Companies (Accounting Standards) Regulations

THIRD SCHEDULE

Regulation 2(b)

Adoption and Modification of International Accounting Standards or International Financial Reporting Standards

First column

Second column

Third column

Financial Reporting Standard (“FRS”)

International Accounting Standard/ International Financial Reporting Standard

Modification of International Accounting Standard/International Financial Reporting Standard for the purposes of FRS

FRS 1

IAS 1 (revised 1997)

Delete paragraphs 103 and 104 of IAS 1 and substitute the following paragraph:

Presentation of Financial Statements

“103. FRS 1, Presentation of Financial Statements, is operative for financial statements covering periods beginning on or after 1st January 2000.”.

FRS 2

IAS 2 (revised 1993)

(i) Delete paragraphs 2, 23, 24 and 36 of IAS 2.

Inventories

(ii) Delete paragraph 41 of IAS 2 and substitute the following paragraph:

“41. FRS 2, Inventories, is operative for financial statements covering periods beginning on or after 1st July 1997.”.

FRS 7

IAS 7 (revised 1992)

(i) Delete paragraph 2 of IAS 7.

Cash Flow Statements

(ii) Delete paragraph 53 of IAS 7 and substitute the following paragraph:

“53. FRS 7, Cash Flow Statements, is operative for financial statements covering periods beginning on or after 1st January 1995.”.

FRS 8

IAS 8 (revised 1993)

(i) Delete paragraph 2 of IAS 8.

Net Profit or Loss for the Period, Fundamental Errors and Changes in Accounting Policies

(ii) Delete paragraph 58 of IAS 8 and substitute the following paragraph:

“58. FRS 8, Net Profit or Loss for the Period, Fundamental Errors and Changes in Accounting Policies, is operative for financial statements covering periods beginning on or after 1st July 2000.”.

FRS 10

IAS 10 (revised 1999)

Delete paragraphs 22 and 23 of IAS 10 and substitute the following paragraph:

Events after the Balance Sheet Date

“22. FRS 10, Events after the Balance Sheet Date, is operative for financial statements covering periods beginning on or after 1st October 2000.”.

FRS 11

IAS 11 (revised 1993)

(i) Delete paragraph 2 of IAS 11.

Construction Contracts

(ii) Delete paragraph 46 of IAS 11 and substitute the following paragraph:

“46. FRS 11, Construction Contracts, is operative for financial statements covering periods beginning on or after 1st January 1997.”.

FRS 12

IAS 12 (revised 2000)

Delete paragraphs 89, 90 and 91 of IAS 12 and substitute the following paragraph:

Income Taxes

“89. FRS 12, Income Taxes, is operative for financial statements covering periods beginning on or after 1st April 2001.”.

FRS 14

IAS 14 (revised 1997)

Delete paragraph 84 of IAS 14 and substitute the following paragraph:

Segment Reporting

“84. FRS 14, Segment Reporting, is operative for financial statements covering periods beginning on or after 1st January 2000.”.

FRS 15

IAS 15 (1981)
(reformatted 1994)

(i) Insert, immediately before paragraph 1 under “Scope” of FRS 15, the following paragraph:

Information Reflecting the Effects of Changing Prices

"Foreword

Enterprises need not disclose the information required by this Standard in order that their financial statements conform with the FRSs. Enterprises are encouraged to present such information and to disclose the items required by this Standard.".

(ii) Delete paragraph 2 of IAS 15.

(iii) Delete the following words in paragraph 19 of IAS 15:

“Consequently, the International Accounting Standards Committee believes that further experimentation is necessary before consideration can be given to requiring enterprises to prepare primary financial statements using a comprehensive and uniform system for reflecting changing prices.”,

and substitute the following words:

“Consequently, further experimentation is necessary before consideration can be given to requiring enterprises to prepare primary financial statements using a comprehensive and uniform system for reflecting changing prices.”.

(iv) Delete paragraph 27 of IAS 15 and substitute the following paragraph:

“27. FRS 15, Information Reflecting the Effects of Changing Prices, is operative for financial statements covering periods beginning on or after 1st April 2001.”.

