Ifrs

IFRS

When to Use

• Apply recognition and measurement under key IFRS standards (IFRS 9, 15, 16, 38; IAS 12, 16, 36; IFRS 2, 3, 10)
• Structure financial statement presentation and note disclosures (IAS 1, IFRS 7, industry supplements)
• Document fair value measurement and IFRS 13 hierarchy disclosures
• Assess going concern, materiality, and accounting policy choices under IAS 1 / IAS 8
• Prepare significant judgments and estimates narratives for the financial statements
• Plan first-time adoption (IFRS 1) and opening balance sheet mechanics
• Explain consolidation, business combinations, and share-based payment accounting
• Compare IFRS vs local GAAP / US GAAP at a reporting level for convergence or dual-reporting entities
• Draft audit-ready disclosure checklists and tie-outs to the primary statements

When NOT to Use

• US GAAP-only technical deep dives (ASC-by-ASC) without IFRS context → note US GAAP difference at high level only; use US GAAP resources for ASC detail
• Tax law, tax provision computation, or transfer pricing → tax specialists; IAS 12 covers accounting for income taxes, not tax advice
• Legal entity structuring, incorporation, or corporate law → commercial-counsel
• Full external audit execution, sampling, workpapers, or attestation → auditor
• ERP / system configuration, chart of accounts build, or automation implementation → senior-software-engineer or IT finance systems teams
• Management accounting only (budgets, variances, KPI dashboards) without IFRS reporting impact → finance ops; return here when amounts hit the general ledger or external reports
• Contract legal redlines or regulatory interpretation as counsel → commercial-counsel
• Broad strategy without accounting standard application → business-consultant

Related skills

Core Workflows

1. Scope the reporting question

1. Identify reporting entity, functional currency, and reporting period 2. Confirm consolidation boundary (IFRS 10) and any separate parent-only requirements 3. List standards in play (revenue, leases, financial instruments, taxes, impairment, combinations) 4. Gather facts: contracts, lease terms, instrument terms, acquisition agreements, impairment triggers 5. Flag judgment areas and estimate inputs early

See `references/ifrs_scope.md`.

2. Recognition and measurement

1. Map each balance sheet and P&L line to the applicable standard 2. Apply recognition criteria; measure at initial and subsequent amounts 3. Document policy elections permitted by the standard (e.g., IFRS 9, IFRS 16 practical expedients) 4. Reconcile to general ledger and subledgers 5. Capture effective date and transition requirements if standards newly adopted

See `references/recognition_measurement_by_standard.md`, `references/revenue_leases_and_financial_instruments.md`, and `references/consolidation_and_business_combinations.md`.

3. Presentation, disclosure, and fair value

1. Align primary statements with IAS 1 classification (current/non-current, OCI, equity) 2. Build note disclosure packs by topic (accounting policies, risk, fair value, related parties) 3. Apply IFRS 7 (financial instruments) and IFRS 13 fair value hierarchy where relevant 4. Draft materiality filter and comparative restatement notes if needed 5. Tie each disclosure to supporting schedules and auditor request lists

See `references/references_presentation_disclosure_and_fair_value.md`.

4. Judgments, adoption, and GAAP differences

1. Draft significant judgments and sources of estimation uncertainty (IAS 1.122–125) 2. For first-time adopters, execute IFRS 1 mandatory exceptions and optional exemptions log 3. Summarize IFRS vs other GAAP differences affecting reported results (high level) 4. Prepare management representation support topics and open items list for audit

See `references/references_judgments_first_adoption_and_gaap_differences.md`.

Outputs

• Accounting memo — facts, standard citations, conclusion, journal entry outline
• Policy paper — elected options, measurement bases, presentation choices
• Disclosure checklist — IAS 1 / IFRS 7 / standard-specific requirements with preparer status
• Judgments register — assumption, sensitivity, and conclusion per estimate
• IFRS 1 transition log — exemptions, adjustments, reconciliations
• GAAP difference summary — key reconciling items for investors or dual reporters

Principles

• Standard-first — cite the IFRS requirement before concluding; distinguish mandatory vs optional
• Fact-driven — no conclusion without contract, market, or entity-specific inputs
• Disclosure-complete — if recognized in the statements, explain it in the notes at appropriate granularity
• Audit-ready — schedules tie to GL; judgments are explicit and reviewable
• Stay in lane — explain accounting; do not provide tax, legal, or audit opinions

Reference map

Disclaimer

This skill supports IFRS accounting analysis and disclosure drafting workflows. It does not provide legal, tax, or audit attestation advice. Qualified accountants, auditors, and counsel must review conclusions before filing, publishing, or signing financial statements.

