5 International Accounting Standards Committee (IASC) Foundation — (31-12-2009)
Accounting Policies :
(a) Basis of preparation :
These financial statements have been prepared in accordance with International Financial Reporting Standards, on the historical cost basis, as modified by the revaluation of financial assets and liabilities, including derivative financial instruments, at fair value through profit or loss. The policies have been consistently applied to all years presented, unless otherwise stated.
For the purposes of organising the financial information the IASC Foundation has categorised income and expenses into two categories. Standard-setting and related activities include all activities associated with standard-setting and support functions required to achieve the organisations objectives. Publications and related activities include information related to the sales of print and electronic IFRS materials, educational activities and Extensible Business Reporting Language (XBRL).
(b) Contributions :
Contributions are recognised as revenue in the year designated by the contributor.
(c) Publications and related revenue :
Subscriptions to the IASC Foundation’s comprehensive package and eIFRS products are recognised as revenue on a time-apportioned basis over the period covered by the subscriptions. Royalties are recognised as revenue on an accrual basis. Publications’ direct cost of sales comprises printing, salaries, promotion, computer and various related overhead costs.
(d) Inventories :
Inventories of current publications are valued at the lower of net realisable value and the cost of printing the publications, on a first-in-first-out basis. Inventories that have been superseded by new editions are written off.
(e) Depreciation :
Leasehold improvements and furniture and equipment are initially measured at cost, and depreciated on a straight-line basis (in the case of leasehold improvements over the period of the lease). All other assets are depreciated over 5 years, except computer equipment, which is depreciated over 3 years.
(f) Foreign currency transactions :
The IASC Foundation’s presentational and functional currency is sterling. Transactions denominated in currencies other than sterling are recorded at the exchange rate at the date of the transaction. Differences in exchange rates are recognised in the Statement of Comprehensive Income. Monetary assets and liabilities are translated into sterling at the exchange rate at the end of the reporting period.
(g) Operating leases — Office accommodation :
Lease payments for office accommodation are recognised as an expense on a straight-line basis over th e non-cancelable term of the lease. Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. The aggregate benefit of lease incentives is recognised as a reduction of the rental expense over the lease term on a straight-line basis.
(h) Financial assets :
Regular purchases and sales of financial assets are recognised on the trade date, the date on which the IASC Foundation is committed to purchase or sell the asset. Investments are recognised initially at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the IASC Foundation has transferred substantially all risks and rewards of ownership. The IASC Foundation classifies financial assets as subsequently measured at either amortised cost or fair value based on its business model for managing the financial assets and the contractual cash flow characteristics of the financial asset. All financial assets, except for bonds and derivatives, are carried at amortised cost as the objective is to hold these assets in order to collect contractual cash flows and those cash flows are solely principal and interest. Investments in bonds are classified as subsequently measured at fair value through profit or loss, and the corresponding gains or losses are included within profit (loss) before tax. Bond holdings are discussed more fully in Note 10.
(i) Derivative financial assets and liabilities :
The IASC Foundation uses contributions, primarily in US dollars and euro, to fund a portion of sterling obligations arising from its activities. In accordance with its financial risk management policy, the IASC Foundation does not hold or issue derivative financial instruments for trading purposes; the forward foreign currency hedges are entered into to provide certainty regarding funding to protect against currency fluctuation on future cash flows that are designated in US dollars and euro. Derivative financial instruments are recognised and subsequently measured at fair value. The corresponding gains or losses are included within profit (loss) before tax.
(j) Provisions and contingencies :
Provisions are recognised when the following three conditions are met — the IASC Foundation has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount of the provision represents the best estimate of the expenditure required to settle the obligation at the end of the reporting period. Provisions are measured at the present value of the expenditure expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is recognised as interest expense.
(k) Critical accounting estimates and judgments :
The IASC Foundation makes estimates and assumptions regarding the future. In the future, actual experience may differ from those estimates and assumptions. The Trustees consider there are none that are material to the preparation of the financial statements.
l) New standards and interpretations issued:
The financial statements have been drawn up on the basis of accounting standards, interpretations and amendments effective at the beginning of the accounting period on 1 January 2009, except for that explained below. The IASC Foundation has concluded that there are no other relevant standards or interpretations in issue not yet adopted.
l Standard adopted early IFRS 9 Financial Instruments was issued in November 2009 and is required to be applied from 1st January 2013. The presentation of the IASC Foundation’s financial statements has not significantly changed as a result of the early adoption of the new standard as it did not change the measurement of any assets.
m) Reclassification of items in the financial statements:
In order to conform to the current year’s presentation in the financial statements, the following comparative amounts were reclassified. The changes in presentation are to improve the information provided :
Recruitment expenses are included in Other Costs and listed in Note 9. The prior year amount of £ 126,000 was presented as follows : £ 121,000 was included in salaries, wages and benefits; £ 5,000 was included in Trustees’ fees. A corresponding change has been made to the statement of cash flows and the details of salaries, wages and benefits as disclosed in Note 5.
Fundraising expenses are included in Other Costs and listed in Note 9. In the prior year, £ 36,000 was listed separately in the statement of comprehensive income.
The details of accommodation expenses presented in Note 8(a) has been expanded to disclose the amount included in publication costs.
