Essential Advisors Mix - B

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This 8 Hour Online CPD Course covers a range of core technical topics including Audit, Financial Reporting & Company Law. For a limited time only you will get a bonus 2 Hours Tax Online CPD giving you 10 hours CPD for just €180.00.

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Essential Advisors Mix - B

  1. 1. Education & TrainingThe Essential Advisors Mix 2011 Afternoon Session Financial Reporting Refresher Presenter: Garret Wynne, ACA, Dip IFRS, MBS Accounting, BA - OmniPro Critical Company Law Update Presenter:Conor Sweeney, BA FCIS, Dip Corporate Governance - OmniPro OmniPro Education & TrainingUnit 3 South Court, Block D, Iveagh Court,Wexford Road Business Park, 5 – 8 Harcourt Road,Carlow. Dublin 2.059 9183888 01 4110000www.omnipro.ie info@omnipro.ie
  2. 2. Financial Reporting Refresher Supporting Documentation Index PagePowerpoint Slide Set 1 – 24Supporting DocumentationAldi Stores Financial Statements 25 – 60Arnotts Holdings Limited Financial Statements 61 – 104Glencullen Holdings Limited 105 – 132Ballymun Shopping Centre 133 – 160FRS 30 Heritage Assets Guidance Document 161 – 170OmniPro Sample Financial Statements Medium/Large Company Limited 171 – 200OmniPro Medium Company Abridged Financial Statements 201 – 232OmniPro Small Company Abridged Financial Statements 233 – 247Financial Statements Call Over and Disclosure Checklist 248 – 253Property Management Company Financial Statements inc. Tangible FA 254 – 275Property Management Company Financial Statements No Tangible FA 276 – 294MUDS Disclosure Checklist 295Dunnes Stores Unqualified Report – Deloitte 296 – 297OmniPro Sample Company Statements IFRS for SMEs 298 – 330
  3. 3. Critical Company Law Update Supporting Documentation Index PagePowerpoint Slide SetSection 1 Implementation of the Multi-Unit Developments Act – What must Auditors Know & Developers & Directors Do 332 - 336Section 2 Review of New Companies Bill 336 - 339Section 3 Client Confidentiality – Unlimited Structures as a method 339 – 341 of keeping figures out of the public domainSection 4 New Requirements for Signing Audit Reports 341 – 343Section 5 Notifying IAASA of Cessation of Office by an Auditor 343 – 344Section 6 Proposed new Audit Exemption Limits 345Section 7 What’s new in the CRO 346 – 352Section 8 ODCE Review & Current Focus 352 – 358Section 9 Mandatory E-Stamping for Stamp Duty 359Section 9 New Legislation Update 360 - 363Supporting Documentation Paper on Multi-Unit Developments Act 2011 364 – 372 Headings on Financial Statements from New Companies Bill 373 – 382 Paper on Non-Filing Accounts Structure 383 – 387 Paper on Signature on Audit Reports 388 - 389 Paper on Cessation of Office by an Auditor 390 - 391 IAASA Auditor Notification of Cessation of Office 392 – 394 H15 Voluntary Strike Off Form 395 – 396 Changes to the Form B1 397 – 403 ODCE – Pages from Annual Report & Cases 404 – 410 DPP Case – Prosecution of an Auditor 411 Mandatory E-Stamping of Share Transfer Forms 412 – 414
  4. 4. Financial Reporting for SMEs Session Topics• Key current reporting standards• Sample full financial statements• Sample abridged financial statements• Property management company issues• Unlimited company filing requirements• Introduction to IFRS for SMEs Financial Reporting for SMEs Key current reporting standards • SSAP 9 Stocks and Long Term Contracts • FRS 10 Goodwill and Intangible Assets • FRS 11 Impairment of Fixed Assets and Goodwill • FRS 12 Provisions, Contingent Liabilities and Contingent Assets • FRS 15 Tangible Fixed Assets • FRS 18 Accounting Policies • FRS 21 Events After the Balance Sheet Date • FRS 30 Heritage Assets OmniPro Education & Training 1 of 414
  5. 5. Financial Reporting for SMEs SSAP 9 Stocks & Long Term Contracts• Stock comprises the following – Goods/Assets purchased for resale – Consumables – Raw materials and related components – Work in progress – Long term contract balances – Finished goods Financial Reporting for SMEs SSAP 9 Stocks & Long Term Contracts• A long term contract is – A contract entered into for the design, manufacture or construction of a single substantial asset or the provision of a service – Where the time taken to complete the contract falls into different accounting periods – Usually exceeding one year in duration Financial Reporting for SMEs SSAP 9 Stocks & Long Term Contracts• Stock valued at the lower of cost and net realisable value• Cost is defined as expenditure incurred in the normal course of business in bringing the product or service to its present location and condition• Net realisable value is the estimated selling price less all further costs to completion OmniPro Education & Training 2 of 414
  6. 6. Financial Reporting for SMEs SSAP 9 Stocks & Long Term Contracts• Long term contracts are assessed on a contract by contract basis• Disclose in Profit and Loss a/c – Turnover and related costs assessed by stage of completion• Profit should only be recognised where the contract outcome can be assessed with reasonable certainty Financial Reporting for SMEs SSAP 9 Stocks & Long Term Contracts• Disclose in Balance Sheet – Stocks – net cost less foreseeable losses and payments on account – Amounts recoverable on contracts – excess of turnover over payments on account – Payments on account – payments received in excess of turnover• Accounting policy applied to stocks and long term contracts Financial Reporting for SMEs FRS 10 Goodwill & Intangible Assets• Purchased Goodwill is the difference between the cost of an acquired entity and the fair value of the acquired assets and liabilities• Intangible asset is defined as a non-financial fixed asset that does not have physical substance but is identifiable and controlled by the entity OmniPro Education & Training 3 of 414