Consolidation and business combinations

Table of contents

1. Purpose 2. IFRS 10 — Consolidated financial statements 3. Control assessment 4. IFRS 3 — Business combinations 5. IFRS 2 — Share-based payment 6. IFRS 11 and IAS 28 — Joint arrangements and associates 7. Consolidation mechanics 8. Disclosure and audit support

Purpose

Guide group reporting under IFRS 10, acquisition accounting under IFRS 3, and equity compensation under IFRS 2, including interaction with separate financial statements (IAS 27) where relevant.

IFRS 10 — Consolidated financial statements

Principle: A parent presents consolidated financial statements when it controls one or more entities.

Control exists when the investor:

1. Has power over the investee 2. Is exposed, or has rights, to variable returns 3. Can use power to affect those returns

Structured entities: Assess purpose and design; voting rights may be irrelevant.

Non-controlling interests (NCI): Present in equity; share of profit or loss allocated.

Control assessment

Document for each investee:

Reassess when facts change (loss of control, step acquisitions, deconsolidation).

Deconsolidation

• Recognize gain/loss on loss of control
• Remeasure any retained interest at fair value
• Reclassify OCI related to former subsidiary

IFRS 3 — Business combinations

Definition

A business is an integrated set of activities and assets capable of being conducted and managed to provide returns. Not all asset acquisitions are business combinations.

Acquisition method (business combinations only)

1. Identify the acquirer 2. Determine acquisition date 3. Recognize and measure identifiable assets acquired, liabilities assumed, and NCI 4. Recognize goodwill or bargain purchase gain

Measurement:

• Contingent consideration — fair value at acquisition date; remeasure FVTPL unless measurement period adjustment
• Transaction costs — expense (except costs to issue debt/equity)
• Measurement period — up to 12 months for provisional amounts

Goodwill

Goodwill = Consideration transferred + NCI + previously held interest
           − Net identifiable assets acquired (at fair value)

Impairment: Test goodwill at CGU level annually (IAS 36); no amortization.

Disclosures

• Acquisition-date fair values by class
• Contingent consideration and indemnification assets
• Revenue and profit of acquiree if material (post-acquisition)

IFRS 2 — Share-based payment

Scope

Equity-settled, cash-settled, and equity-settled with cash alternatives.

Measurement

• Grant date fair value of instruments (options: models such as Black-Scholes or binomial — document inputs)
• Vesting conditions — service, performance, market
• Forfeitures — estimate expected forfeitures or true up when policy elected

Classification

Modifications, cancellations, replacements

• Incremental fair value at modification date
• Acceleration of unrecognized expense on cancellation without replacement

IFRS 11 and IAS 28 — Joint arrangements and associates

Equity method: Initial cost; adjust for share of profit/loss, OCI, dividends, and impairment.

Consolidation mechanics

1. Trial balance aggregation of parent and subsidiaries 2. Eliminate intercompany balances and transactions (revenue, expenses, dividends, loans) 3. Translate foreign subsidiaries (IAS 21) — functional currency, exchange rates, CTA in OCI/equity 4. NCI calculation in equity and P&L 5. Uniform accounting policies — align subsidiary policies to group where practicable

Step acquisitions

• Remeasure previously held interest to fair value through P&L (or OCI if applicable)
• Reclassify amounts recognized in OCI

Disclosure and audit support

• Subsidiary list with ownership %, country, principal activity
• Control judgments narrative for structured or non-majority control
• Acquisition pro forma (if required by materiality)
• Share-based payment tables: outstanding instruments, weighted average fair value, expense by category
• Reconciliation of NCI roll-forward

Route presentation of group statements to references_presentation_disclosure_and_fair_value.md.

