IAS 1 — Presentation of Financial Statements

Overview

IAS 1 Presentation of Financial Statements sets out the overall requirements for financial
statements, including how they should be structured, the minimum requirements for their
content and overriding concepts such as going concern, the accrual basis of accounting and the
current/non-current distinction. The standard requires a complete set of financial statements to
comprise a statement of financial position, a statement of profit or loss and other comprehensive
income, a statement of changes in equity and a statement of cash flows.
IAS 1 was reissued in September 2007 and applies to annual periods beginning on or after 1
January 2009. IAS 1 will be superseded by IFRS 18 Presentation and Disclosure in Financial
Statements, which becomes effective for annual periods beginning on or after 1 January 2027.
Objective of IAS 1

The objective of IAS 1 (2007) is to prescribe the basis for presentation of general purpose financial
statements, to ensure comparability both with the entity's financial statements of previous
periods and with the financial statements of other entities. IAS 1 sets out the overall
requirements for the presentation of financial statements, guidelines for their structure and
minimum requirements for their content. [IAS 1.1] Standards for recognising, measuring, and
disclosing specific transactions are addressed in other Standards and Interpretations. [IAS 1.3]
Objective of financial statements

The objective of general-purpose financial statements is to provide information about the

financial position, financial performance, and cash flows of an entity that is useful to a wide range
of users in making economic decisions. To meet that objective, financial statements provide
information about an entity's: [IAS 1.9]

assets liabilities equity income and expenses, including gains and losses contributions by and
distributions to owners (in their capacity as owners) cash flows.
That information, along with other information in the notes, assists users of financial statements
in predicting the entity's future cash flows and, in particular, their timing and certainty.
Components of financial statements

A complete set of financial statements includes: [IAS 1.10]

a statement of financial position (balance sheet) at the end of the period a statement of profit or
loss and other comprehensive income for the period (presented as a single statement, or by
presenting the profit or loss section in a separate statement of profit or loss, immediately
followed by a statement presenting comprehensive income beginning with profit or loss) a
statement of changes in equity for the period a statement of cash flows for the period notes,
comprising a summary of significant accounting policies and other explanatory notes
comparative information prescribed by the standard.An entity may use titles for the statements
other than those stated above. All financial statements are required to be presented with equal
prominence. [IAS 1.10]

When an entity applies an accounting policy retrospectively or makes a retrospective

restatement of items in its financial statements, or when it reclassifies items in its financial
statements, it must also present a statement of financial position (balance sheet) as at the
beginning of the earliest comparative period.

Reports that are presented outside of the financial statements – including financial reviews by
management, environmental reports, and value-added statements – are outside the scope of
IFRSs. [IAS 1.14]
Fair presentation and compliance with IFRSs

The financial statements must "present fairly" the financial position, financial performance and
cash flows of an entity. Fair presentation requires the faithful representation of the effects of
transactions, other events, and conditions in accordance with the definitions and recognition
criteria for assets, liabilities, income and expenses set out in the Framework. The application of
IFRSs, with additional disclosure when necessary, is presumed to result in financial statements
that achieve a fair presentation. [IAS 1.15]

IAS 1 requires an entity whose financial statements comply with IFRSs to make an explicit and
unreserved statement of such compliance in the notes. Financial statements cannot be described
as complying with IFRSs unless they comply with all the requirements of IFRSs (which includes
International Financial Reporting Standards, International Accounting Standards, IFRIC
Interpretations and SIC Interpretations). [IAS 1.16]
Inappropriate accounting policies are not rectified either by disclosure of the accounting policies
used or by notes or explanatory material. [IAS 1.18]
IAS 1 acknowledges that, in extremely rare circumstances, management may conclude that
compliance with an IFRS requirement would be so misleading that it would conflict with the
objective of financial statements set out in the Framework. In such a case, the entity is required
to depart from the IFRS requirement, with detailed disclosure of the nature, reasons, and impact
of the departure. [IAS 1.19-21]
Going concern

The Conceptual Framework notes that financial statements are normally prepared assuming the
entity is a going concern and will continue in operation for the foreseeable future. [Conceptual
Framework, paragraph 4.1]
IAS 1 requires management to make an assessment of an entity's ability to continue as a going
concern. If management has significant concerns about the entity's ability to continue as a going
concern, the uncertainties must be disclosed. If management concludes that the entity is not a
going concern, the financial statements should not be prepared on a going concern basis, in
which case IAS 1 requires a series of disclosures. [IAS 1.25]
Accrual basis of accounting

IAS 1 requires that an entity prepare its financial statements, except for cash flow information,
using the accrual basis of accounting. [IAS 1.27]
Consistency of presentation

The presentation and classification of items in the financial statements shall be retained from
one period to the next unless a change is justified either by a change in circumstances or a
requirement of a new IFRS. [IAS 1.45]
Materiality and aggregation

Information is material if omitting, misstating or obscuring it could reasonably be expected to

influence decisions that the primary users of general purpose financial statements make on the
basis of those financial statements, which provide financial information about a specific reporting
entity. [IAS 1.7]*
Each material class of similar items must be presented separately in the financial statements.
Dissimilar items may be aggregated only if they are individually immaterial. [IAS 1.29]

However, information should not be obscured by aggregating or by providing immaterial

information, materiality considerations apply to the all parts of the financial statements, and
even when a standard requires a specific disclosure, materiality considerations do apply. [IAS
1.30A-31]
Comparative information

IAS 1 requires that comparative information to be disclosed in respect of the previous period for
all amounts reported in the financial statements, both on the face of the financial statements
and in the notes, unless another Standard requires otherwise. Comparative information is
provided for narrative and descriptive where it is relevant to understanding the financial
statements of the current period. [IAS 1.38]

An entity is required to present at least two of each of the following primary financial statements:
[IAS 1.38A]
statement of financial position* statement of profit or loss and other comprehensive income
separate statements of profit or loss (where presented) statement of cash flows statement of
changes in equity related notes for each of the above items.
* A third statement of financial position is required to be presented if the entity retrospectively
applies an accounting policy, restates items, or reclassifies items, and those adjustments had a
material effect on the information in the statement of financial position at the beginning of the
comparative period. [IAS 1.40A]Where comparative amounts are changed or reclassified, various
disclosures are required. [IAS 1.41]
Structure and content of financial statements in general

