingitemthatisexposedtothespecificfinancialriskthatanentityhaschosentohedge.Thehedgeditemcanbeasingleorgroupofrecognisedassetsorliabilities,unrecognisedfirmcommitments,highlyprobableforecasttransactionsornetinvestmentsinforeignoperationswithsimilarriskcharacteristics;orinaportfoliohedgeofinterestraterisk,aportionofaportfoliooffinancialassetsorfinancialliabilitiesthatsharetheriskbeinghedged.

Allderivatives,includingseparableembeddedderivatives,canqualifyashedginginstruments,withsomelimitations.

Thehedgedriskmustbeonethatcouldaffectprofitorloss.

Toqualifyforhedgeaccounting,ahedgemustbe“expectedtobe”(prospectively)and“actuallyhavebeen”(retrospectively)highlyeffective.Theactualresultsofthehedgemustbewithintherangeof80-�2�percenteffective.

Hedgeaccountingmustbediscontinuedprospectivelyifthehedgedtransactionnolongerishighlyprobable;thehedginginstrumentexpires,issold,terminatedorexercised;thehedgeditemissold,settledorotherwisedisposedof;orthehedgeisnolongerhighlyeffective.




3.7 Hedgeaccounting (SFAS 133, SFAS 138, SFAS 149, EITF 00-19)

LikeIFRSs,thehedgeaccountingmodelapplieddependsonwhetherthehedgedexposureisafairvalueexposure,acashflowexposure,oracurrencyexposureonanetinvestmentinaforeignoperation.

IFRSs,hedgeaccountingispermittedonlywhenstrictdocumentationandeffectivenesstestingrequirementsaremet.UnlikeIFRSs,ashort-cutmethodisavailableifspecificcriteriaaremetwhenhedgingwithinterestrateswaps.

LikeIFRSs,thehedgeditemistheunderlyingitemthatisexposedtothespecificfinancialriskthatanentityhaschosentohedge.LikeIFRSs,thehedgeditemcanbeasingleorgroupofrecognisedassetsorliabilities,unrecognisedfirmcommitments,highlyprobableforecasttransactionsornetinvestmentsinforeignoperationswithsimilarriskcharacteristics;orinaportfoliohedgeofinterestraterisk,aportionofaportfoliooffinancialassetsorfinancialliabilitiesthatsharetheriskbeinghedged.UnlikeIFRSs,U.S.GAAPrestrictsthehedgedrisktotheentireriskofchangesincashflowsorfairvalue,benchmarkinterestraterisk,currencyrisk,orcounterpartycreditriskinahedgeditem.

LikeIFRSs,allderivatives,includingseparableembeddedderivatives,canqualifyashedginginstruments,withsomelimitations.However,thoselimitationsdifferfromIFRSsincertainrespects.

LikeIFRSs,thehedgedriskmustbeonethatcouldaffectprofitorloss.

LikeIFRSs,toqualifyforhedgeaccounting,ahedgemustbeexpectedtobe(prospectively)andactuallyhavebeen(retrospectively)highlyeffective.UnlikeIFRSs,the80-�2�percentrangeisnotspecified.

LikeIFRSs,hedgeaccountingisdiscontinuedprospectivelyifthehedgedtransactionnolongerishighlyprobable;thehedginginstrumentexpires,issold,terminatedorexercised;thehedgeditemissold,settledorotherwisedisposedof;orthehedgeisnolongerhighlyeffective.

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3.8 Inventories (IAS 2)

Generallyinventoriesaremeasuredatthelowerofcostandnetrealisablevalue.

Costincludesalldirectexpendituretogetinventoryreadyforsale,includingattributableoverheads.

Decommissioningandrestorationcostsincurredthroughtheproductionofinventoryareincludedinthecostofthatinventory.

ThecostofinventorygenerallyisdeterminedusingtheFIFO(first-in,first-out)orweightedaveragecostmethod.TheuseoftheLIFO(last-in,first-out)methodisprohibited.

Othercostformulas,suchasthestandardcostorretailmethod,maybeusediftheresultapproximatesactualcost.

Thesamecostformulaisappliedtoallinventorieshavingasimilarnatureandusetotheentity.

Netrealisablevalueistheestimatedsellingpricelesstheestimatedcostsofcompletionandsale.

Ifthenetrealisablevalueofanitemthathasbeenwrittendownincreasessubsequently,thenthewrite-downisreversed.




3.8 Inventories (ARB 43, SFAS 151, EITF 02-16, SAB Topic 4-BB)

UnlikeIFRSs,generallyinventoriesaremeasuredatthelowerofcostandmarket.

LikeIFRSs,costincludesalldirectexpendituretogetinventoryreadyforsale,includingattributableoverheads.

UnlikeIFRSs,assetretirementobligationsincurredthroughtheproductionofinventoryareaddedtothecarryingamountoftherelateditemofproperty,plantandequipment.

UnlikeIFRSs,thecostofinventorycanbedeterminedusingtheLIFOmethodinadditiontotheFIFOorweightedaveragemethod.

LikeIFRSs,thestandardcostorretailmethodmaybeusediftheresultapproximatesactualcost.

UnlikeIFRSs,thesamecostformulaneednotbeappliedtoallinventorieshavingasimilarnatureandusetotheentity.

UnlikeIFRSs,“market”isreplacementcostlimitedbynetrealisablevalue(ceiling)andnetrealisablevaluelessanormalprofitmargin(floor).LikeIFRSs,netrealisablevalueistheestimatedsellingpricelesstheestimatedcostsofcompletionandsale.

UnlikeIFRSs,awrite-downofinventorytomarketisnotreversedforsubsequentrecoveriesinvalue.

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3.9 Biologicalassets (IAS 41)

Biologicalassetsaremeasuredatfairvaluelessestimatedpoint-of-salecostsunlessfairvaluecannotbemeasuredreliably,inwhichcasetheyaremeasuredatcost.Changesthereinarerecognisedinprofitorloss.

Agriculturalproduceismeasuredatfairvaluelessestimatedpoint-of-salecostsatthepointofharvest,andsubsequentlyisaccountedforatthelowerofcostandnetrealisablevalue.




3.9 Biologicalassets (SOP 85-3)

UnlikeIFRSs,“biologicalassets”arestatedatthelowerofcostandmarket.Theterms“growingcrops”and“animalsbeingdevelopedforsale”areusedtodescribewhatwouldbebiologicalassetsunderIFRSs.

UnlikeIFRSs,agriculturalproduceismeasuredatsalespricelesscostsofdisposalwhencertainconditionsaremet.Theterm“harvestedcrops”and“animalsheldforsale”areusedtodescribewhatwouldbeagriculturalproduceunderIFRSs.

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3.�0 Impairment (IAS 36, IFRIC 10)

Theimpairmentstandarddealswiththeimpairmentofavarietyofnon-financialassets,includingproperty,plantandequipment,intangibleassetsandgoodwill;investmentpropertyandbiologicalassetscarriedatcostlessaccumulateddepreciation;andinvestmentsinsubsidiaries,jointventuresandassociates.

Impairmenttestingisrequiredwhenthereisanindicatorofimpairment.

Annualimpairmenttestingisrequiredforgoodwill,andintangibleassetsthateitherarenotyetavailableforuseorhaveanindefiniteusefullife.Thisimpairmenttestmaybeperformedatanytimeduringanannualreportingperiodprovidedthatitisperformedatthesametimeeachyear.

Goodwillisallocatedtocash-generatingunits(CGUs)orgroupsofCGUsthatareexpectedtobenefitfromthesynergiesofthebusinesscombinationfromwhichitarose.

ACGUisthesmallestgroupofassetsthatgeneratescashinflowsfromcontinuingusethatlargelyareindependentofthecashinflowsofotherassetsorgroupsthereof.

Wheneverpossibleanimpairmenttestisperformedforanindividualasset.OtherwiseassetsaretestedforimpairmentinCGUs.GoodwillalwaysistestedforimpairmentatthelevelofaCGUoragroupofCGUs.




3.�0 Impairment (SFAS 142, SFAS 144, CON 7, EITF 95-23)

LikeIFRSs,theimpairmentstandardsdealwiththeimpairmentofavarietyofnon-financiallong-livedassets,includingproperty,plantandequipment,intangibleassetsandgoodwill.However,unlikeIFRSs,differentstandardsaddressimpairmentsofbiologicalassets,investmentsinjointventuresandequity-methodinvestees(associates).

LikeIFRSs,impairmenttestingisrequiredwhenthereisanindicatorofimpairment.

LikeIFRSs,annualimpairmenttestingisrequiredforgoodwillandintangibleassetsthathaveanindefiniteusefullife.UnlikeIFRSs,intangibleassetsnotyetavailableforusearetestedforimpairmentonlyifthereisanindicatorofimpairment.LikeIFRSs,theimpairmenttestmaybeperformedatanytimeduringanannualreportingperiodprovidedthatitisperformedatthesametimeeachyear.

UnlikeIFRSs,goodwillisallocatedtoreportingunits(RUs)thatareexpectedtobenefitfromthesynergiesofthebusinesscombinationfromwhichitarose.UnlikeIFRSs,anRUisdefinedasanoperatingsegmentoronelevelbelowanoperatingsegment.

UnlikeIFRSs,anassetgroupisthelowestlevelforwhichthereareidentifiablecashflowsthatlargelyareindependentofthecashflows(ratherthancashinflows)ofothergroupsofassets.

LikeIFRSs,wheneverpossibleanimpairmenttestisperformedforanindividualasset;however,unlikeIFRSs,generallyanindefinite-livedintangibleassetistestedasanindividualasset.Otherwiseassetsaretestedforimpairmentinassetgroups,unlikeIFRSs.UnlikeIFRSs,goodwillalwaysistestedforimpairmentattheRUlevel,andRUsmaydifferfromCGUs.

82 OverviewofIFRS



Thecarryingamountofgoodwillisgrossedupforimpairmenttestingifminorityinterestsarepresent.

Animpairmentlossisrecognisedifanasset’s(CGU’s)carryingamountexceedsitsrecoverableamount.Therecoverableamountisthegreateroffairvaluelesscoststosellandvalueinuse,whichisbasedonthenetpresentvalueoffuturecashflows.

Estimatesoffuturecashflowsusedinthevalueinusecalculationarespecifictotheentity.

Thediscountrateusedinthevalueinusecalculationisapre-taxratethatreflectsthemarket’sassessmentoftherisksspecifictotheasset.

AnimpairmentlossforaCGUisallocatedfirsttoanygoodwillandthenpro ratatootherassetsintheCGU.

Animpairmentlossonarevaluedassetischargeddirectlytotherevaluationreservetotheextentthatitreversesapreviousrevaluationsurplusrelatingtothesameasset.Anyexcessisrecognisedinprofitorloss.

Reversalsofimpairmentarerecognised,otherthaninrespectofgoodwill.




UnlikeIFRSs,thecarryingamountofgoodwillisnotgrossedupforimpairmenttestingifminorityinterestsarepresent.

UnlikeIFRSs,animpairmentlossisrecognisedforassetsotherthangoodwillandidentifiableintangibleswithindefinitelivesonlyiftheasset’s(assetgroup’s)carryingamountislessthantheundiscountedcashflowsoftheassetorassetgroup.Theimpairmentlossiscalculatedbasedonthefairvalueoftheasset(assetgroup),unlikeIFRSs.UnlikeIFRSs,animpairmentlossisrecognisedforgoodwillifthefairvalueoftheRUislessthanitscarryingamount,andforanindefinite-livedidentifiableintangibleassetifitsfairvalueislessthanitscarryingamount.

LikeIFRSs,estimatesoffuturecashflowsusedtoassessrecoverabilityarespecifictotheentity.

UnlikeIFRSs,thecashflowsusedtoassessrecoverabilityarenotdiscounted.

UnlikeIFRSs,animpairmentlossforanassetgroupisallocatedpro ratatoassetsintheassetgroup,whichexcludesgoodwill,corporateassetsandindefinite-livedintangibleassets.

UnlikeIFRSs,therevaluationofproperty,plantandequipmentandintangibleassetsisnotpermitted;thereforeallimpairmentlossesarerecognisedinprofitorloss.

UnlikeIFRSs,reversalsofimpairmentsareprohibited.

84 OverviewofIFRS



3.�� Equityandfinancialliabilities (IAS 1, IAS 27, IAS 32, IAS 39)

Afinancialinstrumentisafinancialliabilityiftheissuercanbeobligedtosettleincashorbydeliveringanotherfinancialinstrument.

