Ifrs for pensions schemes emac

E
M
A
C
ELSAM MANAGEMENT CONSULTANTS
INTERNATIONAL
FINANCIAL REPORTING
STANDARDS
IFRS by Sako Mayrick
www.elsamconsult.com

E
M
A
C
Welcoming Remarks
 Who are we?
 Elsam Management Consultants (EMAC) is
a pool of professional consultants in
Finance, BSC, HR and Risk Management
disciplines established as a limited liability
company since 2006
 Core Functions are: Recruitment, Training
and Consultancies
 More details: www.elsamconsult.com
www.elsamconsult.com 2

E
M
A
C
Welcoming Remarks
 Introduction of facilitators
 Self introduction to others on your team
 Recap- Share something on personal
experience in Financial Reporting and
high level expectations of this training
 Document the expectations
 Agree on key rules

E
M
A
C
Organization of this training
 Day 1 – Overview of IFRS and Financial Statement
Presentation
Day 2 - Financial Instruments, IFRS 7,9 and IAS 32, 39
Interim Financial Reports and IAS 34
Day 3 – PPE, IAS 16, IFRS 13, IAS 28
Day 4 - IAS 19, Employee Benefits, IFRs 10 and
IAS 27
Day 5 - Practical Issues in Taxation for Pension
Funds,
See the detailed Program Schedule in your bag

E
M
A
C
Day 1
Overview of IFRS

E
M
A
C
Session 1
GAAP,IASB, IFRS
&
Convergence Project

E
M
A
C
Introduction to GAAPs
 GAAPs are set of standards that are generally accepted and
universally practiced to recognize, classify, record and report
financial transactions.
 There are different types of GAAPs
 American GAAPs
 SEC
 AICPA
 FASB
 International GAAPs
 IFRS
 IAS
 IFRIC
 SIC
 Best Practices not yet codified

E
M
A
C
Which GAAP should we use at
Pension?
What about Actuaries?

E
M
A
C
Convergence of GAAPs
 More than 125 Countries uses International GAAPs
 There was turgor between US FASB and IFRS
 But something changed the landscape
Watch pract 1
 The convergence project is ongoing … lets see updates
Watch pract 2
 It is expected that the entire globe will be reporting under IFRS.
WHY?
 1
 2
 3

E
M
A
C
Are the Pension Scheme Financial
Statements prepared using GAAPs

E
M
A
C
IASB, IFRS, SIC AND IFRIC

E
M
A
C
 IASB, IFRS, SIC and IFRIC are all under control of IFRS
Foundation which establishes the IASB
 IFRS Foundation primary mission to develop, in public
interest, a single set of high quality, understandable,
enforceable and globally acceptable IFRS based upon clearly
articulated principles
 IFRS are developed by IASB, the independent standards
setting body of IFRS Foundation.
 IASB is the independent standard-setting body of IFRS
Foundation, including technical staff and advisory bodies,
composed of international experts

E
M
A
C
 What then are IFRIC
 IFRIC is the interpretation body of the IASB. The mandate of the
interpretations Committee is to review on timely basis
implementation of issues that have arisen within the context of
current IFRS and to provide authoritative guidance (IFRCs)
 What then is IAS and SIC?
 IAS are IFRS that were created by the predecessor body of the
IASB. They were adopted by IAS when it took over in 2001 and
therefore forms part of the body of IFRS requirements
 SIC are the official interpretations of the IAS that were
developed by the IASB’s predecessor body and its interpretative
committee
For more interest on IASB and IFRS visit www.ifrs.org

E
M
A
C

E
M
A
C
IASB – HQ
Canon St. No. 13 London

E
M
A
C
Current IASB Projects
 IFRS 9 to be effective by 2018. Early adoption recommended
 Major changes in IFRS for insurance contacts, leases, IFRS
for SMEs, Review of Conceptual framework and accounting
for Dynamic Risk Management: a Portfolio revaluation
Application to Macro hedging (October, 2014
commencement)
 It also includes Rate regulated activities, disclosure
initiative.
 Amendment of IAS 1 and fair value measurement;
recognition of Deferred tax assets for unrealized losses