IAS 1 requires an entity to clearly identify: [IAS 1.49-51]

the financial statements, which must be distinguished from other information in a published
document each financial statement and the notes to the financial statements.
In addition, the following information must be displayed prominently, and repeated as necessary:
[IAS 1.51]
the name of the reporting entity and any change in the name whether the financial statements
are a group of entities or an individual entity information about the reporting period the
presentation currency (as defined by IAS 21 The Effects of Changes in Foreign Exchange Rates)
the level of rounding used (e.g. thousands, millions).
Reporting period

There is a presumption that financial statements will be prepared at least annually. If the annual
reporting period changes and financial statements are prepared for a different period, the entity
must disclose the reason for the change and state that amounts are not entirely comparable. [IAS
1.36]
Statement of financial position (balance sheet)

Current and non-current classification

An entity must normally present a classified statement of financial position, separating current
and non-current assets and liabilities, unless presentation based on liquidity provides
information that is reliable. [IAS 1.60] In either case, if an asset (liability) category combines
amounts that will be received (settled) after 12 months with assets (liabilities) that will be
received (settled) within 12 months, note disclosure is required that separates the longer-term
amounts from the 12-month amounts. [IAS 1.61]
Current assets are assets that are: [IAS 1.66]

expected to be realised in the entity's normal operating cycle held primarily for the purpose of
trading expected to be realised within 12 months after the reporting period cash and cash
equivalents (unless restricted).
All other assets are non-current. [IAS 1.66]

Current liabilities are those: [IAS 1.69]

expected to be settled within the entity's normal operating cycle held for purpose of trading due
to be settled within 12 months for which the entity does not have the right at the end of the
reporting period to defer settlement beyond 12 months.
Other liabilities are non-current.
When a long-term debt is expected to be refinanced under an existing loan facility, and the entity
has the discretion to do so, the debt is classified as non-current, even if the liability would
otherwise be due within 12 months. [IAS 1.73]
If a liability has become payable on demand because an entity has breached an undertaking
under a long-term loan agreement on or before the reporting date, the liability is current, even
if the lender has agreed, after the reporting date and before the authorisation of the financial
statements for issue, not to demand payment as a consequence of the breach. [IAS 1.74]
However, the liability is classified as non-current if the lender agreed by the reporting date to
provide a period of grace ending at least 12 months after the end of the reporting period, within
which the entity can rectify the breach and during which the lender cannot demand immediate
repayment. [IAS 1.75]

Line items
The line items to be included on the face of the statement of financial position are: [IAS 1.54]
(a) property, plant and equipment
(b) investment property
(c) intangible assets
(d) financial assets (excluding amounts shown under (e), (h), and (i))
(e) investments accounted for using the equity method
(f) biological assets
(g) inventories
(h) trade and other receivables
(i) cash and cash equivalents
(j) assets held for sale
(k) trade and other payables
(l) provisions
(m) financial liabilities (excluding amounts shown under (k) and (l))
(n) current tax liabilities and current tax assets, as defined in IAS 12
(o) deferred tax liabilities and deferred tax assets, as defined in IAS 12
(p) liabilities included in disposal groups
(q) non-controlling interests, presented within equity
(r) issued capital and reserves attributable to owners of the parent.
Additional line items, headings and subtotals may be needed to fairly present the entity's
financial position. [IAS 1.55]
When an entity presents subtotals, those subtotals shall be comprised of line items made up of
amounts recognised and measured in accordance with IFRS; be presented and labelled in a clear
and understandable manner; be consistent from period to period; and not be displayed with
more prominence than the required subtotals and totals. [IAS 1.55A]*
* Added by Disclosure Initiative (Amendments to IAS 1), effective 1 January 2016.

Further sub-classifications of line items presented are made in the statement or in the notes, for
example: [IAS 1.77-78]:
classes of property, plant and equipment disaggregation of receivables disaggregation of
inventories in accordance with IAS 2 Inventories disaggregation of provisions into employee
benefits and other items classes of equity and reserves.
Format of statement

IAS 1 does not prescribe the format of the statement of financial position. Assets can be
presented current then non-current, or vice versa, and liabilities and equity can be presented
current then non-current then equity, or vice versa. A net asset presentation (assets minus
liabilities) is allowed. The long-term financing approach used in UK and elsewhere – fixed assets
+ current assets - short term payables = long-term debt plus equity – is also acceptable.
Share capital and reserves

Regarding issued share capital and reserves, the following disclosures are required: [IAS 1.79]
numbers of shares authorised, issued and fully paid, and issued but not fully paid par value (or
that shares do not have a par value) a reconciliation of the number of shares outstanding at the
beginning and the end of the period description of rights, preferences, and restrictions treasury
shares, including shares held by subsidiaries and associates shares reserved for issuance under
options and contracts a description of the nature and purpose of each reserve within equity.
Additional disclosures are required in respect of entities without share capital and where an
entity has reclassified puttable financial instruments. [IAS 1.80-80A]
Statement of profit or loss and other comprehensive income

Concepts of profit or loss and comprehensive income

Profit or loss is defined as "the total of income less expenses, excluding the components of other
comprehensive income". Other comprehensive income is defined as comprising "items of
income and expense (including reclassification adjustments) that are not recognised in profit or
loss as required or permitted by other IFRSs". Total comprehensive income is defined as "the
change in equity during a period resulting from transactions and other events, other than those
changes resulting from transactions with owners in their capacity as owners". [IAS 1.7]
Comprehensive income

for the period = Profit or loss + Other comprehensive income

All items of income and expense recognised in a period must be included in profit or loss unless
a Standard or an Interpretation requires otherwise. [IAS 1.88] Some IFRSs require or permit that
some components to be excluded from profit or loss and instead to be included in other
comprehensive income.
Choice in presentation and basic requirements

An entity has a choice of presenting:

a single statement of profit or loss and other comprehensive income, with profit or loss and other
comprehensive income presented in two sections, or two statements:

a separate statement of profit or loss a statement of comprehensive income, immediately

following the statement of profit or loss and beginning with profit or loss [IAS 1.10A]
The statement(s) must present: [IAS 1.81A]
profit or loss total other comprehensive income comprehensive income for the period an
allocation of profit or loss and comprehensive income for the period between non-controlling
interests and owners of the parent.
Profit or loss section or statement

The following minimum line items must be presented in the profit or loss section (or separate
statement of profit or loss, if presented): [IAS 1.82-82A]
revenue gains and losses from the derecognition of financial assets measured at amortised cost
finance costs share of the profit or loss of associates and joint ventures accounted for using the
equity method certain gains or losses associated with the reclassification of financial assets tax
expense a single amount for the total of discontinued items
Expenses recognised in profit or loss should be analysed either by nature (raw materials, staffing
costs, depreciation, etc.) or by function (cost of sales, selling, administrative, etc). [IAS 1.99] If an
entity categorises by function, then additional information on the nature of expenses – at a
minimum depreciation, amortisation and employee benefits expense – must be disclosed. [IAS
1.104]
Other comprehensive income section The other comprehensive income section is required to
present line items which are classified by their nature, and grouped between those items that
will or will not be reclassified to profit and loss in subsequent periods. [IAS 1.82A]
An entity's share of OCI of equity-accounted associates and joint ventures is presented in
aggregate as single line items based on whether or not it will subsequently be reclassified to
profit or loss. [IAS 1.82A]*

* Clarified by Disclosure Initiative (Amendments to IAS 1), effective 1 January 2016.

