獨(dú)立錄制f7講義notes

1、知識(shí)準(zhǔn)則/核識(shí)儲(chǔ)備1Golden FinanceThe objective of general purpfinancial reportingThe Conceptual Framework states that:The objective of general purpose financial rep reporting entity that is useful to existing creditors in making decisions about provon about thers and otherThe Conceptual Frameworkaccruals bas

2、is.ation should be prepared on anAccru The ef cash oand red other events are recognised when they occu (and not as received or paid) and they are recorded in the accounting recordscial statements of the periods to which they rel te.Accruals basis Level2Right and obligation2Golden FinanceUnderlying a

3、ssumptionGoing concern is the underlying assumption in preparing financial statements.The entity is normally viewed as a going concern, that is, as continuing in operation the foreseeable future. It is assumed that the entity has neither the intention nor the necessity of liquidation or of curtailin

4、g materially the scale of its operations.3Golden FinanceQualitative characteristics of financial informationChapter 3 of the Conceptual Framework distinguishes bet enhancing qualitative characteristics, for analysis pu characteristics distinguish useful financial reponot useful or misleading. Enhanc

5、ing qualitativinformation from less useful informationvethat is ore usefulThe two fundameare relevance and faithful representation.RelevanceRelevant information is capable of making a difference in the decisions made by users. It is capable of making a difference in decisions if it has predictive va

6、lue, confirmatoryvalue or both.The relevance of information is affected by its nature and its materiality.Materiality. Information is material if omitting it or misstating it could influence decisions that users make on the basis of financial information about a specific reporting entity.4Golden Fin

7、anceFaithful representationFinancial reports represent economic phenomena in words and numbers. To be useful, financial information must not only represent relevant phenomena but must faithfullrepresent the phenomena that it purports to represent.To be a faithful representation information must be c

8、omplete, neutral and freeA complete depiction includes all information nephenomenon being depicted, including all nd thelanations.A neutral depiction is without bias in This means that information mudecisions of users.of financial information.n order to influence theFree from error means the phenome

9、non and no error produced. It does not meahave to be made.in the description of thewhich the financial information was cies can arise, particularly where estimatesSubstance over formThis is not a separate qualitative characteristic under the Conceptu l Framework. The IASB says that to do so would be

10、 redundant because it is implied in faithful representation. Faithful representation of a transaction is only possible if it is accounted for according to its substance and economic reality.5Golden FinanceEnhancing qualitative characteristicsComparability Comparability is the qualitati similarities

11、in, and diffe useful if it can be compinformation aboutusers to identify and understand ation about a reporting entity is more about other entities and with similareriod or date.6Golden FinanceConsistency, although related to comparability, is not the same. It refers to the use of thesame methods fo

12、r the same items (i.e. consistency of treatment) either from period to period within a reporting entity or in a single period across entities.The disclosure of accounting policies is particularly important here. Users mu distinguish between different accounting policies in order to be able to make a

13、comparison of similar items in the accounts of different entities.Comparability is not the same as uniformity. Entities should changthose policies become inappropriate.Corresponding information for preceding periods shoulover time.isonVerifiability Verifiability helps assure phenomena it purports to

14、 independent observers corepresentation.ly represents the economic different knowledgeable ands that a particular depiction is a faithfulInformation that can be independently verified is generally more decision-useful thaninformation that cannot.TimelinessTimeliness means having information availabl

15、e to decision-makers in time to be capableof influencing their decisions. Generally, the older information is the less useful it is.Information may become less useful if there is a delay in reporting it. There is a balance between timeliness and the provision of reliable information. If information

16、is reported on a timely basis when not all aspects of the transaction are known, it may not be complete orfree from error.7Golden FinanceUnderstandabilityClassifying, characterising and presenting information clearly and counderstandable.Financial reports are prepared for users who have a reason eco

17、nomic activities and who review and analyse the infor phenomena are inherently complex and cannot be m information on those phenomena might make twithout it those reports would be incomplete ashould not be left out of financial statemndding, but efore mattersThe cost constr This is a per provided, i

18、t subjecbenefito appportingcharacteristic. When information is ts of obtaining and presenting it. This is aifficulties: others, not the intended users, may gain a y someone other than the users. It is therefore difficults, but preparers and users should be aware of the constraint.8Golden FinanceThe

19、elements of financial statementsElements of financial statementsElements of financial statementsMeasurement of financial position in Statement of financial positionMeasurement of performance in Statement of profit or loss and othincomeAsset. A resource controlled by an eneconomic benefits are expect

20、edand from which futureLiability. A present oblig which is expected to resuleconomic benefits.past events, the settlement ofy of resources embodyingEquity. The residu l interthe entity after deducting all its liabilities.Income. Increases in economic benefits during the account ng period in the form

