The and expenses. Specifically, Kesko discloses the

Theimportance of understanding the differences between financial statementsproduced under IFRS and VAS can be identified through the analysis and comparisonof financial statements produced in 2013 from two businesses operating in thefood industry.

In particular, Kinh Do Corporation, preparing its statementsaccording to VAS and Kesko Group, in conformity with IFRS. UnderIAS 1, Kesko are required to disclose any assumptions or judgements made by themanager concerning the future and any cause of estimation uncertainty that mayinfluence the carrying amount of asset and liabilities or income and expenses.Specifically, Kesko discloses the impairment test conducted for goodwill intheir notes, where the variable of EBITDA has been emphasised in Note 12 as ithas significant influence on the resultant impairment test (Appendix A). Nodisclosures are made in the statements of Kinh Do as VAS 21 does not identifythe requirement for the disclosure of such assumptions or judgements. Inaddition, the statement of changes in equity is presented as a primarycomponent in the statements of Kesko, whereas, VAS 21 requires such a statementto be included in the notes (Appendix B). Inreference to property, plant and equipment, PPE, the assets of Kesko arerecorded in accordance with IAS 16, where they are measured at their historic costand the related depreciation and impairment losses are recognised.

Within thisscope of measurement are asset dismantle, removal and repair costs, where suchcosts are accounted for in Note 11 as “Additions.” (Appendix C) Under VAS 3,the statements of Kinh Do are only able to include the costs incurred ininstalling the item, where, the impairment write down of PPE is not permittedunless approval is obtained from the Government. The dismantle, removal andrepair costs are accounted for as an expense in the income statement (AppendixD). There is a significant difference when considering goodwill. At Kesko, theamortisation of goodwill is not accepted, instead impairment is tested annually(Appendix E). In comparison, Kinh Do is permitted to amortise goodwill over themaximum period of ten years (Appendix F)