When an entity presents subtotals, those subtotals shall be comprised of line items made up of
amounts recognised and measured in accordance with IFRS; be presented and labelled in a clear
and understandable manner; be consistent from period to period; not be displayed with more
prominence than the required subtotals and totals; and reconciled with the subtotals or totals
required in IFRS. [IAS 1.85A-85B]*
* Added by Disclosure Initiative (Amendments to IAS 1), effective 1 January 2016.
Other requirements

Additional line items may be needed to fairly present the entity's results of operations. [IAS 1.85]

Items cannot be presented as 'extraordinary items' in the financial statements or in the notes.
[IAS 1.87]
Certain items must be disclosed separately either in the statement of comprehensive income or
in the notes, if material, including: [IAS 1.98]
write-downs of inventories to net realisable value or of property, plant and equipment to
recoverable amount, as well as reversals of such write-downs restructurings of the activities of
an entity and reversals of any provisions for the costs of restructuring disposals of items of
property, plant and equipment disposals of investments discontinuing operations litigation
settlements other reversals of provisions

Statement of cash flows

Rather than setting out separate requirements for presentation of the statement of cash flows,
IAS 1.111 refers to IAS 7 Statement of Cash Flows.
Statement of changes in equity

IAS 1 requires an entity to present a separate statement of changes in equity. The statement
must show: [IAS 1.106]
total comprehensive income for the period, showing separately amounts attributable to owners
of the parent and to non-controlling interests the effects of any retrospective application of
accounting policies or restatements made in accordance with IAS 8, separately for each
component of other comprehensive income reconciliations between the carrying amounts at the
beginning and the end of the period for each component of equity, separately disclosing:
profit or loss other comprehensive income* transactions with owners, showing separately
contributions by and distributions to owners and changes in ownership interests in subsidiaries
that do not result in a loss of control

* An analysis of other comprehensive income by item is required to be presented either in the

statement or in the notes. [IAS 1.106A]
The following amounts may also be presented on the face of the statement of changes in equity,
or they may be presented in the notes: [IAS 1.107]

amount of dividends recognised as distributions the related amount per share.

Notes to the financial statements

The notes must: [IAS 1.112]

present information about the basis of preparation of the financial statements and the specific
accounting policies used disclose any information required by IFRSs that is not presented
elsewhere in the financial statements and provide additional information that is not presented
elsewhere in the financial statements but is relevant to an understanding of any of them
Notes are presented in a systematic manner and cross-referenced from the face of the financial
statements to the relevant note. [IAS 1.113]
IAS 1.114 suggests that the notes should normally be presented in the following order:*

a statement of compliance with IFRSs a summary of significant accounting policies applied,

including: [IAS 1.117]
the measurement basis (or bases) used in preparing the financial statements the other
accounting policies used that are relevant to an understanding of the financial statements

supporting information for items presented on the face of the statement of financial position
(balance sheet), statement(s) of profit or loss and other comprehensive income, statement of
changes in equity and statement of cash flows, in the order in which each statement and each
line item is presented other disclosures, including:

contingent liabilities (see IAS 37) and unrecognised contractual commitments non-financial
disclosures, such as the entity's financial risk management objectives and policies (see IFRS 7
Financial Instruments: Disclosures)

* Disclosure Initiative (Amendments to IAS 1), effective 1 January 2016, clarifies this order just to
be an example of how notes can be ordered and adds additional examples of possible ways of
ordering the notes to clarify that understandability and comparability should be considered when
determining the order of the notes.
Other disclosures

Judgements and key assumptions

An entity must disclose, in the summary of significant accounting policies or other notes, the
judgements, apart from those involving estimations, that management has made in the process
of applying the entity's accounting policies that have the most significant effect on the amounts
recognised in the financial statements. [IAS 1.122]
Examples cited in IAS 1.123 include management's judgements in determining:
when substantially all the significant risks and rewards of ownership of financial assets and lease
assets are transferred to other entities whether, in substance, particular sales of goods are
financing arrangements and therefore do not give rise to revenue.
An entity must also disclose, in the notes, information about the key assumptions concerning the
future, and other key sources of estimation uncertainty at the end of the reporting period, that
have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year. [IAS 1.125] These disclosures do not involve disclosing
budgets or forecasts. [IAS 1.130]

IAS 8 — Accounting Policies, Changes in Accounting Estimates and Errors

Overview
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors is applied in selecting and
applying accounting policies, accounting for changes in estimates and reflecting corrections of
prior period errors.
The standard requires compliance with any specific IFRS applying to a transaction, event or
condition, and provides guidance on developing accounting policies for other items that result in
relevant and reliable information. Changes in accounting policies and corrections of errors are
generally retrospectively accounted for, whereas changes in accounting estimates are generally
accounted for on a prospective basis.
IAS 8 was reissued in December 2005 and applies to annual periods beginning on or after 1
January 2005.
History of IAS 8

October 1976 Exposure Draft E8 The Treatment in the Income Statement of Unusual Items and
Changes in Accounting Estimates and Accounting Policies
February 1978 IAS 8 Unusual and Prior Period Items and Changes in Accounting Policies
July 1992 Exposure Draft E46 Extraordinary Items, Fundamental Errors and Changes in
Accounting Policies

December 1993 IAS 8 (1993) Net Profit or Loss for the Period, Fundamental Errors and
Changes in Accounting Policies (revised as part of the 'Comparability of Financial Statements'
project)
1 January 1995 Effective date of IAS 8 (1993)

