IAS/IFRS
No.

TAS
No.

Topic

IAS/IFRS

TAS

IFRS 1

None

First-time
adoption

General principle is full retrospective application of IFRSs in force at the time of adoption, unless the specific exceptions and exemptions in IFRS 1 permit or require otherwise.

Currently not relevant to Thailand.

IFRS 2

                 
(1)
None

Share-based payments

Summary is as follows:

All share-based payment transactions are recognized in the financial statements, using a fair value measurement basis.

Currently not addressed.

An expense is recognized when the goods or services received are consumed.

IFRS 2 applies to both public and non-public companies. However, if the fair value of equity instruments of non-public companies cannot be measured reliably, intrinsic value measurements are used.

IFRS 4

       
(1)
None

Insurance contracts

Summary is as follows:

Currently not addressed.

Insurers are exempted from applying the IASB Framework and certain existing IFRSs.

Catastrophe reserves and equalization provisions are prohibited.

Requires a test for the adequacy of recognized insurance liabilities and an impairment test for reinsurance assets.

Insurance liabilities may not be offset against related reinsurance assets.

Accounting policy changes are restricted.

New disclosures are required.

IAS 12

  
(1)
56

Deferred taxes

Summary is as follows:

Currently not addressed.

Current tax liabilities and assets are recognized for current and prior period taxes, measured at the rates applicable for the period.

A temporary difference is a difference between the carrying amount of an asset or liability and its tax base.

Deferred tax liabilities are recognized for the future tax consequences of all taxable temporary differences with three exceptions:

- where the deferred tax liability arises from the initial recognition of goodwill;

- the initial recognition of an asset/liability other than in a business combination which, at the time of the transaction, does not affect either the accounting or the taxable profit; and

IAS 12

   
(1)
56

Deferred taxes (cont.)

- differences arising from investments in subsidiaries, branches associates and interests in joint ventures (e.g. due to undistributed profits) where the entity is able to control the timing of the reversal of  the difference and it is probable that the reversal will not occur in the foreseeable future.

Currently not addressed

A deferred tax asset is recognized for deductible temporary differences, unused tax losses, and unused tax credits, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilized, with the following exceptions:

- a deferred tax asset arising from the initial recognition of an asset/liability, other than in a business combination, which, at the time of the transaction, does not affect the accounting or the taxable profit, and

IAS 12

(1)
56

Deferred taxes (cont.)

- assets arising from deductible temporary differences associated with investments are recognized only to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profit will be available to utilize the difference.

Currently not addressed.

Deferred tax liabilities (assets) are measured at the tax rates expected to apply when the liability is settled or the asset is realized, based on tax rates/laws that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and liabilities are not discounted.

Deferred tax assets and liabilities are presented as non-current items in the statement of financial position.

IAS 18

(1)
26&37

Revenue recognition guidance

General principles are consistent with Thai GAAP, however more detailed or industry specific guidance is available which may cause differences in practice.

General principles are consistent with IFRS.

With respect to real estate sales, IAS 18 provides guidance that sales should be recognized using the accrual method.

TAS 26 allows real estate sales to be recognized using the percentage of completion, installment or accrual method.

IAS 19

  
(1)
None

Employee benefits

Summary is as follows:

Currently not addressed.

Underlying principle: the cost of providing employee benefits is recognized in the period in which the entity receives services from the employee, rather than when the benefits are paid or payable.

IAS 19

  
(1)
None

Employee benefits (cont.)

Short-term employee benefits (payable within 12 months) are recognized as an expense in the period in which the employee renders the service. Unpaid benefit liability is measured at undiscounted amount.

Profit-sharing and bonus payments are recognized only when the entity has a legal or constructive obligation to pay them and the costs can be reliably estimated.

Post-employment benefit plans (such as pensions and health care) are categorized as either defined contribution plans or defined benefit plans.

For defined contribution plans, expenses are recognized in the period the contribution is payable.

Currently not addressed. 

It should be noted that under a Thai labour law, an entity is legally obligated to make a severance payment to any employee who reaches the documented retirement age under certain circumstances. The severance payment is based on a statutorily-determined formula based on years of service and salary level at the retirement age. In practice, Thai companies generally accrue for this post-retirement benefit when due (once an employee reaches retirement age).

IAS 21

 
(1)
30

Definition of functional and presentation currencies

The functional currency is the currency of the primary economic environment in which the entity operates. The presentation currency is the currency in which the financial statements are presented.

