Financial Statements & International Accounting Standards

Pre Test
Introduction 

• International accounting standard (1)
• Presentation of financial statements 
  • Objective - scope - definitions 
  • Financial statements 
    • Purpose of financial statements 
    • Complete set of financial statements 
    • General features 
    • Fair presentation and compliance with IFRSs 
    • Going concern - Accrual basis of accounting 
    • Materiality and aggregation 
    • Offsetting 
    • Frequency of reporting 
    • Comparative information 
    • Consistency of presentation 
  • Structure and content 
    • Introduction 
    • Identification of the financial statements 
• Statement of financial position 
  • Information to be presented in the statement of financial position 
  • Current/non-Current distinction 
  • Current assets - Current liabilities 
  • Information to be presented either in the statement of financial position or in the notes 
• Statement of comprehensive income 
  • Information to be presented in the statement of comprehensive income profit or Loss for the period 
  • Other comprehensive income for the period 
  • Information to be presented in the statement of comprehensive income
  • Statement of changes in equity 
• Statement of cash flows 
  • Structure 
  • Disclosure of accounting policies 
  • Sources of estimation uncertainty 
  • Capital 
  • Other disclosures

Case Study
Group discussion & Quiz

International Accounting Standard (2 )

• Inventories
  • Introduction
  • International accounting standard no (2)
  • Inventories - objective - scope definitions
  • Measurement of inventories
    • Cost of inventories
    • Costs of purchase
    • Costs of conversion
    • Other costs
    • Cost of inventories of a service provider
    • Cost of agricultural produce harvested from biological assets
    • Techniques for the measurement of cost
    • Cost formulas
    • Net realizable value
  • Recognition as an expense
  • Disclosure
  • Effective date
  • Withdrawal of other pronouncements
  • Appendix
    • Amendments to other pronouncements
  • Approval of IAS 2 by the board
• Basis for conclusions

Case Study

Group discussion & Quiz

International Accounting Standard  ( 7 )

Statement of Cash Flows

• Objective
• Scope
• Benefits of cash flow information
• Definitions
  • Cash and cash equivalents
• Presentation of a statement of cash flows operating activities
  • Investing activities
  • Financing activities
• Reporting cash flows from operating activities
• Reporting cash flows from investing and financing activities
• Reporting cash flows on a net basis
• Interest and dividends
• Taxes on income
• Investments in subsidiaries, associates and joint ventures
• Changes in ownership interests in subsidiaries and other businesses
• Non-cash transactions
• Components of cash and cash equivalents
• Other disclosures
• Effective date

Case Study
Group discussion & Quiz

International accounting standard (8)

Accounting policies, changes in accounting estimates and errors

• Objective  - scope - definitions accounting policies
  
  • Selection and application of accounting policies
  • Consistency of accounting policies
  • Changes in accounting policies
  • Applying changes in accounting policies
  • Retrospective application
  • Limitations on retrospective application
  • Disclosure
• Changes in accounting estimates
  
  • Disclosure
• Errors
  
  • Limitations on retrospective restatement
  • Disclosure of prior period errors
• Impracticability in respect of retrospective application and
• Retrospective restatement
• Effective date
• Withdrawal of other pronouncements
• Appendix
• Amendments to other pronouncements
  
  • Approval of IAS 8 by the board
• Basis for conclusions
• Implementation guidance

Case study

Group discussion & Quiz

International accounting standard  

• Events after the reporting period
• Objective - scope - definitions
• Recognition and measurement
  • Adjusting events after the reporting period
  • Non-adjusting events after the reporting period - Dividends
• Going concern
• Disclosure
  • Date of authorisation for issue
  • Updating disclosure about conditions at the end of the reporting period Non-adjusting events after the reporting period
• Effective date

Case study

Group Discussion & Quiz

International Accounting Standard  ( 16 )

Property, Plant and Equipment

• Introduction
• International accounting standard
• Property, plant and equipment
• Objective
• Scope
• Definitions
• Recognition
  