Afinancialinstrumentisafinancialliabilityifitwillormaybesettledinavariablenumberoftheentity’sownequityinstruments.

Aninstrumentissuedinthelegalformofapreferenceshareandsimilarinstrumentsmayhavetobeclassifiedinwholeorinpartasaliabilitybasedonananalysisofthecontractualtermsoftheinstrument.

Thecomponentsofcompoundfinancialinstruments,whichhavebothliabilityandequitycharacteristics,areaccountedforseparately.

Anon-derivativecontractthatwillbesettledbyanentitydeliveringitsownequityinstrumentsisanequityinstrumentif,andonlyif,itissettledbyexchangingafixednumberofitsownequityinstrumentsforafixedamountofcashoranotherfinancialasset.




3.�� Equityandfinancialliabilities (ARB 43, SFAS 133, SFAS 150, EITF 00-19, EITF 00-29, EITF D-98, FSP

FAS 150-3, ASR 268, CON 6)

LikeIFRSs,financialinstrumentsthatcanobligatetheissuertosettleincashorbydeliveringanotherfinancialinstrumentareclassifiedasliabilities.UnlikeIFRSs,certainsecuritieswithredemptionfeaturesthatareoutsidethecontroloftheissuer,suchasredeemablepreferredshares,thatwouldnototherwisebeclassifiedasliabilities,arepresentedinthebalancesheetbetweentotalliabilitiesandequity(themezzanine).

LikeIFRSs,afinancialinstrumentisafinancialliabilityifitispredominantlyindexedtoafixedmonetaryamountknownatinceptionthatwillormaybesettledinavariablenumberoftheentity’sownequityinstruments.UnlikeIFRSs,afinancialinstrumentthatisanoutstandingsharethatonlyconditionallyobligatessettlementinavariablenumberofsharesisclassifiedasequityifothercriteriaaremet.

LikeIFRSs,aninstrumentissuedinthelegalformofapreferredshareandsimilarinstrumentsmayhavetobeclassifiedinwholeorinpartasaliabilitybasedonananalysisofthecontractualtermsoftheinstrument.However,differencesbetweenIFRSsandU.S.GAAPexistinclassifyingpreferredsharesasdebtorequity.

UnlikeIFRSs,instrumentswithcharacteristicsofbothdebtandequityarenotalwayssplitbetweentheirdebtandequitycomponents.

UnlikeIFRSs,anon-derivativecontractthatmayormustbesettledinanentity’sownsharesgenerallyisclassifiedasequity,unlessitpredominantlyrepresentsanobligationtoissueavariablenumberofsharesorisafinancialinstrumentotherthananoutstandingsharethatembodiesaconditionalobligationtoissueavariablenumberofsharesbasedonafixedmonetaryamountknownatinceptionorcertainothercriteria.

86 OverviewofIFRS



Aderivativecontractthatcanbesettledbytheentitydeliveringafixednumberofownequityinstrumentsforafixedamountofcash,butwhichcontainssettlementoptions,isanequityinstrumentonlyifallsettlementalternativesleadtoequityclassification.

Anobligationforanentitytoacquireitsownequityinstrumentsgivesrisetoafinancialliability.

Incrementalcoststhataredirectlyattributabletoissuingorbuyingbackownequityinstrumentsarerecogniseddirectlyinequity.

Treasurysharesarepresentedasadeductionfromequity.

Gainsandlossesontransactionsinownequityinstrumentsclassifiedasequityarerecogniseddirectlyinequity.

Minorityinterestsinthebalancesheetareclassifiedasequitybutarepresentedseparatelyfromtheparentshareholders’equity.

Dividendsandotherdistributionstotheholdersofequityinstruments,intheircapacityasowners,arerecogniseddirectlyinequity.




LikeIFRSs,derivativeinstrumentsindexedtoanentity’sownsharesmaybeclassifiedasequity;however,thecriteriafordeterminingequityorliabilityclassificationdifferfromIFRSs.

IFRSs,anobligationforanentitytoacquireitsownequityinstrumentscreatesafinancialliabilityonlyifithascertaincharacteristics.

LikeIFRSs,incrementalcoststhataredirectlyattributabletoissuingorbuyingbackanentity’sownequityinstrumentsarerecogniseddirectlyinequity.

IFRSs,treasurysharesarepresentedasadeductionfromequity.

IFRSs,gainsandlossesontransactionsinownequityinstrumentsclassifiedasequityarerecogniseddirectlyinequity.

IFRSs,minorityinterestsinthebalancesheetarepresentedeitherasalong-termliability,orbetweentotalliabilitiesandequity(themezzanine).

IFRSs,dividendsonsharesclassifiedasequityorinthemezzaninearerecogniseddirectlyinequity.

88 OverviewofIFRS



3.�2 Provisions (IAS 37, IAS 16, IFRIC 1, IFRIC 5, IFRIC 6)

Aprovisionisrecognisedforalegalorconstructiveobligationarisingfromapastevent,ifthereisaprobableoutflowofresourcesandtheamountcanbeestimatedreliably.“Probable”inthiscontextmeans“morelikelythannot”.

Aconstructiveobligationariseswhenanentitycreatesavalidexpectationthatitwillactinacertainway.

Unlessthefairvalueofanobligationisobservableinamarket,aprovisionismeasuredatthe“bestestimate”oftheexpendituretobeincurred.

Ifthereisalargehomogeneouspopulation,thentheobligationgenerallyismeasuredatitsexpectedvalue.

Ifthereisalargepopulationandacontinuousrangeofequallypossibleoutcomes,thentheobligationismeasuredatthemid-pointintherange.

Ifthepossibleoutcomesofasingleobligationaremostlyhigher(lower)thanthesinglemostlikelyoutcome,thentheobligationismeasuredatanamounthigher(lower)thanthesinglemostlikelyoutcome.

Provisionsarediscountediftheeffectofdiscountingismaterial.

Areimbursementrightisrecognisedasaseparateassetwhenrecoveryisvirtuallycertain,cappedattheamountoftherelatedprovision.




3.�2 Recognisedcontingenciesandother“provisions” (SFAS 5, SFAS 48, SFAS 88, SFAS 143, SFAS 146, FIN 14, FIN 30,

FIN 45, FIN 47, FTB 79-15, SOP 96-1, EITF 89-13, EITF 01-10, EITF 02-6, EITF D-97, FSP FAS 143-1, FSP FIN 45-1, FSP FIN 45-2, FSP EITF 00-19-2, SAB Topic 5-P, SAB Topic 5-Y, CON 6, TPA 5100.35)

UnlikeIFRSs,acontingency(provision)isrecognisedifitisprobablethataliabilityhasbeenincurredandtheamountcanbeestimatedreasonably.However,unlikeIFRSs,“probable”inthiscontextmeans“likelytooccur”.

LikeIFRSs,aconstructiveobligationariseswhenanentitycreatesavalidexpectationthatitwillactinacertainway.However,unlikeIFRSs,constructiveobligationsarerecognisedonlyifrequiredbyaspecificstandard.

UnlikeIFRSs,arecognisedcontingencyismeasuredusinga“reasonableestimate”.UnderotherstandardsobligationsthatareaprovisionunderIFRSsaremeasuredatfairvalue.

LikeIFRSs,ifthereisalargehomogeneouspopulation,thentheobligationgenerallyismeasuredatitsexpectedvalue.

UnlikeIFRSs,ifnoamountwithinarangeisabetterestimatethananyother,thentheobligationismeasuredatthelowendoftherange.Thistechniqueisnotlimitedtolargepopulations,unlikeIFRSs.

UnlikeIFRSs,anobligationismeasuredatthesinglemostlikelyoutcomeevenifthepossibleoutcomesaremostlyhigherorlowerthanthatamount.

UnlikeIFRSs,recognisedcontingenciesarenotdiscountedexceptinlimitedcases,inwhichcasespecificrequirementsapplythatmaydifferfromIFRSs.

UnlikeIFRSs,areimbursementrightisrecognisedasaseparateassetwhenrecoveryisprobable;likeIFRSs,theassetiscappedattheamountoftherelatedrecognisedcontingency.

90 OverviewofIFRS



Aprovisionisnotrecognisedforfutureoperatinglosses.

Aprovisionforrestructuringcostsisnotrecogniseduntilthereisaformalplananddetailsoftherestructuringhavebeencommunicatedtothoseaffectedbytheplan.

IFRSsdonotspecificallyaddressprovisionsforcontractterminationcosts.

Provisionsarenotrecognisedfortherepairormaintenanceofownassets,orforself-insurancepriortoanobligationbeingincurred.

Aprovisionisrecognisedforacontractthatisonerous,i.e.,oneinwhichtheunavoidablecostsofmeetingtheobligationsunderthecontractexceedthebenefitstobederived.




LikeIFRSs,aprovisionisnotrecognisedforfutureoperatinglosses.

LikeIFRSs,aprovisionforrestructuringcoststoterminateemployeesisnotrecogniseduntilthereisaformalplananddetailsoftherestructuringhavebeencommunicatedtothoseaffectedbytheplan,unlessthebenefitswillbepaidpursuanttoanongoingpost-employmentbenefitplan,inwhichcasetheywillberecognisedwhenprobableandreasonablyestimable.However,unlikeIFRSs,terminationbenefitstoemployeesarerecognisedatthecommunicationdateonlyifallservicesrequiredtoreceivethebenefitshavebeenperformed.

UnlikeIFRSs,forcontractterminationcostsrelatedtoarestructuring,aliabilityisrecognisedonlywhenthecontracthasbeenterminatedpursuanttoitstermsortheentityhaspermanentlyceasedusingtherightsgrantedunderthecontract.

LikeIFRSs,provisionsarenotrecognisedfortherepairormaintenanceofownassets,orforself-insurancepriortoanobligationbeingincurred.

UnlikeIFRSs,thereisnogeneralrequirementtorecognisealossforonerouscontracts;suchaprovisionisrecognisedonlywhenrequiredbyaspecificstandard.

92 OverviewofIFRS



3.�3 Incometaxes (IAS 12, SIC–21, SIC–25)

Thetotalincometaxexpenserecognisedintheincomestatementisthesumofcurrenttaxexpense(orrecovery)plusthechangeindeferredtaxliabilitiesandassetsduringtheperiod,netoftaxrecogniseddirectlyinequityorarisingfromabusinesscombination.

Deferredtaxisrecognisedfortheestimatedfuturetaxeffectsoftemporarydifferencesandtaxlosscarry-forwards.

Atemporarydifferenceisthedifferencebetweenthetaxbaseofanassetorliabilityanditscarryingamountinthefinancialstatements.

Adeferredtaxliabilityisnotrecognisedifitarisesfromtheinitialrecognitionofgoodwill.However,anytemporarydifferenceisrecognisedsubsequentlyifthegoodwillistaxdeductible.

Adeferredtaxliability(asset)isnotrecognisedifitarisesfromtheinitialrecognitionofanassetorliabilityinatransactionthatisnotabusinesscombination,andatthetimeofthetransactionaffectsneitheraccountingprofitnortaxableprofit.

Adeferredtaxliability(asset)isrecognisedforthedifferenceintaxbasesbetweenjurisdictionsasaresultofanintra-grouptransferofassets.

Adeferredtaxliability(asset)isrecognisedforexchangegainsandlossesrelatedtoforeignnon-monetaryassetsandliabilitiesthatareremeasuredintothefunctionalcurrencyusinghistoricalexchangeratesorindexingfortaxpurposes.




3.�3 Incometaxes (APB 2, APB 4, SFAS 13, SFAS 109, FIN 48, EITF 93-7, EITF 93-9, EITF 93-

16, EITF 95-9, EITF 95-10, EITF 95-20, EITF 98-11, FSP FAS 13-2)

LikeIFRSs,thetotalincometaxexpenserecognisedintheincomestatementisthesumofcurrenttaxexpense(orrecovery)plusthechangeindeferredtaxliabilitiesandassetsduringtheperiod,netoftaxrecogniseddirectlyinequityorarisingfromabusinesscombination.

LikeIFRSs,deferredtaxisrecognisedfortheestimatedfuturetaxeffectsoftemporarydifferencesandtaxlosscarry-forwards.

LikeIFRSs,atemporarydifferenceisthedifferencebetweenthetaxbaseofanassetorliabilityanditscarryingamountinthefinancialstatements.

LikeIFRSs,adeferredtaxliabilityisnotrecognisedifitarisesfromtheinitialrecognitionofgoodwill.However,likeIFRSs,anytemporarydifferenceisrecognisedsubsequentlyifthegoodwillistaxdeductible.

