Illustrative Condensed Interim Financial Statements 2020

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Illustrative condensedinterim financialstatements 2020VALUE IFRS Plc

This publication presents the sample interim financial reports of a fictional listed company, VALUE IFRS Plc. Itillustrates the financial reporting requirements that would apply to such a company under InternationalFinancial Reporting Standards as issued at 31 January 2020. Supporting commentary is also provided. For thepurposes of this publication, VALUE IFRS Plc is listed on a fictive Stock Exchange and is the parent entity in aconsolidated entity.VALUE IFRS Plc – Interim financial reporting June 2020 is for illustrative purposes only and should be used inconjunction with the relevant financial reporting standards and any other reporting pronouncements andlegislation applicable in specific jurisdictions.Global Accounting Consulting ServicesPricewaterhouseCoopers LLPThis content is for general information purposes only, and should not be used as a substitute forconsultation with professional advisors.About PwCWith offices in 157 countries and more than 276,000 people, we are among the leading professionalservices networks in the world. We help organisations and individuals create the value they’re lookingfor, by delivering quality in assurance, tax and advisory services. Find out more and tell us what mattersto you by visiting us at www.pwc.com 2020 PricewaterhouseCoopers. All rights reserved. PwC refers to the PwC network and/or one or more of itsmember firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

IntroductionThis publication presents illustrative interim financial statements for a fictitious listed company, VALUE IFRS Plc, for thesix months to 30 June 2020. The financial statements comply with International Financial Reporting Standards (IFRS) asissued at 31 January 2020 and that apply to annual reporting periods commencing on or after 1 January 2020, includingIAS 34 Interim Financial Reporting.New requirements for 2020There are only a limited number of amendments to the accounting standards that become applicable from 1 January 2020and that entities will need to consider in the preparation of interim reports for periods commencing after that date. Theseare listed in the commentary to the notes (paragraph 28 on page 36). As they are primarily clarifications, we have assumedthat none of them required a change in VALUE IFRS Plc’s accounting policies. However, this assumption will notnecessarily apply to all entities. Where there has been a change in policy, this will need to be disclosed in the notes.Our fact pattern further assumes that VALUE IFRS Plc will not be affected by the interest rate benchmark reforms.However, entities with significant hedging relationships may need to explain the changes to their accounting policies arisingfrom the adoption of the amendments made to IFRS 9 Financial Instruments or IAS 39 Financial Instruments:Recognition and Measurement. This includes entities that have exposure to interest rates where (i) the interest rates aredependent on interbank offered rates (IBORs), and (ii) these IBORs are subject to interest rate benchmark reform. Affectedentities should also consider disclosing qualitative information about how the entity is affected by IBOR reform and ismanaging the transition process, the nominal amount of hedging instruments to which the reliefs are applied and anysignificant assumptions or judgements made in applying the reliefs.Finally, all entities, including those that are not insurers, will also need to consider whether they have any contracts thatmeet the definition of insurance contracts and hence could be affected by the future adoption of IFRS 17 InsuranceContracts. Where this is the case, users may expect to see some information about the entity’s assessments and possibleplans of adoption, even if the entity has concluded that the impact will not be material.Using this publicationThe source for each disclosure requirement is given in the reference column. Shading in this column indicates revisedrequirements that become applicable for the first time this year. There is also commentary that (i) explains some of themore challenging areas and (ii) lists disclosures that have not been included because they are not relevant to VALUE IFRSPlc.As VALUE IFRS Plc is an existing preparer of IFRS consolidated financial statements, IFRS 1 First-time Adoption ofInternational Financial Reporting Standards does not apply. Guidance on interim financial statements for first-timeadopters of IFRS is available in Chapter 2 of our Manual of Accounting.The example disclosures are not the only acceptable form of presenting financial statements. Alternative presentations maybe acceptable if they comply with the specific disclosure requirements prescribed in IFRS. This illustrative report does alsonot cover all possible disclosures that IFRS require.Some of the disclosures in this publication would likely be immaterial if VALUE IFRS Plc was a ‘real life’ company. Thepurpose of this publication is to provide a broad selection of illustrative disclosures which cover most common scenariosencountered in practice. The underlying story of the company only provides the framework for these disclosures and theamounts disclosed are for illustration purposes only. Disclosures should not be included where they are not relevant or notmaterial in specific circumstances.Preparers of interim financial reports should also consider local legal and regulatory requirements which may stipulateadditional disclosures that are not illustrated in this publication.Top interim reporting pitfallsOur experience of reviewing interim reports suggests that the following errors or omissions are the most frequent: Incorrect or no disclosure of new standards, amendments and IFRIC interpretations that are effective for the first timefor the interim period and required a change in accounting policy. Appropriate disclosures are particularly importantfor major new or revised standards that will require significant changes, such as IFRS 17 Insurance Contracts. Basis of preparation note is incorrect, eg does not refer to IAS 34 or IFRSs. No disclosure of the nature and amount of items that are unusual by their nature, size or incidence. Omission of some or all business combinations disclosures, especially those related to combinations after the interimreporting date.PwC2

