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ACCAFinancialReportingPaperF7CourseACCAFinancialReportingPaperF7CourseNotes太重要，趕緊掃一掃目錄準(zhǔn)則/知識(shí)儲(chǔ)備 目錄準(zhǔn)則/知識(shí)儲(chǔ)備 1IntroductiontoF7 3IFRSFramework 5Presentationofpublishedfinancialstatements 24IAS16Propertyplantandequipment 28IAS40Investmentproperty 48IAS38Intangibleassets 55IAS23Borrowingcosts 64IAS2Inventories 70IAS36Impairmentofassets 78IFRS9Financialinstruments 87IAS37Provisions,contingentliabilitiesandcontingentassets 108IAS18Revenue 123IAS11Constructioncontracts 127IAS17Lease 137Off-balancesheetfinance 147IAS12Incometax 157IAS33EPS 174IFRS5Non-currentassetsheldforsaleanddiscontinuedoperations 187IAS8Accountingpolicies,changesinaccountingestimatesanderrors 192IAS10Eventsafterthereportingperiod 197IAS20Governmentgrants 202IAS41Agriculture 207單獨(dú)公司報(bào)表 212合并報(bào)表 236財(cái)務(wù)分析 284現(xiàn)金流量表 306知識(shí)補(bǔ)充 317練習(xí) 328自我強(qiáng)化測(cè)試 396知識(shí)模塊準(zhǔn)則/知識(shí)儲(chǔ)備1GoldenF知識(shí)模塊準(zhǔn)則/知識(shí)儲(chǔ)備1GoldenF2GoldenFinance2GoldenFIntroductiontoF7ContentF7isademandingIntroductiontoF7ContentF7isademandingpapercoveringallthefundamentalsoffinancialreporting.Ithasfivemainsections:.5.TheconceptualframeworkofaccountingTheregulatoryframeworkPreparationoffinancialstatementswhichconformwithIFRSPreparationofconsolidatedfinancialstatementsAnalysisandinterpretationoffinancialstatementsTheexampaper8TheexamisathreehourpaperwithtwentyMCQsandthreewrittenquestions.Allquestionsarecompulsory.MarksQuestion1-MCQsQuestion2Question3Question4401530100Question1willbe20two-markquestionscoveringallareasofthesyllabusQuestions2–4willbeonpreparationoffinancialstatements–singleentity,consolidatedandstatementsofcashflows–interpretationoffinancialstatementsandotherissuesapplyingIFRS.Question4willfeaturethepreparationoffinancialstatementsforeitherasingleentityoragroup.3GoldenF課程設(shè)計(jì)知識(shí)模塊練習(xí)模塊自我強(qiáng)化測(cè)試?？紱_刺課程設(shè)計(jì)–知識(shí)模塊.準(zhǔn)則/知識(shí)儲(chǔ)備（單獨(dú)公司報(bào)表，合并報(bào)表，現(xiàn)金流量表）財(cái)務(wù)分析/報(bào)表解讀知識(shí)補(bǔ)充課程設(shè)計(jì)–練習(xí)模塊5.練習(xí)模塊1403，2課程設(shè)計(jì)知識(shí)模塊練習(xí)模塊自我強(qiáng)化測(cè)試?？紱_刺課程設(shè)計(jì)–知識(shí)模塊.準(zhǔn)則/知識(shí)儲(chǔ)備（單獨(dú)公司報(bào)表，合并報(bào)表，現(xiàn)金流量表）財(cái)務(wù)分析/報(bào)表解讀知識(shí)補(bǔ)充課程設(shè)計(jì)–練習(xí)模塊5.練習(xí)模塊1403，2，1流量表！學(xué)習(xí)建議：每天20-3010-14課程設(shè)計(jì)–自我強(qiáng)化測(cè)試6.自我強(qiáng)化測(cè)試！學(xué)習(xí)建議：為其一周！課程設(shè)計(jì)–模考沖刺7.?？紱_刺104GoldenFIFRSFrameworkIFRSFramework5GoldenFLevel1Level2optionalTheobjectiveofgeneralpurposefinancialreportingYQualitativeIFRSFrameworkIFRSFramework5GoldenFLevel1Level2optionalTheobjectiveofgeneralpurposefinancialreportingYQualitativecharacteristicsYTheelementsoffinancialstatementsYFinancialPositionapproachYYYRecognitionYMeasurementYTheobjectiveofgeneralpurposefinancialreportingTheConceptualFrameworkTheobjectiveofgeneralpurposefinancialreportingTheConceptualFrameworkstatesthat:'Theobjectiveofgeneralpurposefinancialreportingistoprovideinformationaboutthereportingentitythatisusefultoexistingandpotentialinvestors,lendersandothercreditorsinmakingdecisionsaboutprovidingresourcestotheentity.'TheConceptualFrameworkmakesitclearthatthisinformationshouldbepreparedonanaccrualsbasis.AccrualsbasisTheeffectsoftransactionsandothereventsarerecognisedwhentheyoccur(andnotascashoritsequivalentisreceivedorpaid)andtheyarerecordedintheaccountingrecordsandreportedinthefinancialstatementsoftheperiodstowhichtheyrelate.Accrualsbasis–Level2Rightandobligation6GoldenFUnderlyingassumptionGoingUnderlyingassumptionGoingconcernistheunderlyingassumptioninpreparingfinancialstatements.Theentityisnormallyviewedasagoingconcern,thatis,ascontinuinginoperationfortheforeseeablefuture.Itisassumedthattheentityhasneithertheintentionnorthenecessityofliquidationorofcurtailingmateriallythescaleofitsoperations.7GoldenFQualitativecharacteristicsofusefulfinancialinformationTheConceptualFrameworkdistinguishesbetweenfundamentalandenhancingqualitativecharacteristics,foranalysispurposes.FundamentalqualitativecharacteristicsdistinguishQualitativecharacteristicsofusefulfinancialinformationTheConceptualFrameworkdistinguishesbetweenfundamentalandenhancingqualitativecharacteristics,foranalysispurposes.Fundamentalqualitativecharacteristicsdistinguishusefulfinancialreportinginformationfrominformationthatisnotusefulormisleading.Enhancingqualitativecharacteristicsdistinguishmoreusefulinformationfromlessusefulinformation.Thetwofundamentalqualitativecharacteristicsarerelevanceandfaithfulrepresentation.RelevanceRelevantinformationiscapableofmakingadifferenceinthedecisionsmadebyusers.Itiscapableofmakingadifferenceindecisionsifithaspredictivevalue,confirmatoryvalueorboth.Therelevanceofinformationisaffectedbyitsnatureanditsmateriality.Materiality.Informationismaterialifomittingitormisstatingitcouldinfluencedecisionsthatusersmakeonthebasisoffinancialinformationaboutaspecificreportingentity.8GoldenFFaithfulrepresentationFinancialreportsrepresenteconomicFaithfulrepresentationFinancialreportsrepresenteconomicphenomenainwordsandnumbers.Tobeuseful,financialinformationmustnotonlyrepresentrelevantphenomenabutmustfaithfullyrepresentthephenomenathatitpurportstorepresent.Tobeafaithfulrepresentationinformationmustbecomplete,neutralandfreefromerror.Acompletedepictionincludesallinformationnecessaryforausertounderstandthephenomenonbeingdepicted,includingallnecessarydescriptionsandexplanations.Aneutraldepictioniswithoutbiasintheselectionorpresentationoffinancialinformation.Thismeansthatinformationmustnotbemanipulatedinanywayinordertoinfluencethedecisionsofusers.Freefromerrormeanstherearenoerrorsoromissionsinthedescriptionofthephenomenonandnoerrorsmadeintheprocessbywhichthefinancialinformationwasproduced.Itdoesnotmeanthatnoinaccuraciescanarise,particularlywhereestimateshavetobemade.SubstanceoverformThisisnotaseparatequalitativecharacteristicundertheConceptualFramework.TheIASBsaysthattodosowouldberedundantbecauseitisimpliedinfaithfulrepresentation.Faithfulrepresentationofatransactionisonlypossibleifitisaccountedforaccordingtoitssubstanceandeconomicreality.9GoldenFEnhancingqualitativecharacteristicsComparabilityEnhancingqualitativecharacteristicsComparabilityComparabilityisthequalitativecharacteristicthatenablesuserstoidentifyandunderstandsimilaritiesin,anddifferencesamong,items.Informationaboutareportingentityismoreusefulifitcanbecomparedwithsimilarinformationaboutotherentitiesandwithsimilarinformationaboutthesameentityforanotherperiodordate.10GoldenFConsistency,althoughrelatedtocomparability,isConsistency