In 2015, the accounting and auditing standards compilation committee of the auditing organization has compiled or revised some accounting and auditing standards as follows, which requires the members of the society to know the full text of the said standards in order to use them in the audits.
The full text of the mentioned standards is available through the community website, the website of the auditing organization, or the publication of the aforementioned publication (publications of the auditing organization).
accounting standards
Accounting standard number 4
Reserves, Contingent Liabilities and Contingent Assets (Revised)
This standard was approved in July 2015 and is valid for all financial statements whose financial period starts on 1/1/2015 and after.
The reason for revising the standard:
This revision is done with the aim of more harmonization with international accounting standards and improvement of the previous standard.
Main changes:
– In this standard, the titles of reserves, contingent liabilities and contingent assets have been replaced by the title of contingent events.
In the new standard, definitions are provided for reserves, contingent liabilities and contingent assets. But in the previous standard, only the possible event was defined.
– In the previous standard, the creation of debt or the reduction of assets due to future events was divided into three groups: probable, possible and unlikely. In the new standard, probable liabilities are defined in the form of reserves, and possible and unlikely liabilities are also considered as contingent liabilities.
– In this standard, the calculation of the present value is required to recognize the reserve if the effect of the time value of money is significant.
In the new standard, requirements on unprofitable contracts and restructuring expenses are presented.
Target:
The purpose of this standard is to ensure the use of appropriate recognition criteria and measurement bases for reserves, contingent liabilities and contingent assets, as well as disclosure of sufficient information in explanatory notes for a better understanding of their nature, timing and amount by financial statement standards.
Accounting standard number 5
Events after the balance sheet date
(Revised 1384)
This standard was approved in July 2015 and is valid for all financial statements whose financial period starts on 1/1/2015 and after.
The reason for revising the standard:
This revision is done with the aim of more harmonization with international accounting standards and improvement of the previous standard.
Main change:
The main change compared to the previous standard is related to the proposed dividend which is presented in paragraphs 10 and 11. According to the requirements in these paragraphs, dividends approved after the balance sheet date or proposed dividends are not recognized as liabilities on the balance sheet date.
Target:
The purpose of this standard is to determine the following requirements:
A- Cases where financial statements are adjusted for events after the balance sheet date, and
B- Disclosure of information about events after the balance sheet date until the date of approval of the financial statements, also according to this standard, if the events after the balance sheet date indicate the inappropriateness of using the going concern assumption, the business entity should not prepare its financial statements based on the going concern basis.
Accounting Standard No. 18
Consolidated financial statements and investment accounting
In subsidiary business units
(Revised 1384)
This standard was approved in July 1385 and is valid for all financial statements whose financial period starts from 1/1/1385 and after.
Reasons for revising the standard:
This revision is done with the aim of more harmonization with international accounting standards and improvement of the previous standard.
Main changes:
– According to the previous standards, the main business units that had more than 90% of their shares in the possession of another main business unit were not required to submit consolidated financial statements in case of obtaining the consent of other shareholders, the condition of 90% has been removed in the new standard, but other conditions are according to paragraph 6 standards have been added.
– The requirement to prepare consolidated financial statements in case of severe and long-term restrictions has been removed in this standard, because if the restriction leads to the loss of control, the investing entity does not comply with the definition of a subsidiary business entity and is therefore not subject to consolidation. but if, despite the existence of restrictions, control is still in place, the main business unit must prepare consolidated financial statements.
– In the revised standard, the minority share is calculated based on the net fair value of identifiable assets of the subsidiary business unit on the date of acquisition, in the previous standard, the minority share was calculated based on the book amount.
– To reflect the investment in the business unit in separate financial statements, the net worth method will not be allowed from now on. In the previous standard, the use of this method was allowed.
Target:
The purpose of this standard is to require the main business units to prepare consolidated financial statements in order to provide financial information about the economic activities of the group of business units, in such a way that the resources under the control of the group, the obligations of the group and the results obtained through the use of the resources of the group It shows as a single economic character. This standard is set with the assumption that the business units of the group are joint stock companies. But its requirements are also applicable to other types of business units.
Accounting Standard No. 19
Commercial combinations
(Revised 1384)
This standard was approved in July 2015 and is valid for all financial statements whose financial period starts on 1/1/2015 and after that.
Reasons for revising the standard:
This revision aims to harmonize more with international accounting standards
Ray and improvement of the previous standard has been done.
Main changes:
– According to the previous standard, business units were allowed to use two methods of purchase and union of interests to carry out business combinations. In the new standard, the method of combining interests has been removed.
– In the revised standard, the minority share is calculated based on the net fair value of identifiable assets of the subsidiary business entity. In the previous standard, the minority share was calculated based on the book amount.
– The excess of the acquiring unit’s share of the net fair value of the identifiable assets and liabilities of the acquired entity compared to the cost price is shared among identifiable non-monetary assets in proportion to the fair value and is not recognized as income. Thus, negative goodwill and its accounting method have been removed in this standard.
Target:
The objective of this standard is some requirements related to financial reporting of business combinations. According to this standard, all business combinations must be accounted for using the purchase method. Therefore, the acquiring entity recognizes the identifiable assets and liabilities of the acquired entity at their fair value on the date of acquisition. In addition to this, goodwill is also recognized and amortized, and the impairment test is also carried out.
Accounting Standard No. 28
General insurance activities
This standard was approved in July 2015 and is valid for all financial statements whose financial period starts on 1/1/2016 and after that.
Target:
The purpose of this standard is to prescribe accounting methods for insurance premiums, damages and expenses for the acquisition of direct and indirect general insurances, as well as the disclosure of information about this type of activity in the financial statements of insurance companies and institutions. Requirements of other accounting standards if applicable to general insurance activity that are not replaced by this standard.
Scope of application:
This standard should be applied to general insurance and term life insurance activities and is not applicable to other life insurances.
Auditing standards
Auditing standard
Section 50: Audit evidence
(Revised 1384)
This standard was approved in July 2015 and is valid for the audit of financial statements whose financial period starts on 1/1/2015 and after that.
The purpose of this section is to provide the necessary standards and guidance about the types of audit evidence, the quantity and quality of audit evidence and the methods of obtaining such evidence in the audit of financial statements.
In order for the auditor to be able to reach a logical conclusion and express his professional opinion based on this, the auditor must obtain sufficient and appropriate evidence.
Auditing standard
Section 50-1: Audit evidence – specific items
(replacing the attachment of section 50)
This standard was approved in July 2015 and is valid for the audit of financial statements whose financial period starts on 1/1/2015 and after that.
The purpose of this section is to provide standards and financial guidance, in addition to what is stated in the standard text of audit evidence, about some specific items of financial statements and other disclosures.
The application of these standards and guidelines helps the auditor in obtaining audit evidence about some specific items included in the financial statements and other disclosures in the said statements.