No explanations of the effect of seasonality on operations. Incomplete IFRS 7 and IFRS 13 financial instruments disclosures.Management commentary guidanceIAS 34 does not require entities to present a separate management commentary. Entities that prepare interim financialinformation are generally listed and should prepare management commentary in accordance with the regulations of therelevant stock exchange.The IASB issued a non-mandatory practice statement on management commentary in December 2010 which providesprinciples for the presentation of a narrative report on an entity’s financial performance, position and cash flows. For detailsabout this and other guidance available in relation to management commentaries (or operating and financial reviews) referto Appendix A of our Illustrative IFRS consolidated financial statements for 2019 year-ends publication.PwC3

VALUE IFRS PlcInterim report – Six months ended 30 June 2020IAS34(6)Not mandatoryIAS34(8)(e)IAS1(138)(a)Condensed consolidated statement of profit or loss5Condensed consolidated statement of comprehensive income6Condensed consolidated balance sheet7Condensed consolidated statement of changes in equity9Condensed consolidated statement of cash flows11Notes to the condensed consolidated financial statements151 Significant changes in the current reporting period2 Segment information3 Profit and loss information4 Dividends5 Property, plant and equipment6 Intangible assets7 Current provisions8 Borrowings9 Equity securities issues10 Business combination11 Discontinued operation12 Interests in associates and joint ventures13 Contingencies14 Events occurring after the reporting period15 Related party transactions16 Fair value measurements17 Basis of preparation of half-year reportCommentary on the notes to the financial pendent auditor’s review report to the members38This interim financial report does not include all the notes of the type normally included in an annualfinancial report. Accordingly, this report should be read in conjunction with the annual report for theyear ended 31 December 2019 and any public announcements made by VALUE IFRS Plc during theinterim reporting period. 1VALUE IFRS Plc is a company limited by shares, incorporated and domiciled in Oneland. Itsregistered office and principal place of business is at 350 Harbour Street, 1234 Nice Town. Its sharesare listed on the Oneland Stock Exchange.These condensed interim financial statements were approved for issue on 29 August 2020.The financial statements have been reviewed, not audited.CommentaryInterim report to be read in conjunction with annual report1.PwCSee paragraph 22 of the commentary to the notes to the consolidated financial statements(page 34) for our thoughts on why this disclosure should be retained.4

IAS34(8)(b)Condensed consolidated statement of profit or 000CU’000Continuing st of sales of (5,078)12,45915,85211(b)(32 sCents22.521.730.028.622.421.631.229.9Cost of providing servicesGross ibution costsAdministrative expensesNet impairment losses on financial assetsOther incomeOther gains/(losses) – netOperating profit13-14Finance income13-14Finance costsFinance costs – netShare of net profits of associates and joint ventures accountedfor using the equity methodProfit before income taxIncome tax expenseProfit from continuing operations(Loss)/profit from discontinued operationProfit for the half-yearProfit is attributable to:Owners of VALUE IFRS PlcNon-controlling interestsIAS34(11)Earnings per share for profit attributable to the ordinaryequity holders of the company: 11,12Basic earnings per shareDiluted earnings per shareNot mandatoryPwC12Earnings per share for profit from continuing operationsattributable to the ordinary equity holders of thecompany:11,12Basic earnings per shareDiluted earnings per shareIAS34(11)3The above condensed consolidated statement of profit or loss should be read in conjunction with theaccompanying notes.VALUE IFRS Plc30 June 20205

