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    Reporting Interview Guide

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    idrees bajjar
    This document provides a table of contents for various International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS). The table lists key standards such as IAS 2 on inventories, IAS 8 on accounting policies and errors, IAS 12 on income taxes, IAS 16 on property, plant and equipment, IFRS 9 on financial instruments, and IFRS 16 on leases. For each standard, there is a brief high-level summary of the scope and key requirements. The document serves as a reference guide to the major provisions within numerous IAS/IFRS.

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    Reporting Interview Guide

    Uploaded by

    idrees bajjar
    25 views7 pages
    This document provides a table of contents for various International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS). The table lists key standards such as IAS 2 on inventories, IAS 8 on accounting policies and errors, IAS 12 on income taxes, IAS 16 on property, plant and equipment, IFRS 9 on financial instruments, and IFRS 16 on leases. For each standard, there is a brief high-level summary of the scope and key requirements. The document serves as a reference guide to the major provisions within numerous IAS/IFRS.

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    Reporting Interview guide

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    This document provides a table of contents for various International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS). The table lists key standards such as IAS 2 on inventories, IAS 8 on accounting policies and errors, IAS 12 on income taxes, IAS 16 on property, plant and equipment, IFRS 9 on financial instruments, and IFRS 16 on leases. For each standard, there is a brief high-level summary of the scope and key requirements. The document serves as a reference guide to the major provisions within numerous IAS/IFRS.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    25 views7 pages

    Reporting Interview Guide

    Uploaded by

    idrees bajjar
    This document provides a table of contents for various International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS). The table lists key standards such as IAS 2 on inventories, IAS 8 on accounting policies and errors, IAS 12 on income taxes, IAS 16 on property, plant and equipment, IFRS 9 on financial instruments, and IFRS 16 on leases. For each standard, there is a brief high-level summary of the scope and key requirements. The document serves as a reference guide to the major provisions within numerous IAS/IFRS.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 7

    Table of Contents

    IAS 2-INVENTORIES ............................................................................2


    IAS 8-CHANGES IN:- ............................................................................2
    IAS 10-SUBSEQUENT EVENTS ..............................................................2
    IAS 12-INCOME TAX ...........................................................................3
    IAS 16-PROPERTY, PLANT AND EQUIPMENT........................................3
    IAS 20-GOVERNMENT GRANTS ...........................................................4
    IAS 23-BORROWING COSTS ................................................................4
    IAS 36-IMPAIRMENT ..........................................................................4
    IAS 40-INVESTMENT PROPERTY ..........................................................5
    IFRS 9-FINANCIAL INSTRUMENTS ........................................................5
    IFRS 15-REVENUE FROM CONTRACTS WITH CUSTOMERS ....................6
    IFRS 16-LEASES ...................................................................................7

    Page | 1
    IAS 2-INVENTORIES
    Scope: Asset held for sale during ordinary course of business or one held for use to produce
    goods or render services
    Measurement: Lower of cost or NRV
    Cost: Purchase price plus directly attributable costs
    NRV: Sale price less cost to sell or cost to improve
    Policy: AVCO or FIFO (should be followed every year)

    IAS 8-CHANGES IN:-


    Change in estimate: Like (provision, depreciation, residual value, depreciation rate) is dealt
    prospectively
    Change in accounting policy: (AVCO/FIFO, REVALUATION/COST/ FAIR VALUE MODELS) is dealt
    retrospectively, change is allowed only if better presentation or required by law.
    Errors: First see if material, if change is necessary then it is dealt retrospectively.

    IAS 10-SUBSEQUENT EVENTS


    Scope: Events after reporting period
    Adjusting events: Events for which conditions existed at balance sheet date eg.

    • Subsequent bankruptcy of debtors


    • Sale of inventory below cost after year end
    • Settlement of sale price of assets/inventory which is sold before year end
    • Change in going concern basis
    • Return of defected inventory
    Non-adjusting events: Events for which conditions are not existed at balance sheet date eg

    • Sale of assets or business after balance sheet date


    • Issuance of shares or debentures
    • Major restructuring of business
    • Investment in subsidiary
    • Dividend declared after reporting date
    Material non-adjusting events need to be disclosed in financial statements.

    Page | 2
    IAS 12-INCOME TAX
    Tax expense: Current tax + deferred tax
    Current tax: (Taxable income*tax rate) - (tax allowable expenses*tax rate) + (Deductions not
    allowed*tax rate)
    Deferred tax: Accounting measure to match the tax effect of transactions with the accounting
    impact to produce less distorted results
    Temporary difference: It is difference between carrying amount of an asset/liability as per
    statement of financial position and its tax base.
    Taxable temporary difference: A temporary difference that will yield amounts that are taxable
    in future when determining taxable profit or loss. (CA of Asset>TB of asset) or (CA of liability
    <TB of liability)
    Deductible temporary difference: A temporary difference that will yield amounts that are
    deductible in future when determining taxable profit or loss (CA of asset < TB of asset) or (CA of
    liability> TB of liability)
    Deferred tax liability: The amounts of income tax payable in future periods in respect of
    taxable temporary difference.
    Deferred tax asset: The amount of income tax deductible in future periods in respect of
    deductible temporary difference or unused tax losses or tax credits.

