2 Title This will give you a good idea of what the standard deals with. These days the title of the standard is fairly self explanatory. e.g. Inventories (NZ IAS 2)

3 Objective This gives an expanded explanation of what the standard covers. e.g. “to prescribe the accounting treatment for inventories….” (NZ IAS 2:1)

4 Scope This tells you what the standard applies to e.g. all inventories except… (NZ IAS 2:2). May also list specific things that are covered by the standard and also specific exclusions. It is important to look at this section to ensure that the situation you are dealing with is covered.

5 Definitions This section will give definitions for items that are dealt with by the standard. It is extremely important to always look at this section as the definitions of items for the purposes of the standard may be slightly different to the more common definitions you are used to.

6 Measurement This section indicates the rules to apply when measuring items that are dealt with by the specific standard. e.g “Inventories shall be measured at the lower of cost and net realisable value”. (NZ IAS 2:9 ) Be careful with the language used and make sure you distinguish between “shall” – you must do it this way, and “may” – you can choose to do it this way but there are alternatives.

7 Recognition This section tells you how the items that are dealt with by the specific standard are to be included in calculations, i.e. how they are to be taken into account.

8 Disclosure This section tells you how the items dealt with by the standard are to be disclosed in the financial statements. Disclosure basically refers to “letting people know about it”. It is important to realise that often items are required by standards to be recognised but there may be no specific requirement for those items to be disclosed.