IAS34(8)(b)Condensed consolidated statement of comprehensive income 1-10IAS34(20)(b)NotesProfit for the l comprehensive income for the half-year13,75817,248Total comprehensive income for the half-year is attributable to:Owners of VALUE IFRS PlcNon-controlling 5,90683413,25916,740Other comprehensive incomeIAS1(82A)IAS1(91)IAS1(82A)IAS1(91)Items that may be reclassified to profit or lossChanges in the fair value of debt instruments at fair valuethrough other comprehensive incomeExchange differences on translation of foreign operationsExchange differences on translation of discontinuedoperationGains and losses on cash flow hedgesCosts of hedgingHedging gains reclassified to profit or lossGains on net investment hedgeIncome tax relating to these itemsItems that will not be reclassified to profit or lossGain on revaluation of land and buildingsChanges in the fair value of equity investments at fair valuethrough other comprehensive incomeRemeasurements of retirement benefit obligationsIncome tax relating to these itemsOther comprehensive income for the half-year, net of taxIFRS5(33)(d)Not mandatoryPwCTotal comprehensive income for the period attributable toowners of VALUE IFRS Plc arises from:Continuing operationsDiscontinued operations11The above condensed consolidated statement of comprehensive income should be read in conjunctionwith the accompanying notes.VALUE IFRS Plc30 June 20206

IAS34(8)(a)Condensed consolidated balance sheet 1-9IAS34(20)(a)Notes30 June2020CU’00031 nt assetsProperty, plant and equipmentIFRS16(47)(a)Right-of-use assets515Investment propertiesIntangible assets6Deferred tax assetsOther assetsIFRS7(8)(h)IFRS7(8)(f)Investments accounted for using the equity method124,2303,775Financial assets at fair value through othercomprehensive incomeFinancial asset at fair value through profit or 71,100Financial assets at amortised costDerivative financial instruments16Total non-current assetsCurrent assetsInventoriesOther current assetsIFRS15(105)Contract assetsTrade receivablesIFRS7(8)(f)Other financial assets at amortised costFinancial assets at fair value through profit or loss1611,15011,300Derivative financial instruments161,6341,854Cash and cash equivalents (excluding bank overdrafts)35,36955,083Assets classified as held for sale94,866-109,162250Total current Total assetsLIABILITIESNon-current liabilitiesIFRS16(47)(b)BorrowingsLease liabilities 15Deferred tax liabilitiesEmployee benefit obligationsProvisionsTotal non-current liabilitiesPwC8VALUE VALUE IFRS Plc30 June 20207

Condensed consolidated balance sheetIAS34(20)(a)Notes30 June2020CU’00031 December2019CU’00015,53515,7601,0251,982Current liabilitiesTrade and other payablesIFRS15(105)Contract liabilitiesCurrent tax 006903,4672,69734,00635,043Total liabilities155,831153,429Net assets158,191157,39183,69283,0541,6361,774Other reserves18,90717,993Retained earningsCapital and reserves attributable to the owners of VALUEIFRS 391BorrowingsIFRS16(47)(b)Lease liabilities815Derivative financial instruments16Employee benefit obligationsProvisions7Total current liabilities1EQUITYShare capital and share premiumOther equityNon-controlling interestsTotal equityNot mandatoryPwC9The above condensed consolidated balance sheet should be read in conjunction with theaccompanying notes.VALUE IFRS Plc30 June 20208