UnlikeIFRSs,thereisnoexemptionfromrecognisingadeferredtaxliability(asset)fortheinitialrecognitionofanassetorliabilityinatransactionthatisnotabusinesscombination,andatthetimeofthetransactionaffectsneitheraccountingprofitnortaxableprofit.

UnlikeIFRSs,adeferredtaxliability(asset)isnotrecognisedforthedifferenceintaxbasesbetweenjurisdictionsasaresultofanintra-grouptransferofassets.

UnlikeIFRSs,whenthereportingcurrencyisthefunctionalcurrency,adeferredtaxliability(asset)isnotrecognisedforexchangegainsandlossesrelatedtoforeignnon-monetaryassetsandliabilitiesthatareremeasuredintothefunctionalcurrencyusinghistoricalexchangeratesorindexingfortaxpurposes.

94 OverviewofIFRS



Deferredtaxisnotrecognisedinrespectofinvestmentsinsubsidiaries,associatesandjointventuresifcertainconditionsaremet.

Adeferredtaxassetisrecognisedifitisprobablethatitwillberealised.

Deferredtaxismeasuredbasedonratesandtaxlawsthatareenactedorsubstantivelyenactedatthereportingdate.

Deferredtaxismeasuredbasedontheexpectedmannerofsettlement(liability)orrecovery(asset).

Deferredtaxismeasuredonanundiscountedbasis.

Deferredtaxisclassifiedasnon-currentinaclassifiedbalancesheet.

Incometaxrelatingtoitemschargedorcrediteddirectlytoequity,inthecurrentorapreviousperiod,ischargedorcrediteddirectlytoequity.

Deferredtaxassetsrecognisedinrelationtoshare-basedpaymentarrangementsareadjustedeachperiodtoreflecttheamountoftaxdeductionthattheentitywouldreceiveiftheawardweretaxdeductibleinthecurrentperiodbasedonthecurrentmarketpriceoftheshares.




LikeIFRSs,deferredtaxisnotrecognisedinrespectofinvestmentsinforeignsubsidiariesifcertainconditionsaremet;however,theconditionsdifferfromIFRSs.UnlikeIFRSs,deferredtaxalwaysisrecognisedinrespectofinvestmentsinequity-methodinvestees(associates).

UnlikeIFRSs,alldeferredtaxassetsarerecognisedandavaluationallowanceisrecognisedtotheextentthatitismorelikelythannotthatthedeferredtaxassetswillnotberealised.

UnlikeIFRSs,deferredtaxismeasuredbasedonratesandtaxlawsthatareenactedatthereportingdate.

UnlikeIFRSs,deferredtaxismeasuredbasedonanassumptionthattheunderlyingasset(liability)willberecovered(settled)inamannerconsistentwithitscurrentuseinthebusiness.

LikeIFRSs,deferredtaxismeasuredonanundiscountedbasis.

UnlikeIFRSs,deferredtax,butnotthevaluationallowance,isclassifiedaseithercurrentornon-currentaccordingtotheclassificationoftherelatedassetorliabilitygivingrisetothetemporarydifference.Thevaluationallowanceisallocatedagainstcurrentandnon-currentdeferredtaxassetsfortherelevanttaxjurisdictiononapro ratabasis,unlikeIFRSs.

LikeIFRSs,thetaxeffectofitemschargedorcrediteddirectlytoequityduringthecurrentreportingperiodischargedorcrediteddirectlytoequity.However,unlikeIFRSs,subsequentchangesintaxratesandlaws,taxstatus,andtheassessmentoftherecoverabilityofdeferredtaxforitemspreviouslyrecognisedinequityarerecognisedinprofitorloss.

UnlikeIFRSs,temporarydifferencesrelatedtoshare-basedpaymentarrangementsarebasedontheamountofcompensationcostrecognisedinprofitorlosswithoutanyadjustmentfortheentity’scurrentsharepriceuntilthetaxbenefitisrealised.

96 OverviewofIFRS



Currenttaxassetsandliabilitiesareoffsetonlywhenthereisalegallyenforceablerightofoffset,andtheentityintendstoapplyoffsetortosettlesimultaneously.




LikeIFRSs,currenttaxassetsandliabilitiesareoffsetonlywhenthereisalegallyenforceablerightofoffset.However,unlikeIFRSs,theentityneednotintendtoapplyoffsetortosettlesimultaneously.

98 OverviewofIFRS



3.�4 Contingentassetsandliabilities (IAS 37, IFRS 3)

Contingentliabilitiesareobligationswithuncertaintiesabouteithertheprobabilityofoutflowsofresourcesorabouttheamountoftheoutflows,orpossibleobligationswhentheexistenceofanobligationisuncertain;theseuncertaintiesresultinthenon-recognitionoftheitem.

Contingentliabilitiesarenotrecognisedotherthaninconnectionwithabusinesscombination.

Detailsofcontingentliabilitiesaredisclosedinthenotestothefinancialstatementsunlesstheprobabilityofanoutflowisremote.

Contingentassetsarepossibleassetswhoseexistenceisuncertain.

Contingentassetsarenotrecognisedunlesstheirrealisationisvirtuallycertain.




3.�4 Unrecognisedcontingencies (SFAS 5, SFAS 143, FIN 47)

UnlikeIFRSs,theterm“contingentliabilities”referstobothrecognisedandunrecogniseduncertainobligations.Thischapteraddressesonlyunrecognisedcontingentliabilities.

UnlikeIFRSs,contingentliabilitiesassumedinabusinesscombinationarenotrecognised.Othercontingentliabilitiesalsoarenotrecognisedinthebalancesheet,likeIFRSs.

LikeIFRSs,generallyinformationoncontingentliabilitiesisdisclosedinthenotestothefinancialstatementsunlesstheprobabilityofanoutflowisremote.However,unlikeIFRSs,certaincontingentliabilitiesaredisclosedevenifthelikelihoodofanoutflowisremote.

UnlikeIFRSs,contingentassetsarenotdefined.

UnlikeIFRSs,gaincontingenciesarenotrecogniseduntiltheyarerealised.However,ifacontingentassetoffsetsarecognisedloss,thenitisrecognisedwhenitis“likely”toresultinaninflowofresources.

�00 OverviewofIFRS



4. Specificincomestatementitems

4.� General (IAS 1, IAS 8)

WhileIFRSsrequirecertainitemstobepresentedonthefaceoftheincomestatement,thereisnoprescribedformat.

Ananalysisofexpensesisrequired,eitherbynatureorbyfunction,onthefaceoftheincomestatementorinthenotes.

Thepresentationofalternativeearningsmeasures,onthefaceoftheincomestatementorinthenotes,isnotprohibited.

IFRSsdonotdescribeeventsoritemsofincomeorexpenseas“exceptional”or“unusual”items.

Thepresentationordisclosureofitemsofincomeandexpensecharacterisedas“extraordinaryitems”isprohibited.

ItemsofincomeandexpensearenotoffsetunlessrequiredorpermittedbyanotherIFRS,orwhentheamountsrelatetosimilartransactionsoreventsthatarenotmaterial.

OverviewofU.S.GAAP �0�



4. Specificincomestatementitems

4.� General (APB 9, APB 30, SFAS 141, SFAS 144, EITF 99-19, EITF 00-10, EITF 01-

9, EITF 01-14, EITF 02-16, Reg S-X, SAB Topic 5-P)

UnlikeIFRSs,SECregulationsprescribetheformatandcertainminimumlineitemdisclosuresforSECregistrants.Fornon-SECregistrants,thereislimitedguidanceonthepresentationoftheincomestatement,likeIFRSs.

UnlikeIFRSs,thereisnorequirementforexpensestobeclassifiedaccordingtotheirnatureorfunction.SECregulationsprescribeexpenseclassificationrequirementsforcertainspecialisedindustries,unlikeIFRSs.

UnlikeIFRSs,thepresentationofalternativeearningsmeasuresbySECregistrantsisprohibited.Also,unlikeIFRSs,inpracticethepresentationofalternativeearningsmeasuresinthefinancialstatementsbynon-SECregistrantsisnotpermitted.

UnlikeIFRSs,transactionsofanunusualnaturearedefinedaseventsortransactionspossessingahighdegreeofabnormalityandofatypeclearlyunrelatedto,oronlyincidentallyrelatedto,theordinaryandtypicalactivitiesoftheentity.

UnlikeIFRSs,thepresentationofcertainitemsas“extraordinaryitems”isrequired.Anextraordinaryitemisonethatisbothunusualinnatureandinfrequentinoccurrence.

LikeIFRSs,generallyitemsofincomeandexpensearenotoffsetunlessrequiredorpermittedbyanotherstandard,orwhentheamountsrelatetosimilartransactionsoreventsthatarenotmaterial.However,unlikeIFRSs,thereismoredetailedguidanceonwhenamountsareoffset.




4.2 Revenue (IAS 18, Framework, IAS 1, IAS 11, IAS 17, SIC–27, SIC–31, IFRIC 4)

Revenuerecognitionisbasedmainlyonasinglestandardthatcontainsgeneralprinciplesthatareappliedtodifferenttypesoftransactions.

Revenueincludesamountsreceivedbyanentityforitsownaccount.Inanagencyrelationship,amountscollectedonbehalfoftheprincipalarenotrecognisedasrevenuebytheagent.

Whenatransactioncomprisesmultipleelements,asageneralprincipleeachelementisaccountedforseparately.

Revenuefromthesaleofgoodsisrecognisedwhentheentityhastransferredthesignificantrisksandrewardsofownershiptothebuyeranditnolongerretainscontrolormanagerialinvolvementinthegoods.

Fixedpriceconstructioncontractsareaccountedforusingthepercentage-of-completionmethod.Thecompletedcontractmethodisnotpermitted.

Underthepercentage-of-completionmethod,bothcontractrevenueandcostsarerecognisedbyreferencetothestageofcompletionofthework.




4.2 Revenue (CON 5, FTB No. 90-1, ARB 45, APB 29, SFAS 19, SFAS 45, SFAS 48,

SFAS 49, SFAS 50, SFAS 51, SFAS 60, SFAS 63, SFAS 66, SFAS 91, SFAS 140, SFAS 152, SFAS 153, FIN 43, FIN 45, SOP 81-1, SOP 85-3, SOP 97-2, SOP 98-9, SOP 00-2, EITF 84-15, EITF 85-9, EITF 85-24, EITF 87-10, EITF 90-22, EITF 91-6, EITF 91-9, EITF 95-1, EITF 95-4, EITF 96-17, EITF 99-19, EITF 00-10, EITF 00-21, EITF 00-24, EITF 01-4, EITF 01-09, EITF 01-14, EITF 02-16, EITF 03-5, EITF 03-10, EITF 03-12, EITF 04-11, EITF 06-1, EITF 06-3, SAB Topic 13, TPA 5100)

UnlikeIFRSs,thereisextensiveguidanceonrevenuerecognitionspecifictotheindustryandtypeofcontract.

LikeIFRSs,revenueincludesamountsreceivedbyanentityforitsownaccount.LikeIFRSs,inanagencyrelationship,amountscollectedonbehalfoftheprincipalarenotrecognisedasrevenuebytheagent.However,unlikeIFRSs,therearespecificindicatorsinevaluatingwhetheranentityisactingasaprincipaloragent.

LikeIFRSs,whenatransactioncomprisesmultipleelements,thearrangementmustbeevaluatedtodetermineifitconstitutesoneormultipleunitsofaccount.UnlikeIFRSs,thereisdetailedguidancethatmustbefollowedinmakingthisassessment.

LikeIFRSs,revenuefromthesaleofgoodsisrecognisedwhentheentityhastransferredthesignificantrisksandrewardsofownershiptothebuyeranditnolongerretainscontrolormanagerialinvolvementinthegoods.However,thedetailedcriteriaunderlyingtheseprinciplesaredifferentfromthoseunderIFRSs.

UnlikeIFRSs,constructioncontracts(includingfixedpricecontracts)areaccountedforusingthepercentage-of-completionmethodonlyifcertaincriteriaaremet;otherwise,unlikeIFRSs,thecompletedcontractmethodisused.

LikeIFRSs,underthepercentage-of-completionmethod,bothcontractrevenueandcostsmayberecognisedbyreferencetothestageofcompletionofthework.However,unlikeIFRSs,italsoispermittedtorecogniseallcostsincurred,withrevenuecalculatedbyreferencetothegrossmarginearnedonthecontractduringtheperiod.




Constructioncontractsaresegmentedwhencertaincriteriaaremet.

Revenuefromservicecontractsisrecognisedintheperiodthattheserviceisrendered,generallyusingthepercentage-of-completionmethod.

