International Accounting Standard No. 20 (IAS 20): Accounting for Official Grants and Disclosure of Public Aid
This reordered International Accounting Standard replaces the one originally approved by the Board in November 1982. It is presented in accordance with the structure of the paragraphs adopted in the International Accounting Standards issued since 1991. The terminology has been modified in certain cases, in order to adapt it to current IASC uses.
Scope
- This Standard deals with the accounting and disclosure of government grants, as well as the disclosure of other forms of public aid. The Standard does not address:
- The special problems that appear in the accounting of government grants within financial statements that reflect the effects of changes in prices, or Public aid that is granted to the company in the form of advantages that materialize when calculating the results for tax purposes or are determined or limited on the basis of tax obligations
Definitions:
The following terms are used, in this Standard, with the meaning specified below:
- With the name of Public Administrations, reference will be made both to the government administration itself, as well as to government agencies and similar organizations, whether local, regional, national or international.Public aid are actions carried out by the public sector in order to provide specific economic benefits to a company or type of companies, selected under certain criteria. For the purpose of this Standard, the benefits that are produced indirectly on the companies by actions on the general conditions of trade or industry are not public aid, such as the provision of infrastructure in developing areas or the imposition of trade restrictions on competitors.
Definitions: Official Grants
- Government grants, including those of a non-monetary nature valued at fair value, should not be recognized until there is a prudent assurance that: (a) the company will comply with the conditions associated with their enjoyment; and (b) the grants will be received.
For the accounting treatment of government grants, two methods can be considered: the capital method, according to which grants are recorded directly in the equity accounts; and the income method, according to which the subsidies are charged to the results of one or more years.
Effects of changes in foreign currency exchange rates Objective
- The objective of this standard is to prescribe how foreign currency transactions and foreign operations are incorporated into the financial statements of an entity, and how to convert the financial statements to the chosen presentation currency. They are the exchange rate or rates to be used, as well as the way to report on the effects of exchange rate variations within the financial statements.
Scope
This Standard will apply:
When accounting for transactions and balances in foreign currency, except for transactions and balances that are within the scope of IAS 39 Financial Instruments: Recognition and Measurement;
When converting the results and financial situation of foreign businesses that are included in the entity's financial statements, either by consolidation, by proportional consolidation or by the equity method; and
By converting the results and financial position of the entity to a presentation currency 8/29/14.
INTERNATIONAL ACCOUNTING STANDARD No 22 (IAS 22)
(REVISED 1998)
Business combinations
OBJECTIVE
- The objective of this Standard is to prescribe the accounting treatment for business combinations. The Standard addresses both the case of acquisition of one company by another, and the rare case of unification of interests between two companies when neither of them can be identified as the acquirer.
SCOPE:
- This Standard must be applied in accounting for business combinations.
- A business combination can be structured in different ways, depending on legal, tax or other relevant considerations. It can involve the purchase, by one company, of the titles that represent the property of another, or the acquisition of the assets net of the other company.
DEFINITIONS
The following terms are used, in this Standard, with the meaning specified below:
A business combination is the unification of independent companies into a single economic entity, as a result of one of the companies joining with the other or obtaining control over the net assets and operations of the same.
An acquisition is a business combination in which one of the companies, the acquirer, obtains control over the net assets and activities of the other, the acquiree, in exchange for a transfer of assets, the recognition of a liability or the capital issue. in order to achieve a mutual sharing in the risks and benefits of the combined entity from that moment on, so that no entity of which they are part can be identified as an acquirer compared to the other or the other.
International Accounting Standard No. 24 (IAS 24) Related party disclosure
objective
- The objective of this Standard is to ensure that the financial statements of an entity contain the information necessary to highlight the possibility that both the financial position and the result for the year may have been affected by the existence of related parties, as well as by transactions made and balances pending with them.
Scope
- This Standard will be applicable in:
- The identification of relationships and transactions between related parties; The identification of the outstanding balances between an entity and its related parties; The identification of the circumstances in which it is required to disclose information on sections (a) and (b) above; yDetermining the information to be disclosed on all these items.
- This Standard requires disclosure of information about related party transactions and balances
Definitions
The following terms are used, in this Standard, with the meaning specified below:
Control is the power to direct the financial and operating policies of an entity, in order to obtain benefits from its activities.
