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					THE NEW ACCOUNTING STANDARDS & IFRS/IAS

TRAINING MATERIAL

1. FIRST TIME ADOPTION..................................................................................................... 1 CHAPTER 1.1 1.1 FIRST TIME ADOPTION ...................................................................................... 2

2. REPORTING FINANCIAL PERFORMANCE ..................................................................... 5 CHAPTER 2.1 EXCHANGE OF NON-MONETARY ASSETS ........................................................... 6 2.1 CHAPTER 2.2 SHARE BASED PAYMENTS (NEW STANDARD)...................................................... 8 2.2 CHAPTER 2.3 REVENUE....................................................................................................... 12 2.3 CHAPTER 2.4 CONSTRUCTION CONTRACTS .......................................................................... 15 2.4 CHAPTER 2.5 ACCOUNTING POLICIES, CHANGES IN ACCOUNTING ESTIMATES & ERRORS ......... 18 2.5 CHAPTER 2.6 EVENTS AFTER THE BALANCE SHEET DATE ....................................................... 21 2.6 CHAPTER 2.7 PRESENTATION OF FINANCIAL STATEMENTS ..................................................... 23 2.7 CHAPTER 2.8 CASH FLOW STATEMENTS ............................................................................... 28 2.8 CHAPTER 2.9 INTERIM FINANCIAL REPORTING ....................................................................... 31 2.9 CHAPTER 2.10 EARNINGS PER SHARE (NEW STANDARD)......................................................... 33 2.10 CHAPTER 2.11 SEGMENT REPORTING (NEW STANDARD) ......................................................... 37 2.11 CHAPTER 2.12 RELATED PARTY DISCLOSURES........................................................................ 41 2.12 3. ASSETS ............................................................................................................................ 45 CHAPTER 3.1 3.1 CHAPTER 3.2 3.2 CHAPTER 3.3 3.3 CHAPTER 3.4 3.4 CHAPTER 3.5 3.5 CHAPTER 3.6 3.6 CHAPTER 3.7 3.7 CHAPTER 3.8 3.8 INVENTORIES ................................................................................................. 46 INVESTMENT PROPERTY (NEW STANDARD)...................................................... 50 FIXED ASSETS ............................................................................................... 55 INTANGIBLE ASSETS ....................................................................................... 60 IMPAIRMENT OF ASSETS (NEW STANDARD) ...................................................... 66 GOVERNMENT GRANTS ................................................................................... 72 BORROWING COSTS ....................................................................................... 74 LEASES ......................................................................................................... 77

4. LIABILITIES ...................................................................................................................... 82 CHAPTER 4.1 4.1 CHAPTER 4.2 4.2 CHAPTER 4.3 4.3 CHAPTER 4.4 4.4 EMPLOYEE BENEFITS ..................................................................................... 83 DEBT RESTRUCTURING .................................................................................. 86 CONTINGENCY ............................................................................................... 89 INCOME TAXES ............................................................................................... 94

5. GROUP ISSUES ............................................................................................................... 99 CHAPTER 5.1 5.1 CHAPTER 5.2 5.2 CHAPTER 5.3 5.3 CHAPTER 5.4 5.4 LONG-TERM EQUITY INVESTMENTS ............................................................... 100 FOREIGN EXCHANGE .................................................................................... 104 BUSINESS COMBINATIONS (NEW STANDARD) ................................................. 108 CONSOLIDATED & SEPARATE FINANCIAL STATEMENTS .................................... 111

6. FINANCIAL INSTRUMENTS ............................................................................................ 114 CHAPTER 6.1 FINANCIAL INSTRUMENTS (NEW STANDARD) .................................................. 115 6.1

CAS 7 Exchange of the non-monetary assets CAS 7

2. Reporting financial performance

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CAS 7 Exchange of the non-monetary assets CAS 7

Chapter 2.1 Exchange of Non-monetary Assets 2.1
Sources:
CAS 7 7

Brief Summary of requirements
CAS 7 is the accounting treatment for the exchange of the non-monetary asset; especially classify the exchange with or without commercial substance. 7

Details Requirements:
An exchange of non-monetary assets is said to be commercial substance if the following conditions are fulfilled; The cash flow for the exchange-in asset is materially different for the exchange out asset in timing and amount and risk. The net present value of the cash flow for the traded assets is materially different and the difference is material to the fair value of the assets.

Sometimes, the exchange will involve supplementary cash for settlement. If the cash supplement is not significant in amount, CAS 7 is still applied.

Accounting Treatment
Where non-monetary transactions are of commercial substance and the fair value of the trade-in or trade-out asset can be measured reliably:

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Trade-in asset is recorded at fair value. Difference between the fair value and carrying amount of the trade-out assets is recognized in the income statement.

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CAS 7 Exchange of the non-monetary assets CAS 7

Otherwise, trade-in asset is recorded at the carrying amount of the trade-out assets, and no gain or loss is recognized. It provides guidance on evaluation of whether a non-monetary transaction has commercial substance and points out in particular that a non-monetary transaction between related parties may lack commercial substance.

Disclosure
The class of trade-in and trade-out assets The measurement method of the trade-in assets The fair value of the trade-in and trade-out assets and the carrying amount of the trade out assets The profit and loss recognized in the exchange of the non-monetary assets.

Comparison with IAS
There is no separate equivalent standard under IAS, However, the standard is basically consistent with the principle of relevant sections under IAS 16 “property, Plant and Equipment”. 16

Comparison with the Old CAS
For the old CAS, no fair value concept for the trade-in assets. Profit and loss is recorded only for the supplementary cash in the transaction.

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