The details of cash holdings presented in Note 10(a) have been clarified by listing currencies irrespective of their country location.
6. The Institute of Chartered Accountants of India — (31-3-2009)
Statement on Significant Accounting Policies:
I. Accounting convention:
These accounts are drawn up on historical cost basis and have been prepared in accordance with the applicable Accounting Standards issued by the Institute of Chartered Accountants of India and are on accrual basis unless otherwise stated.
II) Revenue recognition:
a. Membership Fee
i. The Entrance Fee is collected at the time of admission of a person as a member and one-third thereof is recognised as income in that year.
ii. Annual Membership and Certificate of Practice Fee(s) are recognised in the year as and when these become due.
b. Distant Education and Post-Qualification Course Fee are recognised over the duration of the course.
c.Examination Fee is recognised on the basis of conduct of examination.
d. Subscription for Journal is recognised in the year as and when it becomes due.
e. Revenue from Sale of Publications is recognised at the time of preparing the sale bill i.e., when the property in goods as well as the significant risks and rewards of the property get transferred to the buyer.
Income from Investments:
i. Dividend on investments in units is recognised as income on the basis of entitlement to receive.
ii. Income on Interest-bearing securities and fixed deposits is recognised on a time-proportion basis taking into account the amount out-standing and the rate applicable.
III. Allocations/transfer to reserves & surplus and earmarked fund :
a) Admission Fee from Fellow Members and brd portion of the Entrance Fee from persons ad-mitted as Members are taken to Infrastructure Reserve.
b) Donations received during the year for build-ings and for research purpose are accounted for directly under the respective Reserves Account.
c) 25% of the Distant Education Fee not ex-ceeding 50% of the net surplus of the year is transferred to Education fund.
d) 0.75% of Membership Fee (Annual and Certificate of Practice Fee) received from the members during the year is allocated to the Employees’ Benevolent Fund.
e) Transfer to Education Reserve from the following earmarked funds :
f) Income from investments of Earmarked Funds is allocated directly to Earmarked Funds on opening balances of the respective Earmarked Funds on the basis of weighted average method.
IV. Fixed assets/depreciation and amortisation :
a) Fixed Assets excluding land are stated at historical cost less depreciation.
b) Freehold land is stated at cost. Leasehold land is stated at the amount of premium paid for acquiring the lease rights. The premium so paid is amortised over the period of the lease.
c) Depreciation is provided on the written down value method at the following rates as approved by the Council based on the useful life of the respective assets :
d) Depreciation on additions is provided on monthly pro-rata basis.
e) Library books are depreciated at the rate of 100% in the year of purchase.
f) Intangible Assets (Software) are amortised equally over a period of three years.
V) Investments:
a. Long-term investments are carried at cost and diminution in value, other than temporary is provided for.
b. Current investments are carried at lower of cost or fair value.
VI. Inventories:
Inventories of paper, consumables, publications and study material are valued at lower of cost or net realisable value. The cost is determined on FIFO Method.
VII. Foreign currency transactions:
a) Foreign currency transactions are recorded on initial recognition in the reporting currency by applying to the foreign currency amount at the exchange rate prevailing on the date of transaction.
b) All incomes and expenses are translated at average rate. All monetary assets/liabilities are translated at the year-end rates whereas non-monetary assets are carried at the rate on the date of transaction.
c) Any income or expense on account of ex-change rate difference is recognised in the Income and Expenditure Account.
VIII. Employee benefits:
a) Short-term employee benefits are charged off in the year in which the related service is rendered.
b) Post-employment and other long-term employee benefits are charged off in the year in which the employee has rendered services. The amount charged off is recognised at the present value of the amounts payable determined on the basis of actuarial valuation. The actuarial valuation is done as per Projected Unit Credit Method. Actuarial gain and losses in respect of post-employment and other long-term benefits are charged to Income & Expenditure Account and are not deferred.
c) Retirement benefits in the form of Provident Fund are a defined contribution scheme and the contribution to the Provident Fund Trust is charged to the Income and Expenditure Account for the period when the contribution to the respective fund is due.
IX. Impairment of assets:
a) The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal/ external factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is higher of asset’s net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value at the weighted cost of capital.
b) After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.
x. Provisions:
A provision is recognised when an enterprise has a present obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimates required to settle the obligations at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.
7. Bombay Chartered Accountants’ Society — (31-3-2010)
Significant accounting policies:
a) Method of Accounting:
Accounts are maintained on accrual basis.
b) Fixed Assets and Depreciation:
Fixed assets are stated at cost. Depreciation is provided on fixed assets as per the written-down value method at the rates prescribed in the Income Tax Rules except for books on which depreciation is provided at the rate of 50% per annum.
c) Investments:
Investments are stated at cost of acquisition less permanent diminution (if any) in compliance with AS-13 issued by The Institute of Chartered Accountants of India.
d) Inventories:
Inventories are stated at cost.
e) Life Membership & Entrance Fees:
Life Membership fees and Entrance fees are credited to Corpus Fund.
f) Gratuity:
The premium payable each year on the Group Gratuity Policy taken with Life Insurance Corporation of India is recognised as Gratuity expenses of that year.