18 December 2003 Revised version of IAS 8 issued by the IASB

1 January 2005 Effective date of IAS 8 (2003)
31 October 2018 Amended by Definition of Material (Amendments to IAS 1 and IAS 8)
1 January 2020 Effective date of October 2018 amendments

Related Interpretations
IAS 8(2003) supersedes SIC-2 Consistency - Capitalisation of Borrowing Costs
IAS 8(2003) supersedes SIC-18 Consistency - Alternative Methods.
Amendments under consideration by the IASB

Disclosure initiative – Principles of disclosure

Disclosure initiative — Changes in accounting policies and estimates
Summary of IAS 8
Key definitions [IAS 8.5]

Accounting policies are the specific principles, bases, conventions, rules and practices applied by
an entity in preparing and presenting financial statements.
A change in accounting estimate is an adjustment of the carrying amount of an asset or liability,
or related expense, resulting from reassessing the expected future benefits and obligations
associated with that asset or liability.
International Financial Reporting Standardsare standards and interpretations adopted by the
International Accounting Standards Board (IASB). They comprise:
International Financial Reporting Standards (IFRSs)

International Accounting Standards (IASs)

Interpretations developed by the International Financial Reporting Interpretations Committee
(IFRIC) or the former Standing Interpretations Committee (SIC) and approved by the IASB.
Materiality. Information is material if omitting, misstating or obscuring it could reasonably be
expected to influence decisions that the primary users of general purpose financial statements
make on the basis of those financial statements, which provide financial information about a
specific reporting entity.*
Prior period errors are omissions from, and misstatements in, an entity's financial statements for
one or more prior periods arising from a failure to use, or misuse of, reliable information that
was available and could reasonably be expected to have been obtained and taken into account
in preparing those statements. Such errors result from mathematical mistakes, mistakes in
applying accounting policies, oversights or misinterpretations of facts, and fraud.

* Clarified by Definition of Material (Amendments to IAS 1 and IAS 8), effective 1 January 2020.
Selection and application of accounting policies

When a Standard or an Interpretation specifically applies to a transaction, other event or

condition, the accounting policy or policies applied to that item must be determined by applying
the Standard or Interpretation and considering any relevant Implementation Guidance issued by
the IASB for the Standard or Interpretation. [IAS 8.7]

In the absence of a Standard or an Interpretation that specifically applies to a transaction, other

event or condition, management must use its judgement in developing and applying an
accounting policy that results in information that is relevant and reliable. [IAS 8.10]. In making
that judgement, management must refer to, and consider the applicability of, the following
sources in descending order:
the requirements and guidance in IASB standards and interpretations dealing with similar and
related issues; and
the definitions, recognition criteria and measurement concepts for assets, liabilities, income and
expenses in the Framework. [IAS 8.11]
Management may also consider the most recent pronouncements of other standard-setting
bodies that use a similar conceptual framework to develop accounting standards, other
accounting literature and accepted industry practices, to the extent that these do not conflict
with the sources in paragraph 11. [IAS 8.12]
Consistency of accounting policies

An entity shall select and apply its accounting policies consistently for similar transactions, other
events and conditions, unless a Standard or an Interpretation specifically requires or permits
categorisation of items for which different policies may be appropriate. If a Standard or an
Interpretation requires or permits such categorisation, an appropriate accounting policy shall be
selected and applied consistently to each category. [IAS 8.13]
Changes in accounting policies

An entity is permitted to change an accounting policy only if the change:

is required by a standard or interpretation; or

results in the financial statements providing reliable and more relevant information about the
effects of transactions, other events or conditions on the entity's financial position, financial
performance, or cash flows. [IAS 8.14]

Note that changes in accounting policies do not include applying an accounting policy to a kind
of transaction or event that did not occur previously or were immaterial. [IAS 8.16]
If a change in accounting policy is required by a new IASB standard or interpretation, the change
is accounted for as required by that new pronouncement or, if the new pronouncement does not
include specific transition provisions, then the change in accounting policy is applied
retrospectively. [IAS 8.19]
Retrospective application means adjusting the opening balance of each affected component of
equity for the earliest prior period presented and the other comparative amounts disclosed for
each prior period presented as if the new accounting policy had always been applied. [IAS 8.22]

However, if it is impracticable to determine either the period-specific effects or the cumulative

effect of the change for one or more prior periods presented, the entity shall apply the new
accounting policy to the carrying amounts of assets and liabilities as at the beginning of the
earliest period for which retrospective application is practicable, which may be the current
period, and shall make a corresponding adjustment to the opening balance of each affected
component of equity for that period. [IAS 8.24]
Also, if it is impracticable to determine the cumulative effect, at the beginning of the current
period, of applying a new accounting policy to all prior periods, the entity shall adjust the
comparative information to apply the new accounting policy prospectively from the earliest date
practicable. [IAS 8.25]
Disclosures relating to changes in accounting policies
Disclosures relating to changes in accounting policy caused by a new standard or interpretation
include: [IAS 8.28]
The title of the standard or interpretation causing the change

The nature of the change in accounting policy

a description of the transitional provisions, including those that might have an effect on future
periods
for the current period and each prior period presented, to the extent practicable, the amount of
the adjustment:
for each financial statement line item affected, and
for basic and diluted earnings per share (only if the entity is applying IAS 33)
the amount of the adjustment relating to periods before those presented, to the extent
practicable
if retrospective application is impracticable, an explanation and description of how the change in
accounting policy was applied.
Financial statements of subsequent periods need not repeat these disclosures.

Disclosures relating to voluntary changes in accounting policy include: [IAS 8.29]

the nature of the change in accounting policy

the reasons why applying the new accounting policy provides reliable and more relevant
information
for the current period and each prior period presented, to the extent practicable, the amount of
the adjustment:
for each financial statement line item affected, and
for basic and diluted earnings per share (only if the entity is applying IAS 33)
the amount of the adjustment relating to periods before those presented, to the extent
practicable
if retrospective application is impracticable, an explanation and description of how the change in
accounting policy was applied.
Financial statements of subsequent periods need not repeat these disclosures.

If an entity has not applied a new standard or interpretation that has been issued but is not yet
effective, the entity must disclose that fact and any and known or reasonably estimable
information relevant to assessing the possible impact that the new pronouncement will have in
the year it is applied. [IAS 8.30]
Changes in accounting estimates
The effect of a change in an accounting estimate shall be recognised prospectively by including it
in profit or loss in: [IAS 8.36]
the period of the change, if the change affects that period only, or
the period of the change and future periods, if the change affects both.
However, to the extent that a change in an accounting estimate gives rise to changes in assets
and liabilities, or relates to an item of equity, it is recognised by adjusting the carrying amount of
the related asset, liability, or equity item in the period of the change. [IAS 8.37]

Disclosures relating to changes in accounting estimates

Disclose:the nature and amount of a change in an accounting estimate that has an effect in the
current period or is expected to have an effect in future periods
if the amount of the effect in future periods is not disclosed because estimating it is
impracticable, an entity shall disclose that fact. [IAS 8.39-40]
Errors
The general principle in IAS 8 is that an entity must correct all material prior period errors
retrospectively in the first set of financial statements authorised for issue after their discovery
by: [IAS 8.42]
restating the comparative amounts for the prior period(s) presented in which the error occurred;
or
if the error occurred before the earliest prior period presented, restating the opening balances
of assets, liabilities and equity for the earliest prior period presented.
However, if it is impracticable to determine the period-specific effects of an error on comparative
information for one or more prior periods presented, the entity must restate the opening
balances of assets, liabilities, and equity for the earliest period for which retrospective
restatement is practicable (which may be the current period). [IAS 8.44]

Further, if it is impracticable to determine the cumulative effect, at the beginning of the current
period, of an error on all prior periods, the entity must restate the comparative information to
correct the error prospectively from the earliest date practicable. [IAS 8.45]
Disclosures relating to prior period errors

Disclosures relating to prior period errors include: [IAS 8.49]

the nature of the prior period error
for each prior period presented, to the extent practicable, the amount of the correction:
for each financial statement line item affected, and
for basic and diluted earnings per share (only if the entity is applying IAS 33)
the amount of the correction at the beginning of the earliest prior period presented
if retrospective restatement is impracticable, an explanation and description of how the error
has been corrected.
Financial statements of subsequent periods need not repeat these disclosures.
 IAS 10 — Events After the Reporting Period
Overview
IAS 10 Events After The Reporting Period contains requirements for when events after the end of the
reporting period should be adjusted in the financial statements. Adjusting events are those providing
evidence of conditions existing at the end of the reporting period, whereas non-adjusting events are
indicative of conditions arising after the reporting period (the latter being disclosed where material).
IAS 10 was reissued in December 2003 and applies to annual periods beginning on or after 1 January 2005.
Summary of IAS 10
Key definitions
Event after the reporting period: An event, which could be favourable or unfavourable, that occurs
between the end of the reporting period and the date that the financial statements are authorised for issue.
[IAS 10.3]
Adjusting event: An event after the reporting period that provides further evidence of conditions that
existed at the end of the reporting period, including an event that indicates that the going concern
assumption in relation to the whole or part of the enterprise is not appropriate. [IAS 10.3]
Non-adjusting event: An event after the reporting period that is indicative of a condition that arose after
the end of the reporting period. [IAS 10.3]
Accounting
• Adjust financial statements for adjusting events - events after the balance sheet date that provide
further evidence of conditions that existed at the end of the reporting period, including events that
indicate that the going concern assumption in relation to the whole or part of the enterprise is not
appropriate. [IAS 10.8]
• Do not adjust for non-adjusting events - events or conditions that arose after the end of the reporting
period. [IAS 10.10]
• If an entity declares dividends after the reporting period, the entity shall not recognise those
dividends as a liability at the end of the reporting period. That is a non-adjusting event. [IAS 10.12]
Going concern issues arising after end of the reporting period
An entity shall not prepare its financial statements on a going concern basis if management determines after
the end of the reporting period either that it intends to liquidate the entity or to cease trading, or that it has
no realistic alternative but to do so. [IAS 10.14]
Disclosure
Non-adjusting events should be disclosed if they are of such importance that non-disclosure would affect
the ability of users to make proper evaluations and decisions. The required disclosure is (a) the nature of
the event and (b) an estimate of its financial effect or a statement that a reasonable estimate of the effect
cannot be made. [IAS 10.21]A company should update disclosures that relate to conditions that existed at
the end of the reporting period to reflect any new information that it receives after the reporting period
about those conditions. [IAS 10.19] Companies must disclose the date when the financial statements were
authorised for issue and who gave that authorisation. If the enterprise's owners or others have the power to
amend the financial statements after issuance, the enterprise must disclose that fact. [IAS 10.17]
 IAS 16 — Property, Plant and Equipment
Overview
IAS 16 Property, Plant and Equipment outlines the accounting treatment for most types of property, plant
and equipment. Property, plant and equipment is initially measured at its cost, subsequently measured either
using a cost or revaluation model, and depreciated so that its depreciable amount is allocated on a systematic
basis over its useful life.
IAS 16 was reissued in December 2003 and applies to annual periods beginning on or after 1 January 2005.
Summary of IAS 16
Objective of IAS 16
The objective of IAS 16 is to prescribe the accounting treatment for property, plant, and equipment. The
principal issues are the recognition of assets, the determination of their carrying amounts, and the
depreciation charges and impairment losses to be recognised in relation to them.
Scope
IAS 16 applies to the accounting for property, plant and equipment, except where another standard requires
or permits differing accounting treatments, for example:
• assets classified as held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and
Discontinued Operations
• biological assets related to agricultural activity accounted for under IAS 41 Agriculture
• exploration and evaluation assets recognised in accordance with IFRS 6 Exploration for and
Evaluation of Mineral Resources
• mineral rights and mineral reserves such as oil, natural gas and similar non-regenerative resources.
The standard does apply to property, plant, and equipment used to develop or maintain the last three
categories of assets. [IAS 16.3]
The cost model in IAS 16 also applies to investment property accounted for using the cost model
under IAS 40 Investment Property. [IAS 16.5]
The standard does apply to bearer plants but it does not apply to the produce on bearer plants. [IAS 16.3]
Recognition
Items of property, plant, and equipment should be recognised as assets when it is probable that: [IAS 16.7]
• it is probable that the future economic benefits associated with the asset will flow to the entity, and
• the cost of the asset can be measured reliably.
This recognition principle is applied to all property, plant, and equipment costs at the time they are incurred.
These costs include costs incurred initially to acquire or construct an item of property, plant and equipment
and costs incurred subsequently to add to, replace part of, or service it.
IAS 16 does not prescribe the unit of measure for recognition – what constitutes an item of property, plant,
and equipment. [IAS 16.9] Note, however, that if the cost model is used (see below) each part of an item
of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must
be depreciated separately. [IAS 16.43]
IAS 16 recognises that parts of some items of property, plant, and equipment may require replacement at
regular intervals. The carrying amount of an item of property, plant, and equipment will include the cost of
replacing the part of such an item when that cost is incurred if the recognition criteria (future benefits and
measurement reliability) are met. The carrying amount of those parts that are replaced is derecognised in
accordance with the derecognition provisions of IAS 16.67-72. [IAS 16.13]
Also, continued operation of an item of property, plant, and equipment (for example, an aircraft) may
require regular major inspections for faults regardless of whether parts of the item are replaced. When each
major inspection is performed, its cost is recognised in the carrying amount of the item of property, plant,
and equipment as a replacement if the recognition criteria are satisfied. If necessary, the estimated cost of
a future similar inspection may be used as an indication of what the cost of the existing inspection
component was when the item was acquired or constructed. [IAS 16.14]
Initial measurement
An item of property, plant and equipment should initially be recorded at cost. [IAS 16.15] Cost includes all
costs necessary to bring the asset to working condition for its intended use. This would include not only its
original purchase price but also costs of site preparation, delivery and handling, installation, related
professional fees for architects and engineers, and the estimated cost of dismantling and removing the asset
and restoring the site (see IAS 37 Provisions, Contingent Liabilities and Contingent Assets). [IAS 16.16-
17]
Proceeds from selling items produced while bringing an item of property, plant and equipment to the
location and condition necessary for it to be capable of operating in the manner intended by management
are not deducted from the cost of the item of property, plant and equipment but recognised in profit or
loss. [IAS 16.20A]
If payment for an item of property, plant, and equipment is deferred, interest at a market rate must be
recognised or imputed. [IAS 16.23]
If an asset is acquired in exchange for another asset (whether similar or dissimilar in nature), the cost will
be measured at the fair value unless (a) the exchange transaction lacks commercial substance or (b) the fair
value of neither the asset received nor the asset given up is reliably measurable. If the acquired item is not
measured at fair value, its cost is measured at the carrying amount of the asset given up. [IAS 16.24]
Measurement subsequent to initial recognition
IAS 16 permits two accounting models:
• Cost model. The asset is carried at cost less accumulated depreciation and impairment. [IAS 16.30]

