IFRS 10, 11 and 12

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IFRS 10, IFRS 11 and IFRS 12 are three International Financial Reporting Standards (IFRS) promulgated by the International Accounting Standards Board (IASB) providing accounting guidance related to consolidation and joint ventures. The standards were issued in 2011 and became effective in 2013. [1] IFRS 10 addresses consolidated financial statements, IFRS 11 addresses joint ventures and IFRS 12 address disclosures of interests in other entities. [1] [2] The standards were developed in part in response to the financial crisis of 2008. [1] [2] During the crisis, accounting rules were criticized for permitting certain risky arrangements to be excluded from company balance sheets. [1] IFRS 10 revised the definition of having "control" of another entity, and thus requiring that entity to be consolidated onto the controlling entity's balance sheet. [1] The revised definition is expected to increase the likelihood that an entity is deemed to have control over another. [2] [3] IFRS 11 largely retained previous accounting guidance for joint ventures, but adopted the IFRS 10 definition of "control," meaning that "joint control" would be deemed to exist in some circumstances where it wasn't previously, and vice versa. [1] [3] IFRS 12 requires the disclosures related to subsidiaries, joint ventures and interests in other entities which are not consolidated to be combined into a single disclosure. [1] [2] It also requires disclosures about judgements used to determine whether control exists, why it determined that control did not exist and its relationship with entities it did not consolidate. [1] [2] These extra disclosures were also in response of criticism of the previous accounting guidance in light of the financial crisis. [2]

The Financial Accounting Standards Board (FASB), which promulgates accounting standards in the United States, also revised its consolidation rules in response to the financial crisis, although its revised guidance is not identical to IFRS 10, 11 and 12. [1] However, IFRS 11 is very close to the FASB guidance for joint ventures. [1]

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<span class="mw-page-title-main">International Financial Reporting Standards</span> Technical standard

International Financial Reporting Standards, commonly called IFRS, are accounting standards issued by the IFRS Foundation and the International Accounting Standards Board (IASB). They constitute a standardised way of describing the company's financial performance and position so that company financial statements are understandable and comparable across international boundaries. They are particularly relevant for companies with shares or securities publicly listed.

<span class="mw-page-title-main">Financial Accounting Standards Board</span> Rulemaking body for moneyed transactions tracking in the US private sector

The Financial Accounting Standards Board (FASB) is a private standard-setting body whose primary purpose is to establish and improve Generally Accepted Accounting Principles (GAAP) within the United States in the public's interest. The Securities and Exchange Commission (SEC) designated the FASB as the organization responsible for setting accounting standards for public companies in the U.S. The FASB replaced the American Institute of Certified Public Accountants' (AICPA) Accounting Principles Board (APB) on July 1, 1973. The FASB is run by the nonprofit Financial Accounting Foundation.

<span class="mw-page-title-main">Generally Accepted Accounting Principles (United States)</span> Accounting principles and rules used in the United States

Generally Accepted Accounting Principles is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC) and is the default accounting standard used by companies based in the United States.

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The International Accounting Standards Board (IASB) is the independent accounting standard-setting body of the IFRS Foundation.

<span class="mw-page-title-main">IAS 39</span>

IAS 39: Financial Instruments: Recognition and Measurement was an international accounting standard which outlined the requirements for the recognition and measurement of financial assets, financial liabilities, and some contracts to buy or sell non-financial items. It was released by the International Accounting Standards Board (IASB) in 2003, and was replaced in 2014 by IFRS 9, which became effective in 2018.

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<span class="mw-page-title-main">IAS 37</span>

International Accounting Standard 37: Provisions, Contingent Liabilities and Contingent Assets, or IAS 37, is an international financial reporting standard adopted by the International Accounting Standards Board (IASB). It sets out the accounting and disclosure requirements for provisions, contingent liabilities and contingent assets, with several exceptions, establishing the important principle that a provision is to be recognized only when the entity has a liability.

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<span class="mw-page-title-main">IFRS 9</span>

IFRS 9 is an International Financial Reporting Standard (IFRS) published by the International Accounting Standards Board (IASB). It addresses the accounting for financial instruments. It contains three main topics: classification and measurement of financial instruments, impairment of financial assets and hedge accounting. The standard came into force on 1 January 2018, replacing the earlier IFRS for financial instruments, IAS 39.

<span class="mw-page-title-main">IFRS 15</span>

IFRS 15 is an International Financial Reporting Standard (IFRS) promulgated by the International Accounting Standards Board (IASB) providing guidance on accounting for revenue from contracts with customers. It was adopted in 2014 and became effective in January 2018. It was the subject of a joint project with the Financial Accounting Standards Board (FASB), which issues accounting guidance in the United States, and the guidance is substantially similar between the two boards.

<span class="mw-page-title-main">IFRS 4</span>

IFRS 4 is an International Financial Reporting Standard (IFRS) issued by the International Accounting Standards Board (IASB) providing guidance for the accounting of insurance contracts. The standard was issued in March 2004, and was amended in 2005 to clarify that the standard covers most financial guarantee contracts. Paragraph 35 of IFRS also applies the standard to financial instruments with discretionary participation features.

<span class="mw-page-title-main">IFRS 16</span>

IFRS 16 is an International Financial Reporting Standard (IFRS) promulgated by the International Accounting Standards Board (IASB) providing guidance on accounting for leases. IFRS 16 was issued in January 2016 and is effective for most companies that report under IFRS since 1 January 2019. Upon becoming effective, it replaced the earlier leasing standard, IAS 17.

IAS 14Segment Reporting is a former International Accounting Standard that was fully withdrawn in 2009 and superseded by IFRS 8 Operating Segments. IAS 14 set guidelines on disclosing information by business segment in a company's financial statements.

References

  1. 1 2 3 4 5 6 7 8 9 10 "IASB issues three new standards: Consolidated Financial Statements, Joint Arrangements, and Disclosure of Interests in Other Entities" (PDF). Ernst & Young. May 2011. Retrieved 2014-08-31.
  2. 1 2 3 4 5 6 "Insights into IFRS Insurance: IFRS 10, 11 and 12 and Insurers" (PDF). Deloitte. 2013. Archived from the original (PDF) on 2014-09-03. Retrieved 2014-08-31.
  3. 1 2 "IFRS 10, 11 and 12 on consolidation and joint arrangements" (PDF). Ernst & Young. 2011. Retrieved 2014-08-31.