Бакалавриат 2020/2021

Международные стандарты финансовой отчетности

Статус: Курс по выбору (Экономика и статистика)

Направление: 38.03.01. Экономика

Кто читает: Школа финансов

Где читается: Факультет экономических наук

Когда читается: 3-й курс, 1, 2 модуль

Формат изучения: без онлайн-курса

Преподаватели: Макушина Елена Юрьевна, Малофеева Татьяна Николаевна

Язык: английский

Кредиты: 5

Контактные часы: 58

Course Syllabus

Abstract

Course is designed for bachelor students who have experience with International Financial Reporting Standards. This course covers the IFRS Concepts Framework and major formats of financial statements according to IFRS. Then the course is focused on the recognition, measurement and disclosure for such elements of financial accounting as Revenue, Inventory and biological assets, Long-term assets as Property, Plant and Equipment, Intangible assets and Provisions. In separate topic is impairment of long- term assets. The course contains concepts of accounting and reporting for lease operations (financial and operating lease). One class is devoted to the Cash Flow Statement preparation techniques. The course also covers the topic of Financial Instruments. The last part of the course deals with the consolidated financial statements. It covers the main concepts of control, subsidiary, single and consolidated statements. Special part is accounting at the date of acquisition: goodwill, measuring the consideration transferred, measuring the net assets acquired. The course does not require extensive knowledge of mathematics and statistics.

Learning Objectives

• Recognition and measurement principles for non-current assets (including tangible and intangible), revenue, inventory and biological assets, financial instruments, leases, provisions, contingent liabilities and contingent assets, impairment calculation and reporting.
• Single entity financial statements preparation techniques.
• Consolidated financial statement preparation techniques.

