Bachelor 2020/2021

International Financial Reporting Standards

Category 'Best Course for Career Development'

Category 'Best Course for Broadening Horizons and Diversity of Knowledge and Skills'

Type: Elective course (Economics)

Area of studies: Economics

Delivered by: School of Finance

Where: Faculty of Economic Sciences

When: 2 year, 1, 2 module

Mode of studies: offline

Instructors: Aglaia Kokurina, Oksana Soboleva

Language: English

ECTS credits: 5

Contact hours: 58

Course Syllabus

Abstract

This course is designed for undergraduate students who have some experience with accounting methods and practices. The course covers International Financial Reporting Standards (IFRS) Concepts Framework and major formats of financial statements according to IFRS. Following that, the course is focused on 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. Accounting for Impairments of Long-term assets is also covered. The course contains concepts of accounting and reporting for Lease operations (financial and operating leases). One class is focused on the Cash Flow Statement preparation techniques. The course also covers the crucial topic of Financial Instruments. The last part of the course deals with the consolidated financial statements. It covers the main concepts of control, subsidiaries and affiliates, single and consolidated statements. After this course, the students will be able to deal with special items (e.g. intra-companies transactions and unrealized gains), and to prepare basic consolidated financial statements. Finally, the methods of accounting at the date of acquisition – that is, goodwill, measuring the consideration transferred, measuring the net assets acquired – will be examined. The course does not require extensive knowledge of mathematics and statistics.

Learning Objectives

• Learn to apply 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.
• Master single entity financial statements preparation techniques
• Learn to prepare consolidated financial statements for companies with complex transactions.

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

Course Contents

• The repetition of the basics learned in the course Financial Accounting.
• Topic 1. The IFRS Conceptual Framework and the Financial Statements
  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. Long-term assets. Impairment of 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. 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 3. Inventories and biological assets.
  Describe and apply the principles of inventory valuation. Apply the requirement of relevant accounting standards for biological assets.
• Topic 4. Leasing.
  Obtaining non-current assets, types of leases (classification of lease, identifying financial lease), accounting for finance leases (present value of the minimum lease payments, definitions and working examples, lease terms, setting up accounts in the statement of financial position, depreciating the asset, making the payments, finance charge). Disclosure in the financial statements. Other issues. Operating leases.
• 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.
• Preparation for mid-term test
• Topic 6. 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 7. 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. 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 8. Revenue Recognition.
  Apply the principle of substance over form to the recognition of revenue. 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 9. Group accounts: associates. Business combinations, consolidated financial statements
  Investments in an associate, equity method: consolidated statement of financial position & consolidated income statement; associate’s losses; transactions between a group and its associate. Source of requirements; IFRS3 (revised) “Business combinations”; identifying the acquirer; determining the acquisition date; measuring the consideration transferred; recognition and measuring the net assets acquired; goodwill; practical issues; disclosures.
• Topic 10. Group accounts: basic principles. Consolidated accounts: consolidated statement of financial position, consolidated statement of financial performance.
  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). 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, standardized workings; fair value adjustments; mid-year acquisitions; dividends; other adjustments.
• Topic 11. 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.
• Введение в финансовый учет
  Цель бухгалтерской (финансовой) отчетности. Виды учета. Организационно-правовые формы хозяйственной деятельности. Основные формы бухгалтерской (финансовой) отчетности. Пользователи бухгалтерской (финансовой) отчетности. Элементы бухгалтерской (финансовой) отчетности. Концептуальные основы бухгалтерского учета. Концепция социальной ответственности бизнеса. Качественные характеристики информации и учетные принципы. Системы регулирования бухгалтерского учета в России и на международном уровне.

Assessment Elements

• Homework
• Class participation
• Mid-term test
• Final exam (remotely)
• Homework
• Class participation
• Mid-term test
• 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 test

Bibliography

Recommended Core Bibliography

• Beyersdorff, M., & Ernst & Young. (2017). International GAAP 2017 : Generally Accepted Accounting Practice Under International Financial Reporting Standards. Chichester, West Sussex, United Kingdom: Wiley. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=1450533
• Epstein, B. J., & Jermakowicz, E. K. (2007). Wiley IFRS 2007 : Interpretation and Application of International Financial Reporting Standards. Hoboken, N.J.: Wiley. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=492804

Recommended Additional Bibliography

• Tobór-Osadnik, P. D. K., Wyganowska, P. D. M., & Kabalski, P. D. P. (2013). International Financial Reporting Standards vs. homo sovieticus personality the case of Poland. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsbas&AN=edsbas.BC1B9426