• Revaluation model. The asset is carried at a revalued amount, being its fair value at the date of
revaluation less subsequent depreciation and impairment, provided that fair value can be measured
reliably. [IAS 16.31]
The revaluation model
Under the revaluation model, revaluations should be carried out regularly, so that the carrying amount of
an asset does not differ materially from its fair value at the balance sheet date. [IAS 16.31]
If an item is revalued, the entire class of assets to which that asset belongs should be revalued. [IAS 16.36]
Revalued assets are depreciated in the same way as under the cost model (see below).
If a revaluation results in an increase in value, it should be credited to other comprehensive income and
accumulated in equity under the heading "revaluation surplus" unless it represents the reversal of a
revaluation decrease of the same asset previously recognised as an expense, in which case it should be
recognised in profit or loss. [IAS 16.39]
A decrease arising as a result of a revaluation should be recognised as an expense to the extent that it
exceeds any amount previously credited to the revaluation surplus relating to the same asset. [IAS 16.40]
When a revalued asset is disposed of, any revaluation surplus may be transferred directly to retained
earnings, or it may be left in equity under the heading revaluation surplus. The transfer to retained earnings
should not be made through profit or loss. [IAS 16.41]
Depreciation (cost and revaluation models)
For all depreciable assets:
The depreciable amount (cost less residual value) should be allocated on a systematic basis over the asset's
useful life [IAS 16.50].
The residual value and the useful life of an asset should be reviewed at least at each financial year-end and,
if expectations differ from previous estimates, any change is accounted for prospectively as a change in
estimate under IAS 8. [IAS 16.51]
The depreciation method used should reflect the pattern in which the asset's economic benefits are
consumed by the entity [IAS 16.60]; a depreciation method that is based on revenue that is generated by an
activity that includes the use of an asset is not appropriate. [IAS 16.62A]
The depreciation method should be reviewed at least annually and, if the pattern of consumption of benefits
has changed, the depreciation method should be changed prospectively as a change in estimate under IAS
8. [IAS 16.61] Expected future reductions in selling prices could be indicative of a higher rate of
consumption of the future economic benefits embodied in an asset. [IAS 16.56]
Depreciation should be charged to profit or loss, unless it is included in the carrying amount of another
asset [IAS 16.48].
Depreciation begins when the asset is available for use and continues until the asset is derecognised, even
if it is idle. [IAS 16.55]
Recoverability of the carrying amount
IAS 16 Property, Plant and Equipment requires impairment testing and, if necessary, recognition for
property, plant, and equipment. An item of property, plant, or equipment shall not be carried at more than
recoverable amount. Recoverable amount is the higher of an asset's fair value less costs to sell and its value
in use.
Any claim for compensation from third parties for impairment is included in profit or loss when the claim
becomes receivable. [IAS 16.65]
Derecognition (retirements and disposals)
An asset should be removed from the statement of financial position on disposal or when it is withdrawn
from use and no future economic benefits are expected from its disposal. The gain or loss on disposal is the
difference between the proceeds and the carrying amount and should be recognised in profit and loss. [IAS
16.67-71]
If an entity rents some assets and then ceases to rent them, the assets should be transferred to inventories at
their carrying amounts as they become held for sale in the ordinary course of business. [IAS 16.68A]
Disclosure
Information about each class of property, plant and equipment
For each class of property, plant, and equipment, disclose: [IAS 16.73]
• basis for measuring carrying amount
• depreciation method(s) used
• useful lives or depreciation rates
• gross carrying amount and accumulated depreciation and impairment losses
• reconciliation of the carrying amount at the beginning and the end of the period, showing:
o additions
o disposals
o acquisitions through business combinations
o revaluation increases or decreases
o impairment losses
o reversals of impairment losses
o depreciation
o net foreign exchange differences on translation
o other movements
Additional disclosures
The following disclosures are also required: [IAS 16.74]
• restrictions on title and items pledged as security for liabilities
• expenditures to construct property, plant, and equipment during the period
• contractual commitments to acquire property, plant, and equipment
• compensation from third parties for items of property, plant, and equipment that were impaired,
lost or given up that is included in profit or loss.
IAS 16 also encourages, but does not require, a number of additional disclosures. [IAS 16.79]
Revalued property, plant and equipment
If property, plant, and equipment is stated at revalued amounts, certain additional disclosures are required:
[IAS 16.77]
• the effective date of the revaluation
• whether an independent valuer was involved
• for each revalued class of property, the carrying amount that would have been recognised had the
assets been carried under the cost model
 • the revaluation surplus, including changes during the period and any restrictions on the distribution
of the balance to shareholders.
Entities with property, plant and equipment stated at revalued amounts are also required to make disclosures
under IFRS 13 Fair Value Measurement.

