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Financial Statements & International Accounting Standards

Financial statements are prepared and presented for external users by many entities around the world.


Although such financial statements may appear similar from country to country, there are differences which have probably been caused by a variety of social, economic and legal circumstances and by different countries having in mind the needs of different users of financial statements when setting national requirements.


These different circumstances have led to the use of a variety of definitions of the elements of financial statements; that is, for example, assets, liabilities, equity, income and expenses. They have also resulted in the use of different criteria for the recognition of items in the financial statements and in a preference for different bases of measurement.
The scope of the financial statements and the disclosures made in them have also been affected.

The International Accounting Standards Committee (IASC) is committed to narrowing these differences by seeking to harmonise regulations, accounting standards and procedures relating to the preparation and presentation of financial statements. It believes that further harmonisation can best be pursued by focusing on financial statements that are prepared for the purpose of providing information that is useful in making economic decisions.

Day 1

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

Day 2

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

Day 3

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

Day 4

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

Day 5

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

Day 6

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

Day 7

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

Day 8

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

Day 9

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

Day 10

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

Learning activity mix
  • Accountants, section heads, dept. heads and Assistant Gen. Managers. It is a must for those who are working in finance and cost accounting Depts. of Projects, Operations and Exploration. 
  • Commercial Managers and commercial staff 
  • financial staff 
  • The staff of Auditing department 
  • Lawyers and the staff of legal affairs

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