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    Illustrative IFRS corporate consolidated financial statements for 2010 year ends

    This publication provides an illustrative set of consolidated financial statements, prepared in accordance with International Financial Reporting Standards (IFRS), for a fictional manufacturing, wholesale and retail group (IFRS GAAP plc). IFRS GAAP plc is an existing preparer of IFRS consolidated financial statements.

    This publication is based on the requirements of IFRS standards and interpretations for financial years beginning on or after 1 January 2010. Areas in which presentation has changed significantly since 2009 are highlighted. It includes an appendix providing illustrative financial statements relating to IFRS 9, Financial instruments for early adopters; and an appendix providing illustrative financial statements of first-time adopters of IFRS.

    Illustrative IFRS corporateconsolidated financial statementsfor 2010 year ends

    Illustrative IFRS

    corporate consolidated financial statements for 2010 year ends

    UP/GCR116-BI10001

    Also available:

    Manual of accounting IFRS 2011Global guide to IFRS providing comprehensive practical guidance on how to prepare financial statements in accordance with IFRS. Includes hundreds of worked examples and extracts from company accounts. The Manual is a three-volume set comprising:

    Manual of accounting IFRS 2011

    Manual of accounting Financial instruments 2011

    Illustrative IFRS corporate consolidated financial statements for 2010 year ends.

    For details of other IFRS publications, please see the inside covers.

  • Illustrative IFRS corporate consolidatedfinancial statements for 2010 year ends

    Global Accounting Consulting ServicesPricewaterhouseCoopers LLP

    145 London RoadKingston-upon-ThamesSurreyKT2 6SRTel: +44 (0) 870 777 2906Fax: +44 (0) 870 247 1184E-mail: info@cch.co.ukWebsite: www.cch.co.uk

  • This book has been prepared for general guidance on matters of interest only, and does notconstitute professional advice. You should not act upon the information contained in this bookwithout obtaining specific professional advice. Accordingly, to the extent permitted by law,PricewaterhouseCoopers LLP (and its members, employees and agents) and publisher accept noliability, and disclaim all responsibility, for the consequences of you or anyone else acting, orrefraining from acting, in reliance on the information contained in this document or for any decisionbased on it, or for any consequential, special or similar damages even if advised of the possibility ofsuch damages.

    ISBN 978-1-84798-337-4

    Printed in Great Britain.

    British Library Cataloguing-in-Publication Data.A catalogue record for this book is available from the British Library.

    # 2010 PricewaterhouseCoopers

    No part of this publication may be reproduced, stored in any system, or transmitted in any form or byany means, electronic, mechanical, photocopying, recording, or otherwise without the priorpermission of PricewaterhouseCoopers LLP.

  • Introduction

    This publication provides an illustrative set of consolidated financial statements,prepared in accordance with International Financial Reporting Standards (IFRS) for afictional manufacturing, wholesale and retail group (IFRS GAAP plc).

    IFRS GAAP plc is an existing preparer of IFRS consolidated financial statements;IFRS 1, First-time adoption of International Financial Reporting Standards, is notapplicable.

    This publication is based on the requirements of IFRS standards and interpretations forfinancial years beginning on or after 1 January 2010.

    PricewaterhouseCoopers commentary has been provided, in grey boxes, to explain thedetail behind the presentation of a number of challenging areas. These commentaryboxes relate to the presentation in: the income statement, statement of comprehensiveincome, balance sheet, statement of changes in equity and statement of cash flows, thesummary of significant accounting policies, and financial risk management.

    Areas in which presentation has changed significantly since 2009 have beenhighlighted in blue.

    Readers should refer to PricewaterhouseCoopers industry illustrative financialstatements for industry-specific transactions and presentation. See inside front cover ofthis publication for details.

    We have attempted to create a realistic set of financial statements for a corporate entity.Certain types of transaction have been excluded, as they are not relevant to the groupsoperations. The example disclosures for some of these additional items have beenincluded in appendices III and IV.

    The forthcoming IFRS requirements are outlined in Appendix VII.

    The example disclosures should not be considered the only acceptable form ofpresentation. The form and content of each reporting entitys financial statements are theresponsibility of the entitys management. Alternative presentations to those proposed inthis publication may be equally acceptable if they comply with the specific disclosurerequirements prescribed in IFRS.

    These illustrative financial statements are not a substitute for reading the standards andinterpretations themselves or for professional judgement as to fairness of presentation.They do not cover all possible disclosures that IFRS requires. Further specificinformation may be required in order to ensure fair presentation under IFRS. Werecommend that readers refer to the 2010 version of GAAPChecker (our automatedchecklist), as well as our publication IFRS disclosure checklist 2010.

    PricewaterhouseCoopers i

  • Abbreviations

    IFRS1p37 = International Financial Reporting Standard [number], paragraphnumber.

    7p22 = International Accounting Standards [number], paragraph number.

    SIC-15p5 = Standing Interpretations Committee [number], paragraph number.

    DV = Disclose Voluntary. Disclosure is encouraged but not required and,therefore, represents best practice.

    ii PricewaterhouseCoopers

    Abbreviations

  • Contents

    Consolidated income statement by function of expense .......................................... 1Consolidated statement of comprehensive income ..................................................... 2Consolidated balance sheet ...................................................................................... 10Consolidated statement of changes in equity ............................................................ 14Consolidated statement of cash flows ....................................................................... 18Notes to the consolidated financial statements: ........................................................ 221 General information ............................................................................................ 222 Summary of significant accounting policies: ....................................................... 22

    2.1 Basis of preparation .................................................................................. 222.2 Consolidation ............................................................................................. 262.3 Segment reporting ..................................................................................... 292.4 Foreign currency translation ...................................................................... 292.5 Property, plant and equipment .................................................................. 302.6 Intangible assets ....................................................................................... 312.7 Impairment of non-financial assets ........................................................... 322.8 Non-current assets (or disposal groups) held-for-sale .............................. 322.9 Financial assets ........................................................................................ 332.10 Offsetting financial instruments ................................................................. 342.11 Impairment of financial assets ................................................................... 342.12 Derivative financial instruments and hedging activities ............................. 352.13 Inventories ................................................................................................. 372.14 Trade receivables ...................................................................................... 372.15 Cash and cash equivalents ....................................................................... 372.16 Share capital ............................................................................................. 382.17 Trade payables ......................................................................................... 382.18 Borrowings ................................................................................................ 382.19 Compound financial instruments ............................................................... 382.20 Current and deferred income tax .............................................................. 392.21 Employee benefits ..................................................................................... 402.22 Share-based payments ............................................................................. 412.23 Provisions .................................................................................................. 422.24 Revenue recognition ................................................................................. 422.25 Leases ....................................................................................................... 442.26 Dividend distribution .................................................................................. 44

    3 Financial risk management ................................................................................. 483.1 Finan