  • Initial costs
  • Subsequent costs
• Measurement at recognition
  
  • Elements of cost
  • Measurement of cost
  • Measurement after recognition
  • Cost model
  • Revaluation model
  • Depreciation
  • Depreciable amount and depreciation period
  • Depreciation method
  • Impairment
  • Compensation for impairment
• Derecognition
• Disclosure
• Transitional provisions
• Effective date
• Withdrawal of other pronouncements

Case Study

International Accounting Standard ( 18 ) Revenue

• Objective
• Scope
• Definitions
• Measurement of revenue
• Identification of the transaction
• Sale of goods
• Rendering of services
• Interest, royalties and dividends
• Disclosure
• Effective date

Case study

Group discussion & Quiz

International Accounting Standard ( 21 )

The Effects of Changes in Foreign Exchange Rates

• Objective - scope - definitions
  
  • Elaboration on the definitions
  • Functional currency
  • Net investment in a foreign operation
  • Monetary items
• Summary of the approach required by this standard
• Reporting foreign currency transactions in the functional Currency
  • Initial recognition
  • Reporting at the ends of subsequent reporting periods
  • Recognition of exchange differences
  • Change in functional currency
• Use of a presentation currency other than the functional Currency
  • Translation to the presentation currency
  • Translation of a foreign operation
  • Disposal or partial disposal of a foreign operation
• Tax effects of all exchange differences
• Disclosure
• Effective date and transition
• Withdrawal of other pronouncements

Case study

International Accounting Standard ( 23 )

Borrowing Costs

• Core principle – scope.
• Definitions - recognition
  
  • Borrowing costs eligible for capitalisation
  • Excess of the carrying amount of the qualifying asset over recoverable mount
  • Commencement of capitalisation - Suspension of capitalisation
  • Cessation of capitalisation
• Disclosure
• Transitional provisions
• Effective date

Case study

International Accounting Standard  ( 24 )

Related Party Disclosures

• International accounting standard
• Related party disclosures
• Objective - scope
• Purpose of related party disclosures
• Definitions
• Disclosure
• Effective date

Case study

Group discussion & Quiz

International Accounting Standard ( 27 )

Consolidated and Separate Financial Statements

• Scope - definitions
• Presentation of consolidated financial statements
• Scope of consolidated financial statements
• Consolidation procedures
• Loss of control
• Accounting for investments in subsidiaries,
• Jointly controlled entities and associates in
• Separate financial statements
• Disclosure
• Effective date and transition

Case study

International Accounting Standard  ( 31 )

Interests in Joint Ventures

• Scope - definitions
  
  • Forms of joint venture
  • Joint control
  • Contractual arrangement
• Jointly controlled operations
• Jointly controlled assets
• Jointly controlled entities
  
  • Financial statements of a venturer
  • Proportionate consolidation
  • Equity method
  • Exceptions to proportionate consolidation and equity method
  • Separate financial statements of a venturer
• Transactions between a venturer and a joint venture
• Reporting interests in joint ventures in
• The financial statements of an investor
• Operators of joint ventures
• Disclosure
• Effective date

Case study

International Accounting Standard ( 32 )

Financial Instruments: Presentation

• Objective - scope - definitions
• Presentation - liabilities and equity
  
  • No contractual obligation to deliver cash or another financial asset
  • Settlement in the entity’s own equity instruments
  • Contingent settlement provisions
  • Settlement options
  • Compound financial instruments
  • Treasury shares
  • Interest, dividends, losses and gains
  • Offsetting a financial asset and a financial liability 50
• Effective date
• Withdrawal of other pronouncements
• Appendix: application guidance
• Definitions
  
  • Financial assets and financial liabilities
  • Equity instruments
  • Derivative financial instruments
  • Contracts to buy or sell non-financial items
• Presentation
  
  • Liabilities and equity
  • No contractual obligation to deliver cash or another financial asset
  • Settlement in the entity’s own equity instruments
  • Contingent settlement provisions
  • Treatment in consolidated financial statements
  • Compound financial instruments
  • Treasury shares
  • Interest, dividends, losses and gains
  • Offsetting a financial asset and a financial liability

Case study

Group discussion & Quiz

International Accounting Standard( 34)