Thereisnospecificguidanceonsoftwarerevenuerecognition.

Thereislimitedguidanceonsalesofrealestate.




UnlikeIFRSs,constructioncontractsmay,butarenotrequiredto,besegmentedwhencertaincriteriaaremet;additionally,thecriteriadifferfromIFRSs.

LikeIFRSs,revenuefromservicecontractsisrecognisedintheperiodthattheserviceisrendered.However,unlikeIFRSs,revenuefromservicesgenerallyisrecognisedusingtheproportionalperformanceorstraight-linemethodratherthanthepercentage-of-completionmethod.

UnlikeIFRSs,thereisdetailedguidanceonsoftwarerevenuerecognition.

UnlikeIFRSs,thereisdetailedguidanceonaccountingforsalesofrealestate.




4.3 Governmentgrants (IAS 20, IAS 41, SIC–10)

Governmentgrantsarerecognisedwhenthereisreasonableassurancethattheentitywillcomplywiththerelevantconditionsandthatthegrantwillbereceived.

Governmentgrantsrelatedtobiologicalassetsmeasuredatfairvaluelesspointofsalecostsarerecognisedinprofitorlosswhentheyareunconditionallyreceivable.

Othergovernmentgrantsarerecognisedinprofitorlosssoastomatchtherelatedexpenses.

Whenagovernmentgrantisintheformofanon-monetaryasset,boththeassetandgrantarerecognisedateitherthefairvalueofthenon-monetaryasset,oratanominalamount.




4.3 Governmentgrants

UnlikeIFRSs,thereisnospecificguidanceontheaccountingforgrantsfromgovernment.

LikeIFRSs,contributionsfromgovernmentof“biologicalassets”arerecognisedinitiallyatfairvaluewhentheyareunconditionallyreceivable.However,unlikeIFRSs,thereisnorequirementfortheamounttoberecognisedinprofitorloss.

UnlikeIFRSs,thereisnospecificguidanceonaccountingforgrantsfromgovernment.

UnlikeIFRSs,acontributednon-monetaryassetmustberecognisedatfairvaluewhenfairvaluecanbemeasuredreliably.




4.4 Employeebenefits (IAS 19, IFRIC 14)

Liabilitiesforemployeebenefitsarerecognisedonthebasisofalegalorconstructiveobligation.

Liabilitiesandexpensesforemployeebenefitsgenerallyarerecognisedintheperiodinwhichtheservicesarerendered.

Allbenefitsprovidedafterthecessationofemployment,i.e.,bothbeforeandduringretirement,areaccountedforunderasinglesetofrequirementsandarereferredtoaspost-employmentbenefits.

Adefinedcontributionplanisapost-employmentbenefitplanunderwhichtheemployerpaysspecifiedcontributionsintoaseparateentityandhasnofurtherobligations.Allotherpost-employmentplansaredefinedbenefitplans.

Multi-employerplansarepost-employmentplansthatpooltheassetscontributedbyvariousentitiestoprovidebenefitstoemployeesofmorethanoneentity.Suchplansareclassifiedasdefinedcontributionordefinedbenefitplansfollowingtheabovedefinitions.However,ifinsufficientinformationisavailabletopermitdefinedbenefitaccounting,thenaplanisaccountedforasadefinedcontributionplan.

Post-employmentplansinwhichparticipatingemployerspooltheirassetsforinvestmentpurposes,butmaintainseparateaccountsforpurposesofbenefitpayments,areclassifiedasdefinedcontributionordefinedbenefitplansfollowingtheabovedefinitions.




4.4 Employeebenefits (APB 12, SFAS 43, SFAS 87, SFAS 88, SFAS 106, SFAS 112, SFAS 146,

SFAS 158, FSP FAS 146-1, FSP FAS 158-1, EITF 88-1, EITF 05-5, EITF 06-2)

LikeIFRSs,liabilitiesforpostretirementbenefitsarerecognisedonthebasisofalegalorconstructiveobligation.Othertypesofemployeebenefitsarerecognisedasthebenefitsaccumulateifothercriteriaaremet,unlikeIFRSs.

LikeIFRSs,liabilitiesandexpensesforemployeebenefitsgenerallyarerecognisedintheperiodinwhichtheserviceisrendered.

UnlikeIFRSs,post-employmentbenefitsaredividedintopostretirementbenefits(providedduringretirement)andotherpost-employmentbenefits(providedafterthecessationofemploymentbutbeforeretirement).Theaccountingforpost-employmentbenefitsdependsonthetypeofbenefitprovided,unlikeIFRSs.

LikeIFRSs,adefinedcontributionplanisapostretirementbenefitplanunderwhichtheemployerpaysspecifiedcontributionsintoaseparateentityandhasnofurtherobligations.Allotherpostretirementplansaredefinedbenefitplans.However,unlikeIFRSs,otherpost-employmentbenefitplansdonothavetobeclassifiedaseitherdefinedcontributionordefinedbenefitplans.

LikeIFRSs,multi-employerplansarepensionplansthatpooltheassetscontributedbyvariousentitiestoprovidebenefitstoemployeesofmorethanoneentity.However,unlikeIFRSs,suchplansareaccountedforlikedefinedcontributionplans.

UnlikeIFRSs,pensionplansinwhichparticipatingemployerspooltheirassetsforinvestmentpurposesbutmaintainseparateaccountsforpurposesofbenefitpayments(multiple-employerplans)areclassifiedasdefinedbenefitplans.

��0 OverviewofIFRS



Groupplansareclassifiedasdefinedcontributionordefinedbenefitplansfollowingtheabovedefinitions.

Thereisnospecificguidanceontheapplicationofdefinedbenefitaccountingtoplansthatwouldbedefinedcontributionplansexceptthattheycontainminimumbenefitguarantees.

Contributionstoadefinedcontributionplanareexpensedastheobligationtomakethepaymentsisincurred.

Aliabilityisrecognisedforanemployer’sobligationunderadefinedbenefitplan.Theliabilityandexpensearemeasuredactuariallyusingtheprojectedunitcreditmethod.

Themeasurementofthedefinedbenefitobligationincludesestimatedfuturesalaryincreases,andfuturechangesinstatebenefitsifthereisreliableevidencethatthechangewilloccur.

Thedefinedbenefitobligationisdiscountedusingahighqualitycorporatebondrate,oragovernmentbondratewhenthereisaninsufficientlydeepcorporatebondmarket.

Toqualifyasplanassets,assetsmustmeetstrictcriteria,includingarequirementthattheybeunavailabletotheentity’screditors.

Insurancepoliciesissuedtothesponsorbyapartyunrelatedtotheentitymaymeetthedefinitionofplanassets.

Thefairvalueofqualifyingplanassetsisoffsetagainstthedefinedbenefitobligation.

Themeasurementofthedefinedbenefitobligationandrelatedplanassetsismadeasofthereportingdate.




UnlikeIFRSs,groupplansareaccountedfordependingonwhethertheyaremulti-ormultiple-employerplans.

UnlikeIFRSs,thereisspecificguidanceontheapplicationofdefinedbenefitaccountingtoplansthatwouldbedefinedcontributionplansexceptthattheycontainminimumbenefitguarantees.

LikeIFRSs,contributionstoadefinedcontributionplanareexpensedastheobligationtomakethepaymentsisincurred.

LikeIFRSs,aliabilityisrecognisedforanemployer’sobligationunderadefinedbenefitplan.Theliabilityandexpensearemeasuredactuariallyusingtheprojectedunitcreditmethod,likeIFRSs.

LikeIFRSs,themeasurementofthedefinedbenefitobligationgenerallyincludesestimatedfuturesalaryincreases.However,unlikeIFRSs,futurechangesinstatebenefitsarenotincludeduntilenacted.

UnlikeIFRSs,thedefinedbenefitobligationmustbediscountedusingahighqualitycorporatebondrate.

LikeIFRSs,toqualifyasplanassets,assetsmustmeetstrictcriteria.However,unlikeIFRSs,thereisnorequirementthattheybeunavailabletotheentity’screditors.

UnlikeIFRSs,insurancepoliciescanmeetthedefinitionofplanassetsevenifissuedbyarelatedparty,butonlyiftheyareheldbytheplan.

LikeIFRSs,thefairvalueofqualifyingplanassetsisoffsetagainstthedefinedbenefitobligation.

UnlikeIFRSs,themeasurementofthedefinedbenefitobligationandrelatedplanassetsmaybemadeuptothreemonthspriortothereportingdate.




Actuarialgainsandlossesofdefinedbenefitplansarerecognisedeitherinprofitorloss,orimmediatelydirectlyinequity.Amountsrecogniseddirectlyinequityarenotrecycledtoprofitorloss.

Ifactuarialgainsandlossesofadefinedbenefitplanarerecognisedinprofitorloss,thengainsandlossesthatexceeda“corridor”generallyarerequiredtoberecognisedovertheaverageremainingworkinglivesofemployeesintheplan.Fasterrecognitioninprofitorlossispermitted.

Thecorridoris�0percentofthegreateroftheobligationandthefairvalueofplanassetsatthebeginningoftheperiod.

Liabilitiesandexpensesforvestedpastservicecostsunderadefinedbenefitplanarerecognisedimmediately.Liabilitiesandexpensesforunvestedpastservicecostsunderadefinedbenefitplanarerecognisedoverthevestingperiod.

Ifplanassetsexceedthedefinedbenefitobligation,thentheamountofanynetassetrecognisedislimitedtoavailablefuturebenefitsfromtheplanandunrecognisedactuariallossesandpastservicecosts.

Gainsandlossesonthesettlementorcurtailmentofadefinedbenefitplanarerecognisedimmediately.However,thereisnospecificguidanceonthecalculationofthegainorloss.

Settlementandcurtailmentgainsandlossesarenotaccountedforuntiltheentityiscommitted.

Theexpenseforlong-termemployeebenefitsisaccruedovertheserviceperiod.

Terminationbenefitsarenotrecogniseduntilcommunicatedtoaffectedemployees.

OverviewofU.S.GAAP ��3



LikeIFRSs,actuarialgainsandlossesthatarenotincludedinprofitorlossarerecognisedinothercomprehensiveincome(OCI).Amountsrecognisedinaccumulatedothercomprehensiveincome(AOCI)arerecycledtoprofitorloss,unlikeIFRSs.

LikeIFRSs,actuarialgainsandlossesthatexceeda“corridor”generallyarerecognisedovertheaverageremainingworkinglivesofactiveemployeesintheplan.Fasterrecognitioninprofitorlossispermitted,likeIFRSs.

UnlikeIFRSs,thecorridoris�0percentofthegreateroftheobligationandthemarketrelatedvalue,ratherthanthefairvalue,ofplanassetsatthebeginningoftheperiod.

UnlikeIFRSs,prior(past)servicecostsarerecognisedinitiallyinOCI,andbothvestedandunvestedamountsgenerallyareamortisedfromAOCItoprofitorlossovertheaverageremainingserviceperiod.

UnlikeIFRSs,therecognitionofanassetinrespectofadefinedbenefitplanisnotrestricted.

LikeIFRSs,gainsandlossesonthesettlementorcurtailmentofadefinedbenefitplanarerecognisedimmediately.However,unlikeIFRSs,thereisspecificguidanceonthecalculationofthegainorloss.

LikeIFRSs,settlementgainsandlossesandcurtailmentgainsarenotaccountedforuntiltheentityiscommitted.However,unlikeIFRSs,curtailmentlossesarerecognisedwhentheyareprobable.

LikeIFRSs,theexpenseforlong-termemployeebenefitsisaccruedovertheserviceperiod.

UnlikeIFRSs,thereisnotasinglemodelfortherecognitionofterminationbenefits.Thetimingofrecognitiondependsonwhetherthecostswillbepaidpursuanttoanongoingplan.




4.� Share-basedpayments (IFRS 2, IFRIC 8)

Goodsorservicesreceivedinashare-basedpaymenttransactionaremeasuredatfairvalue.

Goodsarerecognisedwhentheyareobtainedandservicesarerecognisedovertheperiodthattheyarereceived.

Equity-settledshare-basedpaymentsarewithinthescopeoftheshare-basedpaymentstandardevenifsettledbyanothergroupentityorbyashareholder.

Cash-settledshare-basedpaymentsarewithinthescopeoftheshare-basedpaymentstandard.However,thereisnoexplicitguidancewhentheliabilityissettledbyashareholderoranothergroupentity.

Equity-settledgrantstoemployeesgenerallyaremeasuredbasedonthegrantdatefairvalueoftheequityinstrumentsissued.