Does not include the concept of functional and presentation currencies. The reporting currency used is the Thai Baht.

IAS 21

 
(1)
30

Foreign currency translation reserve – accounting for dividends considered to be returns of investment

Accounted for as a disposal of part of the foreign investment and relevant part of the reserve is recycled to the income statement.

Currently not addressed.

IAS 21

 
(1)
30

Foreign currency translation – capitalization of losses from exchange translation

Capitalization of losses resulting from severe currency devaluation without any method to hedge shall be recognized in the profit and loss immediately.

Capitalization of losses resulting from severe currency devaluation without any method to hedge shall be recognized in the cost of assets.

IAS 21

 
(1)
30

Foreign currency translation method

There is no difference in the translation method for a foreign business which is a part of an integral operation or an independent foreign entity. When translating financial statements of a foreign operation, exchange rate differences between the period end date and transaction date should be recognized in equity.

There is a difference in the translation method for a foreign business which is a part of an integral operation or an independent foreign entity.

When translating financial statements of a foreign business which is an integral operation, exchange rate differences between the period end date and transaction date should be recognized in profit and loss immediately.

IAS 39

None

Applicability

All entities.

Currently there is no TAS equivalent to IAS 39. However the following TAS can provide accounting guidance for various financial instruments:

IAS 39

None

Applicability
(cont.)

All entities.

- TAS 11, Doubtful Accounts and Bad Debts;

- TAS 34, Troubled Debt Restructuring;

- TAS 40, Accounting for Investments in Debt and Equity Securities;

- TAS 42, Accounting for Investment Companies.

IAS 39

     
   (1)
None

Recognition

All financial assets and financial liabilities, including all derivatives and certain embedded derivatives, are recognized in the statement of financial position.

Derivative accounting is currently not addressed. There is disparity in practice with some entities recording derivatives using the mark-to-market approach or disclosing derivative transactions in accordance with TAS 48, Financial Instruments: Disclosure and Presentation.

IAS 39

       
(1)
None

Initial measurement of financial Instruments

At fair value at the date of acquisition or issue. Usually this is the same as cost, but sometimes an adjustment is required.

At fair value.

IAS 39

  
(1)
None

Hedge accounting

Summary is as follows:

Currently not addressed.

Hedge accounting (recognizing the offsetting effects of fair value changes of both the hedging instrument and the hedged item in the same period’s profit or loss) is permitted in certain circumstances, provided that the hedging relationship is clearly defined, measurable, and actually effective. IAS 39 provides for three types of hedges:

- fair value hedge: if an entity hedges a change in fair value of a recognized asset or liability or firm commitment, the change in fair values of both the hedging instrument and the hedged item are recognized in profit or loss when they occur;

- cash flow hedge: if an entity hedges changes in the future cash flows relating to a recognized asset or liability or a probable forecast transaction, then the change in fair value of the hedging instrument is recognized in other comprehensive income until such time as those future cash flows occur; and

Currently not addressed.

IAS 39

 
(1)
None

Hedge accounting (cont.)

- hedge of a net investment in a foreign entity: this is treated as a cash flow hedge.

A hedge of foreign currency risk in a firm commitment may be accounted for as a fair value hedge or as a cash flow hedge.

IAS 41

   
(1)
57

Measurement basis

All biological assets are measured at fair value less estimated point-of-sale costs, unless fair value cannot be measured reliably.

Currently not addressed. In practice, these assets are typically accounted for as inventory in accordance with TAS 31, Inventories.

Agricultural produce is measured at fair value at the point of harvest less estimated point-of-sale costs. Because harvested produce is a marketable commodity, there is no ‘measurement reliability’ exception for produce.

Any change in the fair value of biological assets during a period is reported in profit or loss.

IAS 41

     
(1)
57

Measurement basis (cont.)

Exception to fair value model for biological assets: if there is no active market at the time of recognition in the financial statements, and no other reliable measurement method, then the cost model is used for the specific biological asset only. The biological asset is measured at depreciated cost less any accumulated impairment losses.

Currently not addressed. In practice these assets are typically accounted for as inventory in accordance with TAS 31, Inventories.

Quoted market price in an active market generally represents the best measure of fair value of a biological asset or agricultural produce. If an active market does not exist, IAS 41 provides guidance for choosing another measurement basis.

Fair value measurement stops at harvest. IAS 2 applies after harvest.