advanced accounting and financial reporting

1015 Pages·2016·6.37 MB·English

by  George Primentas

2016
ADVANCED ACCOUNTING AND
FINANCIAL REPORTING
STUDY SUPPORT MATERIAL

ICAP

Advanced accounting and
financial reporting
First edition published by
Emile Woolf International
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© Emile Woolf International, May 2016

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Notice
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© Emile Woolf International ii The Institute of Chartered Accountants of Pakistan
Certified Finance and Accounting Professional

Advanced accounting and financial reporting
C

Contents

Page
Syllabus objective and learning outcomes v
Chapter
1 Regulatory framework 1
2 Accounting and reporting concepts 25
3 Presentation of financial statements
(IAS 1, IAS 34, IAS 24, IFRS 8, IAS 10) 53
4 IAS 8: Accounting policies, changes in accounting estimates
and errors 81
5 IFRS 15: Revenue from contracts with customers 103
6 IAS 16: Property, plant and equipment 117
7 Non-current assets: sundry standards
(IAS 23, IAS 20 and IAS 40) 149
8 IAS 38: Intangible assets 173
9 IAS 36: Impairment of assets 195
10 IFRS 5: Non-current assets held for sale and discontinued
operations 213
11 IFRS 16: Leases 235
12 IAS 37: Provisions, contingent liabilities and contingent assets 292
13 IAS 19: Employee benefits 323
14 IFRS 2: Share based payments 349
15 Financial instruments: Recognition and measurement 395
16 Financial instruments: Presentation and disclosure 457

© Emile Woolf International iii The Institute of Chartered Accountants of Pakistan
Advanced accounting and financial reporting
Page
17 IFRS 13: Fair value measurement 475
18 IAS 12: Income taxes 493
19 Business combinations and consolidation 535
20 Consolidated statements of profit or loss and other
comprehensive income 577
21 Associates and joint ventures 589
22 Business combinations achieved in stages 607
23 Complex groups 625
24 Disposal of subsidiaries 659
25 Other group standards (IAS 27 and IFRS 12) 687
26 Foreign currency 697
27 IAS 7: Statements of cash flows 729
28 IAS 33: Earnings per share 771
29 Analysis and interpretation of financial statements 811
30 Sundry standards and interpretations
(IAS 2, IAS 41, IFRS 6, IFRS 14, IFRIC 12, SIC 7) 853
31 IFRS 1: First time adoption of IFRS 879
32 Specialised financial statements 891
33 International public sector accounting standards (IPSAS) 933
34 Accounting for hyperinflation 949
35 Islamic accounting standards 963
36 Ethical issues in financial reporting 977
Index 995

© Emile Woolf International iv The Institute of Chartered Accountants of Pakistan
Certified Finance and Accounting Professional

Advanced accounting and financial reporting
S

Syllabus objective
and learning outcomes
CERTIFIED FINANCE AND ACCOUNTING PROFESSIONAL
AADVANCED ACCOUNTING AND FINANCIAL REPORTING
Objective
To develop an in-depth understanding of, and the ability to apply the requirements of
international pronouncements, the Companies Ordinance, 1984, and other applicable
regulatory requirements in respect of financial reporting and the presentation of financial
statements.

Learning Outcome
On the successful completion of this paper candidates will be able to:
1 prepare financial statements in accordance with the international pronouncements
and under the Companies Ordinance, 1984.
2 evaluate and analyse financial data in order to arrive at firm decisions on the
accounting treatment and reporting of the same.
3 exercise professional judgment and act in an ethical manner (that is in the best
interest of society and the profession).
4 prepare financial statements of specialized entities (including small and medium
sized entities in accordance with the Companies Ordinance, 1984 and the
applicable reporting framework, retirement benefit funds in accordance with
international pronouncements) and be able to demonstrate an understanding of
reporting requirements under the laws specific to insurance, banking companies
and mutual funds.