Joint control is the contractual agreement to share control over an economic activity.
Close relatives of a person are those family members who could influence, or be influenced by, that person in their relationships with the entity. These may include:
- The spouse or person with a similar affective relationship and the children; The children of the spouse or person with a similar affective relationship; yPeople in their charge or in charge of their spouse or person with a similar affective relationship.
Significant influence is the power to intervene in the entity's financial and operating policy decisions, although without actually having control of them. It can be obtained through ownership participation, by legal or statutory provision, or through agreements.
The entity will disclose that the conditions of transactions with related third parties are equivalent to those that occur in transactions made under conditions of mutual independence between the parties, only if such conditions can be justified or proven.
Items of a similar nature may be presented in aggregate, unless their disaggregation is necessary to understand the effects of related party transactions on the entity's financial statements. Effective date
The entity will apply this Standard in annual periods beginning on or after January 1, 2005. Early application is advised. If the entity applies this Standard for a period beginning before January 1, 2005, it shall disclose this fact.
Repeal of IAS 24 (reordered in 1994)
- This Standard supersedes IAS 24 Related Party Information (reordered in 1994).
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International Accounting Standard No. 25 (IAS 25) The cost of the investment is composed of its purchase value and the costs related to the acquisition
Such as: fees, brokerage, fees and bank fees.
- There are long and short-term investments, depending on your needs to settle it. If there is a sale of investments, the difference between the sale and the book value must be charged or credited to income. Financial statements, accounting policies, significant amounts, prescriptions and market values of the investments must be disclosed. According to this bulletin, Four groups can be found to account for investments: 1) financial instruments with a variable value, 2) financial instruments with a pre-established value, 3) permanent investments in other companies and 4) other investments Variable value financial instruments: Those that represent a determined amount of money and that are traded in the stock market Financial instruments with pre-established value:are those that represent a certain amount in money according to reestablished conditions. Permanent investments in other companies: they are shares or rights in other companies that are held for the purpose of exerting significant influence on them.
INTERNATIONAL ACCOUNTING STANDARD No 26 (IAS26)
(RE-ORDERED IN 1994)
Accounting and financial information on retirement benefit plans
This reordered International Accounting Standard replaces the one originally approved by the IASC Board in June 1986. It is presented in accordance with the structure of paragraphs adopted in the International Accounting Standards issued since 1991.
SCOPE:
1.- This Standard is applied in the preparation of reports of retirement benefit plans, when such reports are prepared and presented.
- Retirement benefit plans are sometimes known as pension plans, supplementary retirement benefit systems.
2.- This Standard deals with the accounting and the information to be presented, by the plan, to all the participants, understood as a group. It does not deal with individual information to shareholders about their acquired rights.
INTERNATIONAL ACCOUNTING STANDARD No 26 (IAS26) (RE-ORGANIZED IN 1994)
Accounting and financial information on retirement benefit plans
DEFINITIONS
The following terms are used, in this Standard, with the meaning specified below:
- Retirement benefit plans are agreements in which a company undertakes to provide benefits to its employees, at the time of terminating their services or afterwards, either in the form of periodic income or as a single payment, provided that such benefits, or contributions to them that depend on the employer, can be determined or estimated prior to the moment of retirement Actuarial current value of promised retirement benefits is, in a retirement benefit plan, the present value of the payments expected to be made to employees, former and current, due to the services they have provided up to now.
The information provided by a retirement benefit plan contains a description of the plan itself: it may contain the following points:
- The names of the employers and the identification of the groups of employees covered The number of participants who receive benefits, as well as the number of other participants, suitably classified The type of plan: defined contribution or defined benefit; A note in that which is specified if the participants make their contributions to the plan; A description of the retirement benefits promised to the participants;
EFFECTIVE DATE
This International Accounting Standard shall be effective for financial statements that cover periods beginning on or after January 1, 1988.
INTERNATIONAL ACCOUNTING STANDARD No. 27 (IAS 27) (REVISED IN 2000)
Consolidated financial statements and accounting for investments in subsidiaries
This International Accounting Standard supersedes the original one, approved in June 1998. It is presented in the revised format adopted by the International Accounting Standards in 1991.