IFRS scope and role boundaries

Table of contents

1. Purpose 2. IFRS framework overview 3. In-scope vs out-of-scope 4. Engagement types 5. Entity and reporting boundary 6. Standard selection map 7. Working with auditors and regulators 8. Quality checklist

Purpose

Define when the IFRS skill applies, how it interfaces with peer skills, and the minimum context required before applying recognition, measurement, or disclosure guidance.

IFRS framework overview

International Financial Reporting Standards (IFRS) are issued by the IASB. Entities applying IFRS typically prepare:

• Statement of financial position (balance sheet)
• Statement of profit or loss (and optionally OCI in a separate statement or combined)
• Statement of changes in equity
• Statement of cash flows
• Notes, comprising accounting policies and other explanatory information

IAS 1 governs presentation. IAS 8 governs accounting policies, changes, and errors. Individual IFRS and IAS standards govern recognition, measurement, and topic-specific disclosure.

IFRS for SMEs is a separate, simplified standard—confirm which framework the entity uses before applying full IFRS guidance.

In-scope vs out-of-scope

Engagement types

Entity and reporting boundary

Before technical work, confirm:

1. Reporting entity name and consolidation scope (IFRS 10) 2. Functional currency and presentation currency (IAS 21) 3. Reporting period and comparatives (full year, interim if IAS 34) 4. Going concern basis (IAS 1) — any material doubt? 5. Related parties and joint arrangements (IAS 24, IFRS 11)

Document non-consolidated investments (associates, joint ventures) and the applicable equity or proportionate method.

Standard selection map

Use the map to open the correct reference file before drafting conclusions.

Working with auditors and regulators

• Provide clear fact packs and judgment registers early
• Tie disclosures to lead schedules and roll-forwards
• Separate accounting conclusion from audit opinion — route testing and sampling to auditor
• For legal contingencies, coordinate fact pattern with commercial-counsel; recognition under IAS 37 remains accounting

Quality checklist

• [ ] Framework confirmed (full IFRS vs IFRS for SMEs)
• [ ] Reporting date and comparatives agreed
• [ ] Consolidation perimeter documented
• [ ] Functional / presentation currency confirmed
• [ ] All significant contracts and instruments indexed
• [ ] Judgment and estimate areas listed
• [ ] Peer skill handoffs identified (audit, tax, legal, ERP)
• [ ] Disclaimer: not legal, tax, or audit advice

Recognition and measurement by standard

Table of contents

1. Purpose 2. General recognition pattern 3. IAS 16 — Property, plant and equipment 4. IAS 38 — Intangible assets 5. IAS 12 — Income taxes 6. IAS 36 — Impairment of assets 7. IAS 2, 40, 19, 37 — Other common standards 8. Initial vs subsequent measurement summary 9. Documentation template

Purpose

Provide a cross-standard map for initial recognition, subsequent measurement, and common policy elections for non-financial and tax balances frequently encountered in IFRS reporting.

General recognition pattern

1. Identify the transaction or event 2. Determine whether the definition of an asset/liability/income/expense is met 3. Apply the specific standard for recognition timing 4. Select measurement basis (cost, fair value, amortized cost, etc.) 5. Capture presentation and disclosure implications

IAS 16 — Property, plant and equipment

Recognition: Capitalize when probable future economic benefits and cost can be measured reliably.

Initial measurement: Cost, including directly attributable costs and dismantlement provisions (IAS 37).

Subsequent measurement (policy election):

• Cost model — cost less accumulated depreciation and impairment (IAS 36)
• Revaluation model — fair value at revaluation date less subsequent depreciation; revaluation surplus in OCI/equity

Depreciation: Systematic over useful life; residual value reviewed each period.

Componentization: Significant parts with different lives depreciated separately.

Key judgments: Useful life, residual value, capitalization vs expense (repairs, spare parts).

IAS 38 — Intangible assets

Recognition (separate acquisition): Same probability and measurability tests as IAS 16.

Internally generated intangibles: Research → expense. Development → capitalize only when six IAS 38.57 criteria met.

Measurement:

• Cost model or revaluation model (active market required for revaluation)
• Amortization over finite useful life; indefinite life → no amortization, annual impairment test

Business combinations: Acquired intangibles at fair value (IFRS 3) even if not recognized in acquiree books.

