The International Financial Reporting Standards (IFRS) and the concept of fair value

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The International Financial Reporting Standards (IFRS) and the concept of fair value

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Abstract

The International Financial Reporting Standards (IFRS) have been implemented against rapidly changing international financial standards. Their implementation is a logical revision of the international financial system, especially following the Enron affair in 2001.

IFRSs are designed to harmonize international accounting standards and provide a single model that all companies can apply. The main issue of the adoption of these standards is to facilitate the functioning of capital markets by protecting investors and maintaining confidence in financial markets.

Introduction
The application of the principle of fair value in net financial debt
1. TDIRA (IAS 32)
2. Derivatives and Cash Collateral (IAS 39)
3. Commitments on minority (IAS27/IAS32
The cash flow in addition to the income statement
1. Differentiating with French standards
2. The value of cash flow table
Conclusion

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[...] This enables readers to gain visibility into the company's ability to generate cash from its operating activities, the profitability of its investments and its ability to repay its financing or to raise funds for finance for its investments - The value of cash flow table The cash flow will show some operations are not included in the income statement but generate an outflow of cash as capital expenditures. Thus, an analysis over several years enables readers to consider whether investment spending has resulted in an increase in cash. [...]

[...] In fact, the group neutralizes the impact of the Standard by affecting the effective portion of the Hedges and latent, in computing its debt Commitments on minority (IAS27/IAS32) French Gaap In IAS / IFRS The commitments for minority If minority shareholders have the interests are off the balance right to sell shares that the company sheet, except in cases of risk must redeem, the latter's obligation of outflow of economic is to record a financial liability benefits without symmetrical (present value of the exercise price) economic benefits. [...]

[...] Thus, the accruals depend on fluctuations in market rates, which constitute a risk for the group Derivatives and Cash Collateral (IAS 39) French Gaap In IAS / IFRS Hedging instruments are off balance, Debt converted at closing excluding hedging instruments that are in the balance sheet (debt to Derivatives accounted for the debt coverage ratio = + closing rate balance sheet at fair value hedging instrument). Change the value of products made in the Income Statement (except for hedge accounting of cash) The solution adopted by France Telecom Under IAS 39, France Telecom integrates the derivatives in the calculation of net financial debt. [...]

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