  7. 7. Financial Reporting for SMEs FRS 10 Goodwill & Intangible Assets• Purchased goodwill and intangible assets should be capitalised as assets• Internally generated goodwill should not be capitalised• Internally developed intangible assets only capitalised where they have a readily ascertainable market value Financial Reporting for SMEs FRS 10 Goodwill & Intangible Assets• Initial Recognition – Purchased goodwill recognised at cost – Intangible asset purchased separately to a business should be capitalised at cost – Intangible asset acquired as part of business acquisition should be capitalised separately and recognised if its value can be measured reliably – Where value cannot be measured reliably should be included within total goodwill acquired Financial Reporting for SMEs FRS 10 Goodwill & Intangible Assets• Amortisation – Limited useful life – amortise straight line over expected useful life (assume useful life < 20 yrs) – Indefinite useful life – not amortised – Residual value may be assigned to intangible asset if it can be measured reliably – No residual value on goodwill – Amortisation method should reflect the expected pattern of depletion OmniPro Education & Training 4 of 414
  8. 8. Financial Reporting for SMEs FRS 10 Goodwill & Intangible Assets• Economic Lives – Useful economic lives should be reviewed at the end of each reporting period – If the useful life is revised the carrying value should be amortised over the revised remaining useful life Financial Reporting for SMEs FRS 10 Goodwill & Intangible Assets• Impairment reviews – Where amortisation is for a period less than 20 years impairment review carried out • At end of year 1; and • If events or circumstances indicate the carrying value is not recoverable – Where amortisation is for a period greater than 20 years impairment review carried out annually Financial Reporting for SMEs FRS 10 Goodwill & Intangible Assets• Negative Goodwill – Recognised separately on Balance Sheet – Check fair value of acquired assets and liabilities – Negative goodwill to the value of non monetary assets acquired recognised in P&L in which the non monetary assets are recovered – Negative goodwill in excess of non monetary assets recognised in P&L in the periods expected to benefit OmniPro Education & Training 5 of 414
  9. 9. Financial Reporting for SMEs FRS 10 Goodwill & Intangible Assets• Disclosure Requirements – Recognition and measurement of intangibles and goodwill – Method and period of amortisation of intangibles and goodwill – Revaluations, if any, in the period – Negative goodwill recognised in the period Financial Reporting for SMEs FRS 11 Impairment of Fixed Assets and Goodwill• Impairment is defined as a reduction in the recoverable amount of a fixed asset or goodwill below its carrying amount• A review for impairment should be carried out if events or circumstances indicate the carrying amount may not be recoverable Financial Reporting for SMEs FRS 11 Impairment of Fixed Assets and Goodwill• An impairment review is the comparison of the carrying amount of the asset or goodwill with its recoverable amount OmniPro Education & Training 6 of 414
  10. 10. Financial Reporting for SMEs FRS 11 Impairment of Fixed Assets and Goodwill• The recoverable amount is the higher of net realisable value and value in use• Net realisable value is the amount which an asset could be disposed of less any direct selling costs Financial Reporting for SMEs FRS 11 Impairment of Fixed Assets and Goodwill• Value in use is calculated at the level of income generating units• Income generating units are identified by dividing the total income of the entity into as many independent income streams Financial Reporting for SMEs FRS 11 Impairment of Fixed Assets and Goodwill• Expected future cash flows of the income generating units should be calculated• Cash flows are estimated on assets in their current condition• Exclude future capital expenditure or estimated cost savings on reorganisation OmniPro Education & Training 7 of 414
  11. 11. Financial Reporting for SMEs FRS 11 Impairment of Fixed Assets and Goodwill• Cash flows are then discounted to the establish the present value of future cash flows• The present value is then compared to the carrying amount of the income generating units indicating if the asset is impaired or not Financial Reporting for SMEs FRS 11 Impairment of Fixed Assets and Goodwill• Disclosure requirements – Impairment losses recognised in P&L are included in operating profit and disclosed as exceptional if appropriate – Impairment losses recognised in STRGL are disclosed separately in STRGL – Accounting policy for impairments Financial Reporting for SMEsFRS 12 Provisions, Contingent Liabilities and Contingent Assets• A provision is defined as a liability of uncertain timing or amount• A contingent liability is defined as – A possible obligation arising from past events confirmed by one or more uncertain future events outside the entities control OmniPro Education & Training 8 of 414
  12. 12. Financial Reporting for SMEsFRS 12 Provisions, Contingent Liabilities and Contingent Assets – A present obligation arising from past events but not recognised as the amount of obligation and transfer is not certain• A contingent asset is defined as – A possible asset that arises from past events and whose existence will be confirmed by one or more uncertain future events outside the entities control Financial Reporting for SMEsFRS 12 Provisions, Contingent Liabilities and Contingent Assets• A provision should be recognised when: – An entity has a present obligation as a result of past events – It is probable that a transfer of economic benefits will be required – A reliable estimate can be made of the obligation Financial Reporting for SMEsFRS 12 Provisions, Contingent Liabilities and Contingent Assets• Provisions should be reviewed annually and adjusted to reflect the current best estimate• A provision should only be used for expenditures for which the provision was originally recognised OmniPro Education & Training 9 of 414