E
M
A
C
Key IFRSs - 2014
 How many IFRSs do we have?
 12
 Framework
 IFRS 1 – First time adoption of IFRS
 IFRS 2 – Share Based payments
 IFRS 3 – Business Combinations
 IFRS 4 - Insurance Contracts
 IFRS 5 – Non Current Assets Held for Sale and Discontinued operations
 IFRS 6 – Exploration for and evaluation of Mineral resources
 IFRS 7 -Financial Instruments; Disclosure
 IFRS 8 – Operating Segments
 IFRS 9 – Financial Instruments
 IFRS 10 - Consolidated Financial Statements
 IFRS 11 - Joint Arrangements
 IFRS 12 – Disclosure of interest in other entities
 IFRS 13 – Fair Value Measurement

E
M
A
C
 How many are they?
 26
Key IAS- 2014
 IAS 1- Presentation of Financial Statements
 IAS 2- Inventories
 IAS 7 – Statement of Cash Flows
 IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors
 IAS 10 – Events after the reporting Period
 IAS 11 - Construction Contracts
 IAS 12 – Income Taxes
 IAS 16 – Property, Plant and Equipment
 IAS 17 - Leases
 IAS 18 - Revenue
 IAS 19 – Employee Benefits
 IAS 20 – Accounting for Government Grants and Disclosure of Government
Assistance
 IAS 21 - The Effects of changes in Foreign Exchange rates
 IAS 23 – Borrowing Costs
 IAS 24 – Related Party Disclosures

 IAS 26 – Accounting and Reporting by Retirement Benefit plans
 IAS 27 – Separate Financial Statements
 IAS 28 – Investment in Associates and Joint Ventures
 IAS 29 – Financial Reporting in Hyperinflationary Economies
 IAS 32 – Financial Instruments: Presentation
 IAS 33 – Earning Per share
 IAS 34 – Interim Financial Reporting
 IAS 36 – Impairment of Assets
 IAS 37 – Provisions, contingent liabilities and contingent Assets
 IAS 38 – Intangible Assets
 IAS 39 – Financial Instruments: Recognition and Measurement
 IAS 40 – Investment Property
 IAS 41 - Agriculture www.elsamconsult.com 19
E
M
A
C
Key IAS- 2014

E
M
A
C
Key IFRIC and SIC - 2014
 There are 17 IFRICs
 What are they?
 There are 8 SIC
 What are they?

E
M
A
C
New and Revised standards
 IFRS 10 – consolidated Financial Statements
 IFRS 11 Joint arrangements
 IFRS 12 Disclosure of interest in Other Entities
 IAS 27 – Separate Financial Statements
 IAS 28 Investment in Associates and Joint Ventures
 Amendments to IFRS 10, IFRS 11 and IFRS 12
Consolidated Financial Statements, Joint
Arrangements and Disclosure interest in Other
Entities: Transition Guidance

E
M
A
C
New and Revised standards
 IFRS 13 Fair Value Measurement
 IAS 19 Employee Benefits
 Amendments to IFRS 1 Government Loans
 Amendments to IFRS 7 Disclosures- Offsetting
Financial Assets and Financial Liabilities
 Amendments to IAS 1 Presentation of items of OCI
 IFRC 20 Stripping Costs in the Production Phase of a
surface Mine
 Annual Improvements to IFRSs

E
M
A
C
IFRS 10 – Consolidated Financial
Statements
 Nature of Consolidation and what is not

E
M
A
C
Statements
 Nature of Consolidation and what is not - Summary
Subsidiary Associate Joint
Arrangement
Criteria Control Significance
Influence
Joint control
Share >50% 20%+ NA
Accounting Acquisition
method ( full
consolidation)
Equity method Depends on
type
Other Investments – Financial Instruments (IFRS 9/IAS 39)

