Advanced Financial Reporting
A Complete Guide to IFRS
By Derry Cotter
February 2012
Pearson Education
Distributed by the Trans-Atlantic Publications
ISBN: 9780273732358
487 Pages
$92.50 Paper original
International Financial Reporting provides a current and comprehensive guide to international accounting standards. Covering both IFRS and IAS, this book adopts a user-friendly structure. By clearly explaining the theory behind each standard and then illustrating its application in worked examples, this text makes a technical subject accessible and easy to understand.
This text has been written primarily for intermediate and advanced students of Financial Reporting studying an undergraduate or masters level programme. It is also appropriate for students studying for professional exams on IFRS.
Contents
Part 1: A BRIEF HISTORY OF ACCOUNTING
1. The rise of Accounting
Accounting in ancient times
Evolution of double entry book-keeping
Economic consequences of financial statements
Impact of technological revolution
Part 2: A THEORETICAL FRAMEWORK FOR ACCOUNTING
2. Conceptual framework
Introduction to IASB’s Framework
Objective of financial reporting
Financial statements
- underlying assumptions
- qualitative characteristics
- elements
- measurement basis
- recognition criteria
- capital maintenance concepts
3. Alternative income models Historical cost accounting
Current purchasing power
Current cost accounting
Part 3: FINANCIAL REPORTING REGULATION
4. The regulatory environment
Purpose of regulation
Sources of regulation
Role of management
Impact of financial statements
5. The Annual Report
Contents of the annual report
Evolution of the annual report
6. Accountability Creative accounting
Corporate governance
Ethics
Whistle-blowing
Corporate social reporting
Environmental accounting
Part 4: PRESENTATION OF FINANCIAL STATEMENTS
7. Presentation of financial statements Objective of IAS 1
Components of financial statements
Sample financial statements
8. Statement of cash flows
Introduction
Presentation of a statement of cash flows
9. Accounting policies, accounting estimates and errors Accounting policies
Factors that influence management’s choice of accounting policies
Changes in accounting estimates
Errors
10. Interim financial reporting
Part 5: ACCOUNTING FOR ASSETS
11. Inventories
Classification of inventory
Measurement of cost
Net realisable value
12. Construction contracts &amnbsp;
Definition of a construction contract
Accounting for construction contracts
Presentation in financial statements
13. Property, plant and equipment
Recognition of P, P & E in financial statements
Measurement of P, P & E.
Depreciation
Decrecognition
14. Intangible assets
Recognition in statement of financial position
Initial measurement
Measurement subsequent to recognition
Derecognition of an intangible asset
15. Investment property
Definition of investment property
Recognition in statement of financial position
Measurement at recognition
Measurement after recognition
16. Impairment of assets
Identifying an impaired asset
Impairment review procedures
Recognising an impairment loss
Reversal of an impairment loss
Impairment of goodwill
17. Non-current assets held for sale and discontinued operations
Assets held for sale
Discontinued operations
Part 6: LIABILITIES AND EQUITY
18. Share-based payment
Introduction
Equity settled share-based payment
Cash settled share-based payment
Share-based payment transactions with a cash alternative
19. Income taxes
Current tax
Deferred tax
20. Employee benefits
Short-term employee benefits
Post-employment benefits
Other long-term employee benefits
Termination benefits
21. Provisions, contingent liabilities and contingent assets
Introduction
Provisions
Contingent liabilities and contingent assets
Part 7: CONSOLIDATED FINANCIAL STATEMENTS
22. Introduction to group accounts
Definition of a group
Parents and subsidiaries
Consolidation procedures
23. Consolidated statement of financial position
Date of acquisition
Post-acquisition periods
Goodwill and bargain purchase
Non-controlling interests
Elimination of unrealised profits
Intra-group balances
24. Consolidated statement of comprehensive income
Intra-group items
Non-controlling interests
Dividends
Subsidiary acquired during the reporting period
25. Business combinations
The acquisition method
Recognition and measurement of assets and liabilities acquired
Measurement period
Subsequent measurement and accounting
Separate financial statements of a parent
26. Changes in ownership
Acquisition of shares
- business combination achieved in stages
- purchase of additional equity shares after control is attained
Disposal of shares in a subsidiary
- loss of control
- disposals not resulting in a loss of control
27. Investments in associates
Definition of an associate
Accounting for investments in associates
Goodwill arising on the acquisition of shares in an associate
Upstream and downstream transactions
Reporting periods and accounting policies
Losses of an associate
28. Interests in joint ventures
Types of joint venture
- jointly controlled operations
- jointly controlled assets
- jointly controlled entities
29. Consolidated statement of cash flows
Acquisition of a subsidiary during the period
Non-controlling interests
Impairment of goodwill
Investments which are equity-accounted
Disposal of a subsidiary during the period
Part 8: MISCELLANEOUS ACCOUNTING ISSUES
30. Events after the reporting period
Adjusting events
Non-adjusting events
31. Leases
Key definitions and classification of leases
Accounting by lessees
Accounting by lessors
32. Revenue
Measurement of revenue
Categories of revenue: sale of goods; rendering of services; interest, royalties and dividends
Customer loyalty programmes
33. Accounting for government grants
Initial recognition of grants
Recognition as income
Accounting treatment of government grants
Repayment of government grants
34. The effects of changes in foreign exchange rates
Identifying an entity’s functional currency
Recording transactions in an entity’s functional currency
Monetary and non-monetary items
Use of a presentation currency other than an entity’s functional currency
Translation of a foreign operation
35. Borrowing costs
Borrowing costs incurred in respect of qualifying assets
Other borrowing costs
36. Related party disclosures
Identifying related parties
Disclosure of related party transactions
37. Financial reporting in hyperinflationary economies
Definition of a hyperinflationary economy
The re-statement of financial statements
Part 9: FINANCIAL INSTRUMENTS
38. Capital instruments, reduction of capital and distributable profits Definition of a financial instrument
Financial liabilities and equity instruments
Classification of financial instruments
39. Recognition and measurement of financial instruments
Classification and measurement of financial assets
Financial liabilities
40. Disclosure of financial instruments
Part 10: FINANCIAL ANALYSIS41. Financsp;
Limitations of financial statements
Adjusting financial statements
Criteria for a successful business
Stock exchange/investor ratios
Financial analysis of Ryanair and EasyJet
42. Operating segments
Determining reportable segments
Disclosure requirements
43. Earnings per share
Calculation of basic EPS
Changes in ordinary share capital when computing basic EPS
Diluted EPS
Presentation and disclosure
Part 11: SPECIALIST ACTIVITIES
Accounting policies
Changes in accounting policies
45. Exploration for and evaluation of mineral resources
Measurement of exploration and evaluation assets
Presentation of assets
Impairment of assets
46. Accounting and reporting by retirement benefit plans
Defined contribution plans
Defined benefit plans
47. Agriculture
Recognition and measurement of biological assets and agriculture produce
Contracts for sale
Government grants
Part 12: FIRST TIME ADOPTION of INTERNATIONAL ACCOUNTING STANDARDS
48. Rules for first time adoption of IFRS
Introduction to IFRS 1
Opening IFRS statement of financial position
Exceptions to the retrospective application of other IFRSs
Part 13: SMALL AND MEDIUM-SIZED ENTITIES
49. Accounting for small and medium-sized entities
Introduction to IFRS for SMEs
Principal differences from full IFRS – Appendix 1
Sample financial statements for SMEs – Appendix 2
Glossary of Terms
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