Expected Learning Outcomes

• Describe what is meant by a conceptual framework of accounting
• Discuss whether a conceptual framework is necessary and what an alternative system might be
• Discuss what is meant by relevance and faithful representation and describe the qualities that enhance these characteristics
• Discuss whether faithful representation constitutes more than compliance with accounting standards
• Discuss what is meant by understandability and verifiability in relation to the provision of financial information
• Discuss the importance of comparability and timeliness to users of financial statements
• Discuss the principle of comparability in accounting for changes in accounting policies
• Define what is meant by 'recognition' in financial statements and discuss the recognition criteria
• Apply the recognition criteria to assets and liabilities and income and expenses
• Understand the role of the regulatory system including the roles of the: — International Financial Reporting Standards Foundation (IFRSF) — International Accounting Standards Board (IASB) — International Financial Reporting Standards Advisory Council (IFRSAC) — International Financial Reporting Standards Interpretations Committee (IFRSIC)
• Understand the role of International Financial Reporting Standards (IFRS)
• Explain why accounting standards on their own are not a complete regulatory framework
• Explain why a regulatory framework is needed, also including the advantages and disadvantages of IFRS over a national regulatory framework
• Distinguish between a principles based and a rules based framework and discuss whether they can be complementary
• Describe the IASB's Standard setting process including revisions to and interpretations of Standards
• Explain the relationship of national standard setters to the IASB in respect of the standard setting process
• Define and compute the initial measurement of a non-current (including a self-constructed and borrowing costs) asset
• Identify subsequent expenditure that may be capitalised, distinguishing between capital and revenue items
• Discuss the requirements of relevant accounting standards in relation to the revaluation of non-current assets
• Account for revaluation and disposal gains and losses for non-current assets
• Compute depreciation based on the cost and revaluation models and on assets that have two or more significant parts (complex assets)
• Discuss why the treatment of investment properties should differ from other properties
• Apply the requirements of relevant accounting standards for investment property
• Discuss the nature and accounting treatment of internally generated and purchased intangibles
• Distinguish between goodwill and other intangibles
• Describe the criteria for the initial recognition and measurement of intangible assets
• Describe the subsequent accounting treatment, including the principle of impairment tests in relation to goodwill
• Indicate why the value of purchase consideration for an investment may be less than the value of the acquired identifiable net assets and how the difference should be accounted for
• Describe and apply the requirements of relevant accounting standards to research and development expenditure
• Define an impairment loss
• Identify the circumstances that may indicate impairments to assets
• Describe what is meant by a cash generating unit
• State the basis on which impairment losses should be allocated, and allocate an impairment loss to the assets of a cash generating unit
• Explain and apply the principles of recognition of revenue: i.Identification of contracts i.Identification of performance obligations ii.Determination of transaction price iii.Allocation of the price to performance obligations iv.Recognition of revenue when/as performance obligations are satisfied
• Explain and apply the criteria for recognising revenue generated from contracts where performance obligations are satisfied over time or at a point in time.
• Describe the acceptable methods for measuring progress towards complete satisfaction of a performance obligation.
• Explain and apply the criteria for the recognition of contract costs.
• Apply the principles of recognition of revenue and specifically account for the following types of transaction: – Principal versus agent – Repurchase agreements – Bill and hold arrangements – Consignments
• Prepare financial statement extracts for contracts where performance obligations are satisfied over time.
• Apply the provisions of relevant accounting standards in relation to accounting for government grants.
• Explain the need for an accounting standard on financial instruments
• Define financial instruments in terms of financial assets and financial liabilities
• Indicate for the following categories of financial instruments how they should be measured and how any gains and losses from subsequent measurement should be treated in the financial statements: –Amortised cost –Fair value (including option to elect to present gains and losses on equity instruments in comprehensive income)
• Distinguish between debt and equity capital