E
M
A
C
Other Standards deals with
Consolidation
 Group accounts and consolidation is covered by 6 IFRS
standards
 IAS 27 – Separate Financial statements
 Not for consolidation, just a line for investment
 Presentation of separate financial statements
 Shares in subsidiaries or other investment
 IAS 28 – Investment in Associate
 Investment which you have no control
 20-30% ownership of shares
 We account using equity method
 What is the formula for investment at PPF Pension Fund

E
M
A
C
Statements
 Nature of Consolidation and what is not

E
M
A
C
Statements
 It is a new standard from IAS 27 Consolidated and Separate
Financial statements
 We have one new and one revised standard
 IFRS 10 Consolidated Financial statements
 IAS 27 Separate Financial Statements
 IFRS 10
 IFRS 10 replaces part of IAS 27 Consolidated and Separate Financial
Statements that deals with consolidated financial statements and SIC 12
Consolidation –Special Purpose Entities
 When should an investor consolidate an investee?
 There is only one basis for consolidation for all entities, and that basis is
control
 It removes the problem of IAS 27 and SIC 12, the former uses control
concept while the latter placed greater emphasis on risk and rewards

E
M
A
C
Consolidation
 IFRS 3 – Business Combination
 Defines business combination
 Recognition
 Measurement
 Good will, NCI, Identifiable A and AL
 It does not describe the consolidation but defines the basics of above
 IFRS 10 – Consolidated Financial Statements,
 Directly related to IFRS 3
 Defines Control, what it is
 Requires investor, parent to prepare consolidated financial statements
 Defines procedures for consolidation
 Defines investment entities where there is no need to consolidate

E
M
A
C
 IFRS 10
Statements
 The definition of control under IFRS 10 includes the following elements
 Power over an investee
 Exposure, or rights, to variable returns from its involvement with the
investee
 Ability to use power over the investee to affect the amount of investor’s
returns
 With regard to the first criterion, IFRS 10 states that an investor has
power over an investee when the investor has existing rights that
give it the current ability to direct the relevant activities of the
investee, which are the activities that significantly affect the returns
of the investee (not merely financial and operating activities as set
out in the previous version of IAS 27)

E
M
A
C
 IFRS 10
Statements
 Guidance to deal with complicated issues
 Whether or not an investor has control over an investee when the investor has
less than the majority of the voting right of the investee. For example, a private
entity has a 48% equity interest in a listed investee. A question arises as to
whether the private entity has ‘de facto’ control over the investee.
 IFRS 10 does not give any bright line, although it does include a number of
illustrative examples some of which indicate that the ‘control’ conclusion is clear
in certain scenarios
 Whether or not a decision maker has control over an investee. For
example, a fund manager manages a fund and has discretion over some
key
 activities of the fund. A question arises as to whether the fund manager
has control over the fund it manages. To answer this question, IFRS 10
 requires an analysis as to whether the fund manager is acting as a principal
or an agent. If a fund manager is acting as a principal for a fund it
 manages, it should consolidate the fund. Conversely, if a fund manager is
merely acting as an agent, it should not consolidate the fund.

E
M
A
C
Consolidation
 IFRS 11 – Joint Arrangements
 Activities jointly executed by parties
 Joint ventures
 Joint operations
 IFRS 11 defines and provides accounting treatment for
them
 IFRS 12 – Disclosure of interest in other entities
 Prescribes necessary information one need to disclose
about subsidiaries, associates, joint arrangements in
consolidated financial statements

IFRS 10
E
M
A
C Video Presentation

E
M
A
C
Framework for Preparation
and
presentation of Pension Fund
Financial Statements

E
M
A
C
Conceptual Framework
 Framework is a foundation for preparation of Financial
Statements
 It deals with
1. Objectives of financial reporting
 Useful information to existing and potential investors, lenders,
creditor in making decisions about resources to entity
 Investors , creditors and lenders are primary users of financial
information for general purpose financial information
 The financial information cannot provide all information and other
sources are required
 To meet the objectives, financial statements are prepared based on :
 Accrual basis of accounting
 Going Concern

