DIPIFR Quick Reference Formula Framework Sheet

Essential Calculations & Decision Trees for Exam Success

How to Use This Quick Reference

Pre-Exam: Review for final confirmation of formulas and frameworks During Exam: Quick lookup for calculation verification and decision trees Time-Saver: Avoid mental blanks on formulas under exam pressure Confidence Builder: Systematic approaches to any scenario

πŸ—οΈ IAS 16 - Property, Plant & Equipment

Core Formulas

PPE Initial Cost = Purchase Price + Directly Attributable Costs - Discounts - Incentives

Directly Attributable (MDTT):
βœ“ Materials + Direct Labour + Testing + Transport/Site Prep + Dismantling Provision

NOT Directly Attributable (TACO):  
βœ— Training + Admin + Ceremony + Operational Losses

Annual Depreciation = (Cost - Residual Value) Γ· Useful Life

Revaluation Gain/Loss = Fair Value - Carrying Amount

Key Decision Trees

PPE Recognition Decision:
Future economic benefits probable? β†’ YES
Cost measurably reliable? β†’ YES
β†’ RECOGNIZE PPE

Revaluation Treatment:
Gain β†’ OCI (Revaluation Surplus in Equity)
Loss β†’ P&L (unless reversing previous OCI surplus)

Depreciation Start:
Available for use? β†’ START DEPRECIATION
(Not: actually used, full capacity, training complete)

βš–οΈ IAS 37 - Provisions, Contingent Liabilities & Contingent Assets

Recognition Framework - "3 Ps + R"

P1: Past Event β†’ Has it already happened? β†’ YES
P2: Present Obligation β†’ Can entity avoid settlement? β†’ NO  
P3: Probable Outflow β†’ >50% chance of payment? β†’ YES
R: Reliable Estimate β†’ Can amount be measured? β†’ YES
β†’ RECOGNIZE PROVISION

If any criterion fails β†’ CONTINGENT LIABILITY (disclose only)

Measurement Formulas

Provision = Best Estimate of Expenditure Required

If long-term: Present Value = Future Amount Γ· (1 + Discount Rate)^Years

Annual Unwinding = Provision Carrying Amount Γ— Discount Rate

Constructive Obligation Test:
Past practice + Public statements + Valid expectations = Present Obligation

Probability Thresholds

Virtually Certain (95%+) β†’ Recognize contingent asset
Probable (>50%) β†’ Recognize provision  
Possible (5-50%) β†’ Disclose contingent liability
Remote (<5%) β†’ No disclosure

🧠 IAS 38 - Intangible Assets

Development Capitalization - "6 Criteria Test"

ALL must be met:
1. Technical feasibility demonstrated
2. Intention to complete and use/sell  
3. Ability to use or sell
4. Probable future economic benefits
5. Adequate resources to complete
6. Reliable measurement possible

Research Phase β†’ ALWAYS EXPENSE
Development Phase β†’ CAPITALIZE if 6 criteria met

Subsequent Measurement

Finite Life β†’ Amortize over useful life
Indefinite Life β†’ No amortization + Annual impairment test

Amortization starts when: Available for use
Method: Straight-line (unless other pattern demonstrated)

🌾 IAS 41 - Agriculture

Fair Value Less Costs to Sell (FVLCTS)

FVLCTS = Fair Value - Costs to Sell

Costs to Sell (TBLM):
βœ“ Transport + Brokerage + Legal + Marketing
βœ— Finance costs, Income taxes

Fair Value Hierarchy:
Level 1: Active market prices
Level 2: Adjusted market prices  
Level 3: Present value of expected cash flows

All FV changes β†’ P&L (no OCI treatment)

Asset Classification

Biological Asset β†’ Living plants/animals undergoing transformation (IAS 41)
Agricultural Produce β†’ Harvested product at point of harvest (IAS 41 β†’ IAS 2)
Bearer Plant β†’ Productive plant over multiple periods (IAS 16)

πŸ’° IFRS 9 - Financial Instruments

Classification Decision Tree

FINANCIAL ASSETS:
Business Model + SPPI Test:

Hold to Collect + SPPI Pass β†’ AMORTISED COST
Hold to Collect & Sell + SPPI Pass β†’ FVOCI  
Other/Trading/SPPI Fail β†’ FVPL

FINANCIAL LIABILITIES:
Default β†’ Amortised Cost
Derivatives β†’ FVPL

Key Formulas

Effective Interest Method:
Interest = Carrying Amount Γ— Effective Interest Rate

Amortised Cost = Initial Amount + Interest - Payments + Impairment

Hedge Accounting:
Cash Flow Hedge: Effective portion β†’ OCI, Ineffective β†’ P&L
Fair Value Hedge: Both hedged item & instrument β†’ P&L

🎭 IFRS 2 - Share-based Payment

Classification Framework

Settlement Method Decision:
Equity instruments issued β†’ EQUITY-SETTLED
Cash payment based on share price β†’ CASH-SETTLED

EQUITY-SETTLED:
Measure: Grant date fair value (no remeasurement)
Recognize: Over vesting period β†’ Expense + Equity

CASH-SETTLED:  
Measure: Fair value remeasured each reporting date
Recognize: Over vesting period β†’ Expense + Liability

Vesting Conditions

Service Conditions β†’ Adjust quantity of awards expected to vest
Non-market Performance β†’ Adjust quantity of awards expected to vest  
Market Conditions β†’ Include in grant date fair value (no later adjustment)

Modification: Incremental fair value β†’ Immediate recognition
Cancellation: Remaining unrecognized expense β†’ Immediate recognition

πŸ’΅ IFRS 15 - Revenue from Contracts with Customers

5-Step Model Framework

Step 1: Identify Contract β†’ Committed parties + Commercial substance
Step 2: Identify Performance Obligations β†’ Distinct goods/services
Step 3: Determine Transaction Price β†’ Fixed + Variable (constrained)
Step 4: Allocate Price β†’ Relative standalone selling prices
Step 5: Recognize Revenue β†’ When/as control transfers

"Distinct" Test:
Can customer benefit separately? + Separately identifiable? β†’ YES = Separate Obligation

Recognition Timing

OVER TIME (any criterion):
- Customer receives & consumes benefits as performed
- Customer controls asset as entity creates it  
- No alternative use + Enforceable payment right

POINT IN TIME (default):
Control transfers indicated by:
- Legal title transfer
- Physical possession transfer
- Customer acceptance
- Risks & rewards transfer

Variable Consideration Constraint

Include only if: Highly probable that significant reversal will NOT occur

Expected Value Method: Probability-weighted outcomes
Most Likely Amount: Single most likely scenario

🏠 IFRS 16 - Leases

Initial Recognition

Lease Liability = PV of lease payments at incremental borrowing rate

Lease Payments Include:
βœ“ Fixed payments - Incentives
βœ“ Variable payments based on index/rate
βœ“ Purchase options (if reasonably certain)
βœ“ Termination penalties (if lease term includes)

ROU Asset = Lease Liability + Prepaid payments + Initial direct costs + Restoration costs

Subsequent Measurement

Lease Liability: Amortised cost using effective interest method
Monthly Interest = Opening Liability Γ— (Annual Rate Γ· 12)

ROU Asset: Straight-line depreciation over lease term
Monthly Depreciation = Initial ROU Cost Γ· Lease Term (months)

Modification

Remeasure liability using revised terms + Updated discount rate
Adjust ROU asset by change in liability
Continue depreciation on adjusted ROU balance

πŸ‘₯ IAS 19 - Employee Benefits

Defined Contribution vs Defined Benefit

Risk Allocation Test:
Employer risk limited to contributions β†’ DEFINED CONTRIBUTION
Employer bears actuarial/investment risk β†’ DEFINED BENEFIT

DC Accounting: Expense = Contribution required
DB Accounting: Three-component model

