Doing Business

Doing Business in Mexico 2015

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227 Doing Business in Mexico 2015 Appendix XIII Financial Statements Changes to Mexican Financial Reporting Standards (MFRS) and Improvements to MFRS 2014 During December 2012, 2013 and 2014, CINIF issued a series of MFRS which will be in force as of January 1, 2014, and January 1, 2016, as shown as follows: 2014 MFRS B-12 "Offsetting financial assets and financial liabilities". Establishes standards concerning the rights of compensation to be considered in order to present a financial asset and a financial liability in their offsetting amount within the statement of the financial position, as well as which are the characteristics required contemplating compensation, based on the principle that a financial asset and a financial liability should always be recorded in their offsetting amount and provided the future cash flow of collection or settlement is net. MFRS C-11 "Stockholders' equity". Establishes the valuation, presentation and disclosure standards for those items comprising stockholders' equity in the statement of the financial position of profit entities. The main changes in relation to the above standard are: a) it requires the pricing per share to be issued by advances for future capital increases and that it is established that it can not be repaid before capitalized, in order to qualify as equity, and b) includes the standard related to financial instruments that at initial recognition are identified as equity. MFRS C-12 "Financial instruments with features of liability and equity". Establishes the standards for the initial recognition of final instruments with features of liability and equity in the profit entities' financial statements. The concept of subordination is incorporated. MFRS C-14 "Transfer and derecognition of financial assets". Establishes the principle of transfer of risks and rewards of ownership of the financial asset, as underlying condition to derecognition. When entities deduct accounts or notes receivable with resources, they must not show the discount amount as a credit to accounts and notes receivable, but as a liability. Improvements to MFRS 2014 MFRS C-5 "Advance payments". Establishes the accounting treatment of advanced payments for the purchase of items for which payment is denominated in foreign currency. It also states that impairment losses in the value of advanced payments (and reversals thereof) must be submitted as part of the net profit or loss for the period in the line item that the Company deems appropriate according to its professional judgment, rather than income statement of the period under other income and expenses. Bulletin C-15 "Impairment in the value of long-lived assets and their disposal". Establishes that an impairment loss and its reversal in the value of intangible assets with indefinite lives (including goodwill), should be presented in the income statement of the period in the item showing the depreciation and amortization of assets of the cash-generating unit to which such intangible assets are associated. It is unacceptable to present impairment losses as part of the costs that have been capitalized in the value of any asset. The requirement to submit certain operations in other income and expenses is removed from MFRS B-3 "Comprehensive income statement", MFRS B-16 "Financial statements of non-profit entities", MFRS C-6 "Property, Plant and Equipment", Bulletin C-9 "Liabilities, provisions, contingent assets and liabilities and commitments", MFRS D-3 "Employee benefits", and, instead, the use of those items is left to the discretion of the Company XIII

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