  13. 13. Financial Reporting for SMEsFRS 12 Provisions, Contingent Liabilities and Contingent Assets• Contingent liabilities should not be recognised but disclosed unless the possibility of transfer of economic benefits is remote• Contingent assets should not be recognised but disclosed where an inflow of economic benefits is probable Financial Reporting for SMEsFRS 12 Provisions, Contingent Liabilities and Contingent Assets• Onerous contracts – The present obligation under the contract should be recognised and measured as a provision Financial Reporting for SMEsFRS 12 Provisions, Contingent Liabilities and Contingent Assets• Restructuring – Must have constructive obligation – Must be a detailed formal restructuring plan – Valid expectation must be raised by announcing the plan or starting to implement it OmniPro Education & Training 10 of 414
  14. 14. Financial Reporting for SMEsFRS 12 Provisions, Contingent Liabilities and Contingent Assets• Disclosure – Nature of obligation, timing and potential transfer – Carrying amount at start and end of period – Additional provisions made in the period – Amounts used during the period – Unused amounts reversed during the period Financial Reporting for SMEs FRS 15 Tangible Fixed Assets• Tangible fixed asset initially measured at cost• Costs include all those that are directly attributable to bringing the asset into working condition for its intended use Financial Reporting for SMEs FRS 15 Tangible Fixed Assets• Capitalisation of directly attributable costs should cease when all activities to get the asset ready for use cease even if the asset has not yet been brought into use• Start up or commissioning costs are included where the asset is available for use but incapable of operating at normal levels OmniPro Education & Training 11 of 414
  15. 15. Financial Reporting for SMEs FRS 15 Tangible Fixed Assets• Where finance costs are capitalised only those directly attributable to the construction of the asset should be capitalised• Capitalisation of finance costs should cease when all activities necessary to get the asset ready for use are complete Financial Reporting for SMEs FRS 15 Tangible Fixed Assets• Subsequent expenditure capitalised where – The expenditure enhances to the economic benefits of the asset – A component, treated separately for depreciation, has been replaced or restored – The expenditure restores the economic benefits of the asset that have been consumed by the entity Financial Reporting for SMEs FRS 15 Tangible Fixed Assets• Valuations – Current value at the balance sheet date – Non specialised properties – Existing Use Value – Specialised properties – Depreciated Replacement Cost – Tangible assets – Open Market Value OmniPro Education & Training 12 of 414
  16. 16. Financial Reporting for SMEs FRS 15 Tangible Fixed Assets• Revaluation gains recognised in the P&L to the extent that they reverse previously recognised revaluation losses on the same asset• All other gains are recognised in the STRGL Financial Reporting for SMEs FRS 15 Tangible Fixed Assets• Revaluation losses caused by a clear consumption of economic benefits recognised in the P&L a/c• Other revaluation losses recognised – In STRGL until carrying amount reaches depreciated historical cost – Thereafter in the P&L a/c Financial Reporting for SMEs FRS 15 Tangible Fixed Assets• Disclosure on revalued assets – Name & qualification of the valuer – Basis of valuation – Date of valuation – Carrying amount of historical cost less depreciation – Where the valuation has not been updated the date of the last full valuation OmniPro Education & Training 13 of 414
  17. 17. Financial Reporting for SMEs FRS 15 Tangible Fixed Assets• Depreciation – Charged on a systematic over the assets useful economic life – Recognised as an expense in the P&L a/c Financial Reporting for SMEs FRS 15 Tangible Fixed Assets• Depreciation – Charged on a systematic over the assets useful economic life – Recognised as an expense in the P&L a/c – The useful economic life of a tangible asset should be reviewed at the end of each reporting period Financial Reporting for SMEs FRS 15 Tangible Fixed Assets• Disclosures – Depreciation method used – Useful economic lives of assets – Total depreciation charge for the period – The cost at the beginning and end of the period – The accumulated depreciation – The carrying value at the beginning and end of the period OmniPro Education & Training 14 of 414
  18. 18. Financial Reporting for SMEs FRS 18 Accounting Policies• Accounting policies are defined as the principles, bases, conventions, rules and practices applied by an entity that specify how events are recognised, measured and presented in the financial statements Financial Reporting for SMEs FRS 18 Accounting Policies• An entity should adopt accounting policies that enable its financial statements to give a true and fair view• Accounting policies should be consistent with the requirements of accounting standards, UITF Abstracts and Company Law Financial Reporting for SMEs FRS 18 Accounting Policies• Accounting policies should be judged against – Relevance – Reliability – Comparability – Understandability OmniPro Education & Training 15 of 414
  19. 19. Financial Reporting for SMEs FRS 18 Accounting Policies• Accounting policies should be reviewed regularly to ensure that they remain appropriate for the purpose of giving a true and fair view• Material adjustments applicable to prior periods as a result of a change in accounting policy is accounted for as a prior period adjustment Financial Reporting for SMEs FRS 21 Events after the Balance Sheet Date• Events occurring between the balance sheet date and the date when the financial statements are authorised for issue Financial Reporting for SMEs FRS 21 Events after the Balance Sheet Date• Adjusting events – provide evidence of conditions that existed at the balance sheet date, examples include – Settlement of court case post year end – Indication of asset impairments post year end – Determination of bonus or profit share post year end OmniPro Education & Training 16 of 414