Grantdateisthedateonwhichtheentityandtheemployeehaveasharedunderstandingofthetermsandconditionsofthearrangement.

Theserviceperiodmaycommencepriortothegrantdate.

Awardswithgradedvestingareaccountedforasaseparateshare-basedpaymentarrangements.

Ashare-basedpaymenttransactionsettledinredeemablesharesisclassifiedascash-settled.




4.� Share-basedpayments (SFAS 123R, SOP 93-6, EITF 96-18, EITF D-98, ASR 268)

LikeIFRSs,goodsorservicesreceivedinashare-basedpaymenttransactionaremeasuredatfairvalue.

LikeIFRSs,goodsarerecognisedwhentheyareobtainedandservicesarerecognisedovertheperiodthattheyarereceived.

LikeIFRSs,equity-classifiedshare-basedpaymentsarewithinthescopeoftheshare-basedpaymentstandardevenifsettledbyanothergroupentityorbyashareholder.

UnlikeIFRSs,liability-classified(cash-settled)share-basedpaymentsarewithinthescopeoftheshare-basedpaymentstandardsevenifsettledbyanothergroupentityorashareholder.

LikeIFRSs,equity-classifiedgrantstoemployeesgenerallyaremeasuredbasedonthegrantdatefairvalueoftheequityinstrumentsissued.

LikeIFRSs,grantdateisthedateonwhichtheentityandtheemployeehaveasharedunderstandingofthetermsandconditionsofthearrangement.

LikeIFRSs,theserviceperiodmaycommencepriortothegrantdate.

Awardswithgradedvestingmaybeaccountedforasaseparateshare-basedpaymentarrangements,likeIFRSs;orrateablyoverthelongestvestingtrancheiftheawardvestsbasedonserviceonly,unlikeIFRSs.

Share-basedpaymenttransactionssettledinredeemablesharesgenerallyareliability-classified,likeIFRSs;however,incertaincasestheyareequity-classified,unlikeIFRSs.




Anintrinsicvalueapproachispermittedonlywhenthefairvalueoftheequityinstrumentscannotbeestimatedreliably.

Equity-settledgrantsarenotremeasuredforsubsequentchangesinthevalueoftheequityinstruments.

Forequity-settledtransactionsanentityrecognisesacost,andrecognisesacorrespondingincreaseinequity.

Cash-settledgrantsareremeasureduntilsettlementdateforsubsequentchangesinthevalueoftheliability.

Forcash-settledtransactionsanentityrecognisesacost,andrecognisesacorrespondingliability.Remeasurementsarerecognisedimmediatelyinprofitorloss.

Estimatesofthenumberofequity-settledinstrumentsthatareexpectedtovestareadjustedtotheactualnumbersthatvestunlessforfeituresareduetomarket-basedconditions.

Market-basedvestingconditionsforequity-settledtransactionsarereflectedintheinitialmeasurementoffairvalue.Thereisno“trueup”iftheexpectedandactualoutcomesdifferbecauseofthemarketconditions.

Cancellationofashare-basedpaymentresultsinaccelerationoftheunrecognisedcost.

Themodificationofanequity-settledshare-basedpaymentresultsintherecognitionofanyincrementalfairvalue,butnotanyreductioninfairvalue.




LikeIFRSs,anintrinsicvalueapproachisrequiredintherarecircumstancethatthefairvalueoftheequityinstrumentscannotbeestimatedreliably.However,unlikeIFRSs,allnon-publicentitiesmayapplyanintrinsicvalueapproachforliability-classifiedshare-basedpaymentsasanaccountingpolicyelection.

LikeIFRSs,equity-classifiedgrantsarenotremeasuredforsubsequentchangesinthevalueoftheequityinstruments.

LikeIFRSs,forequity-classifiedtransactionsanentityrecognisesacost,andrecognisesacorrespondingincreaseinequity.

LikeIFRSs,liability-classifiedgrantsareremeasureduntilthesettlementdateforsubsequentchangesinthevalueoftheliability.

LikeIFRSs,forliability-classifiedtransactionsanentityrecognisesacost,andrecognisesacorrespondingliability.UnlikeIFRSs,remeasurementsarerecognisedasacost.

LikeIFRSs,estimatesofthenumberofequity-settledinstrumentsthatvestareadjustedtotheactualnumberthatvests.Thereisnoadjustmentforfailuretoachieveamarketcondition,likeIFRSs.

LikeIFRSs,amarketconditionforequity-classifiedtransactionsisreflectedintheinitialmeasurementoffairvalueandthereisno“true-up”totheactualoutcome.

LikeIFRSs,thecancellationofashare-basedpaymentresultsinaccelerationoftheunrecognisedcost.

LikeIFRSs,themodificationofequity-classifiedinstrumentsresultsintherecognitionofanyincrementalfairvalue,butnotanyreductioninfairvalue.UnlikeIFRSs,whenthereisamodificationofanequity-classifiedawardthat,atthedateofthemodification,isimprobableofvestingundertheoriginalterms,thereisnominimumcompensationcostthatmustberecognised.




Share-basedpaymentstonon-employeesgenerallyaremeasuredatthedate(s)thatthegoodsarereceivedorservicesrendered,basedonthefairvalueofthegoodsorservicesreceived.




UnlikeIFRSs,share-basedpaymentstonon-employeesgenerallyaremeasuredattheearlierofthecompletionofperformanceandtheperformancecommitmentdate,basedonthefairvalueoftheinstrumentsissued.However,ifthefairvalueofthegoodsorservicescanbedeterminedobjectively,thentheirvaluemaybeusedinstead,likeIFRSs.




4.6 Financialincomeandexpense (IAS 18, IAS 23, IAS 39)

Interestincomeandexpensearecalculatedusingtheeffectiveinterestmethod,basedonmarketratesatthedatethattheinstrumentisrecognisedinitially.

Incrementaltransactioncostsgenerallyareincludedintheinitialmeasurementoftheinstrumentbyoffsetagainstitscarryingamount.However,iftheinstrumentisatfairvaluethroughprofitorloss,thensuchcostsarerecognisedinprofitorloss.

Ifthemodificationofafinancialliabilityresultsinitsderecognition,thenanygainorlossisrecognisedinprofitorlossimmediately,togetherwiththerelatedcosts.Ifthefinancialliabilityisnotderecognised,thenanyrelatedcostsareadjustedagainstthecarryingamountoftheliability.

Followingtheimpairmentofafinancialasset,interestcontinuestoberecognisedusingtheeffectiveinterestmethod.

Borrowingcostsrelatedto“qualifying”assetsmaybecapitalisedifcertainconditionsaremet.

Aninvestmentotherthaninvestmentpropertycannotbeaqualifyingasset.

Borrowingcostseligibleforcapitalisationarereducedbyinterestincomefromthetemporaryinvestmentofborrowings.




4.6 Financialincomeandexpense (APB 21, SFAS 34, SFAS 42, SFAS 58, SFAS 62, SFAS 84, SFAS 91,

EITF 96-19, EITF 99-9, EITF 06-6)

LikeIFRSs,generallyinterestincomeandexpensearecalculatedusingtheeffectiveinterestmethodbasedonmarketratesatthedatethattheinstrumentisrecognisedinitially.However,unlikeIFRSs,therearecertainexemptionsfromtherequirementtocalculateaneffectiveinterestrate.

LikeIFRSs,incrementaltransactioncostsgenerallyareincludedintheinitialmeasurementoftheinstrument.Iftheinstrumentisatfairvaluethroughprofitorloss,thensuchcostsarerecognisedinprofitorloss,likeIFRSs.However,debtissuetransactioncostsarepresentedasaseparateassetinthebalancesheet,unlikeIFRSs.

LikeIFRSs,ifthemodificationofafinancialliabilityresultsinitsderecognition,thenanygainorlossisrecognisedinprofitorlossimmediately,togetherwiththerelatedcosts.However,unlikeIFRSs,therelatedcostsarerecognisedinprofitorlossevenifthefinancialliabilityisnotderecognised.

UnlikeIFRSs,followingtheimpairmentofafinancialasset,interestneednotberecognisedusingtheeffectiveinterestmethod.

UnlikeIFRSs,interestrelatedto“qualifying”assetsmustbecapitalised.

LikeIFRSs,property,plantandequipmentthatwouldbeinvestmentpropertyunderIFRSscanbeaqualifyingasset.UnlikeIFRSs,anequity-methodinvesteecanbeaqualifyingasset.However,likeIFRSs,otherinvestmentscannotbe.

UnlikeIFRSs,borrowingcostseligibleforcapitalisationgenerallyarenotreducedbyinterestincomefromthetemporaryinvestmentofborrowings.




�. Specialtopics

�.� Leases (IAS 17, IFRIC 4, SIC–15, SIC–27)

Thereareonlylimitedexclusionsfromtherequirementsinrespectofleaseaccounting.

Undercertaincircumstancesanarrangementthatisnotlegallyaleaseisdeemedtocontainaleaseinsubstance.

Aleaseisclassifiedaseitherafinanceleaseoranoperatinglease.Inrespectoflessors,thereisasub-categoryoffinanceleaseformanufacturerordealerlessors.

Leaseclassificationdependsonwhethersubstantiallyalloftherisksandrewardsincidentaltoownershiphavebeentransferredfromthelessortothelessee,andisdeterminedatinceptionofthelease.

Underafinancelease,thelessorrecognisesafinanceleasereceivableandthelesseerecognisestheleasedassetandaliabilityforfutureleasepayments.

Theleasedassetinanoperatingleaseremainsinthebalancesheetofthelessorandthelesseerecognisesanexpensefortheleasepaymentsovertheleaseterm.




�. Specialtopics

�.� Leases (SFAS 13, SFAS 22, SFAS 23, SFAS 27, SFAS 28, SFAS 29, SFAS 91,

SFAS 98, FIN 19, FIN 21, FIN 23, FIN 24, FIN 26, FIN 27, FTB 79-10, FTB 79-12, FTB 79-13, FTB 79-14, FTB 79-15, FTB 79-16(R), FTB 85-3, FTB 86-2, FTB 88-1, EITF 84-37, EITF 85-16, EITF 85-27, EITF 86-17, EITF 86-43, EITF 88-21, EITF 89-16, EITF 90-14, EITF 90-15, EITF 90-20, EITF 93-8, EITF 95-1, EITF 95-4, EITF 96-21, EITF 97-1, EITF 97-10, EITF 99-13, EITF 01-8, FSP FAS 13-1, FSP FAS 13-2)

UnlikeIFRSs,theleaseaccountingliteratureappliesonlytoproperty,plantandequipment.

LikeIFRSs,undercertaincircumstancesanarrangementthatisnotlegallyaleaseisdeemedtocontainaleaseinsubstance.

LikeIFRSs,aleaseisclassifiedaseitheracapital(finance)leaseoranoperatinglease.Inrespectoflessors,capitalleasesarecategorisedasdirectfinancingleases,sales-typeleasesandleveragedleases,whichdifferincertainrespectsfromIFRSs.

LikeIFRSs,leaseclassificationdependsonwhethersubstantiallyalloftherisksandrewardsincidentaltoownershipofaleasedassethavebeentransferredfromthelessortothelesseeandisdeterminedatinceptionofthelease.However,therearemoredetailedrequirementsthanIFRSs.

LikeIFRSs,underacapitallease,thelessorrecognisesacapitalleasereceivableunlesstheleaseisaleveragedlease,andthelesseerecognisestheleasedassetandaliabilityforfutureleasepayments.

LikeIFRSs,theleasedassetinanoperatingleaseremainsinthebalancesheetofthelessorandthelesseerecognisesanexpensefortheleasepaymentsovertheleaseterm.




Alesseemayclassifyapropertyinterestheldunderanoperatingleaseasaninvestmentpropertyifinvestmentpropertyisaccountedforusingthefairvaluemodel.Insuchcasetheinterestisaccountedforasifitwereafinancelease.

Lessorsandlesseesrecogniseincentivesgrantedtoalesseeunderanoperatingleaseasareductioninleaserentalincome/expenseovertheleaseterm.

Aleaseoflandgenerallyisclassifiedasanoperatingleaseunlesstitletransferstothelessee.

Aleaseoflandandabuildingistreatedastwoseparateleasesifthelandelementismaterialtotheleasedproperty;thetwoleasesmaybeclassifieddifferently.

Immediategainrecognitionfromthesaleandleasebackofanassetdependsonwhetherthesaletakesplaceatfairvalue,andtheclassificationoftheleasebackasanoperatingorfinancelease.