21、 of inflows or enhancements of assets or decreases of liabilities that result in increases inequity, other than those relating to contributions from equity participants.Expenses. Decreases in economic benefits during the accounting period in the form of outflows or depletions of assets or incurrence

22、s of liabilities that result in decreases inequity, other than those relating to distributions to equity participants.9Golden FinanceAssetsAssets are usually employed to produce goods or services for customthen pay for these. Cash itself renders a service to the entity due other resources.lThe exist

23、ence of an asset, particularly in terms of control,(a) physical form (hence patents and co(b) legal rights (hence leases)Transactions or events in the pastdo not in themselves give rise non-current asset does not, incted to occur in the future n to purchase aan asset.Liabi Oblig legallsponsibility t

24、o act or perform in a certain way. Obligations may beconsequence of a binding contract or statutory requirement.Obligations also arise, however, from normal business practice, custom and a desire tomaintain good business relations or act in an equitable manner.It is important to distinguish between

25、a present obligation and a future commitment. A management decision to purchase assets in the future does not, in itself, give rise to apresent obligation.10Golden FinanceProvisionsIs a provision a liability?Provision. A present obligation which satisfies the rest of the definition of a liif the amo

26、unt of the obligation has to be estimated.QuestionConsider the following situations. In each case, ddefinitions given by the Conceptual Framewithin thenswer.a)Pat Co has purchased a paten of a particular manufactfive years.s the company sole use00 a year for the nextb)Baldwin Co paidthat priority tr

27、eatp a car repair shop, on conditionm the companys fleet.c)Deals on Wheels Co provides a warranty with every car sold.Answera)This is an asset, albeit an intangible one There is a past event, control and futureeconomic benefit (through cost savings).b)This cannot be classified as an asset. Baldwin C

28、o has no control over the carrepair shop and it is difficult to argue that there are future economic benefits.c)The warranty claims in total constitute a liability; the business has taken on anobligation. It would be recognised when the warranty is issued rather than when a claim is made.11Golden Fi

29、nanceEquityEquity is defined above as a residual, but it may be sub-classified in t financial position. This will indicate legal or other restrictions onto distribute or otherwise apply its equity. Some reserves are reqlaw, eg for the future protection of creditors.yrThe amount shown for equity depe

30、nds on the measunothing to do with the market value of the entits. It hasIncome Both revenu course of orinition of income. Revenue arises in theGainsrevenits. As such they are no different in nature fromGainsing on the disposal of non-current assets The definition of incomealso includes unrealised g

31、ains, eg on revaluation of marketable securities.ExpensesAs with income, the definition of expenses includes losses as well as those expenses thatarise in the course of ordinary activities of an entity.Losses. Decreases in economic benefits. As such they are no different in nature from otherexpenses

32、.Losses will include those arising on the disposal of non-current assets. The definition ofexpenses will also include unrealised losses, eg the fall in value of an investment.12Golden FinanceFinancial Position approachDr/Cr 會(huì)計(jì)僅僅是的一門語(yǔ)言撿錢13Golden Finance賣貨物處置固定資產(chǎn)14Golden FinanceRecognition of the elem

33、ents of financial statementsItems which meet the definition of assets or liabilities may still not be recogni financial statements because they must also meet certain recognition critAn item that meets the definition of an element and satisfies the forecognition:a) it is probable that any future eco

34、nomic benefit associto or from the entity; andb) the item has a cost or value that can be m一切向錢看一切向錢看15Golden FinanceAssets which cannot be recognizedThe recognition criteria do not cover items which many businesses m.A skilled workforce is an undoubted asset but workers can leavebe no certainty abo

35、ut the probability of future economic bnA company may have come up with a new name for increasing sales but, as it did not buy the namethat can be reliably measured, so it is not recovalue16Golden FinanceMeasurement of the elements of financial statementsMeasurement. The process of determining the m

36、onetary amounts at which the the financial statements are to be recognised and carried in the statement position and statement of profit or loss and other comprehensive inA number of different measurement bases are used in financi Historical cost Current cost Realisable (settlement) value Present va

37、lue of future cash flCurrent cost.Assets are carried at the a the same or an equivalentash equivalents that would have to be paid ifd currently.Liabilities are carried at the undiscounted amount of cash or cash equivalents that wouldbe required to settle the obligation currently.Realisable value. Th

38、e amount of cash or cashby selling an asset in an orderly disposal.quivalents that could currently be obtained17Golden FinancePresent value. A current estimate of the present discounted value of thflows in the normal course of business.Historical cost is the most commonly ad combined with other base

39、s, eg inventoryvalue.t this is usuallyand net realisableRecent standards use the con that would be receivedtransaction between mafined by IFRS 13 as the price sfer a liability in an orderlyrement date.ExampleA machine was purchased on 1 January 20X8 for $3m. That was its original cost. It has a usef