IAS34(8)(c)Condensed consolidated statement of changes in equity 1-9Attributable to owners of VALUE IFRS PlcSharecapitalNonandconOtherOther RetainedsharetrollingTotal interestspremiumequity reserves ’000NotesIAS34(20)(c)63,976(550)Profit for the half-year-Other comprehensive income-Total comprehensive income for thehalf-yearBalance at 1 January 2019Deferred hedging gains and losses andcosts of hedging transferred to thecarrying value of inventory purchasedduring the yearTransfer of gain on disposal of equityinvestments at fair value through othercomprehensive income to retainedearningsTransactions with owners in theircapacity as owners:Contributions of equity, net of transactioncostsIssue of ordinary shares as considerationfor a business combination, net oftransaction costs and taxAcquisition of treasury ing interest on acquisition ofsubsidiaryDividends provided for or paid4-Employee share schemes – value ofemployee servicesIssue of treasury shares to 5,2389,538134,776Balance at 30 June 2019PwCTotalequityCU’000(1,217)5,0515,051(1,710) (13,217)VALUE IFRS Plc30 June 20209

Condensed consolidated statement of changes in equityAttributable to owners of VALUE IFRS PlcSharecapitalNonandconshareOtherOther Retainedtrollingpremiumequity reserves earningsTotal U’000NotesIAS34(20)(c)Balance at 31 December 3012,427Other comprehensive income-1,0931691,262691,331Total comprehensive income for 5)--(238)238---Transactions with owners in theircapacity as owners:Contributions of equity, net of transactioncostsAcquisition of treasury rolling interest on acquisition ofsubsidiaryStep acquisition of associate1012--(30)30-1,720-1,720-Dividends provided for or paid4---(12,782)(12,782)Employee share schemes – value ofemployee servicesIssue of treasury shares to employees9-1,1321,226(1,132)-1,226-Balance at 30 June 2020PwC17,993Profit for the half-yearDeferred hedging gains and losses andcosts of hedging transferred to thecarrying value of inventory purchasedduring the yearTransfer of gain on disposal of equityinvestments at fair value through othercomprehensive income to retainedearningsNot mandatory1,774TotalequityCU’000(2,485) (15,267)-1,226-638(138)64(12,752((12,188)(765) The above condensed consolidated statement of changes in equity should be read in conjunction with the accompanying notes.VALUE IFRS Plc30 June 202010

IAS34(8)(d)Condensed consolidated statement of cash flows 1-9,17Half-yearNotesCash flows from operating activitiesCash generated from operationsInterest receivedInterest paidIncome taxes paidNet cash inflow from operating activitiesCash flows from investing activitiesPayment for acquisition of subsidiary, net of cash acquiredPayments for property, plant and equipmentPayments for investment propertyPayment for acquisition of associatePayments for financial assets at fair value through othercomprehensive incomePayments for financial assets at amortised costPayments for patents and trademarksPayment of software development costsLoans to related partiesProceeds from sale of engineering division **Proceeds from sale of property, plant and equipmentProceeds from sale of financial assets at fair value through othercomprehensive incomeRepayment of loans by related partiesDistributions received from joint ventures and associatesDividends receivedInterest received on financial assets held as investmentsNet cash (outflow)/inflow from investing AS34(16A)(e),IAS7(17)(e)IAS34(16A)(f)Cash flows from financing activitiesProceeds from issues of shares and other equity securitiesProceeds from borrowingsAcquisition of treasury sharesShare issue costRepayment of borrowingsPrincipal elements of lease paymentsDividends paid to company’s shareholdersDividends paid to non-controlling interests in subsidiariesNet cash outflow from financing activitiesNet (decrease)/increase in cash and cash equivalents *Cash and cash equivalents at the beginning of the half-year *Effects of exchange rate changes on cash and cash equivalentsCash and cash equivalents at end of the half-year 52,432(217)33,3296,76228,049(384)34,427* Cash and cash equivalents are net of bank overdrafts (CU2,040,000 at 30 June 2020 and CU2,250,000 at 30 June 2019)** For cash flows of discontinued operations see note 11 16Not mandatoryPwCThe abov

These condensed interim financial statements were approved for issue on 29 August 2020. The financial statements have been reviewed, not audited. Condensed consolidated statement of profit or loss 5 Condensed consolidated statement of comprehensive income 6 Condensed consolidated balance sheet 7

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