SUMMARY OF KEY DIFFERENCES A.

TANG

Key Differences between Full PFRS, PFRS for SMEs and PFRS for SEs

Full PFRS PFRS for SMEs PFRS for SEs

Consolidation: Consolidation is Consolidation is Choice between equity
required under PFRS 10 required under Section 9 method and
(with some exceptions) (with some exceptions) consolidation under
Section 4
Change in accounting Restatement of Restatement of No restatement of
policies and correction comparative comparative comparative
of errors: information is required information is required information under
under PAS 8 (unless under Section 10 (unless Section 5
impracticable) impracticable)
Subsequent 3 general categories Categories under Categories under
measurement of under PFRS 9: Section 11: Section 6:
financial instruments: 1. FVPL 1. FVPL 1. FAAC
2. FVOCI 2. FAAC 2. Cost or FV,
3. FAAC 3. Cost less whichever is
impairment lower
3. Cost less
impairment
Impairment of financial Based on the expected Based on the incurred Based on the incurred
assets credit loss model under loss model under loss model under
PFRS 9 Section 27 Section 21
Measurement of Measured at LCNRV Measured at LCNRV Measured at LCMV
inventories under PAS 2 under Section 13 under Section 8
Accounting for Accounted for using the Accounting policy Accounting policy
Investment in equity model under under Section 14 under Section 9
Associates PAS 28 1. Cost model 1. Cost model
2. Equity model 2. Equity model
3. Fair value
model
Accounting for Joint Accounted for using Accounting policy Accounting policy
Ventures equity model under under Section 15 under Section 10
PAS 28 1. Cost model 1. Cost model
2. Equity model 2. Equity model
3. Fair value
model
Accounting for Accounting policy Accounted using fair Accounting policy
Investment Properties under PAS 40 value model (if fair under Section 11
1. Cost model value can be 1. Cost model
2. Fair value determined) or cost 2. Fair value
model model (if fair value model
cannot be determined)
under Section 16
Accounting for Accounting policy Accounting policy Accounting policy
Property, Plant and under PAS 16 under Section 17 under Section 12
Equipment 1. Cost model 1. Cost model 1. Cost model
2. Revaluation 2. Revaluation 2. Fair value
model model model
Accounting for Accounting policy Accounted for using the Accounted for using the
Intangible Assets under PAS 38 cost model under cost model under
1. Cost model Section 18 Section 13
2. Revaluation
model
Amortization of Intangible assets with All intangible assets are All intangible assets are
Intangible Assets indefinite useful life are amortized under amortized under
not amortized under Section 18 Section 13
PAS 38
Accounting for Direct Expensed under PFRS Included in cost of Included in cost of
Cost of Acquisition in a 3 business combination business combination
Business Combination under Section 19 under Section 14
Leases Lessor accounting and Lessor accounting and Recognize all lease
lessee accounting are lessee accounting are receipts (payments) as
accounted for under accounted for under income (expense) in the
PFRS 16 Section 20 (Similar to period in which they are
PAS 17) incurred under Section
15
Borrowing cost related Capitalized under PAS Expensed under Section Expensed under Section
to qualifying assets 23 during the 25 19
capitalization period
Accounting for Post- Measure obligation Measure obligation Measure obligation
Employment Benefits using the projected using the projected using the accrual
credit unit method credit unit if able to do approach based on
under PAS 19 so without undue cost or current salary and
effort method under years of service
Section 28
Accounting for Deferred Recognize deferred Recognize deferred Accounting policy
Taxes taxes under PAS 12 taxes under Section 29 under Section 23:
1. Taxes payable
method
2. Deferred
income taxes
method
Accounting for Measured at fair value Measured at fair value Accounting policy
Biological Assets less cost to sell (with less cost to sell (or cost under Section 27:
exceptions) under PAS if FV cannot be 1. Current market
40 determined) under price model
Section 34 2. Cost model
Accounting for Conditional government Conditional government Conditional government
Government Grants grants are recognize grants are recognized grants are recognized
when there is when conditions are when conditions are
reasonable assurance already met under already met under
that the conditions will Section 24 Section 28
by met under PAS 20