International Financial Reporting Standards
What are IFRS / IFRS used for?
Currently, the need to carry out appraisals of fixed assets in companies is recognized, in order to have adequate financial information that shows the current values of the assets and allows a more realistic appreciation of the current economic situation of the company. with the revaluation of the fixed asset.
The studies are based on this premise, based on NIFF / IFRS guidelines that are developed for companies.
What is the International Accounting Standards (IAS) - 16?
Property, Plant and Equipment
This study has as objective to determine the carrying amount, depreciation charges and impairment losses that must be recognized in relation to the fixed assets owned by the company, according to the terms and generalities of International Accounting Standards No. 16 (NIC-16), to recognize your situation and its repercussions on financial information.
The service offered consists of the following activities:
I.- Development of a Fixed Asset Control study which will have the purpose of establishing the recognition of the elements of property, plant and equipment defined by components and estimating their useful life (Decomponetization of assets) as well as measuring their cost at moment of recognition.
II.- After having carried out the initial recognition of the elements of property, plant and equipment, the subsequent measurement is carried out, determining the fair value of each component of the item of property, plant and equipment; Likewise, the estimate of the corresponding depreciation, the residual value and the amount of the impairment losses are generated based on the provisions of IAS-36.
- Estimation of fair value. (IFRS-13)
- Depreciation.
- Residual value estimate.
- Impairment of Net Asset Value
What does IFRS-13 International Financial Reporting Standards refer to?
fair value
The fair value is determined based on a detailed study of assets, in which accounting and physical characteristics of each asset required for its market study are identified. The valuation method or technique used is mainly the Market Approach according to the degree of hierarchy of each asset and based on market comparables, cost and income approaches will be applied.
Market Focus
It is used in the appraisals of goods that can be analyzed with comparable goods existing in the open market; It is based on the investigation of the demand for said goods, recent purchase-sale operations, through an homologation of the data obtained that allow the appraiser to estimate a market value.
Income Focus
It is the method to estimate the value that considers the income and expenses data related to the property that is being valued and estimates the value through the capitalization process. Capitalization relates income (usually a net income figure) and a defined type of value, turning a future income amount into an estimate of value.
Cost Approach.
It is the method of estimating the value of a property or other asset that considers the possibility that, as a substitute for it, another replica property could be built or acquired, or one that could provide an equivalent utility. It is based on the cost of reproduction or replacement of the property and its accessories, less total depreciation.
How does the NIC-36 study work?
Impairment of long-lived assets
The studies to estimate the impairment value are carried out under the guidelines indicated in the standard. NIC-36, whereby ANEPSA developed a Commercial Appraisal for the estimation of the fair value less costs of sale and a Financial Appraisal for the estimation of the value in use.
Another important point in the study is the identification of long-term fixed assets, which is carried out through the implementation of a fixed asset control whose objective is to identify each of the elements of property, plant and equipment per generating unit. of cash required by IAS-36; as well as to collect sufficient information of technical data to establish the useful life of each asset and the guidelines for an adequate market study in the estimation of the Fair Value.