© Emile Woolf International v The Institute of Chartered Accountants of Pakistan
Advanced accounting and financial reporting
Grid Weighting
A Presentation of financial statements including public 30-35
sector accounting
B Financial reporting (including ethics) 50- 60
C Specialized financial statements 10-15
Total 100

Contents Chapter
A Presentation of financial statements including public sector
accounting
1 Presentation of financial statements (IAS 1, IAS 7 and Companies 2, 3, 25
Ordinance 1984)
2 IAS 27: Separate financial statements 23
3 IFRS 10: Consolidated financial statements 18, 19, 22
4 IAS 28: Accounting for associates and joint ventures 20
5 IFRS 11: Joint arrangements 20
6 IFRS 12: Disclosure of interests in other entities 22
7 IAS 34: Interim financial reporting 3
8 IAS 29: Financial Reporting in Hyperinflationary Economies 33
9 IFRS 5: Non-current assets held for sale and discontinued 10, 22
operations
10 IFRS 8: Operating segments 3
11 Overview of IPSASs and the conceptual framework for general 32
purpose financial reporting by public sector entities
12 IPSAS 1 Presentation of financial statements 32
13 IPSAS Financial reporting under the cash basis of accounting (this 32
IPSAS has not been given any number).
B Financial reporting and ethics
a Financial reporting
1 The Conceptual Framework for the preparation and presentation of 2
financial statements
2 IFRS 1: First-time adoption of international financial reporting 30
standards
3 IFRS 2: Share-based payment 15
4 IFRS 3: Business combinations 18, 19, 21
5 IFRS 4: Insurance contracts 31
6 IFRS 6: Exploration for and evaluation of mineral resources 29

© Emile Woolf International vi The Institute of Chartered Accountants of Pakistan
Syllabus objective and learning outcomes
Contents Chapter
B Financial reporting and ethics (continued)
a Financial reporting (continued)
7 IFRS 7: Financial instruments: disclosures 17
8 IFRS 9: Financial Instruments 16
9 IFRS 13: Fair value measurement 2, 16
10 IFRS 14: Regulatory deferral accounts 29
11 IFRS 15: Revenue from contracts with customers 5
12 IAS 2: Inventories 29
13 IAS 8: Accounting policies, changes in accounting estimates and 4
errors
14 IAS 10: Events after the reporting date 3
15 IAS 12: Income Taxes 13
16 IAS 16: Property, plant and equipment 6
17 IFRS 16: Leases 11
18 IAS 19: Employee benefits 14
19 IAS 20: Accounting for government grants and disclosure of 7
government assistance
20 IAS 21: The effects of changes in foreign exchange rates 24
21 IAS 23: Borrowing costs 7
22 IAS 24: Related party disclosures 3
23 IAS 32: Financial instruments: Presentation 17
24 IAS 33: Earnings per share 26
25 IAS 36: Impairment of assets 9
26 IAS 37: Provisions, contingent liabilities and contingent assets 12
27 IAS 38: Intangible assets 8
28 IAS 39: Financial instruments: recognition and measurement 16
29 IAS 40: Investment property 7
30 IAS 41: Agriculture 29
31 IFRIC 1: Changes in existing decommissioning, restoration and 6
similar liabilities
32 IFRIC 2: Members’ shares in co-operative entities and similar 17
instruments

© Emile Woolf International vii The Institute of Chartered Accountants of Pakistan
Advanced accounting and financial reporting
Contents Chapter
B Financial reporting and ethics (continued)
a Financial reporting (continued)
33 IFRIC 5: Rights to interests arising from decommissioning, restoration 12
and environmental rehabilitation funds
34 IFRIC 6: Liabilities arising from participating in a specific market – 12
waste electrical and electronic equipment
35 IFRIC 7: Applying the restatement approach under IAS 29 financial 33
reporting in hyperinflationary economies
36 IFRIC 10: Interim financial reporting and impairment 9
37 IFRIC 12: Service concession arrangements 29
38 IFRIC 14: IAS 19 – The limit on a defined benefit asset, minimum 14
funding requirements and their interaction
39 IFRIC 16: Hedges of a net investment in a foreign operation 16
40 IFRIC 17: Distributions of non-cash assets to owners 17
41 IFRIC 19: Extinguishing financial liabilities with equity instruments 17
42 IFRIC 20: Stripping costs in the production phase of a surface mine 6
43 IFRIC 21: Levies 21
44 SIC 7: Introduction of the euro 29
45 SIC 10: Government assistance – no specific relation to operating 7
activities
46 SIC 25: Income taxes – changes in the tax status of an enterprise or 13
its shareholders
47 SIC 29: Disclosure – service concession arrangements 29
48 SIC 32: Intangible Assets – web site costs 8

© Emile Woolf International viii The Institute of Chartered Accountants of Pakistan