  20. 20. Financial Reporting for SMEs FRS 21 Events after the Balance Sheet Date• Non-adjusting events – indicative of conditions that arose after the balance sheet date, examples include – Decline in market value of investments, normally reflects circumstances post year end• Disclose material non-adjusting events Financial Reporting for SMEs FRS 21 Events after the Balance Sheet Date• Dividends declared post balance sheet date are not a liability at the year end• Dividends declared post balance sheet date but authorised before financial statements are issued are disclosed in the notes to the accounts Financial Reporting for SMEs FRS 30 Heritage Assets• Applies to assets that are held and maintained for contribution to knowledge and culture• Historical, artistic, scientific, geophysical, environmental qualities• Reported as tangible fixed assets and accounted for in accordance with FRS 15• FRS 30 supersedes FRS 15 where it applies OmniPro Education & Training 17 of 414
  21. 21. Financial Reporting for SMEs FRS 30 Heritage Assets• Cost recognition – Reported at cost or valuation separately identified – Changes in valuation recognised in STRGL – Impairment losses in accordance with FRS 11• Where cost/valuation is not available and cannot be obtained assets should not be recognised Financial Reporting for SMEs FRS 30 Heritage Assets• Donated assets should be reported at valuation• Where assets are reported at valuation – Date of valuation – Method of valuation – Internal/External valuation – Any limitations on valuation Financial Reporting for SMEs FRS 30 Heritage Assets• Depreciation – None on heritage assets with indefinite lives – Estimated useful life on assets with finite lives – Apply as appropriate – Review carrying value, impairments in accordance with FRS 11 OmniPro Education & Training 18 of 414
  22. 22. Financial Reporting for SMEs FRS 30 Heritage Assets• Disclosure – Nature and scale of heritage assets – Policy for acquisition preservation, management and disposal of HA – Records maintained by the entity and extent to which access is permitted – Accounting basis for measurement bases Financial Reporting for SMEs FRS 30 Heritage Assets• HA not reported in the BS – Disclose why not in the notes – Significance and nature – Carrying amount of heritage assets at beginning and balance sheet date – Classes and groups of assets reported at costs V valuation Financial Reporting for SMEs FRS 30 Heritage Assets• Summary of transactions relating to heritage assets – Cost of acquisition – Value acquired by donation – Carrying amount of assets disposed and proceeds – Any impairments recognised in the period OmniPro Education & Training 19 of 414
  23. 23. Financial Reporting for SMEs Sample Accounts Review• Large/Medium Full Financials• Medium Abridged Financials• Small Abridged Financials• Call over checklist• Financial Statement disclosure checklist Financial Reporting for SMEs Property Management Company• Sample accounts review• MUDS Disclosure Checklist Financial Reporting for SMEs Unlimited Company• Section 149 Companies Act 1963 & Sixth Schedule• Accounts must give a “true and fair view”• Unlimited private company has no obligation to file accounts with annual return• Obliged to attach audit report with annual return OmniPro Education & Training 20 of 414
  24. 24. Financial Reporting for SMEs IFRS FOR SMEs• What is IFRS for SMEs• Proposed three tier reporting system• Publicly accountable• Advantages and disadvantages• First time adoption and transition to IFRS for SMEs Financial Reporting for SMEs Current Reporting System Quoted Companies IFRS Medium/Large Irish GAAP Small Irish GAAP/FRSSE Financial Reporting for SMEs Proposed 3 Tier Reporting Accounting Tier Nature of Entity Standards EU adopted 1 Publicly Accountable (PA) IFRS Medium/Large entities – No 2 IFRS for SMEs PA 3 FRSSE Small entities - no PA OmniPro Education & Training 21 of 414
  25. 25. Financial Reporting for SMEs Publicly Accountable• Debt or equity instruments are traded in a public market or in the process of issuing such instruments for trading• It holds assets in a fiduciary capacity for broad group of outsiders• It is a deposit taking entity for a broad group of outsiders Financial Reporting for SMEs Advantages of IFRS for SMEs• Simpler accounting – Property, plant and equipment – Borrowing costs & development expenditure• Reduced disclosure – Financial instruments – Asset impairment Financial Reporting for SMEs Disadvantages of IFRS for SMEs• Simpler accounting – Borrowing costs & development expenditure – Amortisation of goodwill• Financial statements not acceptable in listing doc or subsequent filings OmniPro Education & Training 22 of 414
  26. 26. Financial Reporting for SMEs Transition to IFRS for SMEs• Key consideration on transition – Financial Instruments – Consolidation – Intangible assets – Deferred tax – Cash flow statement Financial Reporting for SMEs Transition to IFRS for SMEs• Key consideration on transition (cont’d) – Borrowing costs – Revaluations – Business combinations Financial Reporting for SMEs Transition to IFRS for SMEs• Key steps on transition for companies – Select accounting policies – Prepare opening IFRS for SME Balance Sheet – Apply accounting policies retrospectively – Recognise adjustments from GAAP OmniPro Education & Training 23 of 414
  27. 27. Financial Reporting for SMEs Transition to IFRS for SMEs• Key steps on transition for companies – Prepare comparative year – Provide note reconciliation on transition – Update tax OmniPro Services• OmniPro Practice Support – Pre-Monitoring Visits – Strategic Planning & Implementation – Practice Development – Practice Sale, Purchase & Merger – In House Training – File Review Services – Practice Incorporation – Representation and advice in relation to complaints and disciplinary process OmniPro Supporting Irish Accountants Unit 3, Southcourt, Iveagh Court Wexford Road Business Harcourt Road Park, Carlow Dublin 2 gwynne@omnipro.ie doneill@omnipro.ie 059 9183888 01 4110000 OmniPro Education & Training 24 of 414
