INVESTMENT PROPERTY

Definition

Initial Measurement

Subsequent
Measurement

Fair Value

Cost Model

Full PFRS
Same as IFRS for SMEs.
Accounting result likely to
be the same.

PFRS for SMEs

Investment property is a
property (land or building,
or part of a building, or
both) held by the owner
or by lessee under a
finance lease to earn
rentals or for capital
appreciation or both.

Cost of purchased
investment =
Purchase Price + Directly
Attributable Costs (legal
and brokerage fees,
property transfer taxes
and other transaction
cost)

SAME as that of Full PFRS

except of treatment of
Borrowing Costs.

Borrowing costs that are

directly attributable to
the acquisition,
construction or
production of a qualifying
asset are required to be
capitalized as part of
the cost of that asset.
Fair Value or at Cost
However, when an
investment property is
held by a lessee under
an operating lease, the
entity follows the Fair
Value model for all its
investment properties.
Gains and losses arising
from changes in the fair
value of investment
property are recognized
in profit or loss.
(Same as PFRS for SMEs)

Borrowing costs are

recognized as an
expense.

At fair value if its fair

value can be measured
reliably without undue
cost or effort.
Otherwise, the cost
model is used.

(Same as Full PFRS)

The cost model is

consistent with the

treatment of property,
plant and equipment
(PPE).

Transfers

IFRS includes further

guidance on the
situations when a
property can be
transferred to or from the
investment property
category.

Investment properties are

carried at cost less
accumulated depreciation
and any accumulated
impairment losses
Transfer to or from
investment properties
applies when the property
meets or ceases to meet
the definition of an
investment property.

PROPERTY PLANT AND EQUIPMENT

Definition

Full PFRS
Property, plant and
equipment (PPE) are
tangible assets that are:

PFRS for SMEs

(Same definition)

Held for use in the

production or supply of
goods and services, for
rental to others or for
administrative purposes.
Expected to be used
during more than one
period
PPE classified as held for
sale, biological assets,
and some others are
explicitly out of scope of
IAS 16.

Initial Measurement

Cost of purchased
investment =
Purchase Price + Directly
Attributable Costs (legal

Purchase Price + Directly

attributable costs to bring
the asset to the location
and condition necessary

Subsequent
Measurement

Major inspection

Impairment

and brokerage fees,

property transfer taxes
and other transaction
cost)

for it to be capable of
operating in the manner
intended by
management.

Borrowing costs that are

directly attributable to
the acquisition,
construction or
production of a qualifying
asset are required to be
capitalized as part of
the cost of that asset.

The initial estimate of

costs of dismantling and
removing the item and
restoring the site on
which it is located.

Cost or Revaluation
model , wherein PPE are
carried at PPE are carried
at cost less accumulated
depreciation and any
impairment losses or at a
revalued amount less
any accumulated
depreciation and
subsequent accumulated
impairment losses.
same

(Same as PFRS for SMEs)

Borrowing costs are

recognized as an
expense.
Cost Model
PPE are carried at cost
less accumulated
depreciation and any
impairment losses.

The cost of a major

inspection or replacement
of parts of an item
occurring at regular
intervals over its useful
life is capitalized to the
extent that it meets the
recognition criteria of an
asset.
The carrying amount of
the previous
inspection or parts
replaced is
PPE is tested for
impairment when there is
an indication that the
asset may be
impaired. Existence of
impairment indicators is
assessed at each
reporting date.

Depreciation-definition

Same as pfrs for smes

Components approach

PPE may have

significant parts with
different useful lives.
Depreciation is calculated
based on each
individual parts life.

Depreciation charge

Significant parts that

have the same useful
life and depreciation
method may be grouped
in determining the
depreciation charge.
same

Depreciable amount
and Depreciable
period

The depreciable amount

of an asset is allocated
over its useful life.
The residual value and
the useful life of an
asset are reviewed at
least at each annual
reporting date and
amended if expectations
differ from previous
estimates.
Change in residual
value or useful life is
accounted for as a
change in estimate.

Depreciation Method

Similar to IFRS for SMEs.

The depreciation
method is reviewed at
least at each annual
reporting date.