Interim Financial Reporting

• Objective - scope  - definitions
• Content of an interim financial report
  
  • Minimum components of an interim financial report
  • Form and content of interim financial statements
  • Selected explanatory notes
  • Disclosure of compliance with IFRSs
  • Periods for which interim financial statements are required to be presented
  • Materiality
• Disclosure in annual financial statements
• Recognition and measurement
  
  • Same accounting policies as annual
  • Revenues received seasonally, cyclically, or occasionally
  • Costs incurred unevenly during the financial year
  • Applying the recognition and measurement principles
  • Use of estimates

Case study
International Accounting Standard( 36 )

Impairment of Assets

• Objective - scope - definitions
• Identifying an asset that may be impaired
• Measuring recoverable amount
  
  • Measuring the recoverable amount of an intangible asset with an indefinite useful life
  • Fair value less costs to sell
  • Value in use
  • Basis for estimates of future cash flows.
  • Composition of estimates of future cash flows
  • Foreign currency future cash flows.
  • Discount rate.
• Recognising and measuring an impairment loss
• Cash-generating units and goodwill
  
  • Identifying the cash-generating unit to which an asset belongs
  • Recoverable amount and carrying amount of a cash-generating unit
  • Goodwill
  • Allocating goodwill to cash-generating units
  • Testing cash-generating units with goodwill for impairment Timing of impairment tests
  • Corporate assets
  • Impairment loss for a cash-generating unit
• Reversing an impairment loss
  
  • Reversing an impairment loss for an individual asset
  • Reversing an impairment loss for a cash-generating unit
  • Reversing an impairment loss for goodwill
• Disclosure
  
  • Estimates used to measure recoverable amounts of cash-generating units
  • Containing goodwill or intangible assets with indefinite useful lives
• Transitional provisions and effective dates

Group discussion & Quiz

Provisions, Contingent Liabilities and

Contingent Assets

• Objective – scope - definitions
  
  • Provisions and other liabilities
  • Relationship between provisions and contingent liabilities
• Recognition
  
  • Provisions
  • Present obligation
  • Past event
  • Probable outflow of resources embodying economic benefits
  • Reliable estimate of the obligation
  • Contingent liabilities
  • Contingent assets
• Measurement
  
  • Best estimate
  • Risks and uncertainties
  • Present value - Future events
  • Expected disposal of assets
• Reimbursements - changes in provisions
• Use of provisions
• Disclosure

Case Study
International Accounting Standard ( 38 )

Intangible Assets

• Objective - scope - definitions
  
  • Intangible assets
  • Identifiability
  • Control
  • Future economic benefits
• Recognition and measurement
  
  • Separate acquisition
  • Acquisition as part of a business combination
  • Measuring the fair value of an intangible asset acquired in a business combination
  • Subsequent expenditure on an acquired in-process research and development project
  • Acquisition by way of a government grant
  • Exchanges of assets
  • Internally generated goodwill
  • Internally generated intangible assets
  • Research phase
  • Development phase
  • Cost of an internally generated intangible asset
• Recognition of an expense
  
  • Past expenses not to be recognised as an asset
• Measurement after recognition
  
  • Cost model
  • Revaluation model
• Useful life
• Intangible assets with finite useful lives
  
  • Amortizations period and amortization method
  • Residual value
  • Review of amortisation period and amortisation method
• Intangible assets with indefinite useful lives
  
  • Review of useful life assessment
• Recoverable
• Retirements and disposals

Case Study
International Accounting Standard( 39 )

Financial Instruments:Recognition and Measurement

• Objective - scope - definitions
• Embedded derivatives
• Recognition and de-recognition
  
  • Initial recognition
  • De-recognition of a financial asset
  • Transfers that qualify for de-recognition
  • Transfers that do not qualify for de-recognition
  • Continuing involvement in transferred assets
  • All transfers
  • Regular way purchase or sale of a financial asset
  • De-recognition of a financial liability
• Measurement
  
  • Initial measurement of financial assets and financial liabilities
  • Subsequent measurement of financial assets
  • Subsequent measurement of financial liabilities
  • Fair value measurement considerations
  • Reclassifications
  • Gains and losses
  • Impairment and un-collectability of financial assets
  • Financial assets carried at amortised cost
  • Financial assets carried at cost.
  • Available-for-sale financial assets.

Case study

Group discussion & Post test