The Accounting Entity, Relevance, and Faithful Representation: Linking Financial Statement Notes to the FASB and IASB Conceptual Frameworks
ABSTRACT: Although notes are an integral part of the financial statements, users lacking a technical accounting background often overlook them or consider them to be too difficult (Kieso et al. 201...
The success story of international additives producer AG: A case study on categorization of investments under IFRS
International Additives Producer AG (IAP) recently announced ambitious forecasts regarding revenue and operating income to the capital market. These key performance indicators depend on the way IAP's investments are currently accounted for in its consolidated financial statements, a situation that is seriously questioned by the newly appointed auditor. In this context, the case requires the application of the relevant International Financial Reporting Standards (IFRS) regarding the categorization of investments for group reporting purposes. Specifically, Part I of the case requires the application of the control concept of IFRS 10 as well as the classification rules of IFRS 11 for joint arrangements, while Part II of the case introduces the assessment of significant influence according to IAS 28. Throughout the case the consequences of investment categorization on external reporting and related management incentives that arise from the interplay between financial reporting and capital markets, compensation contracts and additional disclosure requirements are discussed.
IAS 1 – Presentation of Financial Statements
Die wesentlichen Vorgaben zum Inhalt von Abschlussen nach IFRS werden im Gefuge der IFRSs in IAS 1 Presentation of Financial Status konkretisiert. Vor diesem Hintergrund finden sich in IAS 1 keine Vorgaben zu einzelnen Bilanzierungssachverhalten fur Ansatz, Bewertung und Ausweispflichten spezifischer Geschaftsvorfalle, sondern weitgehend allgemeine Anforderungen an Zweck, Inhalt und Struktur eines IFRS Abschlusses. Die Konkretisierung zur Bilanzierung von spezifischen Geschaftsvorfallen findet sich in den entsprechenden Einzelstandards.