FRS 16

IAS 16 (revised 1998)

Delete paragraphs 67 and 68 of IAS 16 and substitute the following paragraphs:

Property, Plant and Equipment

"67. FRS 16, Property, Plant and Equipment, is operative for financial statements covering periods beginning on or after 1st January 1997.

For an enterprise which had —

(a) revalued its property, plant and equipment before 1st January 1984 (in accordance with the prevailing accounting standard at that time); or

(b) performed any one-off revaluation on its property, plant and equipment between 1st January 1984 and 31st December 1996 (both dates inclusive),

there will be no need for the enterprise to revalue its assets in accordance with paragraph 29 of this Standard.

In this paragraph, “one-off revaluation” means any instance where an item of property, plant and equipment was revalued only once between 1st January 1984 and 31st December 1996 (both dates inclusive). Where an item of property, plant and equipment has been revalued more than once between 1st January 1984 and 31st December 1996 (both dates inclusive), the company should explain why the particular item of property, plant and equipment should be exempted, and the auditor’s concurrence of the explanation is required.

FRS 17

IAS 17 (revised 1997)

(i) Delete the following words in paragraph 11 of IAS 17:

Leases

“However, a characteristic of land is that it normally has an indefinite economic life and, if title is not expected to pass to the lessee by the end of the lease term, the lessee does not receive substantially all of the risks and rewards incident to ownership. A premium paid for such a leasehold represents pre-paid lease payments which are amortised over the lease term in accordance with the pattern of benefits provided.”.

(ii) Delete paragraphs 59 and 60 of IAS 17 and substitute the following paragraph:

“59. FRS 17, Leases, is operative for financial statements covering periods beginning on or after 1st January 2000.”.

FRS 18

IAS 18 (revised 1993)

(i) Delete paragraph 2 of IAS 18.

Revenue

(ii) Delete paragraph 37 of IAS 18 and substitute the following paragraph:

“37. FRS 18, Revenue, is operative for financial statements covering periods beginning on or after 1st January 1997.”.

FRS 19

IAS 19 (revised 2002)

(i) Delete paragraphs 157 and 158 of IAS 19 and substitute the following paragraph:

Employee Benefits

“157. FRS 19, Employee Benefits, is operative for financial statements covering periods beginning on or after 1st October 2000, except as specified in paragraph 159 of this Standard.”.

(ii) Delete paragraphs 159 and 159A of IAS 19 and substitute the following paragraphs:

"159. The following become operative for annual financial statements* covering periods beginning on or after 1st April 2001:

(a) the revised definition of plan assets in paragraph 7 of this Standard and the related definitions of assets held by a long-term employee benefit fund and qualifying insurance policy; and

(b) the recognition and measurement requirements for reimbursements in paragraphs 104A, 128 and 129 of this Standard and related disclosures in paragraph 120(c)(vii), (f) (iv), (g) and (h) (iii) of this Standard.

159A. The amendment in paragraph 58A of this Standard becomes operative for annual financial statements* covering periods ending on or after 1st October 2002. Earlier adoption is encouraged. If earlier adoption affects the financial statements, an enterprise should disclose that fact.

*Paragraphs 159 and 159A of this Standard refer to “annual financial statements” in line with the more explicit language for writing effective dates adopted in 1998. Paragraph 157 of this Standard refers to “financial statements”.".

FRS 20

IAS 20 (1983)
(reformatted 1994)

Delete paragraph 41 of IAS 20 and substitute the following paragraph:

Accounting for Government Grants and Disclosure of Government Assistance

“41. FRS 20, Accounting for Government Grants and Disclosure of Government Assistance, is operative for financial statements covering periods beginning on or after 1st January 1985.”.

FRS 21

IAS 21 (revised 1993)

(i) Delete paragraph 3 of IAS 21.

The Effects of Changes in Foreign Exchange Rates

(ii) Delete paragraph 49 of IAS 21 and substitute the following paragraph:

“49. FRS 21, The Effects of Changes in Foreign Exchange Rates, is operative for financial statements covering periods beginning on or after 1st January 1997.”.