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  164. 164. FRS 30 Heritage AssetsIn June 2009 the ASB published its new Financial Reporting Standard 30 ‘HeritageAssets’. The standard applies to all heritage assets that are held and maintained by anentity principally for their contribution to knowledge and culture. Heritage assets canhave historical, artistic, scientific, geophysical or environmental qualities. Thestandard applies for all accounting periods beginning on or after 1st April 2010,though early adoption is encouraged.The primary purpose of the new standard is to provide a framework for therecognition, valuation and disclosure of heritage assets. Heritage assets are defined as“tangible assets with historical, artistic, scientific, technological, geophysical orenvironmental qualities that is held and maintained principally for its contribution toknowledge and culture.”The FRS applies to all financial statements that are intended to give a true and fair viewof a reporting entity’s financial position and profit or loss (or income and expenditure) fora period, except that reporting entities applying the Financial Reporting Standard forSmaller Entities (FRSSE) currently applicable are exempt.Recognition and ValuationHeritage assets should be reported as tangible fixed assets and recognised inaccordance with FRS 15 ‘Tangible fixed assets’ subject to the requirements notedbelow. 1. Where information is available on the cost or value of heritage assets: a) they should be presented in the balance sheet separately from other tangible fixed assets; b) the balance sheet or the notes to the accounts should identify separately those classes of heritage assets being reported at cost and those at valuation1; and c) changes in the valuation should be recognised in the statement of total recognised gains and losses, except for impairment losses that should be recognised in accordance with FRS 11 ‘Impairment of Fixed Assets and Goodwill’. 2. Where the cost or valuation is not available and cannot be obtained at a cost which is commensurate with the benefits to users of the financial statements, the assets will not be recognised in the balance sheet and the disclosures detailed below should be made. 3. Donated assets should be reported in the profit and loss account at valuation. Where it is not practicable to obtain a valuation the reasons why should be stated.Depreciation and Impairment 1. For assets with finite lives depreciation is provided over the estimated useful life of the asset.1 Valuations may be made by any method that is appropriate and relevant. There is no requirement forvaluations to be carried out or verified by external valuers, nor is there any prescribed minimum periodbetween valuations. However, the carrying amount should be reviewed with sufficient frequency toensure the valuations remain current. OmniPro Education & Training 161 of 414
  165. 165. 2. For assets with indefinite lives depreciation need not be provided 3. The carrying amount of an asset should be reviewed where there is evidence of impairment. Impairments should be recognised in accordance with FRS 11 ‘Impairment of Fixed Assets and Goodwill’DisclosuresThe accounting policies for heritage assets whether they are reported in the balancesheet or not should disclose: 1. An indication of the nature and scale of heritage assets held by the entity. 2. Details of measurement bases used, including the entity’s policy for the acquisition, preservation, management and disposal of heritage assets2.Where heritage assets are reported in the balance sheet the following should bedisclosed: 1. The carrying amount of heritage assets at the start and end of the financial period including an analysis between assets reported at cost and at valuation; 2. Where assets are reported at valuation, the following information should be disclosed: a) the date of the valuation; b) the methods used to produce the valuation; c) whether the valuation was carried out by external valuers, if this is the case state the name and professional qualification, if any, of the valuer; and d) any significant limitations on the valuation.Where heritage assets are not reported in the balance sheet, the reasons why should beexplained and the notes to the financial statements should explain the significance andnature of those assets that are not reported in the balance sheet.Information that is available to the entity and is helpful in assessing the value of thoseheritage assets that are not reported in the entity’s balance sheet should be disclosed.The financial statements should contain a summary of transactions relating to heritageassets disclosing, for the accounting period and each of the previous four accountingperiods: a) the cost of acquisitions of heritage assets; b) the value of heritage assets acquired by donation; c) the carrying amount of heritage assets disposed of in the period and the proceeds received; and d) any impairment recognised in the period.This summary should show separately transactions in assets that are reported in thebalance sheet and those that are not.Disclosure should be provided on the nature and extent of significant donations ofheritage assets.2 This should include a description of the records maintained by the entity of its collection of heritageassets and information on the extent to which access to the assets is permitted, this can mayalternatively be provided in a document that is crossreferenced from the financial statements. OmniPro Education & Training 162 of 414