• Apply the requirements of relevant accounting standards to the issue and finance costs of: –Equity –Redeemable preference shares and debt instruments with no conversion rights (principle of amortised cost) –Convertible debt
• Account for right of use assets and lease liabilities in the records of the lessee.
• Explain the exemption from the recognition criteria for leases in the records of the lessee.
• Account for sale and leaseback agreements.
• Explain why an accounting standard on provisions is necessary
• Distinguish between legal and constructive obligations
• State when provisions may and may not be made and demonstrate how they should be accounted for
• Explain how provisions should be measured
• Define contingent assets and liabilities and explain their accounting treatment
• Identify and account for: –Warranties/guarantees –Onerous contracts –Environmental and similar provisions –Provisions for future repairs or refurbishments
• Account for changes in accounting estimates, changes in accounting policy and correction of prior period errors
• Discuss the importance of identifying and reporting the results of discontinued operations
• Define and account for non-current assets held for sale and discontinued operations
• Distinguish between and account for adjusting and non-adjusting events after the reporting date
• Identify items requiring separate disclosure, including their accounting treatment and required disclosures
• Explain the difference between functional and presentation currency and explain why adjustments for foreign currency transactions are necessary
• Account for the translation of foreign currency transactions and monetary/non-monetary foreign currency items at the reporting date
• Calculate EPS in accordance with relevant accounting standards dealing with: –Bonus issues –Full market value issues –Rights issues
• Explain the relevance of the diluted EPS and calculate the diluted EPS involving convertible debt and share options (warrants)
• Explain why the trend of EPS may be a more accurate indicator of performance than a company's profit trend and the importance of EPS as a stock market indicator
• Discuss the limitations of using EPS as a performance measure
• Prepare an entity's statement of financial position and statement of profit or loss and other comprehensive income in accordance with the structure prescribed within IFRS and content drawing on accounting treatments as identified within the syllabus
• Prepare a statement of cash flows for a single entity (not a group) in accordance with relevant accounting standards using the direct method and the indirect method
• Prepare and explain the contents and purpose of the statement of changes in equity
• Compare the usefulness of cash flow information with that of a statement of profit or loss or statement of profit or loss and other comprehensive income
• Interpret a statement of cash flows (together with other financial information) to assess the performance and financial position of an entity
• Describe the concept of a group as a single economic unit.
• Explain and apply the definition of a subsidiary within relevant accounting standards.
• Using accounting standards and other applicable regulation identify and outline the circumstances in which a group is required to prepare consolidated financial statements.
• Describe the circumstances when a group may claim exemption from the preparation of consolidated financial statements.
• Explain why directors may not wish to consolidate a subsidiary and when this is permitted by accounting standards and other applicable regulation.
• Explain the objective of consolidated financial statements.
• Explain the need for using coterminous year ends and uniform accounting policies when preparing consolidated financial statements.
• Explain why it is necessary to eliminate intra group transactions.
• Prepare a consolidated statement of financial position for a simple group (parent and one subsidiary) dealing with pre and post acquisition profits, non-controlling interests and consolidated goodwill
• Explain and account for other reserves (eg share premium and revaluation reserves)
• Account for the effects (in the financial statements) of intra-group trading
• Account for the effects of fair value adjustments (including their effect on consolidated goodwill) to depreciating and non-depreciating non-current assets; inventory; monetary liabilities and assets and liabilities not included in the subsidiary's own statement of financial position, including contingent assets and liabilities
• Account for goodwill impairment
• Prepare a consolidated statement of profit or loss and consolidated statement of profit or loss and other comprehensive income for a simple group dealing with an acquisition in the period and non-controlling interest.
• Explain and illustrate the effect of the disposal of a parent’s investment in a subsidiary in the parent’s individual financial statements and/or those of the group (restricted to disposals of the parent’s entire investment in the subsidiary).
• Define an associate and explain the principles and reasoning for the use of equity accounting.
• Prepare consolidated financial statements to include a single subsidiary and an associate.