,althoughrelatedtocomparability,isnotthesame.Itreferstotheuseofthesamemethodsforthesameitems(i.e.consistencyoftreatment)eitherfromperiodtoperiodwithinareportingentityorinasingleperiodacrossentities.Thedisclosureofaccountingpoliciesisparticularlyimportanthere.Usersmustbeabletodistinguishbetweendifferentaccountingpoliciesinordertobeabletomakeavalidcomparisonofsimilaritemsintheaccountsofdifferententities.Comparabilityisnotthesameasuniformity.Entitiesshouldchangeaccountingpoliciesifthosepoliciesbecomeinappropriate.Correspondinginformationforprecedingperiodsshouldbeshowntoenablecomparisonovertime.VerifiabilityVerifiabilityhelpsassureusersthatinformationfaithfullyrepresentstheeconomicphenomenaitpurportstorepresent.Itmeansthatdifferentknowledgeableandindependentobserverscouldreachconsensusthataparticulardepictionisafaithfulrepresentation.Informationthatcanbeindependentlyverifiedisgenerallymoredecision-usefulthaninformationthatcannot.TimelinessTimelinessmeanshavinginformationavailabletodecision-makersintimetobecapableofinfluencingtheirdecisions.Generally,theolderinformationisthelessusefulitis.Informationmaybecomelessusefulifthereisadelayinreportingit.Thereisabalancebetweentimelinessandtheprovisionofreliableinformation.Ifinformationisreportedonatimelybasiswhennotallaspectsofthetransactionareknown,itmaynotbecompleteorfreefromerror.GoldenFUnderstandabilityClassifying,characterisingandpresentingUnderstandabilityClassifying,characterisingandpresentinginformationclearlyandconciselymakesitunderstandable.Financialreportsarepreparedforuserswhohaveareasonableknowledgeofbusinessandeconomicactivitiesandwhoreviewandanalysetheinformationdiligently.Somephenomenaareinherentlycomplexandcannotbemadeeasytounderstand.Excludinginformationonthosephenomenamightmaketheinformationeasiertounderstand,butwithoutitthosereportswouldbeincompleteandthereforemisleading.Thereforemattersshouldnotbeleftoutoffinancialstatementssimply.ThecostconstraintonusefulfinancialreportingThisisapervasiveconstraint,notaqualitativecharacteristic.Wheninformationisprovided,itsbenefitsmustexceedthecostsofobtainingandpresentingit.Thisisasubjectiveareaandthereareotherdifficulties:others,nottheintendedusers,maygainabenefit;alsothecostmaybepaidbysomeoneotherthantheusers.Itisthereforedifficulttoapplyacost-benefitanalysis,butpreparersandusersshouldbeawareoftheconstraint.12GoldenFTheelementsoffinancialstatementsElementsoffinancialTheelementsoffinancialstatementsElementsoffinancialstatementsElementsoffinancialstatementsMeasurementoffinancialpositioninStatementoffinancialpositionMeasurementofperformanceinStatementofprofitorlossandothercomprehensiveincomeAsset.Aresourcecontrolledbyanentityasaresultofpasteventsandfromwhichfutureeconomicbenefitsareexpectedtoflowtotheentity.Liability.Apresentobligationoftheentityarisingfrompastevents,thesettlementofwhichisexpectedtoresultinanoutflowfromtheentityofresourcesembodyingeconomicbenefits.Equity.Theresidualinterestintheassetsoftheentityafterdeductingallitsliabilities.Income.Increasesineconomicbenefitsduringtheaccountingperiodintheformofinflowsorenhancementsofassetsordecreasesofliabilitiesthatresultinincreasesinequity,otherthanthoserelatingtocontributionsfromequityparticipants.Expenses.Decreasesineconomicbenefitsduringtheaccountingperiodintheformofoutflowsordepletionsofassetsorincurrencesofliabilitiesthatresultindecreasesinequity,otherthanthoserelatingtodistributionstoequityparticipants.13GoldenFAssetsAssetsareusuallyemployedtoproduceAssetsAssetsareusuallyemployedtoproducegoodsorservicesforcustomers;customerswillthenpayforthese.Cashitselfrendersaservicetotheentityduetoitscommandoverotherresources.Theexistenceofanasset,particularlyintermsofcontrol,isnotrelianton:(a)physicalform(hencepatentsandcopyrights);nor(b)legalrights(henceleases)Transactionsoreventsinthepastgiverisetoassets;thoseexpectedtooccurinthefuturedonotinthemselvesgiverisetoassets.Forexample,anintentiontopurchaseanon-currentassetdoesnot,initself,meetthedefinitionofanasset.LiabilitiesObligation.Adutyorresponsibilitytoactorperforminacertainway.Obligationsmaybelegallyenforceableasaconsequenceofabindingcontractorstatutoryrequirement.Obligationsalsoarise,however,fromnormalbusinesspractice,customandadesiretomaintaingoodbusinessrelationsoractinanequitablemanner.Itisimportanttodistinguishbetweenapresentobligationandafuturecommitment.Amanagementdecisiontopurchaseassetsinthefuturedoesnot,initself,giverisetoapresentobligation.14GoldenFProvisionsIsaprovisionaliability?Provision.ApresentobligationwhichsatisfiesProvisionsIsaprovisionaliability?Provision.Apresentobligationwhichsatisfiestherestofthedefinitionofaliability,eveniftheamountoftheobligationhastobeestimated.QuestionConsiderthefollowingsituations.Ineachcase,dowehaveanassetorliabilitywithinthedefinitionsgivenbytheConceptualFramework?Givereasonsforyouranswer.a)PatCohaspurchasedapatentfor$20,000.Thepatentgivesthecompanysoleuseofaparticularmanufacturingprocesswhichwillsave$3,000ayearforthenextfiveyears.b)BaldwinCopaidDonBrennan$10,000tosetupacarrepairshop,onconditionthatprioritytreatmentisgiventocarsfromthecompany'sfleet.c)DealsonWheelsCoprovidesawarrantywitheverycarsold.Answera)Thisisanasset,albeitanintangibleone.Thereisapastevent,controlandfutureeconomicbenefit(throughcostsavings).b)Thiscannotbeclassifiedasanasset.BaldwinCohasnocontroloverthecarrepairshopanditisdifficulttoarguethatthereare'futureeconomicbenefits'.c)Thewarrantyclaimsintotalconstitutealiability;thebusinesshastakenonanobligation.Itwouldberecognisedwhenthewarrantyisissuedratherthanwhenaclaimismade.15GoldenFEquityEquityisdefinedaboveasaresidual,butitmaybesub-classifiedinthestatementoffinancialposition.ThiswillindicateEquityEquityisdefinedaboveasaresidual,butitmaybesub-classifiedinthestatementoffinancialposition.Thiswillindicatelegalorotherrestrictionsontheabilityoftheentitytodistributeorotherwiseapplyitsequity.Somereservesarerequiredbystatuteorotherlaw,egforthefutureprotectionofcreditors.Theamountshownforequitydependsonthemeasurementofassetsandliabilities.Ithasnothingtodowiththemarketvalueoftheentity'sshares.IncomeBothrevenueandgainsareincludedinthedefinitionofincome.Revenuearisesinthecourseofordinaryactivitiesofanentity.Gains.Increasesineconomicbenefits.Assuchtheyarenodifferentinnaturefromrevenue.Gainsincludethosearisingonthedisposalofnon-currentassets.Thedefinitionofincomealsoincludesunrealisedgains,egonrevaluationofmarketablesecurities.ExpensesAswithincome,thedefinitionofexpensesincludeslossesaswellasthoseexpensesthatariseinthecourseofordinaryactivitiesofanentity.Losses.Decreasesineconomicbenefits.Assuchtheyarenodifferentinnaturefromotherexpenses.Losseswillincludethosearisingonthedisposalofnon-currentassets.Thedefinitionofexpenseswillalsoincludeunrealisedlosses,egthefallinvalueofaninvestment.16GoldenFFinancialPositionapproachDr/Cr–會(huì)計(jì)僅僅是的一門語(yǔ)言FinancialPositionapproachDr/Cr–會(huì)計(jì)僅僅是的一門語(yǔ)言撿錢17GoldenF賣貨物處置固定資產(chǎn)18GoldenFinance賣貨物處置固定資產(chǎn)18GoldenFRecognitionoftheelementsoffinancialstatementsItemswhichmeettheRecognitionoftheelementsoffinancialstatementsItemswhichmeetthedefinitionofassetsorliabilitiesmaystillnotberecognisedinfinancialstatementsbecausetheymustalsomeetcertainrecognitioncriteria.Anitemthatmeetsthedefinitionofanelementandsatisfiesthefollowingcriteriaforrecognition:a)itisprobablethatanyfutureeconomicbenefitassociatedwiththeitemwillflowtoorfromtheentity;andb)theitemhasacostorvaluethatcanbemeasuredwithreliability.一切向錢看19GoldenFAssetswhichcannotbeAssetswhichcannotberecognizedTherecognitioncriteriadonotcoveritemswhichmanybusinessesmayregardasassets.Askilledworkforceisanundoubtedassetbutworkerscanleaveatanytimesotherecanbenocertaintyabouttheprobabilityoffutureeconomicbenefits.Acompanymayhavecomeupwithanewnameforitsproductwhichisgreatlyincreasingsalesbut,asitdidnotbuythename,thenamedoesnothaveacostorvaluethatcanbereliablymeasured,soitisnotrecognised.20GoldenFMeasurementoftheelementsoffinancialstatementsMeasurementoftheelementsoffinancialstatementsMeasurement.Theprocessofdeterminingthemonetaryamountsatwhichtheelementsofthefinancialstatementsaretoberecognisedandcarriedinthestatementoffinancialpositionandstatementofprofitorlossandothercomprehensiveincome.Anumberofdifferentmeasurementbasesareusedinfinancialstatements.Theyinclude–Historicalcost–Currentcost–Realisable(settlement)value–PresentvalueoffuturecashflowsCurrentcost.Assetsarecarriedattheamountofcashorcashequivalentsthatwouldhavetobepaidifthesameoranequivalentassetwasacquiredcurrently.Liabilitiesarecarriedattheundiscountedamountofcashorcashequivalentsthatwouldberequiredtosettletheobligationcurrently.Realisablevalue.Theamountofcashorcashequivalentsthatcouldcurrentlybeobtainedbysellinganassetinanorderlydisposal.21GoldenFPresentvalue.AcurrentPresentvalue.Acurrentestimateofthepresentdiscountedvalueofthefuturenetcashflowsinthenormalcourseofbusiness.Historicalcostisthemostcommonlyadoptedmeasurementbasis,butthisisusuallycombinedwithotherbases,eginventoryiscarriedatthelowerofcostandnetrealisablevalue.Recentstandardsusetheconceptoffairvalue,whichisdefinedbyIFRS13as?thepricethatwouldbereceivedtosellanassetorpaidtotransferaliabilityinanorderlytransactionbetweenmarketparticipantsatthemeasurementdate?.ExampleAmachinewaspurchasedon1January20X8for$3m.Thatwasitsoriginalcost.Ithasausefullikeof10yearsandunderthehistoricalcostconventionitwillbecarriedatoriginalcostlessaccumulateddepreciation.Sointhefinancialstatementsat31December20X9itwillbecarriedat:$3m–(0.3x2)=$2.4m22GoldenFThecurrentcostofthemachine,whichwillprobablyalsobeitsfairvalue,willbefairlyeasytoascertainifitThecurrentcostofthemachine,whichwillprobablyalsobeitsfairvalue,willbefairlyeasytoascertainifitisnottoospecialised.Forinstance,twoyearoldmachineslikethisonemaycurrentlybechanginghandsfor$2.5m,sothatwillbeanappropriatefairvalue