  166. 166. The following examples have been taken from FRS 30 to assist the reader with itsapplication of the standard.Example 1 — The Vintage Car MuseumThe Museum holds a collection of vintage cars and a collection of motoring ephemerafor the purpose of fostering and promoting a public interest in the history of vintagecars.The vintage car collection is capitalised at market value and was acquired throughdonations and purchases. The collection of motoring ephemera has been assembledover many years and includes manuals, brochures and advertising material. Thecollection does not include items whose value is significant to the financial position ofthe Museum and is not capitalised because valuations could only be obtained atdisproportionate cost.Note 1 Accounting policiesTangible fixed assets and depreciationHeritage assetsThe museum’s collection of vintage and classic cars is reported in the Balance Sheetat market value. Valuations are made by professional valuers (Parker, Glass and Co).Approximately one-third of the collection is valued each year on a rolling basis. Gainsand losses on revaluation are recognised in the Statement of Total Recognised Gainsand Losses.It is the Museum’s policy to maintain its collection of cars in full working order andmaintenance costs are charged to the Income and Expenditure Account whenincurred. The cars are deemed to have indeterminate lives and the Trustees do nottherefore consider it appropriate to charge depreciation.Subject to the approval of the Trustees, the Museum may dispose of items from thecollection, although this will only happen in exceptional circumstances, for examplewhen the item cannot be properly displayed or the disposal proceeds can be used topurchase a better example.In addition, the Museum holds a collection of motoring ephemera which is notrecognised in the Balance Sheet as cost information is not readily available and theTrustees believe the benefits of obtaining valuations for these items would not justifythe cost. Nearly all items in the collection are thought to have a financial value of lessthan £50 and, as far as the Trustees are aware, no individual item is worth more than£1,000. The vast majority of the items in the collection were acquired over twentyyears ago.The Museum’s management policy in respect of its heritage assets is summarised inNote X. Further information is available from the March 2006 publication ‘‘BringingVintage Cars to Life’’ which is available from the Museum’s website. The Museumalso makes available on its website a full listing of its collection of vintage and classiccars. This includes information on the history, provenance and date of acquisition ofeach vehicle and contains a commentary on their historical significance. OmniPro Education & Training 163 of 414
  167. 167. Note 7(a) Tangible fixed assets – heritage assets Vintage Cost or valuation cars £000 1 Apri006 2007 6,700 Additions 200 Disposals (50) Revaluation 335 31 March 2008 7,185 The above represents valuations made in the following financial years: 2007-08 3,000 2006-07 2,185 2005-06 2,000 7,185 The vintage car collection includes the S4 Bentley Sport driven to victory by John Duff and Frank Clement in the 1924 Le Mans race. This vehicle has been included in the accounts at a valuation made in 2006-07 of £150,000 reflecting cars of a similar model and vintage. However, the Museum’s professional valuers have advised that the car would probably realise significantly more than this if it were to be sold on the open market. Additions in 2007-08 comprise: £200,000 purchase of a private collection of 1950s Jaguar sports cars. Disposals in 2007-08 comprise: £50,000 sale of Lotus Elite and Triumph TR2. Note 7(b) Five year financial summary of heritage asset transactions: 2007-2008 2006-2007 2005-2006 2004-2005 2003-2004 £000 £000 £000 £000 £000AdditionsPurchases 200 130 100 160 50Donations - 25 30 - -Total 200 155 130 160 50DisposalsCarrying Value 50 - 30 50 -Sale proceeds 50 - 25 55 - The above information relates only to transactions in cars. There were very few transactions in ephemera during the periods and these were acquisitions by donation. In the Trustees’ view, the value of these donations is not material and obtaining a current valuation would involve disproportionate cost. The OmniPro Education & Training 164 of 414
  168. 168. Museum wishes to acknowledge in particular the donation of 85 workshop manuals in2007-08 from the estate of the late Toad of Toad Hall.Note 8 Heritage assets management policyThe Museum maintains a collection of 250 vintage and classic cars which reflect thehistory of the British sports car from 1900-1960. Approximately 240 of these are ondisplay to the public, while the remainder are held in the Museum’s maintenancedepot undergoing or awaiting repair.Acquisitions are made by purchase or donation. The Museum occasionally disposes ofobjects from the collection in order to fund new acquisitions where the Trusteesdetermine this does not detract from the integrity of the collection.The Museum also holds a collection of motoring ephemera associated with the historyof the British sports car. The collection comprises some 2,000 objects includingmanuals, brochures and advertising material. This collection of ephemera wasoriginally purchased in the early 1970s, although a few items have been acquiredsince mostly through direct donation and occasionally by purchase. The Museumdraws upon this collection for displays in the public rooms and arranges for privateinspection by prior arrangement. OmniPro Education & Training 165 of 414