Course Contents

• The repetition of the basics learned in the course Financial accounting and reporting
• Topic 1. The IFRS Conceptual Framework. The regulatory Framework.
  The notion of financial accounting and reporting, difference from managerial and tax accounting and reporting, statistical reporting. Accounting systems in the world. History of IFRS, IASC and IASB, structure, functions, process of creation of the new standard. The relationship between local financial reporting standards and IFRS. Convergence project with US GAAP. The body of IFRS: standards – IAS ad IFRS, Interpretations, Basis for conclusion, Implementation Guidance. Principles of the presentation of financial information. IFRS Conceptual Framework: general purpose, elements of financial statements – recognition and measurement; qualitative characteristics. Overview of the financial reports
• Topic 2. Tangible non-current assets.
  Life cycle of PPE. Acquisitions, initial measurement - capitalization of costs. Reserves for future costs. Purchase, exchange, government grants, financing by loan and borrowing costs, exchange of assets. Depreciation of PPE – types. Subsequent measurement – historical cost model and fair value model. Revaluation under fair value model.
• Topic 3. Intangible non-current assets. Impairment of assets.
  What are intangible assets? IAS 38: objective and scope. The definition of intangible assets, initial recognition and measurement, internally generated assets, measurement of intangible assets after recognition, disposals, disclosure, goodwill. Impairment of assets – indicators, estimating the amounts, using the Cash Generating Units.
• Topic 4. Revenue recognition
  Apply the rules of revenue recognition using IFRS 15.Identifying the five steps in the revenue recognition process. Identifying the contract with customers. Determining the transaction price. Allocating the transaction price to the separate performance obligations. Identifying other revenue recognition issues. Describing presentation and disclosure regarding revenue. Accounting for government grants.
• Topic 5. Financial instruments
  Defining financial instruments in terms of financial assets and financial liabilities. Distinguishing between debt and equity capital. Measuring financial instruments by amortised cost and fair value ( including option to elect to present gains and losses on equity instruments in other comprehensive income). Applying the requirements of relevant accounting standards to the issue and finance costs of: equity, redeemable preference shares and debt instruments with no conversion rights (principle of amortised cost), convertible debt.
• Revision lecture 1
  preparation fort the Mid-term
• Topic 6. Leases
  Accounting treatment of a lease from the perspective of the lessee. Identifying a lease, elements of lease, lease liability, right-of-use asset. Disclosure in the financial statements.
• Topic 7. Provisions, events after the reporting date
  Provisions and contingencies; provision: definition and recognition; measurement treatment; specific applications; disclosures relating to provisions; contingent liabilities; contingent assets; IAS 10 “Events after balance sheet period”
• Topic 8. Reporting financial performance
  Identifying and reporting the results of discontinued operations. Defining and accounting for non-current assets held for sale and discontinued operations. Accounting for changes in accounting estimates, changes in accounting policy and correction of prior period errors.
• Topic 9. Earnings per share.
  Calculating the EPS in accordance with relevant accounting standards (dealing with bonus issues, full market value issues and rights issues). Explaining the relevance of the diluted EPS and calculating the diluted EPS involving convertible debt and share options (warrants)
• Topic 10. Presentation of published financial statements
  Preparing a single entity's statement of financial position and statement of profit or loss and other comprehensive income in accordance with the structure prescribed within IFRS. Preparing and explaining the contents and purpose of the statement of changes in equity. Classification of enterprise cash flows: financing, investing and operating. Calculating direct cash flows from selling goods, paying for purchases, selling equipment, paying taxes. Direct and indirect method for Cash Flows from operating activities. Disclosure of reconciliation of Net income to Cash Flow from operations. Cash flows reported as separate lines. Non-cash investing/financing.
• Topic 11. Group accounts: basic principals. Consolidated accounts.
  What is a group, what is a subsidiary, accounting principles; the single entity concept; control and ownership (definition of control, ownership, reflecting control and ownership in group accounts).
• Topic 12. Consolidated statement of financial position
  Explain and demonstrate the concept and principals surrounding the consolidation of financial statements including: the single entity concept; substance over form; the distinction between control and ownership. Calculation goodwill, intra-group balances; unrealized intra-group profit, standardised workings; fair value adjustments; mid-year acquisitions; dividends; other adjustments.
• Topic 13. The consolidated statement of profit or loss and other comprehensive income. Group accounts: associates.
  Investments in an associate, equity method: consolidated statement of financial position & consolidated income statement; associate’s losses; transactions between a group and its associate.
• Revision lecture 2
  preparation for the Final Exam

Assessment Elements

• Homework
• Class participation
  0 - absence at the class; 1 - attendance at the class but low active; 2 - attendance at the class and high active
• Mid-term
• Final exam (remotely)

Interim Assessment

• Interim assessment (2 module)
  0.08 * Class participation + 0.6 * Final exam (remotely) + 0.08 * Homework + 0.24 * Mid-term

Bibliography

Recommended Core Bibliography

• Association of Chartered Certified Accountants (Great Britain), & BPP Learning Media (Firm). (2017). Foundations in Accountancy : For Exams From 1 September 2017 to 31 August 2018 (Vol. Sixth edition). London: BPP Learning Media. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=1525702
• BPP Learning Media (Firm). (2017). ACCA Paper F7 (Vol. Eleventh edition). London: BPP Learning Media. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=1515138
• Joubert, M., Garvie, L., & Parle, G. (2017). Implications of the New Accounting Standard for Leases AASB 16 (IFRS 16) with the Inclusion of Operating Leases in the Balance Sheet. Journal of New Business Ideas & Trends, 15(2), 1–11.

Recommended Additional Bibliography

• Association of Chartered Certified Accountants (Great Britain), & BPP Learning Media (Firm). (2017). ACCA : For Exams in September 2017, December 2017, March 2018 and June 2018: Vol. Eleventh edition. BPP Learning Media.
• BPP Learning Media (Firm). (2016). Foundations in Accountancy : Practice & Revision Kit: FFA, ACCA: Paper F3: Financial Accounting: for Exams From 1 September 2016 to 31 August 2017: Vol. Fifth edtion. BPP Learning Media.