PFRS 14 15 16

PFRS 14 — Regulatory Deferral Accounts revenue and subsequently recognized as
revenue when the award credits are redeemed

I. Nature
Recognition of revenue
Rate regulation
An entity shall recognize revenue when
 framework for establishing the prices that or as it satisfies a performance obligation by
can be charged to customers for goods transferring control of a good or service to a
and services customer
 framework is subject to oversight and/or
approval by a rate-regulator Revenue recognition at a point in time
Rate regulator – authorised body that is a. The entity has the right to receive
empowered by statute or regulation to establish payment for the asset and for which the
the rate or range of rates that bind an entity. customer is obliged to pay
b. The customer has a legal title to the
Regulatory deferral account balance – balance asset
of any expense (or income) account that would c. The entity has transferred physical
not be recognised as an asset or a liability in possession of the asset to the customer
accordance with other Standards, but that d. The customer has the significant risks
qualifies for deferral and rewards of ownership of the asset
II. Presentation e. The customer has accepted the asset
 It shall be presented in financial
statements separately. III. Measurement
 An entity shall account for the
award credit as a separately
component of the initial sale
PFRS 15: REVENUE FROM CONTRACTS
transaction
WITH CUSTOMERS
I. Nature IV. Transaction

 The amount of consideration in a
Revenue – income in the ordinary course of contract to which an entity
business activities expects to be entitled in
Income – increase in economic benefit during exchange for transferring good
the accounting period in the form of an inflow or or service to a customer
enhancement of asset or decrease in liability that Factors that may affect transaction price:
result in an increase in equity.
a. Variable consideration
II. Recognition b. Time value of money
Consideration allocated to the award c. Noncash consideration
credits is initially recognized as deferred d. Consideration payable to a customer
Transaction price is allocated to each reimbursement or assumption by the lessor of
performance obligation on the basis of relative the cost of the lessee
stand – alone selling price of each good or
Initial direct cost – Incremental cost of obtaining
service
a lease that would not have been incurred if the
lease had not been obtained
PFRS 16: LEASES Leasehold improvement – is not initial direct

cost and not included in the cost of the right of
I. Nature use asset
Contract or part of a contract that Subsequent Measurement of right of use:
conveys the right to use the underlying asset for
a period of time in exchange for consideration Lessee shall measure the right of use
asset applying the cost model
Underlying asset – the subject of a lease for
which the right to use that asset has been To apply the cost model, the lessee shall
provided by the lessor to the lessee measure the right of use asset at cost less any
accumulated depreciation and impairment loss
Lessee – entity that obtains the right to use an
underlying asset for a period of time in exchange Measurement of lease liability:
for consideration
The lessee shall measure the lease
Lessor – entity that provides the right to use an liability at the present value of lease payments
underlying asset for a period of time in exchange
The lease payments shall be discounted
for consideration
using the interest rate implicit in the lease desired
II. Measurement: by the lessor
A right of use asset is defined as an If the implicit rate cannot be readily

asset that represents the right of a lessee to use determined, the increment borrowing rate of the
an underlying asset over the lease term in a lessee is used
finance lease
III. Presentation:
a. The present value of lease payments
b. Lease payments made to lessor such as The lessee shall present the right of use
lease restoring the underlying asset for asset as a separate line item as noncurrent asset
which the lessee has a present obligation in the statement of financial position
c. Initial direct costs incurred by the lessee As alternative, the lessee may include
d. Estimate of cot of dismantling and the right of use asset in the appropriate line item
restoring the underlying asset for which within which the corresponding underlying asset
the lessee has a present obligation would be presented if owned.
Lease Incentive – payment by the lessor to the
lessee associated with a lease or the
IFRIC INTERPRETATIONS  Fair value of equity instrument issued
 Fair value of liability extinguished
Decommissioning liability – obligation to  Carrying amount of liability extinguished
dismantle, remove and restore an item of PPE as
required by law or contract. Members’ shares in cooperative entities
Change in decommissioning liability  Entity has an unconditional right to

refuse redemption
 A decrease in decommissioning  Redemption is unconditionally
liability is deducted from the cost of the prohibited by law
asset
 An increase in decommissioning
liability is added to the cost at the asset
Distribution of noncash asset to owners –

payment of property dividend to shareholders.
 Shall be measured at fair value of the

asset to be distributed.
 Shall be initially recognized at fair value
of the noncash asset on the date of
declaration and is increased or
decreased as a result of change.
Offsetting debit or credit – directly retained

earnings
Settlement of dividend payable – shall be

recognized as gain or loss on distribution of
property dividend
Non-cash asset distributed – shall be

measured at lower of carrying amount and fair
value less cost of disposal.
Accounting issue – how should an entity initially

measure the equity instrument issued to
extinguish a financial liability.
Equity swap – issuance of share capital by the

debtor to the creditor in full or partial payment of
an obligation.
Equity instrument shall be measured at:

PFRS 14 15 16

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PFRS 14 — Regulatory Deferral Accounts revenue and subsequently recognized as

revenue when the award credits are redeemed

I. Nature IV. Transaction

PFRS 16: LEASES Leasehold improvement – is not initial direct

A right of use asset is defined as an If the implicit rate cannot be readily

Change in decommissioning liability  Entity has an unconditional right to

Distribution of noncash asset to owners –

 Shall be measured at fair value of the

Offsetting debit or credit – directly retained

Settlement of dividend payable – shall be

Non-cash asset distributed – shall be

Accounting issue – how should an entity initially

Equity swap – issuance of share capital by the

Equity instrument shall be measured at:

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