  169. 169. Example 2 — The Barsetshire MuseumThe Museum’s collections relate to the natural and man-made history of Barsetshire.There are three distinct collections: artefacts, fossils and paintings of local interest.The vast majority of the objects held were acquired in the late 19th century.In the opinion of the Trustees, reliable information on cost or valuation is notavailable for the Museum’s collections of fossils and artefacts. This is owing to thelack of information on purchase cost; the lack of comparable market values; thediverse nature of the objects; and the volume of items held. These collections aretherefore not reported as assets in the balance sheet, other than recent purchases whichare reported at cost.The Trustees have obtained valuations for the collection of local paintings which isregularly being updated through acquisitions either by purchase or donation. TheTrustees have also approved the sale of certain paintings.The following disclosures would be provided in the notes to the financial statements.Note 1 Accounting policiesTangible fixed assets and depreciationHeritage assetsThe Museum has three collections of heritage assets which are held in support of theMuseum’s primary objective of increasing knowledge, understanding andappreciation of the Barsetshire landscape. The collections are accounted for asfollows:PaintingsThe collection of paintings, which also includes sketches and photographs, is reportedin the Balance Sheet at market value.Individual items in the collection are periodically revalued by an external valuer withany surplus or deficit on revaluation being reported in the Statement of TotalRecognised Gains and Losses. The paintings are deemed to have indeterminate livesand a high residual value; hence the Trustees do not consider it appropriate to chargedepreciation.Acquisitions are made by purchase or donation. Purchases are initially recorded atcost and donations are recorded at current value ascertained by the Museum’s curatorswith reference, where possible, to commercial markets using recent transactioninformation from auctions.Artefacts and fossilsThe Trustees do not consider that reliable cost or valuation information can beobtained for the vast majority of items held in the collections of artefacts and fossils.This is because of the diverse nature of the assets held, the number of assets held andthe lack of comparable market values. The Museum does not therefore recognisethese assets on its Balance Sheet, other than recent acquisitions which are reported at OmniPro Education & Training 166 of 414
  170. 170. cost, where the object is purchased, or at the Museum curator’s best estimate ofcurrent value where the object is donated.Preservation costsExpenditure which, in the Trustees’ view, is required to preserve or clearly preventfurther deterioration of individual collection items is recognised in the Income andExpenditure account when it is incurred.Further information on the collections is given in Notes X, Y and Z to the accounts.Note 7 Tangible fixed assets – heritage assets Artefacts & Total Paintings Fossils Assets £000 £000 £000 Cost or valuation 1 April 2007 28,900 1,250 30,150 Additions 400 150 550 Disposals (80) - (80) Revaluation 2,600 - 2,600 31 March 2008 30,820 1,400 32,220The Museum’s external valuer (Turner, Constable and Co) carried out a full valuationof the collection of paintings as at 31 March 2008. The valuations were based oncommercial markets, including recent transaction information from auctions wheresimilar types of paintings are regularly being purchased. During the year, a paintingthat was valued in last year’s accounts at £175,000 suffered major damage and wasrevalued at £25,000 at 31 March 2008. The write-down of £150,000 was charged tothe Income and Expenditure account.A particularly significant exhibit within the collection is the portrait of the LadyElinor May, Countess of Barset by William Maclean ca 1750. The portrait is unusualas Maclean is more widely known for his landscapes of the Scottish Highlands. Thepainting has been valued by an external valuer at £2.5 million. Expert opinion isdivided as to the artistic merit of the portrait. A Maclean landscape was recently soldat auction for £3 million.The values reported for the collections of artefacts and fossils are transaction costs forrecent purchases or the Museum curator’s best estimate of a current valuation forrecent donations.Additions in 2007-08 comprise:  £200,000 purchase of a collection of 20 watercolours of Barsetshire landscapes by a local artist.  £150,000 purchase at auction of a private collection of oil paintings from the estate of a local family.  £50,000 donation of various paintings of local interest whose public display will, in the opinion of the Trustees, support the Museum’s objective. OmniPro Education & Training 167 of 414
  171. 171.  £150,000 donation of fossils and artefacts received from the Dorsetshire Museum. The Trustees of the Dorsetshire Museum approved the donation because the objects were unlikely to be displayed at their Museum and it was becoming increasingly difficult to maintain them in good condition. Disposals in 2007-08 comprise:  The disposal relates to a piece of contemporary art that was donated to the Museum by a local artist in 2006-07. The disposal, which is to a private gallery that specialises in contemporary art, was approved by both the artist and the Trustees. The proceeds of £120,000 were used to fund additions to the collection of paintings in 2007-08. Note 8 Five year financial summary of heritage asset transactions: 2007-2008 2006-2007 2005-2006 2004-2005 2003-2004 £000 £000 £000 £000 £000PurchasesPaintings 350 70 100 160 50Artefacts &Fossils 150 5 65 10 20DonationsPaintings 50 20 20 - -Total Additions 550 95 185 170 70Disposal ofPaintingsCarrying value 80 20 - - 10Sale proceeds 120 25 - - 12 Note 9 Further information on the Museum’s collections of heritage assets Paintings The collection consists of 3,000 paintings, sketches and photographs from the last 150 years illustrating the changing landscape and local populace. The collection has been significantly enhanced in 2007-08 by the acquisition of a collection of watercolours from a local artist and a collection of oil paintings from the estate of a local family. The watercolours comprise modern Barsetshire landscapes with the oil paintings depicting more traditional Barsetshire landscapes from the late 19th and early 20th centuries. The Museum occasionally makes available on loan items from the collection to other regional museums and also accepts paintings and other items on loan. At any time, approximately 50 per cent of the collections are on display. The remaining items are held in storage but access is permitted to scholars and others for research purposes. OmniPro Education & Training 168 of 414