The systematic allocation

of the depreciable
amount of an asset over
its useful life.
PPE may have
significant parts with
different useful lives.
The cost of an item of PPE
is allocated to its
significant parts, with
each part depreciated
separately only when
the parts have
significantly different
patterns of benefit
consumption.
The depreciation charge
for each period is
recognized in the profit
or loss unless it is
included in the carrying
amount of another asset.
The depreciable amount
of an asset is allocated
over its useful life.
The residual value and
the useful life of an
asset are reviewed if
there is an indication
of change since the last
reporting date and
amended if expectations
differ from previous
estimates.
Change in residual
value or useful life is
accounted for as a
change in estimate.
The depreciation method
should reflect the pattern
in which the assets
future economic benefits
are expected to be
consumed by the entity.

Change in the
depreciation method is
accounted for as a
change in estimate.

Non-current assets
held for sale

Similar to IFRS for SMEs.

In addition, PPE is
classified as held for sale
if its carrying amount will
be recovered principally
through a sale
transaction rather than
through continuing use.
Assets held for sale,
which are not
depreciated, are
measured at the lower
of its carrying amount
and fair value less
costs to sell.

The depreciation method

is reviewed if there is
an indication that
there has been a
significant change
since the last annual
reporting date.
Change in the
depreciation method is
accounted for as a
change in estimate.
PFRS for SMEs does not
address noncurrent
assets held for sale.
A plan to dispose of an
asset is an indicator of
impairment that triggers
the calculation of the
assets recoverable
amount for the purpose
of determining whether
the asset is impaired.

GOVERNMENT GRANT

Definition

Full PFRS
Similar to IFRS for SMEs.

PFRS for SMEs

Assistance by

Recognition and
Measurement

There are two broad

options under IAS 20: the
capital approach and the
income approach.
Accounting and
presentation could
therefore be different.
Revenue is not
recognized until there is a
reasonable assurance
that:

The entity
complies
with
the
conditions attached to
the grants; and

The grantsare
receivable.

Government grants are

recognized in the
statement of
comprehensive income
over the periods
necessary to match
them with the related
costs that they are
intended to compensate,
on a systematic basis.
They are not credited
directly to shareholders
interest

government in the form

of transfers of resources
to an entity in return for
past or future compliance
with certain conditions
relating to the operating
activities of the entity.
An entity recognizes
government grants
according to the nature of
the grant as follows:
A

grant that does

not impose
specified future
performance
conditions on the
recipient is recognized
in income when the
grant proceeds are
receivable.
A

grant that
imposes
specified
future performance
conditions on the
recipient is recognized in
income only when the
performance
conditions are met.
Grants
received
before the
income
recognition criteria are
satisfied are
recognized as a
liability and released to
income when all
attached conditions have
been complied with.
Grants are measured at
the fair value of the
asset received or

receivable.
Disclosures

accounting policy
adopted for grants,
including method of
balance sheet
presentation
nature and extent of
grants recognized in
the financial
statements
** *

unfulfilled conditions
and contingencies
attaching to recognized
grants

nature and extent of

grants recognized in
the financial
statements
unfulfilled conditions
and contingencies
attaching to recognized
grants that has not
been recognized in
income
an indication of other
forms of government
assistance fom which
the entity directly
benefited.

BORROWING COSTS
Definition

Full PFRS
Similar to IFRS for SMEs.

PFRS for SMEs

Interest and other costs
that an entity incurs in
connection with the
borrowing of funds.

Recognition

Directly attributable
borrowing costs are
capitalized as part of

Interest expense
calculated using
effective interest
method
Finance charges in
respect of finance
leases recognized
Exchange
differences arising
from foreign
currecy borrowings
to the extent that
they are regarded
as an adjustment
to interestcosts
Recognize all borrowing
costs as expense of the
period when incurred.

the cost of the asset.