FRS 22

IAS 22 (revised 1998)

(i) Delete paragraphs 99 to 103 of IAS 22 and substitute the following paragraphs:

Business Combinations

"99. Except as provided for in paragraph 100 of this Standard, retrospective application of this Standard is encouraged but not required. If this Standard is applied retrospectively —

(a) where goodwill (negative goodwill) was immediately adjusted against shareholders’ interests —

(i) restate goodwill and negative goodwill for all acquisitions before this Standard becomes effective;

(ii) determine the amount assigned to the goodwill (negative goodwill) at the date of acquisition under regulation 41(59) of this Standard and recognise the goodwill (negative goodwill) accordingly; and

(iii) determine the accumulated amortisation of the goodwill (the accumulated amount of negative goodwill recognised as income) since the date of acquisition under paragraphs 44 — 54 (61 — 63) of this Standard and recognise it accordingly;

(b) where goodwill (negative goodwill) was recognised initially as an asset (deferred income) but not at the amount that would have been assigned under regulation 41(59) of this Standard, apply the requirements under sub-paragraph (a). If the goodwill (negative goodwill) is not restated, the amount assigned to the goodwill (negative goodwill) at the date of acquisition is deemed to have been properly determined. For the amortisation of goodwill (recognition of negative goodwill as income), see circumstances set out in paragraph 100 of this Standard.

100. At the date when this Standard becomes effective, the following is required:

(a) where goodwill was recognised as an asset but was not previously amortised or the amortisation charge was deemed to be nil, or negative goodwill was recognised initially as a separate item in the balance sheet but was not subsequently recognised as income or the amount of negative goodwill to be recognised as income was deemed to be nil, the carrying amount of the goodwill (negative goodwill) should be restated as if the amortisation of goodwill (amount of negative goodwill recognised as income) had always been determined under this Standard (see paragraphs 44 — 54 (61— 63) of this Standard);

(b) where goodwill (negative goodwill) was previously amortised (recognised as income), do not restate the carrying amount of the goodwill (negative goodwill) for any difference between accumulated amortisation (accumulated negative goodwill recognised as income) in prior years and that calculated under this Standard and —

(i) amortise any carrying amount of the goodwill over its remaining useful life determined under this Standard; and

(ii) recognise any carrying amount of the negative goodwill as income over the remaining weighted average useful life of the identifiable depreciable/ amortisable non-monetary assets acquired (see paragraph 62(a) of this Standard).
(That is, any change is treated in the same way as a change in accounting estimate under FRS 8, Net Profit or Loss for the Period, Fundamental Errors and Changes in Accounting Policies.)

101. The effect of adopting this Standard on its effective date should be recognised under FRS 8, Net Profit or Loss for the Period, Fundamental Errors and Changes in Accounting Policies, that is, as an adjustment either to the opening balance of retained earnings of the earliest period presented (FRS 8 benchmark treatment) or to the net profit or loss for the current period (FRS 8 allowed alternative treatment).

102. In the first annual financial statements issued under this Standard, an enterprise should disclose the transitional provisions adopted where transitional provisions under this Standard permit a choice.

103. FRS 22, Business Combinations, is operative for financial statements covering periods beginning on or after 1st October 2000.".

FRS 23

IAS 23 (revised 1993)

(i) Delete paragraph 2 of IAS 23.

Borrowing Costs

(ii) Delete paragraph 31 of IAS 23 and substitute the following paragraph:

“31. FRS 23, Borrowing Costs, is operative for financial statements covering periods beginning on or after 1st January 1997.”.

FRS 24

IAS 24 (1984)
(reformatted 1994)

Delete paragraph 26 of IAS 24 and substitute the following paragraph:

Related Party Disclosures

“26. FRS 24, Related Party Disclosures, is operative for financial statements covering periods beginning on or after 1st January 1987.”.

FRS 26

IAS 26 (1987)
(reformatted 1994)

(There is no modification on IAS 26.)

Accounting and Reporting by Retirement Benefit Plans

FRS 27

IAS 27 (1989) (reformatted 1994)

(i) Delete paragraph 3 of IAS 27.