IAS 12 — Income taxes

Scope: Accounting for current and deferred tax — not tax return preparation.

Temporary differences: Difference between carrying amount and tax base.

Recognition:

• Current tax — unpaid tax for current and prior periods
• Deferred tax — DTAs and DTLs for taxable/deductible temporary differences, unused tax losses/credits (subject to recoverability)

Measurement: Tax rates expected to apply when asset realized or liability settled.

Key judgments: Uncertain tax positions (IFRIC 23), valuation allowance on DTAs, rate changes.

IAS 36 — Impairment of assets

Trigger: Test when indicators exist; annual test for goodwill and indefinite-life intangibles.

Unit of account: CGU — smallest identifiable group generating largely independent cash inflows.

Measurement:

• Recoverable amount = higher of FV less costs to sell and value in use (VIU)
• Impairment loss if carrying amount > recoverable amount

Reversal: Permitted for non-goodwill assets if indicators change; not for goodwill.

Documentation: Cash flow projections, discount rate, sensitivity, allocation of corporate assets.

IAS 2, 40, 19, 37 — Other common standards

Initial vs subsequent measurement summary

Documentation template

For each balance:

1. Standard and paragraph reference 2. Facts and contract citations 3. Recognition conclusion (yes/no, date) 4. Measurement at initial and subsequent dates 5. Journal entries (debit/credit summary) 6. Disclosures cross-reference (note number) 7. Judgments and sensitivities 8. Reviewer sign-off fields

Route IFRS 9, 15, 16 detail to revenue_leases_and_financial_instruments.md. Route IFRS 10, 3, 2 to consolidation_and_business_combinations.md.

Judgments, first-time adoption, and GAAP differences

Table of contents

1. Purpose 2. Significant judgments and estimates (IAS 1) 3. Judgments register template 4. IFRS 1 — First-time adoption 5. Transition project plan 6. IFRS vs US GAAP and local GAAP 7. Convergence and dual reporting 8. Interaction with audit

Purpose

Document estimation uncertainty, plan IFRS 1 transitions, and summarize high-level GAAP differences without substituting for legal, tax, or US GAAP specialist memos.

Significant judgments and estimates (IAS 1)

Judgments (IAS 1.122)

Disclose judgments that have the most significant effect on amounts recognized, apart from those involving estimation, for example:

• Control under IFRS 10
• Lease identification and term assessments
• Principal vs agent under IFRS 15
• Financial instrument classification (SPPI, business model)

Assumptions and estimation uncertainty (IAS 1.125)

Disclose assumptions about the future and other sources of estimation uncertainty at period end with a significant risk of material adjustment within the next financial year.

Examples:

• ECL and credit risk models
• Impairment VIU discount rates and growth
• Useful lives and residual values
• Tax recoverability of deferred tax assets
• Fair value Level 3 unobservable inputs

For each, provide sensitivity or range when practicable.

Judgments register template

Maintain version control; link to accounting memos and audit request list.

IFRS 1 — First-time adoption

First IFRS financial statements: First set that explicitly states compliance with IFRS.

First IFRS reporting period: First period reported under IFRS in the opening IFRS statement of financial position.

Opening IFRS statement of financial position (at transition date)

Adjust for IFRS 1 requirements:

1. Mandatory exceptions (no retrospective application) — e.g., estimates (IAS 8), derecognition of financial assets/liabilities, hedge accounting, non-controlling interests, classification of assets held for sale 2. Optional exemptions — document election by exemption (e.g., business combinations, cumulative translation, fair value as deemed cost, employee benefits, compound financial instruments)

Recognition principles at transition

• General rule: Retrospective application of other IFRS except where IFRS 1 grants exemption
• Reconciliations: Equity and total comprehensive income reconciliations in first IFRS financial statements

Disclosures (IFRS 1)

• Transition date and first reporting period
• Exemptions elected with brief explanation
• Impact of transition on reported equity and performance
• Estimates at transition date

Transition project plan

IFRS vs US GAAP and local GAAP

Provide high-level differences only; refer to US GAAP literature for ASC detail.