Disclosures

However, costs not

directly attributable
are expensed.
Amount of
borrowing cost
capitalized
during the
period
Capitalization
rate used to
determine the
amount of
borrowing cost
eligible for
capitalization

PFRS for SMEs does not

permit capitalization of
interest directly
attributable or not
Finance costs
Total interest
expense using the
effective interest
method for
financial liabilities
that are not
measured at fair
value through
profit or loss

INTANGIBLE ASSETS

Definition

Full PFRS
Same as pfrs for smes

General principles for

recognition

same

Recognition as
expense

same

PFRS for SMEs

An intangible asset is an
identifiable non-monetary
asset without physical
substance. The
identifiable criterion is
met when intangible
asset is separable (that
is, it can be sold,
transferred, licensed,
rented or exchanged), or
where it arises from
contractual or legal
rights.
Expenditure on
intangibles is recognized
as an asset when it meets
the recognition criteria of
an asset.
Expenditure on the
following items is not
recognized as assets:

Start-up
costs.

Training.

Advertising

Relocation costs.
Expenditures
on
internally
generated intangibles
such as brands,
mastheads, customer
lists, publishing titles
and items similar in
substance
. Past expenses on
intangible items are not
recognized as an asset.
Separately acquired
intangible assets

Intangible assets
acquired as part of a
business combination

Research and
development costs

Measurement after
initial recognition

Initial Measurement
same

Intangible assets are

measured initially at cost.
Cost includes
:

The purchase
price,
Any costs
directly
attributable
to
preparing
the assets for its
intended use.
The cost of an intangible
asset acquired as a part
of a business combination
is its fair value at the
acquisition date.
All research and
development costs are
recognized as an
expense.

Research costs are

expensed as incurred.
Development costs are
capitalised when specific
criteria are met
Subsequent Measurement
In addition to the cost
Intangible assets are
model, the revaluation carried at cost less any
model is an option, in
accumulated amortization
which intangible
and any accumulated
assets are carried at a impairment losses (cost
revalued amount less
model).
any accumulated
depreciation and
subsequent

Useful life

accumulated
impairment losses.
The useful life of an
intangible asset is either
finite or indefinite.
The useful life is
regarded as indefinite
when, based on analysis
of all of the relevant
factors, there is no
foreseeable limit to the
period over which the
asset is expected to
generate net cash
inflows.

Intangible assets with

finite useful life

Similar to IFRS for SMEs

with regard to the useful
life of an intangible asset
that arises from
contractual or other legal
rights, except that
renewal periods may be
taken into account if
certain criteria are met.
Intangible assets with
finite useful life (including
those that are revalued)
are amortised.
Amortization is carried
out on a systematic basis
over the useful lives of
the intangibles.
Same as IFRS for SMEs
with regard to the
residual value of such
assets.
The amortization period,
method and residual
value are reviewed at
least at each annual
reporting period

The useful life of an

intangible asset is
considered to be finite.
The useful life of an
intangible asset that
arises from contractual or
other legal rights should
not exceed the period of
the contractual or other
legal rights but may be
shorter depending on the
period over which the
asset is expected to be
use

Intangible assets are

amortised on a
systematic basis over the
useful lives of the
intangibles.
The useful life of an
intangible is presumed to
be 10 years if a reliable
estimate cannot be
made. The residual value
at the end of their useful
lives is assumed to be
zero, unless there is
either a commitment by a
third party to purchase
the asset and/or there is
an active market for the
asset.
The amortization period,

Intangible assets with

indefinite useful life

Impairment

These assets are not

amortised. The useful life
assessment is reviewed
at each annual reporting
period to determine
whether events and
circumstances continue
to support an indefinite
useful life assessment.
Change in the useful life
assessment from
indefinite to finite is an
indicator that an asset
may be impaired and is
accounted for as a
change in estimate.
Same as IFRS for SMEs.
In addition, intangibles
with indefinite useful
lives are tested for
impairment annually
irrespective of whether
there is an indication of
impairment.

method and residual

value are reviewed if
there is an indication of
change since the last
reporting date. Changes
in the amortization
period/method are
accounted for as a
change in estimate
Not applicable. All
intangible assets are
considered to have finite
lives

Intangible assets are

tested for impairment
when there is an
indication that the asset
may be impaired.
Existence of impairment
indicators is assessed at
each reporting date.

