Uppfyllande av de kvalitativa egenskaperna vid tolkning av IAS 16: En fallstudie av två gruvföretags omprövning av materiella anläggningstillgångar
Independent thesis Basic level (degree of Bachelor), 10 credits / 15 HE creditsStudent thesis
The introduction of IFRS for the consolidated accounts of the EU-listed companies meant a change in Sweden in terms of reviewing tangible assets depreciation method, useful life and residual value. The change led to a requirement to do reviews annually, unlike before when companies only had to do reviews when they felt a need for it. The regulation does not give specific guidelines of how to implement reviews, and since IFRS is a policy-based framework the companies are given room for interpretation. In the mining industry tangible assets are closely related to the useful life of the mine since they are depending on the ore mining. Tangible assets represent over 50 % of mining companies’ balance sheet which makes reviews significant in this industry. The study aims to create understanding of how IAS 16 paragraph 51 and 61 is interpreted by describing the reviewing process in practice in the mining industry. Companies’ interpretation can result in various ways of conducting reviews which in turn affects the design of their financial reports. Financial reports should display a true and fair view but former studies have shown that the term true and fair view is hard to define. The study also examines whether the interpretation contributes to a true and fair view in terms of the qualitative characteristics relevance, faithful representation, comparability and understandability. Empirical data was collected through interviews at corporate level and parent carrier level at two mining companies' financial departments’ in order to, from an accounting perspective, understand how the reviews is performed in practice. The study concludes that the companies’ interpretation of the standard is similar, but the companies are in different stages when it comes to establishing and implementing reviewing processes. The companies' interpretation is based on trade-offs between benefits and costs, which means that reviews occur when companies consider the impact on financial results to be large enough to justify the workload that reviews requires. This interpretation is somewhat subjective, but the trade-off does not seem to affect the financial result to the extent that a true and fair view will not be presented in financial statements. The study raises questions about what is considered to be a review. Is it enough to devote a thought to tangible assets to determine that the circumstances around them have not changed, or should all tangible assets routinely be reviewed annually?
Place, publisher, year, edition, pages
2015. , 43 p.
Social Behaviour Law
Samhälls-, beteendevetenskap, juridik, IFRS, IAS 16, rättvisande bild, materiella anläggningstillgångar, avskrivningsmetod, nyttjandeperiod, restvärde, omprövning, föreställningsram, kvalitativa egenskaper, relevans, tillförlitlighet, jämförbarhet, begriplighet, nytta och kostnad
IdentifiersURN: urn:nbn:se:ltu:diva-55776Local ID: c99c7188-0b58-473c-a883-5ccd2df44b87OAI: oai:DiVA.org:ltu-55776DiVA: diva2:1029160
Subject / course
Student thesis, at least 15 credits
Business Administration, bachelor's level
Curry, AmandaKurkkio, Monika
Validerat; 20150610 (global_studentproject_submitter)2016-10-042016-10-04Bibliographically approved