40、ul like of 10 years and under the historical cost convention it will be carried at original cost less accumulated depreciation. So in the financial statements at 31 December 20X9 itwill be carried at: $3m (0.3 x 2) = $2.4m18Golden FinanceThe current cost of the machine, which will probably also be i

41、ts fair value, will be fairly easy to ascertain if it is not too specialised. For instance, two year old machines like thisone may currently be changing hands for $2.5m, so that will be an appropriate fair vThe net realisable value of the machine will be the am selling it, less any costs involved in

42、 making the sand transported to the buyers premises at a costrom ntledbe $2.3m.The replacement cost of the m depreciation. The cost ofreplacement cost will therw mless two years3.5m. Assuming a 10-year life, theThe present value of he machine will be the discounted value of the future cash flows tha

43、t it is expec ed to generate. If the machine is expected to generate $500 000 per annum for the remaining 8 years of its life and if the companys cost of capital is 10%, present value will be calculated as: $500,000 x 5.335* = $2667,500* Cumulative present of $1 per annum for 8 years discount d at 1

44、0%19Golden FinancePro forma financial statementIAS 1 covers the form and content of financial statements. The Statement of financial position Statement of profit or loss and other compreh Statement of changes in equity Statement of cash flows Notes to the financial stateState XYZ 20X2itionMENT OF FI

45、NANCIAL POSITION AS AT 31 DECEMBER20X2$00020X1$000ASSETSN n-current assetsProperty, plant and equipment GoodwillOther intangible assetsInvestments in associates Investments in equity instrumentsX X X X XXX X X X X X 20Golden FinanceCurrent assets Inventories Trade receivablesOther current assetsCash

46、 and cash equivalentsX X X X XXX X X X X X Total assetsEQUITY AND LIABILITIESEquityShare capital Retained earningsOther components of equityTotal equityNon-current liabilities Long-term borrowings Deferred taxLong-term provisionsTotal non-current liabilities X X Current liabilities Trade and other p

47、ayables Short term borrowingsCurrent portions of long-term borrowings Current tax payableShort-term provisions Total current liabilities Total liabilitiesTotal equity and liabilitiesX X X X X X XXX X X X X X X X 21Golden FinanceXYZ GROUP STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR

48、 THE YEAR ENDED 31 DE(illustrating presentation in one statement)Revenue Cost of sales Gross profit Other incomeDistribution costs Administrative expenses Other expensesFinance costs Profit before tax Income tax expensePROFIT FOR THE YOther comprehe Gains/(losse Investments IncomOtherTOTX (X)(X)(X)(

49、X) X (X)X(X)(X) X (X)XX (X)(X)X X(X) X (X) XXr comprehensive incomethe year, net of taxE INCOME FOR THE YEAR22Golden FinanceXYZ GROUP STATEMENT OF CHANGES IN EQUITY FOR THE YEARENDED 31 DECEMBER 20X2Share capital$000X XRetained Revaluation Totalearnings surplusequity$000X(X)$000X(X) X$000X XBalance

50、at 1 January 20X2 Prior period adjustment* Restated balanceChanges in equity for 20X2 Issue of share capital DividendsTotal comprehensive income for the yearTransfer to retained earningsBalance at 31 December 20X2X(X)XXX23Golden FinanceXYZ GROUP STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED 31 DECE

51、MBER 20X2(illustrating presentation in two statements)20X2$000X (X) X X (X)(X)(20X1$000X (X) XXRevenue Cost of sales Gross profit Other incomeDistribution costs Administrative expenses Other expensesFinance costs Profit before tax Income tax expensePROFIT FOR THE YXYZEMENT OF PROFIT OR LOSS AND OTHE

52、RCOMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 20X220X2$000X20X1$000XProfit for the yearOther comprehensive income:Gains/(losses) on property revaluations Investments in equity instrumentsIncome tax relating to items of other comprehensive incomeOther comprehensive income for the year, net of

53、tax TOTAL COMPREHENSIVE INCOME FOR THE YEARX (X)(X)X X(X) X (X) XX24Golden FinanceDefinition & RecognitionDefinitionsProperty, plant and equipment are tangible assets that: are held for use in the production or supply of goods or services, for refor administrative purposes; and are expected to be us

54、ed during more than one period.Cost is the amount of casconsideration given to acqid or the fair value of the othere time of its acquisition or construction.Residual value is the net amount which the entity expects to obtain for an asset at the endof its useful life after deducting the expected costs of disposal.Carrying amount is the amount at which an asset is recognised in the statement of financial position after deducting any accumulated depreciation and accumulatedimpairment losses.An impairment loss is the amount by which the carrying amount of an asset exceeds itsrecoverable amount