E
M
A
C
 Framework is a foundation for preparation of Financial
Statements
 It deals with
 Objectives of financial reporting
 The qualitative characteristics of useful financial information
 Makes financial statements most useful to the existing and potential
investors, lenders and other creditors
 Must be Relevant – predictive and confirmatory value, faithfully
presented
 Comparable, Verifiable, timely and understandable

E
M
A
C
 Framework is a foundation for preparation of Financial Statements
 It deals with
 The definition, recognition and measurement of elements from which
financial statements are constructed
 Deals with measurement of financial position : Assets, liabilities and Equity
 An Asset is a resource controlled by the entity as a result of past events and from which
economic benefits are expected to flow to an entity
 Liability is a present obligation of the entity arising from past events, the settlement of
which is expected to result in an outflow from the entity resources embodying economic
benefit
 Equity is the residual interest in assets of the entity after deducting all its liabilities
 Income is increases in economic benefits during the accounting period in the form of
inflows or enhancement of assets or decreases in liabilities that result in increases in
equity, other than those contributed by equity participants
 Expenses are decreases in economic benefits during the accounting period in the form
of out-flows or depletion of assets or incurrences of liabilities that result in decreases in
equity, other than those relating to distributions to equity participants

E
M
A
C
 Framework is a foundation for preparation of Financial Statements
 It deals with
 The definition, recognition and measurement of elements from which financial
statements are constructed
 The above elements are recognized only if : it is probable that any future economic
benefit associated with the item will flow to or from the entity and … has a cost or
value that can be measured with reliability
 Concept of capital and capital maintenance
 It is the basis for measurement or determining the monetary amounts at which the
elements of the financial statements are recognized and carried in the balance sheet
and income statements.
 It is concerned with how the entity defines the capital it seeks to maintain
 Differentiate between return of capital and return on capital; only inflows of assets in
excess of amounts needed to maintain capital may be regarded as profits an therefore
as a return on capital
 If there is a conflict between IFRS and Framework, IFRS prevails

E
M
A
C

E
M
A
C
Video Presentation and discussions

E
M
A
C
Group Work 1
Use the Provided questions to
digest various accounting
issues at Pension Fund in
practical perspective

E
M
A
C
Video Case Study
Presentation of Financial Information
and IFRS 1

E
M
A
C
Financial Statement Presentation
 A complete set of financial statements comprises:
 (a) a statement of financial position as at the end of the period;
 (b) a statement of profit and loss and other comprehensive income
for the period;
 (c) a statement of changes in equity for the period;
 (d) a statement of cash flows for the period;
 (e) notes, comprising a summary of significant accounting policies
and other explanatory information; and
 (f) a statement of financial position as at the beginning of the
earliest comparative period 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.

E
M
A
C
Presentation of financial Statements
Video explanation of IAS 1
Video 2 presentation of financial
statements

E
M
A
C
Key Changes in IFRS 2014
 Amendment of IAS 19 – Employee benefits
 Abolishment of Corridor method ( actuarial valuation)
 Terminal Benefits and Post employment benefits
 Introduction of IFRS 13- Fair Value measurement
 Different ways for fair value measurement
 Introduction of IFRS 10 – Consolidated FS
 Consolidated FS
 Replaces part of IAS 27 (Consolidated
 Introduce the issue of investment entity
 Introduction of IFRS 11 – Joint arrangement
 Replaces IAS 31 and Interest in JV
 More details will come tomorrow

E
M
A
C
Introduction to IFRS 9
 The IASB published the final version of IFRS 9 Financial Instruments in July
2014.
 The final version of IFRS 9 brings together the classification and
measurement, impairment and hedge accounting phases of the IASB’s
project to replace IAS 39 Financial Instruments: Recognition and
Measurement.
 IFRS 9 is built on a logical, single classification and measurement approach
for financial assets that reflects the business model in which they are
managed and their cash flow characteristics.
 Built upon this is a forward-looking expected credit loss model that will
result in more timely recognition of loan losses and is a single model that is
applicable to all financial instruments subject to impairment accounting.
 In addition, IFRS 9 addresses the so-called ‘own credit’ issue, whereby banks
and others book gains through profit or loss as a result of the value of their
own debt falling due to a decrease in credit worthiness when they have
elected to measure that debt at fair value.
 The Standard also includes an improved hedge accounting model to better
link the economics of risk management with its accounting treatment.