Aseriesoflinkedtransactionsinthelegalformofaleaseisaccountedforbasedonthesubstanceofthearrangement;thesubstancemaybethattheseriesoftransactionsisnotalease.




UnlikeIFRSs,thereisnoconceptof“investmentproperty”,andtheusualleaseclassificationrequirementsapply.

LikeIFRSs,lessorsandlesseesrecogniseincentivesgrantedunderanoperatingleaseasareductioninleaserentalincome/expenseovertheleaseterm.

LikeIFRSs,aleaseoflandgenerallyisclassifiedasanoperatingleaseunlesstitletransferstothelessee.

LikeIFRSs,aleaseoflandandabuildingistreatedastwoseparateleasesifthelandelementismaterialtotheleasedproperty.However,unlikeIFRSs,thelandelementisdeemedtobematerialonlyifitsfairvalueisatleast2�percentofthefairvalueoftheleasedpropertyasawhole.LikeIFRSs,thetwoleasesmaybeclassifieddifferently.

UnlikeIFRSs,U.S.GAAPdoesnotpermitimmediategainrecognitiononsale-leasebacktransactionsunlesstheleasebackisconsideredtobe“minor”.

UnlikeIFRSs,thereisnoexplicitrequirementthataseriesoflinkedtransactionsinthelegalformofaleasebeaccountedforbasedonthesubstanceofthearrangement.




�.2 Segmentreporting (IAS 14)

Segmentdisclosuresarerequiredonlybyentitieswhoseequityordebtsecuritiesarepubliclytraded,orthatareintheprocessofissuingsuchsecurities.

Disclosuresarerequiredforbothbusinesssegmentsandgeographicalsegments.

Onebasisofsegmentationisprimaryandtheotherissecondary;lessinformationisrequiredtobedisclosedforsecondarysegments.Theassessmentofwhichistheprimarysegmentreportingformatisbasedonthedominantsourceandnatureofanentity’srisksandreturns,aswellastheentity’sinternalreportingstructure.

Segmentsarereportableiftheymeetoneofthreequantitativetests,basedonrevenues,profitsorlosses,andassets.

Theamountsdisclosedarebasedonthesameaccountingpoliciesastheamountsrecognisedinthefinancialstatements.

Comparativeinformationnormallyisadjustedforchangesinreportablesegments,unlessimpracticable.




�.2 Segmentreporting (SFAS 131, SFAS 142, SFAS 144, EITF 04-10)

LikeIFRSs,segmentdisclosuresarerequiredonlybyentitieswhoseequityordebtsecuritiesarepubliclytraded,orthatareintheprocessofissuingsuchsecurities.UnlikeIFRSs,segmentdisclosuresalsoarerequiredforcertainotherentitiesrequiredtofilefinancialstatementswiththeSEC.

UnlikeIFRSs,disclosuresarerequiredforsegmentsreportedtothechiefoperatingdecisionmaker,withnodistinctionbeingmadebetweenbusinessandgeographicalsegments.

UnlikeIFRSs,thereisonlyonebasisofsegmentation,whichisbasedontheinternalreportingstructureoftheentity.

LikeIFRSs,segmentsarereportableiftheymeetoneofthreequantitativetests,basedonrevenues,profitsorlosses,andassets.

UnlikeIFRSs,theamountsdisclosedarebasedontheamountsreportedinternallytothechiefoperatingdecisionmaker.

LikeIFRSs,comparativeinformationisadjustedforchangesinreportablesegments,unlessimpracticable.




�.2AOperatingsegments (IFRS 8)

Anewstandardonoperatingsegmentsiseffectiveforannualperiodsbeginningonorafter�January2009;earlierapplicationispermitted.Thenewrequirements,highlightedbelow,applyretrospectively.

Forthcoming requirements Segmentdisclosuresarerequiredonlybyentitieswhoseequityordebtsecuritiesarepubliclytraded,orthatareintheprocessofissuingsuchsecurities.

Anoperatingsegmentisacomponentofanentitythatengagesinbusinessactivitiesfromwhichitmayearnrevenuesandincurexpenses,whoseoperatingresultsarereviewedregularlybythechiefoperatingdecisionmaker,andforwhichdiscretefinancialinformationisavailable.

Operatingsegmentsareidentifiedonthebasisofinternalreportsreviewedregularlybythechiefoperatingdecisionmaker.

Theaggregationofoperatingsegmentsispermittedonlywhenthesegmentsaresimilarandmeetanumberofotherspecifiedmeasures.

Entitiesthatfollowamatrixformoforganisationdetermineoperatingsegmentsconsistentwiththeobjectiveofthestandardwhenmorethanonesetofcomponentsisreviewedbythechiefoperatingdecisionmaker.

Operatingsegmentsarereportableiftheymeetoneofthreequantitativetests,basedonrevenues,profits,andassets.

Reportablesegmentdisclosuresarebasedonthemeasuresreportedtothechiefoperatingdecisionmaker,whicharenotnecessarilybasedonthesameaccountingpoliciesasinthefinancialstatements.




�.2AOperatingsegments (SFAS 131, SFAS 142, SFAS 144, EITF 04-10)

UnlikeIFRSs,therehavebeennochangesintherequirementsunderU.S.GAAPrelatedtooperatingsegments.Asaconsequence,thefollowingrequirementsarecurrentlyeffectiveunderU.S.GAAP.

Forthcoming requirements LikeIFRSs,segmentdisclosuresarerequiredonlybyentitieswhoseequityordebtsecuritiesarepubliclytraded,orthatareintheprocessofissuingsuchsecurities.UnlikeIFRSs,segmentdisclosuresalsoarerequiredforcertainotherentitiesrequiredtofilefinancialstatementswiththeSEC.

LikeIFRSs,anoperatingsegmentisacomponentofanentitythatengagesinbusinessactivitiesfromwhichitmayearnrevenuesandincurexpenses,whoseoperatingresultsarereviewedregularlybythechiefoperatingdecisionmaker,andforwhichdiscretefinancialinformationisavailable.

LikeIFRSs,operatingsegmentsareidentifiedonthebasisofinternalreportsreviewedregularlybythechiefoperatingdecisionmaker.

LikeIFRSs,theaggregationofoperatingsegmentsispermittedonlywhenthesegmentsaresimilarandmeetanumberofotherspecifiedmeasures.

UnlikeIFRSs,entitiesthatfollowamatrixformoforganisationdetermineoperatingsegmentsbasedonproductsandserviceswhenmorethanonesetofcomponentsisreviewedbythechiefoperatingdecisionmaker.

LikeIFRSs,operatingsegmentsarereportableiftheymeetoneofthreequantitativetests,basedonrevenues,profits,andassets.

LikeIFRSs,reportablesegmentdisclosuresarebasedonthemeasuresreportedtothechiefoperatingdecisionmaker,whicharenotnecessarilybasedonthesameaccountingpoliciesasinthefinancialstatements.




Disclosuresincludeameasureofrevenue,profitorlossandtotalassetsand,ifreportedtothechiefoperatingdecisionmaker,liabilitiesforeachreportablesegment.

Disclosuresarerequiredforadditionstonon-currentassets,withcertainexceptions.

Totalamountsdisclosedforallreportablesegmentsarereconciledtofinancialstatementamounts,withadescriptionofallmaterialreconcilingitems.

Generalandentity-widedisclosuresarerequired,includinginformationaboutproductsandservices,geographicalareas,andmajorcustomers.

Comparativeinformationisrevisedforchangesinthecompositionofsegments,unlessimpracticable.




LikeIFRSs,disclosuresincludeameasureofrevenue,profitorlossandtotalassetsforeachreportablesegment.UnlikeIFRSs,thereisnorequirementtodiscloseinformationaboutliabilities.

UnlikeIFRSs,disclosuresarerequiredonlyforadditionstolong-livedtangibleassets,withcertainexceptions.

LikeIFRSs,totalamountsdisclosedforallreportablesegmentsarereconciledtofinancialstatementamounts,withadescriptionofallmaterialreconcilingitems.

LikeIFRSs,generalandentity-widedisclosuresarerequired,includinginformationaboutproductsandservices,geographicalareas,andmajorcustomers.

LikeIFRSs,comparativeinformationisrevisedforchangesinthecompositionofsegments,unlessimpracticable.




�.3 Earningspershare (IAS 33)

Basicanddilutedearningspershare(EPS)forbothcontinuingoperationsandnetincomearepresentedonthefaceoftheincomestatement,withequalprominence,foreachclassofordinaryshares.

BasicanddilutedEPSisdisclosedfordiscontinuedoperations.

IFRSsdonothavetheconceptofextraordinaryitemsandthereforedisclosureoftherelatedEPSisnotrelevant.

BasicEPSisprofitorlossattributabletoordinaryshareholdersoftheparententityfortheperiod,dividedbytheweightedaveragenumberofordinarysharesoutstanding.

DilutedEPSiscalculatedbasedonprofitorlossattributabletoordinaryshareholdersandtheweightedaveragenumberofsharesoutstanding,adjustedfortheeffectsofalldilutivepotentialordinaryshares.

ContingentlyissuableordinarysharesareincludedinbasicEPSfromthedatethatallnecessaryconditionsaresatisfiedand,whennotyetsatisfied,indilutedEPSbasedonthenumberofsharesthatwouldbeissuableifthereportingdateweretheendofthecontingencyperiod.

Whenacontractmaybesettledineithercashorsharesattheentity’soption,itistreatedasapotentialordinaryshare.

Whenacontractmaybesettledineithercashorsharesattheholder’soption,themoredilutiveofcashandsharesettlementisusedtocalculatedilutedEPS.




�.3 Earningspershare (SFAS 128, EITF 03-6, EITF 04-8, EITF D-42, EITF D-53, EITF D-62,

EITF D-72, EITF D-82, EITF D-95, Reg G)

LikeIFRSs,basicanddilutedEPSforbothcontinuingoperationsandnetincomearepresentedonthefaceoftheincomestatement,withequalprominence,foreachclassofcommonshares.

LikeIFRSs,basicanddilutedEPSisdisclosedfordiscontinuedoperations.

UnlikeIFRSs,entitieswithanextraordinaryitemalsomustpresentEPSdataforthoselineitems,eitheronthefaceoftheincomestatementorinthenotestothefinancialstatements.

LikeIFRSs,basicEPSisprofitorlossattributabletocommonshareholdersoftheparententityfortheperiod,dividedbytheweightedaveragenumberofcommonsharesoutstanding.

LikeIFRSs,dilutedEPSiscalculatedbasedonprofitorlossavailabletocommonshareholdersandtheweightednumberofsharesoutstanding,adjustedfortheeffectsofalldilutivepotentialcommonshares.

LikeIFRSs,contingentlyissuablecommonsharesareincludedinbasicEPSfromthedatethatallnecessaryconditionsaresatisfiedand,whennotsatisfied,indilutedEPSbasedonthenumberofsharesthatwouldbeissuableiftheendofthereportingperiodweretheendofthecontingencyperiod.

LikeIFRSs,whenacontractmaybesettledineithercashorsharesattheentity’soption,itistreatedasapotentialcommonshareunless,unlikeIFRSs,theentityhasanexistingpracticeorastatedpolicythatprovidesareasonablebasistoconcludethecontractwillbepaidpartiallyorwhollyincash.

LikeIFRSs,whenacontractmaybesettledineithercashorsharesattheholder’soption,themoredilutiveofcashandsharesettlementisusedtocalculatedilutedEPS.




FordilutedEPS,dilutedpotentialordinarysharesaredeterminedindependentlyforeachperiodpresented.

Whenthenumberofordinarysharesoutstandingchanges,withoutacorrespondingchangeintotalequity,theweightedaveragenumberofordinarysharesoutstandingduringallperiodspresentedisadjustedretrospectively.

AdjustedbasicanddilutedEPSbasedonalternativeearningsmeasuresmaybedisclosedandexplainedinthenotestothefinancialstatements.




UnlikeIFRSs,thecomputationofdilutedEPSfortheyeartodateisbasedontheweightedaverageofincrementalsharesincludedineachofthequartersmakinguptheyear-to-dateperiod.

LikeIFRSs,whenthenumberofcommonsharesoutstandingchanges,withoutacorrespondingchangeintotalequity,theweightedaveragenumberofcommonsharesoutstandingduringallperiodspresentedisadjustedretrospectively.

UnlikeIFRSs,adjustedbasicanddilutedEPSbasedonalternativeearningsmeasuresmaynotbepresented.