IAS 18 — Revenue
Overview
IAS 18 Revenue outlines the accounting requirements for when to recognise revenue from the sale of goods,
rendering of services, and for interest, royalties and dividends. Revenue is measured at the fair value of the
consideration received or receivable and recognised when prescribed conditions are met, which depend on
the nature of the revenue.
IAS 18 was reissued in December 1993 and is operative for periods beginning on or after 1 January 1995.
ummary of IAS 18
Objective of IAS 18
The objective of IAS 18 is to prescribe the accounting treatment for revenue arising from certain types of
transactions and events.
Key definition
Revenue: the gross inflow of economic benefits (cash, receivables, other assets) arising from the ordinary
operating activities of an entity (such as sales of goods, sales of services, interest, royalties, and dividends).
[IAS 18.7]
Measurement of revenue
Revenue should be measured at the fair value of the consideration received or receivable. [IAS 18.9] An
exchange for goods or services of a similar nature and value is not regarded as a transaction that generates
revenue. However, exchanges for dissimilar items are regarded as generating revenue. [IAS 18.12]
If the inflow of cash or cash equivalents is deferred, the fair value of the consideration receivable is less
than the nominal amount of cash and cash equivalents to be received, and discounting is appropriate. This
would occur, for instance, if the seller is providing interest-free credit to the buyer or is charging a below-
market rate of interest. Interest must be imputed based on market rates. [IAS 18.11]
Recognition of revenue
Recognition, as defined in the IASB Framework, means incorporating an item that meets the definition of
revenue (above) in the income statement when it meets the following criteria:
• it is probable that any future economic benefit associated with the item of revenue will flow to the
entity, and
• the amount of revenue can be measured with reliability
IAS 18 provides guidance for recognising the following specific categories of revenue:
Sale of goods
Revenue arising from the sale of goods should be recognised when all of the following criteria have been
satisfied: [IAS 18.14]
• the seller has transferred to the buyer the significant risks and rewards of ownership
• the seller retains neither continuing managerial involvement to the degree usually associated with
ownership nor effective control over the goods sold
• the amount of revenue can be measured reliably
• it is probable that the economic benefits associated with the transaction will flow to the seller, and
• the costs incurred or to be incurred in respect of the transaction can be measured reliably
Rendering of services
For revenue arising from the rendering of services, provided that all of the following criteria are met,
revenue should be recognised by reference to the stage of completion of the transaction at the balance sheet
date (the percentage-of-completion method): [IAS 18.20]
• the amount of revenue can be measured reliably;
• it is probable that the economic benefits will flow to the seller;
• the stage of completion at the balance sheet date can be measured reliably; and
• the costs incurred, or to be incurred, in respect of the transaction can be measured reliably.
When the above criteria are not met, revenue arising from the rendering of services should be recognised
only to the extent of the expenses recognised that are recoverable (a "cost-recovery approach". [IAS 18.26]
Interest, royalties, and dividends
For interest, royalties and dividends, provided that it is probable that the economic benefits will flow to the
enterprise and the amount of revenue can be measured reliably, revenue should be recognised as follows:
[IAS 18.29-30]
• interest: using the effective interest method as set out in IAS 39
• royalties: on an accruals basis in accordance with the substance of the relevant agreement
• dividends: when the shareholder's right to receive payment is established
Disclosure [IAS 18.35]
• accounting policy for recognising revenue
• amount of each of the following types of revenue:
o sale of goods
o rendering of services
o interest
o royalties
o dividends
o within each of the above categories, the amount of revenue from exchanges of goods or
services
Implementation guidance
Appendix A to IAS 18 provides illustrative examples of how the above principles apply to certain
transactions.

IAS 19 — Employee Benefits (1998) (superseded)