Local GAAP: Map entity’s national standards to IFRS for convergence reporting (e.g., EU endorsed IFRS, jurisdictional carve-outs). Document endorsement status and effective dates.

Convergence and dual reporting

• Primary statements in IFRS; secondary reconciliation to local or US GAAP in appendix or separate column
• Maintain adjustment journal with standard-coded tags
• Investor metrics — align KPI definitions across frameworks or disclose non-IFRS measures with reconciliation (regulatory constraints apply)

Interaction with audit

• Provide IFRS 1 exemption log and reconciliation files at planning
• Align judgment register with auditor’s significant risk assessment
• Separate accounting conclusions from audit opinion — route testing to auditor
• For legal contingencies, facts from commercial-counsel; recognition remains IAS 37 accounting

Steady-state annual tasks

• Update judgments register each close
• Refresh GAAP difference summary when standards amend (IASB updates)
• Archive policy elections and board approvals

Presentation, disclosure, and fair value

Table of contents

1. Purpose 2. IAS 1 — Presentation of financial statements 3. Statement structure and classification 4. IFRS 7 — Financial instruments disclosures 5. IFRS 13 — Fair value measurement 6. Going concern and materiality 7. Audit-ready note architecture 8. Disclosure checklist (core)

Purpose

Structure primary statements and notes under IAS 1, layer financial instrument risk disclosures under IFRS 7, and apply IFRS 13 for fair value measurement and hierarchy reporting.

IAS 1 — Presentation of financial statements

Complete set (general purpose)

• Statement of financial position
• Statement of profit or loss (and OCI)
• Statement of changes in equity
• Statement of cash flows
• Notes (including accounting policies)
• Comparative information for prior period

Fundamental principles

• Fair presentation and compliance with IFRS
• Accrual basis (except cash flow information)
• Going concern
• Materiality and aggregation
• Offsetting prohibited unless permitted by a standard

OCI presentation

Items permitted or required in OCI (e.g., FVOCI debt, cash flow hedges, revaluation surplus, foreign exchange on subsidiaries) — present in single statement or two-statement approach.

Statement structure and classification

Statement of financial position

• Current vs non-current distinction (unless liquidity order more relevant)
• Minimum line items per IAS 1.54 (assets, equity, liabilities)
• Additional subtotals if relevant to understanding

Statement of profit or loss

• Nature vs function expense classification (function requires specific allocations)
• Extraordinary items not permitted — classify within income/expense
• Discontinued operations (IFRS 5) — separate presentation

Statement of cash flows (IAS 7)

• Operating, investing, financing activities
• Direct or indirect method for operating cash flows
• Reconcile to cash and cash equivalents in statement of financial position

IFRS 7 — Financial instruments disclosures

Organize by class of instrument and risk type:

Also disclose:

• Carrying amounts by category (amortized cost, FVOCI, FVTPL)
• Fair value (when carrying amount ≠ fair value)
• Offsetting, collateral, and master netting arrangements
• Hedge accounting policies and effectiveness

Cross-reference IFRS 9 accounting policies in note 1.

IFRS 13 — Fair value measurement

Definition

Exit price in an orderly transaction between market participants at the measurement date.

Hierarchy

Valuation techniques

• Market approach, income approach, cost approach
• Maximize use of observable inputs; minimize unobservable

Disclosures (for recurring and non-recurring FV)

• Fair value at period end by hierarchy level
• Transfers between levels (policy at period end)
• Level 3 reconciliation and sensitivity (where applicable)
• Valuation processes and techniques

Day 1 gains/losses: Document when transaction price ≠ fair value.

Going concern and materiality

Going concern (IAS 1)

Assess whether entity can continue for at least 12 months from reporting date.

• If material uncertainty exists → disclose (IAS 1.25)
• If not going concern → do not prepare on going concern basis (extremely rare)

Materiality

• Misstatements or omissions that could influence decisions
• Apply to presentation (aggregation), disclosure (omit immaterial note lines), and recognition

Document quantitative thresholds and qualitative factors in the close file.