�.4 Non-currentassetsheldforsaleanddiscontinuedoperations

(IFRS 5)

Non-currentassets,andsomegroupsofassetsandliabilitiesknownasdisposalgroups,areclassifiedasheldforsalewhenspecificcriteriarelatedtotheirsalearemet.

Non-currentassets(disposalgroups)heldforsalearemeasuredatthelowerofcarryingamountandfairvaluelesscoststosell,andarepresentedseparatelyonthefaceofthebalancesheet.

Assetsclassifiedasheldforsalearenotamortisedordepreciated.

Thecomparativebalancesheetisnotre-presentedwhenanon-currentasset(disposalgroup)isclassifiedasheldforsale.

Adiscontinuedoperationisacomponentofanentitythateitherhasbeendisposedoforisheldforsale.

Adiscontinuedoperationislimitedtothoseoperationsthatareaseparatemajorlineofbusinessorgeographicalarea,andsubsidiariesacquiredexclusivelywithaviewtoresale.

Discontinuedoperationsarepresentedseparatelyonthefaceoftheincomestatement,andcashflowinformationisdisclosed.

Thecomparativeincomestatementandcashflowinformationisre-presentedfordiscontinuedoperations.




�.4 Non-currentassetsheldforsaleanddiscontinuedoperations

(SFAS 144, SAB Topic 5-Z, EITF 87-24, EITF 03-13)

LikeIFRSs,long-livedassets(disposalgroups)areclassifiedasheldforsalewhenspecificcriteriarelatedtotheirsalearemet.

LikeIFRSs,long-livedassets(disposalgroups)heldforsalearemeasuredatthelowerofcarryingamountandfairvaluelesscoststosell,andarepresentedseparatelyonthefaceofthebalancesheet.

LikeIFRSs,assetsclassifiedasheldforsalearenotamortisedordepreciated.

UnlikeIFRSs,thereisnospecificguidanceonwhetherthecomparativebalancesheetisre-presentedwhenalong-livedasset(disposalgroup)isclassifiedasheldforsale.

LikeIFRSs,adiscontinuedoperationisacomponentofanentitythateitherhasbeendisposedoforisheldforsale.

UnlikeIFRSs,adiscontinuedoperationcomprisesoperationsandcashflowsthathavebeenorwillbeeliminatedfromtheongoingoperationsasaresultofthedisposaltransaction,whichmaybeonlyaportionofaseparatelineofbusiness.Additionally,unlikeIFRSs,theentitycannothavesignificantcontinuinginvolvementintheoperationafterdisposal.

LikeIFRSs,discontinuedoperationsarepresentedseparatelyonthefaceoftheincomestatement.However,unlikeIFRSs,cashflowinformationfordiscontinuedoperationsisnotrequiredtobedisclosed.

LikeIFRSs,thecomparativeincomestatementisre-presentedfordiscontinuedoperations.UnlikeIFRSs,cashflowinformationisre-presentedonlyifcashflowinformationdiscontinuedoperationsispresentedseparatelyforthecurrentreportingperiod.




�.� Relatedpartydisclosures (IAS 24)

Relatedpartyrelationshipsarethoseinvolvingcontrol(directorindirect),jointcontrolorsignificantinfluence.

Keymanagementandtheirclosefamilymembersarerelatedparties.

Therearenospecialrecognitionormeasurementrequirementsforrelatedpartytransactions.

Nodisclosureisrequiredintheconsolidatedfinancialstatementsofintra-grouptransactionseliminatedinpreparingthosestatements.

Comprehensivedisclosuresofrelatedpartytransactionsarerequiredforeachcategoryofrelatedpartyrelationship.

Keymanagementpersonnelcompensationisdisclosedintotalandisanalysedbycomponent.




�.� Relatedpartydisclosures (SFAS 57, Reg S-X)

LikeIFRSs,relatedpartyrelationshipsarethoseinvolvingcontrol(directorindirect),jointcontrolorsignificantinfluence.

LikeIFRSs,managementandmanagement’simmediatefamilymembersarerelatedparties.

LikeIFRSs,therearenospecialrecognitionormeasurementrequirementsforrelatedpartytransactions.

LikeIFRSs,nodisclosureisrequiredintheconsolidatedfinancialstatementsofintra-grouptransactionseliminatedinpreparingthosestatements.

LikeIFRSs,comprehensivedisclosuresofrelatedpartytransactionsarerequired.However,unlikeIFRSs,thereisnorequirementforthedisclosurestobegroupedintocategoriesofrelatedparties.

UnlikeIFRSs,managementcompensationisnotrequiredtobedisclosedinthefinancialstatements.




�.6 Financialinstruments:presentationanddisclosure

(IAS 32, IFRS 7, IFRIC 2)

Separatepresentationonthefaceofthebalancesheetisrequiredforcertainclassesoffinancialassetsandliabilities.

IFRSsdonotprovideguidanceinthebalancesheetpresentationofnon-derivativeorderivativehedginginstruments.

Thereisnoguidanceontheincomestatementpresentationofgainsandlossesonfinancialinstruments.

Afinancialassetandafinancialliabilityareoffsetonlywhenthereisalegallyenforceablerighttooffsetandanintentiontosettlenetortosettlebothamountssimultaneously.

Thetermsandconditionsoffinancialinstrumentsaredisclosed.

Qualitativeinformationinrespectofrisksarisingfromfinancialinstrumentsandmanagement’sapproachtomanagingtheserisksisdisclosed.




�.6 Financialinstruments:presentationanddisclosure

(SFAS 107, SFAS 115, SFAS 133, SFAS 137, SFAS 138, SFAS 140, SFAS 149, SFAS 150, SFAS 155, FIN 45, EITF 85-1, EITF 98-5, EITF 00-19, Reg S-K, Reg S-X, SAB Topic 4-E)

LikeIFRSs,forSECregistrantsseparatepresentationonthefaceofthebalancesheetisrequiredforcertainclassesoffinancialassetsandliabilities.UnlikeIFRSs,therearenopresentationrequirementsfornon-SECregistrants.

LikeIFRSs,thereisnospecificguidanceinthebalancesheetpresentationofnon-derivativeorderivativehedginginstruments.

LikeIFRSs,fornon-SECregistrantsthereisnoguidanceontheincomestatementpresentationofgainsandlossesonfinancialinstruments.UnlikeIFRSs,thereisguidanceforSECregistrants.

LikeIFRSs,afinancialassetandafinancialliabilityareoffsetonlywhenthereisalegallyenforceablerighttooffsetandanintentiontosettlenetortosettlebothamountssimultaneously.However,unlikeIFRSs,thereareadditionalrequirementsformasternettingarrangementsrelatedtoderivatives.

LikeIFRSs,thetermsandconditionsoffinancialinstrumentsaredisclosed.

UnlikeIFRSs,specificqualitativedisclosuresinrespectofrisksarisingfromfinancialinstruments,otherthanconcentrationsofcreditrisk,arenotdisclosed.Qualitativeinformationinrespectofrisksanduncertaintiesrelatedtothenatureofacompany’soperationsanddeterminingestimatesisdisclosed,unlikeIFRSs.Also,unlikeIFRSs,additionalqualitativeinformationinrespectofrisksarisingfromfinancialinstrumentsandmanagement’sapproachtomanagingtheserisksisprovidedoutsideofthefinancialstatements,butonlyforSECregistrants.




Quantitativedisclosuresarerequiredforatleastcredit,liquidityandmarketrisksarisingfromfinancialinstrumentsandhowtheentitymanagesthoserisks.

Thefairvalueofeachclassoffinancialassetandliabilityisdisclosed,aswellasinformationaboutthemethodsandsignificantassumptionsusedindeterminingfairvalue.

Thelevelofdisclosurevariesdependingonthenatureofthefinancialinstruments.




UnlikeIFRSs,non-SECregistrantsarenotrequiredtomakespecificquantitativerisk-relateddisclosuresinrespectoffinancialinstruments,otherthanrelatedtoconcentrationsofcreditrisk.LikeIFRSs,theSECrequirescertainquantitativedisclosures;however,unlikeIFRSs,thosedisclosuresarelimitedtomarketriskdisclosuresandareprovidedoutsideofthefinancialstatements.

LikeIFRSs,thefairvalueofeachclassoffinancialassetandliabilityisdisclosed,aswellasinformationaboutthemethodsandsignificantassumptionsusedindeterminingfairvalue.

LikeIFRSs,thelevelofdisclosurevariesdependingonthenatureofthefinancialinstrumentsand,unlikeIFRSs,whethertheentityisanSECregistrant.




�.7 Non-monetarytransactions (IAS 16, IAS 18, IAS 38, SIC–13, SIC–31)

Generallyexchangesofnon-monetaryassetsaremeasuredatfairvalueandresultintherecognitionofgainsorlossesratherthanrevenue.

Exchangednon-monetaryassetsarerecognisedbasedonhistoricalcostiftheexchangelackscommercialsubstanceorthefairvaluecannotbemeasuredreliably.

Revenueisrecognisedforbartertransactionsunlessthetransactionisincidentaltotheentity’smainrevenue-generatingactivitiesortheitemsareexchangedforitemsthataresimilarinnatureandvalue.

Donatedassetsmaybeaccountedforinamannersimilartogovernmentgrantswhentransferredtotheentitybythegovernment.




�.7 Non-monetarytransactions (APB 29, SFAS 116, SFAS 153, EITF 99-17, EITF 01-2, EITF 04-13, SAB

Topic 5-T)

LikeIFRSs,exchangesofnon-monetaryassetsgenerallyaremeasuredatfairvalueandresultintherecognitionofgainsorlossesratherthanrevenue.

LikeIFRSs,exchangednon-monetaryassetsarerecognisedbasedonhistoricalcostiftheexchangelackscommercialsubstanceorthefairvaluecannotbemeasuredreliably.

UnlikeIFRSs,U.S.GAAPdoesnotrequireanexchangeofdissimilaritemsinabartertransactiontorecogniserevenue.Norevenueisrecognisedforbartertransactionsthatfacilitatesalestocustomers.

UnlikeIFRSs,U.S.GAAPdoesnotprovidespecificguidanceonassetsdonatedbygovernment,whichareaccountedforinaccordancewiththerequirementsforothernon-monetarytransactions.




�.8 Accompanyingfinancialandotherinformation (IAS 1)

Afinancialandoperationalreviewisencouraged,butnotrequired.

AnentityconsidersitsparticularlegalorsecuritieslistingrequirementsinassessingwhatinformationisdisclosedinadditiontothatrequiredbyIFRSs.




�.8 Accompanyingfinancialandotherinformation (Reg S-B, Reg S-K, Reg S-X)

LikeIFRSs,afinancialandoperationalreviewisnotrequired.However,unlikeIFRSs,SECregistrantsarerequiredtoincludemanagement’sdiscussionandanalysisintheirannualandinterimreports.

LikeIFRSs,anentityconsidersthelegal,securitiesexchange,orSECrequirementinassessingtheinformationtobedisclosedinadditiontoU.S.GAAPrequirements.




�.9 Interimfinancialreporting (IAS 34, IAS 8, IFRIC 10)

Interimfinancialstatementscontaineitheracompleteoracondensedsetoffinancialstatementsforaperiodshorterthananannualreportingperiod.

Whenacompletesetofinterimfinancialstatementsisprepared,theformandcontentofthosefinancialstatementsisthesameasforanannualreportingperiod.However,therecognitionandmeasurementrequirementsoftheinterimreportingstandardapply,includingtherequirementsforthepresentationofcomparatives.

Thefollowingmustbepresentedincondensedinterimfinancialstatements:condensedbalancesheet;condensedincomestatement;condensedcashflowstatement;condensedstatementofchangesinequity;selectedexplanatorynotes.

Exceptinrespectofincometaxexpense,eachinterimperiodisviewedasadiscreteperiodindeterminingtherecognitionandmeasurementofelementsofthefinancialstatements.

Incometaxexpenseforaninterimperiodisbasedonanestimatedaverageannualeffectiveincometaxrate.

Generallytheaccountingpoliciesappliedintheinterimfinancialstatementsarethosethatwillbeappliedinthenextannualfinancialstatements.




�.9 Interimfinancialreporting (APB 28, SFAS 154, FIN 18, FTB 79-9, Reg S-X)

LikeIFRSs,interimfinancialstatementscontaineitheracompleteoracondensedsetoffinancialstatementsforaperiodshorterthananannualreportingperiod.

LikeIFRSs,whenacompletesetofinterimfinancialstatementsisprepared,theformandcontentofthosefinancialstatementsisthesameasforanannualreportingperiod.LikeIFRSs,therecognitionandmeasurementrequirementsoftheinterimreportingstandardapply,includingtherequirementsforthepresentationofcomparativesbySECregistrants.