E
M
A
C
 Definitions corner
 Financial instrument is a contract that gives rise to financial
asset to one entity and financial liability to another ( example
of a bond by Pension Fund)
 Financial Assets can be Cash, equity of another entity,
contract to receive cash or contract of financial asset or
contract to exchange financial instrument under favorable
conditions
 Financial Liability can be a contract to deliver cash, contract to
exchange financial instruments under unfavorable conditions
 An equity instruments is not in cash or other asset, it is settled
in shares

E
M
A
C
 How to treat them
 IAS 32
 Classification and presentation
 Classify them when recognized, not when settling
 Types
 Financial Assets
 Financial Liabilities
 Interest/div, Losses and gains
 IAS 39/IFRS 9
 Recognition and measurement
 Initial measurement at fair value
 Transaction costs add to assets or subtract from liabilities UNLESS held at
Fair Value through P and L then should be expensed
 Subsequent measurement
 Fair value through P and L; gain or loss
 Held to maturity e.g. debt, debentures measured at amortized costs

E
M
A
C
IFRS 9
 IFRS 9 is effective for annual periods beginning on or after 1
January 2018.
 However, the Standard is available for early application. In
addition, the own credit changes can be early applied in
isolation without otherwise changing the accounting for
financial instruments.
 The IASB has an active project on accounting for dynamic risk
management. This is separate from IFRS 9.
 IFRS 9 replaces IAS 39, one of the Standards inherited by the
IASB when it began its work in 2001.
 Many preparers of financial statements, their auditors and
users of financial statements find the requirements for
reporting financial instruments complex.

E
M
A
C
Practical changes for 2013-14 with
implication at Pension Fund
 Key changes in IFRS up to May 2014
Watch this IFRS Box Presentation and lets discuss
Discussions of IFRS 9

E
M
A
C
IFRS 13- Fair Value Measurement
 Issued in 2011
 Application date January, 2013
 Objective
 Define fair value
 Set up a single IFRS
 Disclosure
 Fair value is the price that would be received to sell an
asset or paid to transfer a liability in an orderly
transaction between market participants at the
measurement date
 Price is the exit price
 Market is the securities market and not entity based

E
M
A
C
 Pension Scheme is required to determine
 Asset/Liability (Unit of account)
 Non financial asset (Highest and best use)
 Principal/Most advantageous market (DSE, NSE)
 Valuation techniques (fair value hierarchy)
 Asset/Liability
 Stand alone
 Group
 Characteristics
 Condition and location
 Restriction on the sale and use

E
M
A
C
 Pension Fund is required to determine
 Principal/Most advantageous market (DSE, NSE)
 If no principal market use most advantageous market for
asset or liability
 The one that maximizes the amount to sell or minimizes amount
for liability after considering transaction costs particularly transfer
cost
 Market participants should be independent ( IAS 24),
knowledgeable, ablel to enter into transactions, and willing to
enter
 Principal market is the market with more volume of activity for
the asset/liability
 Different entities can have different principal markets
 Price should be on orderly transactions
 Adequate market exposure (knowledge for market exchange)
 Market participants not forced

E
M
A
C
 Non Financial Assets
 Highest and best use
 Physically possible
 Legally permissible
 Financial feasible
 Can be individual assets or combination
 For liabilities and equity instruments
 Assume transfer and not settlement of a liability
 Is there a quoted price then use it
 Is there identical item held as asset by other party the use the FV of
identical assets
 If no corresponding asset by other part use present value
VALUATION TECHNIQUES