    IAS 16-PROPERTY, PLANT AND EQUIPMENT


    Recognition criteria: It is recognized only if :-

    • Cost can be measured reliably


    • Probable that future economic benefits will flow to entity
    Cost: Cost includes

    • Purchase price
    • Directly attributable cost
    • PV of dismantling cost
    Subsequent Measurement: Two Models

    • Cost Model
    • Revaluation Model

    Page | 3
    Cost Model: Cost less accumulated depreciation less accumulated impairment loss
    Revaluation Model: Revalued amount less subsequent accumulated depreciation less
    subsequent impairment loss
    In case of revaluation model whole class of asset should be revalued

    IAS 20-GOVERNMENT GRANTS


    Scope: Assistance by government in form of transfer of resources specifically to entity.
    Recognition criteria: Record only if

    • It is probable that entity will comply with the conditions


    • Grant will be received
    Conditional grants: We record income as and when conditions are fulfilled
    Unconditional grants: We record income immediately

    IAS 23-BORROWING COSTS


    Scope: Interest on loan taken to construct or acquire a qualifying asset
    Qualifying assets: The asset which takes substantial period of time (3 months) to be completed
    Borrowing costs: Interest and other costs incurred by entity in order to borrow funds
    Abnormal Delay: In case of abnormal delay capitalization of interest expense is suspended
    General borrowing: It is overall loan of entity from which some loan is used for construction of
    asset.
    Specific borrowing: It is the loan specifically borrowed for construction of asset
    Borrowing cost= interest expense less interest income of surplus funds

    IAS 36-IMPAIRMENT
    Impairment loss: It is recorded when carrying amount of asset exceeds its recoverable amount
    Recoverable amount: It is higher of

    • Fair value less cost to sell


    • Value in use

    Page | 4
    Value in use: Value in use is net present value of future cashflows including cashflows from
    disposal of asset discounted by market rate
    External Indicators:

    • Market value declines


    • Negative changes in technology
    • Increase in market interest rate
    Internal Indicators:

    • Physical damage
    • Asset is idle, part of restructuring or held for disposal
    • Worse economic performance than expected
    •

    IAS 40-INVESTMENT PROPERTY


    Scope: Deals with land or building held for rental purpose or capital appreciation
    Initial measurement: Cost
    Subsequent measurement: Cost model or fair value model
    Cost Model: Cost less accumulated depreciation less accumulated impairment loss
    Fair value model: Fair value

    IFRS 9-FINANCIAL INSTRUMENTS


    Financial Assets
    DEBT SECURITIES

    BUSINESS MODEL MEASUREMENT


    Hold to Collect and cashflows are SPPI Amortized cost
    Hold to collect or sell and cashflows are SPPI FVTOCI
    Hold to sell or cashflows are not SPPI FVTPL
    *SPPI=solely payment of interest or principal
    EQUITY SECURITIES

    BUSINESS MODEL MEASUREMENT


    Hold to sell FVTPL

    Page | 5
    Strategic investment (irrevocable election) FVTOCI

    Financial Liabilities:

    BUSINESS MODEL MEASUREMENT


    Hold till maturity Amortized cost
    Mismatch of accounting FVTPL

    IFRS 15-REVENUE FROM CONTRACTS WITH CUSTOMERS


    5 STEPS MODEL:
    1. Identify contract with customer
    2. Identify separate performance obligation in the contract
    3. Determine transaction price
    4. Allocate the transaction price between performance obligations
    5. Recognize revenue as and when performance obligations are satisfied
    Methods of revenue recognition:
    1. Point in time
    2. Point over time
    Point over time:
    Entity recognize revenue over time if anyone of the criteria is met
    1. The customer receives and consumes all the benefits provided by the entity as the
    entity performs
    2. The entity’s performance creates or enhances the asset that the customer controls as
    the asset is created
    3. The entity’s performance creates an asset with no alternative use to the entity and
    entity has enforceable right to payment for performance completed till date.
    Point in time:
    If entity does not satisfy its performance obligation over time, it satisfies it at a point in time.

    Page | 6
    IFRS 16-LEASES
    Lease: A contract, or part of a contract, that conveys the right to use an asset (the underlying
    asset) for a period of time in exchange for consideration.
    Finance lease: It transfers substantially all the risks and rewards incidental to ownership of an
    underlying asset to lessee.
    Operating lease: It does not transfer substantially all the risks and rewards incidental to
    ownership of an underlying asset to lessee.
    Indicators of finance lease:
    a) the lease transfers ownership of the underlying asset to the lessee by the end of the lease
    term;
    b) the lessee has the option to purchase the underlying asset at a price that is expected to be
    sufficiently lower than the fair value at the date the option becomes exercisable for it to be
    reasonably certain, at the inception date, that the option will be exercised;
    c) the lease term is for the major part of the economic life of the underlying asset even if title is
    not transferred; (major means say 75% of economic life).
    d) at the inception date, the present value of the lease payments amounts to at least
    substantially all of the fair value of the underlying asset; and (Substantially means 90% or more)
    e) the underlying asset is of such a specialized nature that only the lessee can use it without
    major modifications.
    If answer of any of the above points is “yes”, lease will be a Finance lease
    ROUA
    The cost of the right-of-use asset shall comprise:
    (a) the amount of the initial measurement of the lease liability,
    (b) any lease payments made at or before the commencement date less any lease incentives
    received;
    (c) any initial direct costs incurred by the lessee; and
    (d) an estimate of costs to be incurred by the lessee in dismantling and removing the
    underlying asset and restoring the site on which it is located.
    Lease liability:
    At the commencement date, a lessee shall measure the lease liability at the present value of
    the lease payments that are not paid at that date.

    Page | 7

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