Consolidated Financial Statements and Accounting for Investments in Subsidiaries

(ii) Delete paragraph 33 of IAS 27 and substitute the following paragraph:

“33. FRS 27, Consolidated Financial Statements and Accounting for Investments in Subsidiaries, is operative for financial statements covering periods beginning on or after 1st January 1990.”.

FRS 28

IAS 28 (revised 2000)

(i) Delete paragraph 2 of IAS 28.

Accounting for Investments in Associates

(ii) Delete paragraphs 29, 30 and 31 of IAS 28 and substitute the following paragraphs:

"29. FRS 28, Accounting for Investments in Associates, is operative for financial statements covering periods beginning on or after 1st January 1991.

30. Paragraphs 23 and 24 of this Standard become operative when FRS 36 becomes operative — that is, for annual financial statements covering periods beginning on or after 1st October 2000, unless FRS 36 is applied for earlier periods.".

FRS 29

IAS 29 (1989) (reformatted 1994)

Delete paragraph 41 of IAS 29 and substitute the following paragraph:

Financial Reporting in Hyperinflationary Economies

“41. FRS 29, Financial Reporting in Hyperinflationary Economies, is operative for financial statements covering periods beginning on or after 1st April 2001.”

FRS 31

IAS 31 (revised 2000)

Delete paragraphs 50, 51 and 52 of IAS 31 and substitute the following paragraphs:

Financial Reporting of Interests in Joint Ventures

"50. Except for paragraphs 39, 40 and 41 of this Standard, this Standard becomes operative for financial statements covering periods beginning on or after 1st January 1995.

51. Paragraphs 39, 40 and 41 of this Standard become operative when FRS 36 becomes operative — that is, for annual financial statements covering periods beginning on or after 1st October 2000, unless FRS 36 is applied for earlier periods.".

FRS 32

IAS 32 (revised 1998)

Delete paragraph 96 of IAS 32 and substitute the following paragraph:

Financial Instruments: Disclosure and Presentation

“96. FRS 32, Financial Instruments: Disclosure and Presentation, is operative for financial statements covering periods beginning on or after 1st October 2000.”.

FRS 33

IAS 33 (1997)

Delete paragraph 53 of IAS 33 and substitute the following paragraph:

Earnings Per Share

“53. FRS 33, Earnings Per Share, is operative for financial statements covering periods beginning on or after 1st January 1999.”.

FRS 34

IAS 34 (1998)

Delete paragraph 46 of IAS 34 and substitute the following paragraph:

Interim Financial Reporting

“46. FRS 34, Interim Financial Reporting, is operative for financial statements covering periods beginning on or after 1st October 2001.”.

FRS 35

IAS 35 (1998)

(i) Delete paragraphs 49 and 50 of IAS 35 and substitute the following paragraph:

Discontinuing Operations

“49. FRS 35, Discontinuing Operations, is operative for financial statements covering periods beginning on or after 1st October 2000.”.

(ii) Delete any reference to paragraph 81 of IAS 12 and substitute a reference to paragraph 79 of FRS 12.

FRS 36

IAS 36 (1998)

Delete paragraph 122 of IAS 36 and substitute the following paragraph:

Impairment of Assets

“122. FRS 36, Impairment of Assets, is operative for financial statements covering periods beginning on or after 1st October 2000.”.

FRS 37

IAS 37 (1998)

Delete paragraphs 95 and 96 of IAS 37 and substitute the following paragraph:

Provisions, Contingent Liabilities and Contingent Assets

“95. FRS 37, Provisions, Contingent Liabilities and Contingent Assets, is operative for financial statements covering periods beginning on or after 1st October 2000.”.

FRS 38

IAS 38 (1998)

Delete paragraphs 122 and 123 of IAS 38 and substitute with the following paragraph:

Intangible Assets

“122. FRS 38, Intangible Assets, is operative for financial statements covering periods beginning on or after 1st October 2000.”.