IMPAIRMENT OF ASSETS
Impairment formula

Full PFRS
Same as pfrs for smes

PFRS for SMEs

An asset is impaired when
its carrying amount
exceeds it recoverable
amount, whereby the
recoverable amount is
defined as the higher of

Impairment Losses

Annual assessment of
indicators

Indicators of
impairment

Recoverable amount

Same as IFRS for SMEs,

unless the asset is carried
at revalued amount in
accordance with another
standard. In this case, the
impairment loss is treated
as a revaluation decrease
in accordance with that
other standard.
The following assets are
tested for impairment
irrespective of whether
there is indication of
impairment:

Intangible
assets
with an
indefinite
useful
life or an intangible asset
not yet available for use.

Goodwill.
Same
as
IFRS
for
SMEs. An additional
indicator exists when
the entitys net asset
value is above its
market capitalization.

same

an assets or CGUs fair

value less costs to sell
and its value in use.
An impairment loss is
recognized immediately
in the profit or loss.

Assets
(including
goodwill) are tested for
impairment when there is
an indication that the
asset may be impaired.
The
existence
of
impairment indicators is
assessed
at
each
reporting date

External
indicators
of
impairment
include
a
decline in an assets
market value, significant
adverse
changes
in
technological,
market,
economic
or
legal
environment
and
increases
in
market
interest rates. Internal
indicators
include
evidence of obsolescence
or physical damage of an
asset, changes in the way
an asset is used (for
example,
due
to
restructuring
or
discontinued operations)
or evidence from internal
reporting
that
the
economic performance of
an asset is, or will be,
worse than expected.
Recoverable

Value in use

Fair value less costs to

sell

Same as IFRS for SMEs,

but
more
extensive
guidance about future
cash flows estimation

same

amount
is
the
higher of an assets
(or
CGUs)
fair
value less costs to
sell and its value in
use.
If
either
exceeds
the
carrying amount, it
is not necessary to
estimate the other
amount.
The value in use is
defined as the present
value of the future cash
flows expected to be
derived from an asset or
CGU. Future cash flows
are estimated for the
asset
in
its
current
condition.
Cash inflows or outflows
from financing activities
and income tax receipts
or payments are not
included.
When
performing
the
impairment test of an
asset (or CGU), the entity
estimates the fair value
less costs to sell based on
a hierarchy of reliability of
evidence
:
A
price in
a
binding
sale agreement
in an arms length
or market price
in an
active market, less costs
of disposal.

Best available
information to
reflect
the
amount that an entity
could
obtain at the
reporting
date
from
disposal of the asset in an

Allocation of goodwill

Goodwill acquired in a
business combination is
allocated to the CGUs
that are expected to
benefit
from
the
synergies
of
the
combination.
IAS
36
includes comprehensive
guidance on how to
allocate goodwill under
several circumstances.
Goodwill is tested for
impairment at the lowest
level at which it is
monitored
by
management. CGUs may
be grouped for testing,
but the grouping cannot
be
higher
than
an
operating segment as
defined in IFRS 8 (before
aggregation).

Reversal of
impairment

Similar to IFRS for SMEs;

however, includes more
detailed guidance and
distinction of reversal of
impairment
for
an
individual asset, a CGU
and goodwill.

arms length transaction

between
knowledgeable,
willing
parties, less costs of
disposal.
Outcome
of
recent transactions for
similar assets within the
same industry
need to
be considered.
Goodwill is allocated to
the
CGUs
that
are
expected to benefit from
the synergies of the
combination.
If
such
allocation is not possible
and the reporting entity
has not integrated the
acquired business, the
acquired
entity
is
measured as a whole
when testing goodwill
impairment.
If
such
allocation is not possible
and
the
acquired
business is integrated,
the
entire
group
is
considered when testing
goodwill impairment.
Note: integrated means
that
the
acquired
business
has
been
restructured or dissolved
into the reporting entity
or other subsidiaries
At each reporting date
after recognition of the
impairment loss, an entity
assesses whether there is
any indication that an
impairment
loss
may
have decreased or may
no longer exist. The
impairment
loss
is
reversed
if
the
recoverable amount of an
asset (CGU) exceeds its

carrying
amount.
The
amount of the reversal is
subject
to
certain
limitations.
Goodwill impairment can
never be reversed.