Essay On International Financial Reporting Standards
CHAPTER 1
INTRODUCTION
1.1 Background
Financial statement is also known as business language that accepted as the tool to measure the financial performance of a business entity and to provide information in making economic decisions by whole stakeholders involved. Because of that objectives, in reporting financial statement is supposed to be fairly presented. This mean the report is not providing benefit on the one hand only while other will be on disadvantaged. Therefore the International Accounting Standard Board (IASB) create the standard that is International Financial Reporting Standard (IFRS) to control those reporting activities and preventing any perpetrator to manipulate the report or doing fraud for their own benefit.
Previously,
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Three-year option on shares traded
3. License agreement
4. Finished goods inventory at retail outlets, etc.
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
LEVEL 3 Example:
1. Long-dated currency swap
2. Three-year option on shares traded (historical volatility)
3. Interest rate swap (non-contract)
4. Liabilities decommissioning operations taken over in a business combination
5. Cash Generating Unit: financial forecasts (example cash flow or income) which developed using entity’s own data.
Unobservable inputs for the asset or liability.
2.1.4.4 Disclosure
As stated in PSAK 68, the entities should disclose information that helps the financial statements users to assess the following:
a) For assets and liabilities measured at fair value repeatedly (recurring) or recurrent (non-recurring) in the statement of financial position after initial recognition, valuation techniques and inputs used to develop those measurements.
b) For recurring fair value measurements that use unobservable inputs that are significant (Level 3), the impact of measures of income or other comprehensive income for the period.
To meet those objectives, an entity should consider the whole things as
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