FRS 39

IAS 39

(i) Delete the following words in paragraph 2 of IAS 39:

Financial Instruments:
Recognition and Measurement

“The Board recognises that the payout under some of these contracts is unrelated to the amount of an enterprise’s loss. While the Board considered leaving such derivatives within the scope of the Standard, it concluded that further study is needed to develop operational definitions that distinguish between “insurance-type” and “derivative-type” contracts.”,

and substitute the following words:

“It is recognised that the payout under some of these contracts is unrelated to the amount of an enterprise’s loss. While such derivatives have been left within the scope of the Standard, further study is needed to develop operational definitions that distinguish between “insurance-type” and “derivative-type” contracts.”.

(ii) Delete the following words in paragraph 5 of IAS 39:

“A separate IASC project on accounting for insurance contracts is currently under way, and it will address rights and obligations arising under insurance contracts.”.

(iii) Delete the following words in paragraph 105 of IAS 39:

“The Board believes that this is highly unlikely to be the case for a change from paragraph 103 (b) (i) to paragraph 103 (b) (ii).”,

and substitute the following words:

“This is highly unlikely to be the case for a change from paragraph 103 (b) (i) to paragraph 103 (b) (ii).”.

(iv) Delete paragraph 171 of IAS 39 and substitute the following paragraph:

“171. FRS 39, Financial Instruments: Recognition and Measurement, shall be operative for financial statements covering periods beginning on or after 1st January 2005. Earlier application is permitted.”.

(v) Delete any reference to paragraph 11, 30 or 31 of IAS 18 and substitute a reference to paragraph 10, 29 or 30 of FRS 18, respectively.

(vi) Delete any reference to paragraph 19 of IAS 21 and substitute a reference to paragraph 18 of FRS 21.

(vii) Delete any reference to paragraph 29, 30 or 31 of IAS 27 and substitute a reference to paragraph 28, 29 or 30 of FRS 27, respectively.

(viii) Delete any reference to paragraph 12, 13, 14 or 15 of IAS 28 and substitute a reference to paragraph 10, 11, 12 or 13 of FRS 28, respectively.

FRS 41

IAS 41 (2001)

Delete paragraph 58 of IAS 41 and substitute the following paragraph:

Agriculture

“58. FRS 41, Agriculture, is operative for financial statements covering periods beginning on or after 1st October 2001.”.

FRS 101

IFRS 1

(i) Delete any reference to IFRS 1 and substitute a reference to FRS 101.

First-time Adoption of Financial Reporting Standards

First-time Adoption of International Financial Reporting Standards

(ii) Delete the following words in paragraph IN1 under the heading “Introduction” in IFRS 1:

"The Board developed this IFRS to address concerns that:

(a) some aspects of SIC 8’s requirement for full retrospective application caused costs that exceeded the likely benefits for users of financial statements. Moreover, although SIC 8 did not require retrospective application when this would be impracticable, it did not explain whether a first-time adopter should interpret impracticability as a high hurdle or a low hurdle and it did not specify any particular treatment in cases of impracticability.",

and substitute the following words:

"The CCDG issued this FRS to address concerns that:

(a) some aspects of INT FRS 8’s requirement for full retrospective application caused costs that exceeded the likely benefits for users of financial statements. Moreover, although INT FRS 8 did not require retrospective application when this would be impracticable, it did not explain whether a first-time adopter should interpret impracticability as a high hurdle or a low hurdle and it did not specify any particular treatment in cases of impracticability.".

(iii) Delete any reference to paragraph 172 of IAS 39 and substitute a reference to paragraph 169 of FRS 39.

(iv) Delete the following words in paragraph 27 of IFRS 1:

“In other words, if a first-time adopter derecognised financial assets or financial liabilities under its previous GAAP in a financial year beginning before 1 January 2001, it shall not recognise those assets and liabilities under IFRSs (unless they qualify for recognition as a result of a later transaction or event).”,

and substitute the following words:

“In other words, if a first-time adopter derecognised financial assets or financial liabilities under its previous GAAP in a financial year beginning before 1 January 2005, it shall not recognise those assets and liabilities under FRSs (unless they qualify for recognition as a result of a later transaction or event).”

Search within Legislation