Summary of IAS 19 (1998)
IAS 19 Employee Benefits (1998) is superseded by an amended version, IAS 19 Employee Benefits (2011),
effective for annual periods beginning on or after 1 January 2013. The summary that follows refers to IAS
19 (1998). Readers interested in the requirements of IAS 19 Employee Benefits (2011) should refer to our
summary of IAS 19 (2011).
Objective of IAS 19
The objective of IAS 19 (1998) is to prescribe the accounting and disclosure for employee benefits (that is,
all forms of consideration given by an entity in exchange for service rendered by employees). The principle
underlying all of the detailed requirements of the Standard is that the cost of providing employee benefits
should be recognised in the period in which the benefit is earned by the employee, rather than when it is
paid or payable.
Scope
IAS 19 (1998) applies to (among other kinds of employee benefits):
wages and salaries
compensated absences (paid vacation and sick leave)
profit sharing plans
bonuses
medical and life insurance benefits during employment
housing benefits
free or subsidised goods or services given to employees
pension benefits
post-employment medical and life insurance benefits
long-service or sabbatical leave
'jubilee' benefits
deferred compensation programmes
termination benefits.
IAS 19 (1998) does not apply to employee benefits within the scope of IFRS 2 Share-based Payment or the
reporting by employee benefit plans (see IAS 26 Accounting and Reporting by Retirement Benefit Plans).
Basic principle of IAS 19 (1998)
The cost of providing employee benefits should be recognised in the period in which the benefit is earned
by the employee, rather than when it is paid or payable.
Short-term employee benefits
For short-term employee benefits (those payable within 12 months after service is rendered, such as wages,
paid vacation and sick leave, bonuses, and non-monetary benefits such as medical care and housing), the
undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a
period should be recognised in that period. [IAS 19(1998).10] The expected cost of short-term compensated
absences should be recognised as the employees render service that increases their entitlement or, in the
case of non-accumulating absences, when the absences occur. [IAS 19(1998).11]
Profit-sharing and bonus payments
The entity should recognise the expected cost of profit-sharing and bonus payments when, and only when,
it has a legal or constructive obligation to make such payments as a result of past events and a reliable
estimate of the expected cost can be made. [IAS 19(1998).17]
Types of post-employment benefit plans
The accounting treatment for a post-employment benefit plan depends on whether the plan is a defined
contribution plan or a defined benefit plan:
Under a defined contribution plan, the entity pays fixed contributions into a fund but has no legal or
constructive obligation to make further payments if the fund does not have sufficient assets to pay all of the
employees' entitlements to post-employment benefits
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. These
would include both formal plans and those informal practices that create a constructive obligation to the
entity's employees.
Defined contribution plans
For defined contribution plans, the cost to be recognised in the period is the contribution payable in
exchange for service rendered by employees during the period. [IAS 19(1998).44]
If contributions to a defined contribution plan do not fall due within 12 months after the end of the period
in which the employee renders the service, they are discounted to their present value. [IAS 19(1998).45]
Defined benefit plans
For defined benefit plans, the amount recognised in the statement of financial position is the present value
of the defined benefit obligation (that is, the present value of expected future payments required to settle
the obligation resulting from employee service in the current and prior periods), as adjusted for
unrecognised actuarial gains and losses and unrecognised past service cost, and reduced by the fair value
of plan assets at the end of the reporting period. [IAS 19(1998).54]
The present value of the defined benefit obligation should be determined using the Projected Unit Credit
Method. [IAS 19(1998).64] Valuations should be carried out with sufficient regularity such that the
amounts recognised in the financial statements do not differ materially from those that would be determined
at the end of the reporting period. [IAS 19(1998).56] The assumptions used for the purposes of such
valuations must be unbiased and mutually compatible. [IAS 19(1998).72] The rate used to discount
estimated cash flows is determined by reference to market yields at the end of the reporting period on high
quality corporate bonds, or where there is no deep market in such bonds, by reference to market yields on
government bonds. [IAS 19(1998).78]
On an ongoing basis, actuarial gains and losses arise that comprise experience adjustments (the effects of
differences between the previous actuarial assumptions and what has actually occurred) and the effects of
changes in actuarial assumptions. In the long-term, actuarial gains and losses may offset one another and,
as a result, the entity is not required to recognise all such gains and losses in profit or loss immediately. IAS
19 (1998) specifies that if the accumulated unrecognised actuarial gains and losses exceed 10% of the
greater of the defined benefit obligation or the fair value of plan assets, a portion of that net gain or loss is
required to be recognised immediately as income or expense. The portion recognised is the excess divided
by the expected average remaining working lives of the participating employees. Actuarial gains and losses
that do not breach the 10% limits described above (the 'corridor') need not be recognised - although the
entity may choose to do so. [IAS 19(1998).92-93]
In December 2004, the IASB issued amendments to IAS 19 (1998) to allow the option of recognising
actuarial gains and losses in full in the period in which they occur, outside profit or loss, in other
comprehensive income. This option is similar to the requirements of the UK standard, FRS 17 Retirement
Benefits. The Board concluded that, pending further work on post-employment benefits and on reporting
comprehensive income, the approach in FRS 17 should be available as an option to preparers of financial
statements using IFRSs. [IAS 19(1998).93A]
Over the life of the plan, changes in benefits under the plan will result in increases or decreases in the
entity's obligation.
Past service cost is the term used to describe the change in the obligation for employee service in prior
periods, arising as a result of changes to plan arrangements in the current period. Past service cost may be
either positive (where benefits are introduced or improved) or negative (where existing benefits are
reduced). Past service cost is recognised immediately to the extent that it relates to former employees or to
active employees already vested. Otherwise, it is amortised on a straight-line basis over the average period
until the amended benefits become vested. [IAS 19(1998).96]

Plan curtailments or settlements: Gains or losses resulting from curtailments or settlements of a plan are
recognised when the curtailment or settlement occurs. [IAS 19(1998).109-110] Curtailments are reductions
in scope of employees covered or in benefits.
If the calculation of the statement of financial position amount set out above results in an asset, the amount
recognised is limited to the net total of unrecognised actuarial losses and past service cost, plus the present
value of available refunds and reductions in future contributions to the plan. [IAS 19(1998).58]
The IASB issued the final 'asset ceiling' amendment to IAS 19 (1998) in May 2002. The amendment
prevents the recognition of gains solely as a result of deferral of actuarial losses or past service cost, and
prohibits the recognition of losses solely as a result of deferral of actuarial gains. [IAS 19(1998).58A]
The amount recognised in the profit or loss (unless included in the cost of an asset under another Standard)
in a period in respect of a defined benefit plan is made up of the following components: [IAS 19(1998).61]
current service cost (the actuarial estimate of benefits earned by employee service in the period)
interest cost (the increase in the present value of the obligation as a result of moving one period closer to
settlement)
expected return on plan assets* and on any reimbursement rights
actuarial gains and losses, to the extent recognised
past service cost, to the extent recognised
the effect of any plan curtailments or settlements
the effect of 'asset ceiling'
*The return on plan assets is interest, dividends and other revenue derived from the plan assets, together
with realised and unrealised gains or losses on the plan assets, less any costs of administering the plan (other
than those included in the actuarial assumptions used to measure the defined benefit obligation) and less
any tax payable by the plan itself. [IAS 19(1998).7]
IAS 19 (1998) contains detailed disclosure requirements for defined benefit plans. [IAS 19(1998).120-125]
IAS 19 (1998) also provides guidance on allocating the cost in:
a multi-employer plan to the individual entities-employers [IAS 19(1998).29-33]
a group defined benefit plan to the entities in the group [IAS 19(1998).34-34B]
a state plan to participating entities [IAS 19(1998).36-38].
Other long-term benefits
IAS 19 (1998) requires a simplified application of the model described above for other long-term employee
benefits. This method differs from the accounting required for post-employment benefits in that: [IAS
19(1998).128-129]
actuarial gains and losses are recognised immediately without the application of a 'corridor' (as discussed
above for post-employment benefits)
all past service costs are recognised immediately.
Termination benefits
For termination benefits, IAS 19 (1998) specifies that amounts payable should be recognised when, and
only when, the entity is demonstrably committed to either: [IAS 19(1998).133]

terminate the employment of an employee or group of employees before the normal retirement date, or
provide termination benefits as a result of an offer made in order to encourage voluntary redundancy.
The entity will be demonstrably committed to a termination when, and only when, it has a detailed formal
plan (meeting minimum outlined requirements) for the termination and is without realistic possibility of
withdrawal. [IAS 19(1998).134] Where termination benefits fall due after more than 12 months after the
balance sheet date, they are discounted. [IAS 19(1998).139]