E
M
A
C
 Financial assets and liabilities with offsetting position
 Market risk with Trade receivables, liabilities ( USD $ losses
with USD$ gains), but this requires
 There must be document risk management or investment strategy
 Information of key management personnel
 FV at the end of each reporting period
 FV initial recognition
 Transaction price (Entry price vs exit price)
 Exemptions
 Related parties
 Duress
 Different unit of accounts
 Not on principal or most advantageous market
 If they are different (entry price vs exist price) it is called
day 1 profit

E
M
A
C
 Valuation techniques
 Market approach
 Market multiples e.g. EBITDA, Revenues
 Matrix pricing ( compare with benchmark securities)
 Cost approach
 For non financial assets ( current replacement cost +
obsolescence)
 Income approach
 Coverts future amounts to single present amount ( PV
techniques, option pricing models and multi-period excess
earning method)
 Once adopted, the valuation technique cannot be
changed unless follows IAS 8 ( Changes in accounting
estimate)

E
M
A
C
 Fair value hierarchy
 Use the observable inputs rather than unobservable inputs
 IFRS 13 classifies inputs into three levels for valuation techniques
 Level 1 – quoted prices ( unadjusted) in active markets for identical
assets/liabilities that entity can access at the measurement date e.g.
quoted price of shares traded on stock exchange
 Level 2 – Inputs other than quoted prices within level 1 that are
observable for asset/liability either directly or indirectly ( quoted
price for similar +- in active markets); quoted prices for
similar/identical -+ in inactive market: other observable inputs,
market collaborated inputs
 Level 3
 Unobservable input for asset/liability
 Financial forecasts, historical volatility
 Adjustments to mid market consensus
 Follow from 1,2,3 ( only rarely)

E
M
A
C
 Objectives
IFRS 13- Disclosures
 Enable users to understand the valuation techniques – inputs
 Understand effect of FV measurement on P/L or OCI ( level 3)
 IFRS 13 is not applicable in
 (a) share-based payment transactions within the scope of IFRS 2 Share-based
Payment;
 (b) leasing transactions with in the scope of IAS 17 Leases ; and
 (c) measurements that have some similarities to fair value but are not
fair value, such as net realizable value in IAS 2 Inventories or value in
use in IAS 36 Impairment of Assets
 d) Plan assets measured at FV as per IAS 19 employee benefits
 e) Retirement benefit plan investments measured at FV as per IAS 26
(accounting and Reporting by Retirement Benefit Plans)

E
M
A
C
Introduction to XBRL
 A brief introduction to XBRL (eXtensible Business Reporting Language)
 XBRL representation of the IFRSs, known as the IFRS Taxonomy
 The goal of the IFRS Foundation and its independent standard-setting
body, the International Accounting Standards Board (IASB), is to provide
the world’s integrating capital markets with a common language for
financial reporting.
 XBRL (eXtensible Business Reporting Language) was developed to
provide a common, electronic format for business and financial
reporting. Because both IFRSs and XBRL are intended to standardise
financial reporting in order to promote transparency and to improve the
quality and comparability of business information, the two form a
perfect partnership.
 XBRL can also easily handle language differences and therefore ease the
burden associated with information translation.
 It is estimated that the use of XBRL could reduce the time spent
analysing a single financial statement by 15 - 30 per cent, and this is

E
M
A
C
XBRL
 The IFRS Foundation recognised the potential impact that XBRL
could have on financial reporting. The Foundation also realised
that if XBRL were applied in conjunction with IFRSs, it could
improve access for users to financial information and could also
support IFRS adoption and implementation.
 The IFRS Foundation therefore launched the IFRS XBRL initiative in
2001 and the IFRS Foundation XBRL Team was created.
 In the current economic climate where transparency in financial
reporting is regarded as vital, the regulatory and investment
community are requiring more, increasingly complex business
information to be reported with greater accuracy and speed.
 This demand places additional pressure on those who prepare,
compile and analyse this information. However, the majority of
this work continues to involve manual processing and is therefore
prone to time delay and (human) error, and is cost- intensive.