SCOPE
- This Standard deals with the preparation and presentation of the consolidated financial statements of a group of companies under the control of a parent company. This Standard also deals with accounting for investments in subsidiaries within the individual financial statements that the parent company presented separately. This Standard supersedes IAS 3, Consolidated Financial Statements, except for what said Standard contains relating to accounting for financial investments in associates (see IAS 28, Accounting for Investments in Associated Companies).
INTERNATIONAL ACCOUNTING STANDARD No. 27 (IAS 27) (REVISED IN 2000)
Consolidated financial statements and accounting for investments in subsidiaries
DEFINITIONS
The following terms will be used in this Standard, with their respective meanings:
- Control (for the purposes of this Standard) is the power to direct the financial and operating policies of a company to obtain benefits from its activities.A subsidiary is a company controlled by another.Consolidated financial statements are the financial statements of a group of companies, presented as if it were a single accounting entity Minority interests are that part of the net operating results, as well as the net assets of the subsidiary, that do not belong, either directly or indirectly through other companies dependent, to the dominant of the group.
EFFECTIVE DATE
This International Accounting Standard will be effective for financial statements that cover periods beginning on or after January 1, 1990.
INTERNATIONAL ACCOUNTING STANDARD No 28 (IAS 28)
(REVISED 2000)
Accounting for investments in associates IAS 28 was approved by the IASC Board in November 1988. In November 1994, the text of IAS 28 was rearranged to be presented in the revised format adopted for International Accounting Standards in 1991 (IAS 28, rearranged in 1994).
In addition to the information required in paragraphs 8 and 21, the following information must be disclosed:
- In the consolidated financial statements, a list of significant subsidiaries, including the name, the country where they have been incorporated or are established, the proportion of ownership interest and, if different, the proportion of voting rights held. The reasons for not consolidating a subsidiary, if applicable; The nature of the relationships between the parent and each subsidiary in which it does not have, either directly or indirectly through other subsidiaries, more than half of the voting rights; The name of all the companies that, holding more than half of the voting rights, as subsidiaries in the consolidation due to the absence of control;
DEFINITIONS
The following terms are used, in this Standard, with the meaning specified below:
An associate is a company in which the investor has significant influence, but is not a dependent company or a joint venture for the investor. Equity method
- According to the equity method, the investment is initially recorded at cost, subsequently increasing its carrying amount to recognize the share that corresponds to the investor in the gains or losses obtained by the investee company after the acquisition date. for accumulated earnings received from the investee company, they reduce the carrying amount of the investment. It may be necessary to carry out other adjustments in the carrying amount of the investment, to collect the changes in the part of the investor in the equity of the investee that has not gone through the income statement.
conclusion
The changes that the current world manifests due to the internationalization of the economy, together with the information requirements of companies in a highly competitive market, in which efficiency is a fundamental factor of success, highlight the importance of international accounting standards and the need for their adaptation within the Dominican Republic.
Such standards are considered essential to transact in an open market within a homogeneous base and with solid parameters, which provide security to those who interact with economic entities, so that the users of the information have elements of judgment structured from a system of national accounting information configured based on international accounting standards.
For this reason, in order to participate in this area, the work should focus on developing an approach that allows collecting international standards and their use at the national level, recognizing the differences that must be assimilated in our country through a structural model.
IASC members consider that the adoption of International Accounting Standards by different countries, plus the relevant disclosure regarding compliance with them, will have an important effect over the years. The quality of financial statements will improve and an increasing degree of competitiveness will be achieved. The credibility and consequently the usefulness of financial statements will be enhanced worldwide.
After studying international accounting standards and their effect in the Dominican Republic, it is possible to conclude that generally these standards are harmonized with each other, that is, when comparing these standards by making a parallel, they do not have major differences, perhaps in some cases in the nic, the terms are included a little more, since it has a perspective of seeing in the macro.
But in almost everything, they define very similarly certain concepts that are the most important for the purpose of accounting, which is to provide accurate and useful information to users, with the greatest clarity and understanding possible. To quote Denis Beresford, President of the FASB: "Internationalization should not be a search for the lowest common denominator, but rather an improvement in accounting standards throughout the world."
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