.Thenetrealisablevalueofthemachinewillbetheamountthatcouldbeobtainedfromsellingit,lessanycostsinvolvedinmakingthesale.Ifthemachinehadtobedismantledandtransportedtothebuyer?spremisesatacostof$200,000,theNRVwouldbe$2.3m.Thereplacementcostofthemachinewillbethecostofanewmlesstwoyear?sdepreciation.Thecostofanewmachinemaynowbe$3.5m.Assuminga10-yearlife,thereplacementcostwillthereforebe$2.8m.Thepresentvalueofthemachinewillbethediscountedvalueofthefuturecashflowsthatitisexpectedtogenerate.Ifthemachineisexpectedtogenerate$500,000perannumfortheremaining8yearsofitslifeandifthecompany?scostofcapitalis10%,presentvaluewillbecalculatedas:$500,000x5.335*=$2667,500*Cumulativepresentof$1perannumfor8yearsdiscountedat10%23GoldenFPresentationofpublishedfinancialstatementsPresentationofpublishedfinancialstatementsPresentationofpublishedfinancialstatementsPresentationofpublishedfinancialstatements24GoldenFLevel1Level2optionalPresentationofpublishedfinancialstatements1yPresentationofpublishedfinancialstatements2yyProformafinancialstatementsIAS1coverstheformandcontentoffinancialstatements.ThemainProformafinancialstatementsIAS1coverstheformandcontentoffinancialstatements.Themaincomponentsare:StatementoffinancialpositionStatementofprofitorlossandothercomprehensiveincomeStatementofchangesinequityStatementofcashflowsNotestothefinancialstatementsStatementoffinancialpositionXYZGROUP–STATEMENTOFFINANCIALPOSITIONASAT31DECEMBER20X220X2$'00020X1$'000ASSETSNon-currentassetsProperty,plantandequipmentGoodwillOtherintangibleassetsInvestmentsinassociatesInvestmentsinequityinstrumentsXXXXXXXXXXXXCurrentassetsInventoriesTradereceivablesOthercurrentassetsCashandcashequivalentsXXXXXXXXXXXXTotalassetsEQUITYANDLIABILITIESEquitySharecapitalRetainedearningsOthercomponentsofequityTotalequityNon-currentliabilitiesLong-termborrowingsDeferredtaxLong-termprovisionsTotalnon-currentliabilitiesXXXXXXXXXXXXXXXX25GoldenFCurrentliabilitiesTradeandotherpayablesShorttermborrowingsCurrentportionsoflong-termborrowingsCurrenttaxpayableShort-termprovisionsTotalcurrentCurrentliabilitiesTradeandotherpayablesShorttermborrowingsCurrentportionsoflong-termborrowingsCurrenttaxpayableShort-termprovisionsTotalcurrentliabilitiesTotalliabilitiesTotalequityandliabilitiesXXXXXXXXXXXXXXXXXYZGROUP–STATEMENTOFPROFITORLOSSANDOTHERCOMPREHENSIVEINCOMEFORTHEYEARENDED31DECEMBER20X2(illustratingpresentationinonestatement)20X2$'000X(X)XX(X)(X)(X)(X)X(X)X20X1$'000X(X)XX(X)(X)(X)(X)X(X)XRevenueCostofsalesGrossprofitincomeDistributioncostsAdministrativeexpensesOtherexpensesFinancecostsProfitbeforetaxIncometaxexpensePROFITFORTHEYEAROthercomprehensiveincome:Gains/(losses)onpropertyrevaluationsInvestmentsinequityinstrumentsIncometaxrelatingtoitemsofothercomprehensiveincomeOthercomprehensiveincomefortheyear,netoftaxTOTALCOMPREHENSIVEINCOMEFORTHEYEARX(X)(X)XX(X)X(X)XXXYZGROUP–STATEMENTOFCHANGESINEQUITYFORTHEYEARENDED31DECEMBER20X2Sharecapital$'000X–RetainedRevaluationTotalearningssurplusequity$'000X(X)$'000X(X)$'000X–Balanceat1January20X2Priorperiodadjustment*26GoldenFRestatedbalanceChangesinequityfor20X2IssueofsharecapitalDividendsTotalcomprehensiveincomefortheyearTransfertoretainedearningsBalanceatRestatedbalanceChangesinequityfor20X2IssueofsharecapitalDividendsTotalcomprehensiveincomefortheyearTransfertoretainedearningsBalanceat31December20X2XXXXX––(X)––X(X)––XXXXX(X)XX–XXYZGROUP–STATEMENTOFPROFITORLOSSFORTHEYEARENDED31DECEMBER20X2(illustratingpresentationintwostatements)20X2$'000X(X)XX(X)(X)(X)(X)X(X)X20X1$'000X(X)XX(X)(X)(X)(X)X(X)XRevenueCostofsalesGrossprofitincomeDistributioncostsAdministrativeexpensesOtherexpensesFinancecostsProfitbeforetaxIncometaxexpensePROFITFORTHEYEARXYZGROUP–STATEMENTOFPROFITORLOSSANDOTHERCOMPREHENSIVEINCOMEFORTHEYEARENDED31DECEMBER20X220X2$'000X20X1$'000XProfitfortheyearOthercomprehensiveincome:Gains/(losses)onpropertyrevaluationsInvestmentsinequityinstrumentsIncometaxrelatingtoitemsofothercomprehensiveincomeOthercomprehensiveincomefortheyear,netoftaxTOTALCOMPREHENSIVEINCOMEFORTHEYEARX(X)(X)XX(X)X(X)XX27GoldenFIAS16PropertyplantandequipmentIAS16Propertyplantandequipment28GoldenFLevel1Level2optionalDefinition&RecognitionYInitialMeasurementyYSubsequentMeasurement-IAS16PropertyplantandequipmentIAS16Propertyplantandequipment28GoldenFLevel1Level2optionalDefinition&RecognitionYInitialMeasurementyYSubsequentMeasurement-RevaluationmYExcessdepreciationYExcessdepreciation2YDepreciationYDepreciation2YComplexassetsYDefinition&RecognitionDefinitionsProperty,plantandequipmentDefinition&RecognitionDefinitionsProperty,plantandequipmentaretangibleassetsthat:–areheldforuseintheproductionorsupplyofgoodsorservices,forrentaltoothers,orforadministrativepurposes;and–areexpectedtobeusedduringmorethanoneperiod.Costistheamountofcashorcashequivalentspaidorthefairvalueoftheotherconsiderationgiventoacquireanassetatthetimeofitsacquisitionorconstruction.Residualvalueisthenetamountwhichtheentityexpectstoobtainforanassetattheendofitsusefullifeafterdeductingtheexpectedcostsofdisposal.Carryingamountistheamountatwhichanassetisrecognisedinthestatementoffinancialpositionafterdeductinganyaccumulateddepreciationandaccumulatedimpairmentlosses.Animpairmentlossistheamountbywhichthecarryingamountofanassetexceedsitsrecoverableamount.29GoldenFRecognitionTherecognitionofproperty,RecognitionTherecognitionofproperty,plantandequipmentdependsontwocriteria.a)ItisprobablethatfutureeconomicbenefitsassociatedwiththeassetwillflowtotheentityThecostoftheassettotheentitycanbemeasuredreliablyb)30GoldenFInitialmeasurementInitialmeasurementOnceanitemofInitialmeasurementInitialmeasurementOnceanitemofproperty,plantandequipmentqualifiesforrecognitionasanasset,itwillinitiallybemeasuredatcost.ComponentsofcostPurchaseprice,lessanytradediscountorrebateImportdutiesandnon-refundablepurchasetaxesDirectlyattributablecostsofbringingtheassettoworkingconditionforitsintendeduse,eg:–Thecostofsitepreparation–Initialdeliveryandhandlingcosts–Installationcosts–Testing–Professionalfees(architects,engineers)Initialestimateoftheunavoidablecostofdismantlingandremovingtheassetandrestoringthesiteonwhichitislocated31GoldenFThefollowingcostswillnotbepartThefollowingcostswillnotbepartofthecostofproperty,plantorequipmentunlesstheycanbeattributeddirectlytotheasset'sacquisition,orbringingitintoitsworkingcondition.AdministrationandothergeneraloverheadcostsStart-upandsimilarpre-productioncostsInitialoperatinglossesbeforetheassetreachesplannedperformanceAllofthesewillberecognisedasanexpenseratherthananasset.Inthecaseofself-constructedassets,thesameprinciplesareappliedasforacquiredassets.Iftheentitymakessimilarassetsduringthenormalcourseofbusinessforsaleexternally,thenthecostoftheassetwillbethecostofitsproductionunderIAS2Inventories.Thisalsomeansthatabnormalcosts(wastedmaterial,labourorotherresources)areexcludedfromthecostoftheasset.Anexampleofaselfconstructedassetiswhenabuildingcompanybuildsitsownheadoffice.32GoldenFSubsequentexpenditurePartsofsomeitemsofproperty,plantandequipmentmayrequirereplacementatregularintervals.IAS16givesexamplesofafurnacewhichmayrequirereliningafteraspecifiednumberofSubsequentexpenditurePartsofsomeitemsofproperty,plantandequipmentmayrequirereplacementatregularintervals.IAS16givesexamplesofafurnacewhichmayrequirereliningafteraspecifiednumberofhoursoraircraftinteriorswhichmayrequirereplacementseveraltimesduringthelifeoftheaircraft.Thiscostisrecognisedinfullwhenitisincurredandaddedtothecarryingamountoftheasset.Itwillbedepreciatedoveritsexpectedlife,whichmaybedifferentfromtheexpectedlifeoftheothercomponentsoftheasset.Thecarryingamountoftheitembeingreplaced,suchastheoldfurnacelining,isderecognisedwhenthereplacementtakesplace.QuestionJocattownsanproperty.Duringtheyear,partoftheheatingsystemoftheproperty,whichhadacarryingvalueof$0·5million,wasreplacedbyanewsystem,whichcost$1million.ExchangesofassetsIAS16specifiesthatexchangeofitemsofproperty,plantandequipment,regardlessofwhethertheassetsaresimilar,aremeasuredatfairvalue,unlesstheexchangetransactionlackscommercialsubstanceorthefairvalueofneitheroftheassetsexchangedcanbemeasuredreliably.Iftheacquireditemisnotmeasuredatfairvalue,itscostismeasuredatthecarryingamountoftheassetgivenup.QuestionJocatthadexchangedsurpluslandwithacarryingvalueof$10millionforcashof$15millionandplantvaluedat$4million.Thetransactionhascommercialsubstance.33GoldenFSubsequentMeasurement-RevaluationmThestandardofferstwopossibletreatmentsSubsequentMeasurement-RevaluationmThestandardofferstwopossibletreatmentshere,essentiallyachoicebetweenkeepinganassetrecordedatcostorrevaluingittofairvalue.a)Costm.Carrytheassetatitscostlessdepreciationandanyaccumulatedimpairmentloss.b)Revaluationm.Carrytheassetatarevaluedamount,beingitsfairvalueatthedateoftherevaluationlessanysubsequentaccumulateddepreciationandsubsequentaccumulatedimpairmentlosses.TherevisedIAS16makesclearthattherevaluationmreliably.isavailableonlyifthefairvalueoftheitemcanbemeasuredRevaluations-marketvalueThemarketvalueoflandandbuildingsusuallyrepresentsfairvalue,assumingexistinguseandlineofbusiness.Suchvaluationsareusuallycarriedoutbyprofessionallyqualifiedvaluers.Inthecaseofplantandequipment,fairvaluecanalsobetakenasmarketvalue.Whereamarketvalueisnotavailable,however,depreciatedreplacementcostshouldbeused.Theremaybenomarketvaluewheretypesofplantandequipmentaresoldonlyrarelyorbecauseoftheirspecialisednature(ietheywouldnormallyonlybesoldaspartofanongoingbusiness).34GoldenFRevaluations–frequencyThefrequencyofRevaluations–frequencyThefrequencyofvaluationdependsonthevolatilityofthefairvaluesofindividualitemsofproperty,plantandequipment.Themorevolatilethefairvalue,themorefrequentlyrevaluationsshouldbecarriedout.Wherethecurrentfairvalueisverydifferentfromthecarryingvaluethenarevaluationshouldbecarriedout.Revaluations–scopeMostimportantly,whenanitemofproperty,pl