E
M
A
C
XBRL
 XBRL could potentially solve - or at least mitigate - these problems.
 XBRL works in such a way that it allows financial information to be
automatically accessed, extracted and processed by computers. The
need to manually re-key information to adapt it to specific needs is
removed.
 Issuers are able to compile financial reports more speedily and with less
chance of error. This in turn gives users access to more timely and
accurate data, thereby enabling them to make better, more informed
decisions and to produce more accurate reports in less time.
 Because XBRL is adaptable and is not restricted to particular formats or
tools, XBRL information can be transmitted to users in a variety of ways.
Furthermore, the information contained within an XBRL report allows for
increased comparability and therefore improved analysis.
 The IFRS Foundation therefore launched the IFRS XBRL initiative in 2001
and the IFRS Foundation XBRL Team was created.

E
M
A
C
XBRL
 The mission of the IFRS Foundation XBRL Team is to: create and
provide a framework for the consistent adoption and
implementation of IFRSs with a high-quality IFRS Foundation-developed
IFRS Taxonomy that is consistent with IFRSs. This
mission is part of the adoption and implementation strategy of the
IFRS Foundation and is integrated with the development of IFRSs.
 XBRL is a data-rich dialect of XML (Extensible Markup Language),
the universally preferred language for transmitting information via
the Internet.
 It was developed specifically to communicate information between
businesses and other users of financial information, such as
analysts, investors and regulators.
 XBRL provides a common, electronic format for business reporting.
It does not change what is being reported. It only changes how it
is reported.

E
M
A
C
XBRL
 A typical business report on an Internet page is a closed and self-contained
document. Although it can be viewed and transmitted
using the Internet, its format and content is fixed; neither the
format nor the content can be changed unless you change the
Internet page.
 As a result, to extract the information from such a report for
computerised analysis requires exporting or re-keying the data into
a format that can be handled by computer software.
 A business report that has been prepared using XBRL is known as
an instance document, and it is different to a standard business
report. The information contained in the instance document is not
closed and does not have a predefined, fixed format. The data can
be used interactively because it can be accessed, extracted and
processed automatically by computers. This interactiveness is
made possible by the use of tags.

E
M
A
C
XBRL
 In XBRL, information is not treated as a static block of text or set
of numbers. Instead, information is broken down into unique
items of data (eg total liabilities = 100). These data items are then
assigned mark-up tags that make them computer-readable. For
example, the tag <Liabilities>100</Liabilities> enables a computer
to understand that the item is liabilities, and it has a value of 100.
 Computers can treat information that has been tagged using XBRL
‘intelligently’; they can recognise, process, store, exchange and
analyse it automatically using software.
 Because XBRL tags are formed in a universally-accepted way, they
can be read and processed by any computer that has XBRL
software.

E
M
A
C
XBRL
 XBRL tags are defined and organized using categorization schemes called taxonomies.
 Taxonomies are the computer-readable ‘dictionaries’ of XBRL. Taxonomies provide
definitions for XBRL tags, they provide information about the tags, and they organise
the tags so that they have a meaningful structure.
 Taxonomies differ according to reporting purposes, the type of information being
reported and reporting presentation requirements. Consequently, a company may use
one taxonomy when reporting to a stock exchange, but use a different taxonomy when
reporting to a securities regulator.
 Taxonomies are available for most of the major national accounting standards around
the world. For a company reporting in IFRS, the IFRS Foundation publishes tags for all
IFRS disclosures. These tags are organized and contained within the IFRS Taxonomy.
 As a result, taxonomies enable computers with XBRL software to:
 • understand what the tag is (eg whether it is a monetary item, a percentage or text);
 • what characteristics the tag has (eg if it has a negative value);
 • its relationship to other items (eg if it is part of a calculation).
 This additional information is called meta-data. When information that has been tagged
with XBRL is transmitted, the meta-data contained within the tags is also transmitted.

E
M
A
C
XBRL
What is XBRL

E
M
A
C
End of day 1
Thank you for
Participation

Ifrs for pensions schemes emac

More Related Content

What's hot

Viewers also liked

Similar to Ifrs for pensions schemes emac

More from EMAC Consulting Group

Recently uploaded

Ifrs for pensions schemes emac