DB Plan Three Components

1. Current Service Cost β†’ P&L Operating expense
   = PV of benefits earned through current period service

2. Net Interest β†’ P&L Finance cost  
   = Opening net liability Γ— Discount rate

3. Remeasurements β†’ OCI (not recycled)
   = Actuarial gains/losses + Return differences

Net DB Liability = PV of Obligation - FV of Plan Assets

πŸ’Έ IAS 12 - Income Taxes

Temporary Difference Calculation

Temporary Difference = Carrying Amount - Tax Base

Tax Base:
Assets = Amount deductible in future
Liabilities = Carrying amount - Future deductible amount

Classification:
Carrying > Tax Base β†’ Taxable difference β†’ DTL
Carrying < Tax Base β†’ Deductible difference β†’ DTA

Recognition Rules

DTL: Always recognize (except goodwill initial recognition)
DTA: Only if probable taxable profits available

Measurement = Temporary difference Γ— Enacted tax rate

Presentation:
All deferred tax β†’ Non-current
OCI items β†’ Deferred tax to OCI
P&L items β†’ Deferred tax to P&L

πŸ“Š Cross-Standard Integration Patterns

Common Combinations

IAS 16 + IAS 12: PPE revaluation β†’ DTL to OCI
IAS 37 + IAS 16: Environmental provision β†’ Capitalize in PPE cost  
IAS 37 + IAS 12: Provision β†’ DTA to P&L
IFRS 15 + IAS 37: Warranty β†’ Service type separate obligation
IFRS 16 + IAS 12: ROU asset vs Lease liability β†’ Net DTL
IAS 19 + IAS 12: Pension liability β†’ DTA (to OCI if remeasurements)

Universal Present Value Formula

PV = Future Amount Γ· (1 + Discount Rate)^Number of Periods

Used in: IAS 37 (provisions), IFRS 16 (leases), IAS 19 (pensions)

⚑ Memory Devices & Mnemonics

IAS 16 Cost Classification

MDTT (Capitalize): Materials, Direct labour, Testing, Transport
TACO (Expense): Training, Admin, Ceremony, Operations

IAS 37 Recognition

"Past β†’ Present β†’ Probable β†’ Provision"
3 Ps + R = Past event + Present obligation + Probable outflow + Reliable estimate

IFRS 15 Performance Obligations

"DISTINCT" = Customer can benefit separately + Separately identifiable

IAS 12 Tax Differences

"Carrying vs Tax Base" = Always compare these two amounts

IFRS 9 Classification

"Business model + SPPI" = Two-factor test for debt instruments

πŸš€ Exam Day Quick Checks

Before Starting Any Question

  • [ ] Scan for multiple standards (integration likely)
  • [ ] Identify potential deferred tax implications
  • [ ] Check for ethics manipulation scenarios
  • [ ] Note any fair value measurements required

During Calculations

  • [ ] Show workings clearly with labels
  • [ ] Use examiner terminology from keywords list
  • [ ] Include journal entries where appropriate
  • [ ] State assumptions and principles applied

Before Moving to Next Question

  • [ ] Verified all cross-standard implications addressed
  • [ ] Included ethics paragraph if manipulation present
  • [ ] Used professional language throughout
  • [ ] Checked calculations for arithmetic accuracy

πŸ† Success Formulas by Standard 

IAS 16: MDTT vs TACO + Available for use + OCI revaluations = Success
IAS 37: 3 Ps + R + Constructive obligations + Present value = Success  
IAS 38: Research vs Development + 6 criteria + Available for use = Success
IAS 41: FVLCTS + Control to P&L + Bearer plant distinction = Success
IFRS 9: Business model + SPPI + Hedge accounting = Success
IFRS 2: Equity vs Cash + Grant date vs Remeasure + Vesting = Success
IFRS 15: 5 steps + Distinct + Control transfer = Success  
IFRS 16: PV calculation + ROU vs Liability + Modifications = Success
IAS 19: DC vs DB + Three components + P&L vs OCI = Success
IAS 12: Carrying vs Tax base + Recognition rules + Presentation = Success

Keep this reference close during revision and exams - these formulas and frameworks are your foundation for DIPIFR success! βš‘πŸš€

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