Audit-ready note architecture

Recommended note order (adapt to entity):

1. Corporate information and basis of preparation 2. Significant accounting policies (by standard) 3. Critical judgments and estimates (or integrate per policy) 4. Segment information (IFRS 8 if applicable) 5. Revenue, leases, tax, PPE, intangibles, financial instruments 6. Provisions, contingencies, related parties 7. Subsequent events, commitments 8. Group composition (if consolidated)

Each note should include:

• Lead schedule reference
• Roll-forward (opening, movements, closing)
• Tie-out to trial balance account range
• Preparer / reviewer initials

Disclosure checklist (core)

Route judgments register and IFRS 1 items to references_judgments_first_adoption_and_gaap_differences.md.

Revenue, leases, and financial instruments

Table of contents

1. Purpose 2. IFRS 15 — Revenue from contracts with customers 3. IFRS 16 — Leases 4. IFRS 9 — Financial instruments 5. Interaction between standards 6. Common pitfalls 7. Deliverable checklist

Purpose

Operational workflows for the three standards most frequently driving P&L volatility and note disclosure volume under IFRS. For ASC 606 contract mechanics overlap, coordinate with senior-revenue-accountant when installed.

IFRS 15 — Revenue from contracts with customers

Five-step model

1. Identify the contract with a customer 2. Identify performance obligations (distinct goods/services) 3. Determine transaction price (variable consideration, financing, consideration payable) 4. Allocate transaction price to POs (SSP or residual approach) 5. Recognize revenue when (or as) each PO is satisfied (point in time vs over time)

Over-time criteria (if none met → point in time)

• Customer simultaneously receives and consumes benefits
• Entity’s performance creates/enhances asset customer controls
• No alternative use + enforceable right to payment for performance to date

Key areas

Disclosure themes

• Disaggregation of revenue
• Contract balances (receivables, contract assets/liabilities)
• Remaining performance obligations
• Significant judgments

IFRS 16 — Leases

Lessee accounting (unless short-term / low-value exemption)

1. Identify a lease (right to control identified asset for a period) 2. Initial recognition: ROU asset and lease liability at present value of lease payments 3. Subsequent: Depreciate ROU; remeasure liability for payments, modifications, reassessments 4. Discount rate: IBR at commencement if implicit rate not readily determinable

Lessor accounting

• Finance lease — derecognize asset, recognize receivable, gross profit if applicable
• Operating lease — retain asset, recognize lease income on systematic basis

Practical expedients (document election)

• Short-term leases (≤12 months)
• Low-value underlying asset leases
• Portfolio application of discount rate (if criteria met)

Disclosure themes

• Maturity analysis of lease liabilities
• Amounts recognized in P&L (depreciation, interest, short-term, low-value)
• ROU asset by class

IFRS 9 — Financial instruments

Classification (business model + contractual cash flows)

SPPI test: Contractual cash flows are solely payments of principal and interest on principal outstanding.

Impairment — Expected credit losses (ECL)

• 12-month ECL or lifetime ECL based on staging (simplified approach for trade receivables without significant financing component)
• Significant increase in credit risk triggers lifetime ECL (Stage 2)

Hedge accounting (optional)

• Document risk management objective, hedging relationship, effectiveness testing
• Fair value, cash flow, or net investment hedge models

Disclosure themes (with IFRS 7)

• Credit risk, liquidity risk, market risk
• Fair value hierarchy for instruments measured at fair value
• Reconciliation of opening/closing balances by class

Interaction between standards

Common pitfalls

• Treating non-lease components as lease payments without allocation
• Variable lease payments excluded from liability when they depend on an index/rate (use index at commencement)
• Financing components in revenue contracts ignored
• SPPI failure not identified for structured notes
• ECL models not updated for macro overlays or post-model adjustments undocumented

Deliverable checklist

• [ ] Contract inventory complete (customer, lessor, counterparty)
• [ ] Five-step memo or lease model for each material contract
• [ ] Discount rate and IBR documentation
• [ ] IFRS 9 classification and SPPI analysis per instrument class
• [ ] ECL methodology and staging policy
• [ ] Roll-forward schedules for contract balances, ROU, lease liability, ECL allowance
• [ ] IFRS 7 / IFRS 15 / IFRS 16 disclosure drafts cross-referenced