LikeIFRSs,entitiesmustpresentthefollowingincondensedinterimfinancialstatements:condensedbalancesheet;condensedincomestatement;condensedcashflowstatement;selectedexplanatorynotes.However,unlikeIFRSs,acondensedstatementofchangesinequityisnotrequired.

UnlikeIFRSs,eachinterimperiodisviewedasanintegralpartofanannualperiodtowhichitrelates.

LikeIFRSs,incometaxexpenseforaninterimperiodisbasedonanestimatedaverageannualeffectiveincometaxrate.

LikeIFRSs,generallytheaccountingpoliciesappliedintheinterimfinancialstatementsarethosethatwillbeappliedinthenextannualfinancialstatements.




�.�0 Insurancecontracts (IFRS 4)

Theinsurancestandardappliestoallinsurancecontracts,regardlessofthetypeofentitythatissuedthecontract.Aninsurancecontractisacontractunderwhichtheinsureracceptssignificantinsuranceriskfromthepolicyholder.

Generallyentitiesthatissueinsurancecontractsarepermittedtocontinuetheirexistingaccountingpolicieswithrespecttoinsurancecontracts.

Afinancialinstrumentthatdoesnotmeetthedefinitionofaninsurancecontractisaccountedforunderthegeneralrecognitionandmeasurementrequirementsforfinancialinstruments.

Changesinexistingaccountingpoliciesforinsurancecontractsarepermittedonlyifthenewpolicy,oracombinationofnewpolicies,resultsininformationthatismorerelevantorreliable,orboth,withoutreducingeither.

Discretionaryparticipationfeaturesareaccountedforasinsurancecontracts.

Insomecasesadepositelementisrequiredtobe“unbundled”fromaninsurancecontractandaccountedforasafinancialinstrument.

Somederivativesembeddedininsurancecontractsmustbeseparatedfromtheirhostinsurancecontractandaccountedforasiftheywerestand-alonederivatives.

Therecognitionofcatastropheandequalisationprovisionsisprohibitedforcontractsnotinexistenceatthereportingdate.




�.�0 Insurancecontracts (SFAS 60, SFAS 97, SFAS 113, SFAS 120, SOP 03-1, SOP 05-1)

UnlikeIFRSs,theinsuranceliteratureappliestoallinsurancecontractsissuedbyaninsurancecompany;therearenospecificrequirementsforotherentitiesthatacceptsignificantinsurancerisk.Aninsurancecontractisacontractnamedassuchunderapplicablelaw,unlikeIFRSs.

UnlikeIFRSs,insurancecompaniesmustcomplywiththeaccountingpoliciesspecifiedintheinsuranceliterature.

UnlikeIFRSs,onlycontractsthatarenotlegallyinsurancecontractsareaccountedforunderotherapplicablestandards.

LikeIFRSs,anentitymaychangeanaccountingpolicyifjustifiedonthebasisthatitispreferable.

UnlikeIFRSs,U.S.GAAPdoesnotusetheterm“discretionaryparticipationfeature”andinsteadaddressestheaccountingfordividendstopolicyholders;theseareamountsdistributabletopolicyholdersofparticipatinginsurancecontractsasdeterminedbytheinsurer.

UnlikeIFRSs,U.S.GAAPdoesnothaveabroadunbundlingconceptforinsurancecontracts.

LikeIFRSs,derivativesembeddedininsurancecontractsandmeetingcertaincriteriamustbeseparatedfromthehostinsurancecontractandaccountedforasiftheywerestand-alonederivatives.

LikeIFRSs,therecognitionofcatastropheandequalisationprovisionsisprohibitedforcontractsnotinexistenceatthereportingdate.




Aliabilityadequacytestisrequiredtoensurethatthemeasurementofanentity’sinsuranceliabilitiesconsidersallcontractualcashflows,usingcurrentestimates.

Theintroductionof“shadowaccounting”forinsuranceliabilitiesispermittedforconsistencywiththetreatmentofunrealisedgainsorlossesonassets.

Anexpanded(gross)presentationispermittedforinsurancecontractsacquiredinabusinesscombinationorportfoliotransfer.




UnlikeIFRSs,theterm“liabilityadequacytest”isnotused,andinsteadaformofpremiumdeficiencytestingisrequired,whichmeetstheminimumrequirementsofIFRSsforliabilityadequacytest.

UnlikeIFRSs,theuseof“shadowaccounting”isrequired.

UnlikeIFRSs,U.S.GAAPhasnospecificguidanceonthepresentationforinsurancecontractsacquiredinabusinesscombinationorportfoliotransfer.




�.�� Extractiveactivities (IFRS 6)

IFRSsprovidespecialisedextractiveindustryguidanceonlyinrespectoftheexplorationforandevaluation(E&E)ofmineralresources.

E&Ecostsmaybeexpensedasincurredorcapitalised,inaccordancewiththeentity’sselectedaccountingpolicy.

CapitalisedE&Ecostsaresegregatedandclassifiedaseithertangibleorintangibleassets,accordingtotheirnature.

ThetestforrecoverabilityofE&Eassetscancombineseveralcash-generatingunits,aslongasthecombinationisnotlargerthanasegment.

Thereisnospecificguidanceontherecognitionormeasurementofpre-explorationcostsorpost-explorationdevelopmentexpenditure.




�.�� Extractiveactivities (SFAS 19, SFAS 25, SFAS 69, EITF 04-6, Reg S-X, SAB Topic 12)

UnlikeIFRSs,U.S.GAAPprovidesdetailedguidanceonaccountingandreportingbyoilandgasproducingentitiesforexpenditurethatoccursbefore,duringandafterE&Eactivities;U.S.GAAPdoesnotcontainauthoritativeguidanceforotherextractiveindustries.

UnlikeIFRSs,allcostsrelatedtooilandgasproducingactivitiesareaccountedforundereitherthesuccessfuleffortsmethodorthefullcostmethod,andthetypeofE&Ecostscapitalisedundereachmethoddiffers.

LikeIFRSs,capitalisedcostsaresegregatedandclassifiedaseithertangibleorintangibleassets,accordingtotheirnature.

UnlikeIFRSs,thetestforrecoverabilityusuallyisconductedattheoilandgasfieldlevelunderthesuccessfuleffortsmethod,orbygeographicregionunderthefullcostmethod.

UnlikeIFRSs,thereisspecificguidanceontherecognitionormeasurementofpre-explorationcostsandpost-explorationdevelopmentexpenditureforoilandgasproducingentities.




�.�2 Serviceconcessionarrangements (IFRIC 12)

Theinterpretationonserviceconcessionarrangementsprovidesguidanceontheaccountingbyprivatesectorentities(theoperator)forpublic-to-privateserviceconcessionarrangementsinwhichthepublicsector(thegrantor)controlsorregulatestheservicesprovidedwiththeinfrastructureandtheirprices,andcontrolsanysignificantresidualinterestintheinfrastructure.

Generallytheoperatordoesnotrecognisepublicserviceinfrastructureasitsproperty,plantandequipment.

Theoperatorrecognisesconsiderationreceivablefromthegrantorforconstructionorupgradeservicesasafinancialassetand/oranintangibleasset.

Theoperatorrecognisesafinancialassettotheextentthatithasanunconditionalrighttoreceivecashirrespectiveoftheusageoftheinfrastructure.

Theoperatorrecognisesanintangibleassettotheextentthatithasarighttochargeforusageoftheinfrastructure.

Theoperatorrecognisesandmeasuresrevenueforprovidingconstructionorupgradeservices,andrevenueforotherservices,inaccordancewithapplicablerevenuerecognitionstandards.




�.�2 Serviceconcessionarrangements

UnlikeIFRSs,U.S.GAAPhasnospecificguidanceapplicabletoserviceconcessionarrangements.ThearrangementswouldbeevaluatedinaccordancewithexistingU.S.GAAP.

UnlikeIFRSs,U.S.GAAPdoesnotprovidespecificguidance.Asaconsequence,practicemaybemixedwithsomeentitiesapplyingtheguidanceapplicabletoleasearrangements.

UnlikeIFRSs,theoperatorwouldneedtoevaluatethearrangementasamultipleelementarrangementanddeterminewhetherthearrangementisasingleunitofaccount,orseparateunitsofaccount,andifseparateunitsofaccount,theamountofconsiderationtobeallocatedtoeachunitofaccount.U.S.GAAPdoesnotprovidespecificguidanceontheclassificationofaresultingasset.

LikeIFRSs,theoperatorrecognisesareceivabletotheextentthatithasanunconditionalrighttoreceivecashirrespectiveoftheusageoftheinfrastructure.

UnlikeIFRSs,U.S.GAAPdoesnotprovideguidanceonwhetheranintangibleassetwouldberecognisedfortherighttochargefortheusageoftheinfrastructure.

UnlikeIFRSs,theoperatorisrequiredtoevaluatewhetherthedeliverablesareseparateunitsofaccountunderU.S.GAAPandifso,allocatethearrangementconsiderationtotheseparateunitsofaccount.Inmanysituations,thismayresultineitheradifferentdeterminationaboutthenumberofunitsofaccount,orthearrangementconsiderationassignedtotheunitsofaccountunderU.S.GAAP,anddifferencesinthetimingandamountofrevenuerecognitionbetweenU.S.GAAPandIFRSsarelikelytoresult.




Theoperatorrecognisesandmeasuresobligationstomaintainorrestoreinfrastructure,exceptforanyconstructionorupgradeelement,inaccordancewiththeprovisionsstandard.




UnlikeIFRSs,theoperatorwouldapplythegeneralguidanceapplicabletoperformanceobligationstodeterminewhetheranobligationtomaintainorrestoreinfrastructure,includinganyconstructionorupgradeelement,shouldberecognisedandmeasured.

�60



Appendix�

Abbreviationsusedforpronouncements

IFRSIAS InternationalAccountingStandardIASB InternationalAccountingStandardsBoardIASC InternationalAccountingStandardsCommitteeIFRIC InterpretationoftheInternationalFinancialReporting InterpretationsCommitteeIFRS InternationalFinancialReportingStandardSIC InterpretationoftheStandardsInterpretationCommittee

U.S. GAAPAICPAGuide AccountingandAuditingGuideorIndustryGuideoftheAICPAAIN-APB AICPAInterpretationofanAPBOpinionAPB OpinionoftheAccountingPrinciplesBoardARB AccountingResearchBulletinASR AccountingSeriesReleaseoftheSECAU CodificationofStatementsonAuditingStandardsCON StatementofFinancialAccountingConceptsoftheFASBEITF ConsensusoftheEmergingIssuesTaskForceFASB FinancialAccountingStandardsBoardFIN InterpretationoftheFASBFSP FASBStaffPositionFTB TechnicalBulletinoftheFASBPB AICPAPracticeBulletinReg SECRegulationSAB StaffAccountingBulletinoftheSECstaffSAS StatementonAuditingStandardsSFAS StatementofFinancialAccountingStandardsoftheFASBSOP AICPAStatementofPositionTPA AICPATechnicalPracticeAid

KPMGInternationalFinancialReportingGroupispartofKPMGIFRGLimited.

KPMGInternationalisaSwisscooperativethatservesasacoordinatingentityforanetworkofindependentfirmsoperatingundertheKPMGname.KPMGInternationalprovidesnoauditorotherclientservices.SuchservicesareprovidedsolelybymemberfirmsofKPMGInternational(includingsublicenseesandsubsidiaries)intheirrespectivegeographicareas.KPMGInternationalanditsmemberfirmsarelegallydistinctandseparateentities.Theyarenotandnothingcontainedhereinshallbeconstruedtoplacetheseentitiesintherelationshipofparents,subsidiaries,agents,partners,orjointventurers.Nomemberfirmhasanyauthority(actual,apparent,impliedorotherwise)toobligateorbindKPMGInternationaloranyothermemberfirm,nordoesKPMGInternationalhaveanysuchauthoritytoobligateorbindanymemberfirm,inanymannerwhatsoever.

Theinformationcontainedhereinisofageneralnatureandisnotintendedtoaddressthecircumstancesofanyparticularindividualorentity.Althoughweendeavourtoprovideaccurateandtimelyinformation,therecanbenoguaranteethatsuchinformationisaccurateasofthedateitisreceivedorthatitwillcontinuetobeaccurateinthefuture.Nooneshouldactuponsuchinformationwithoutappropriateprofessionaladviceafterathoroughexaminationoftheparticularsituation.

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KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.

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