  172. 172. Artefacts and fossilsThe Museum’s collections of artefacts and fossils have been developed over 120 yearsand are used for reference, research and education. The Museum occasionally makesavailable on loan objects to other regional museums and also accepts objects on loan.The Trustees are indebted to the Dorsetshire Museum for the permanent transfer tothe Museum of a collection of fossils and artefacts.At any time approximately 20 per cent of the items in the collections are on display.The remaining items are held in storage but access is permitted to scholars forresearch purposes.ArtefactsThe collection consists of 5,000 miscellaneous, man-made objects including flints,pottery and coins from the period 3000 BC to 1900 AD and reflects the activity ofman in the local area over this period. The collection has been developed over manyyears from digs and field surveys undertaken by the county archaeologists.FossilsThe collection consists of 2,000 specimens from the Cretaceous to the Pleistoceneperiod (145 million to 2 million years ago) and includes fossil fish remains such asshark and ray teeth, marine molluscs and sponges and disarticulated remains of fossildinosaurs and mammals. It records the development of fauna from the local area. Thecollection was principally created from a bequest from Octavius Bayley, Victorianphilanthropist and fossil enthusiast.Heritage assets of particular importanceAs explained in note X, the Museum holds one painting which, in the opinion of theTrustees, is of particular significance and has been valued by an external valuer at£2.5 million. The overall value of the collection, as reported in note 7, at 31 March2008 is £30.8 million.The Museum also holds certain items which the Trustees regard as particularlyimportant to the collections of artefacts and fossils and are likely to have a significantmonetary value in comparison with other items in these collections. Of particularimportance are artefacts from the tomb of Baron Percy de Barsette ca 1100-1160comprising chain mail armour, a long shield and a sword. These objects are in poorcondition but are of great rarity. They were acquired by the Museum in the late 19thcentury and, in the Trustees’ opinion, it is not possible to provide a reliable estimateof their value.Preservation and managementThe Museum has a rolling programme of major restoration developed from acomprehensive review of the condition of the Museum’s collections that was carriedout in 2002-03. The review was commissioned by the Trustees following a majorflood in the basement areas where items not on public display are stored.The total cost of the restoration programme is £250,000 which is being partly fundedby a £100,000 grant from the Heritage Preservation Fund. At the end of 2007-08, theprogramme is around 80 per cent complete and the Trustees expect the programme to OmniPro Education & Training 169 of 414
  173. 173. be completed in 2008-09. The costs of the programme have been charged to theIncome and Expenditure Account.Each of the collections is managed by a Curator who reports to the Director ofCollections. The Curators manage the collections in accordance with policies that areapproved by the Trustees. Further information is provided in the Museum’s separatepublication ‘‘The Management and Preservation of the Barsetshire Museum’sCollections’’, which is available on the Museum’s website. As is explained in thatpublication, assets in the collection are only disposed of where, in the opinion of theTrustees, an item does not contribute to the interest and diversity of the Museum’scollection.The Museum maintains a register for its collections of heritage assets which recordsthe nature, provenance and current location of each asset. Due to the large volume ofitems received in the period, the register is not currently complete. It is expected thatit will be fully comprehensive by the end of March 2009. OmniPro Education & Training 170 of 414
  174. 174. CRO Number - 123456 OmniPro Sample Medium/Large Company Limited Directors’ Report & Financial Statements Year Ended 30th June 2011______________________________________________________________DisclaimerThese financial statements are solely illustrative and intended to be used exclusively foreducational and training purposes. They provide guidance in relation to the format and contentsof Medium/Large company financial statements under the relevant company legislation andfinancial reporting standards. They do not purport to give definitive advice in any form. Despitetaking every care in the preparation of this document OmniPro does not take any legalresponsibility for the contents of these financial statements and the consequences that may arisedue to any errors or omissions. OmniPro shall therefore not be liable for any damage or economicloss occasioned to any person acting on, or refraining from any action, as a result of or based onthe material contained in this publication.The size criteria used to assess small and medium companies is outlined below. For thoseCompanies which exceed two or more of the following Large Co Medium Co Turnover €15,236,856 €3,809,214 Balance Sheet Total €7,618,428 €1,904,607 Employees 250 50ES PASE (Ethical Standard Provisions Available for Small Entities) may be availed of for thoseCompanies which meet two or more of the following: o not more than €7.3million in turnover; o not more than €3.65million balance sheet total; and o not more than 50 employees.Disclosures in this regard have been included in this Pro-Forma set of Financial Statements.Each set of Financial Statements should be specifically tailored for each client. OmniPro Education & Training 171 of 414
  175. 175. OmniPro Sample Medium/Large Company Limited Year Ended 30th June 2011 Contents PageDirectors and other information 3Directors report 4-7Directors responsibilities 8Independent Auditors Report to the Members of OmniPro Ltd 9 - 11Statement of accounting policies 12-16Profit and loss account 17Balance sheet 18Cashflow Statement 19Notes to the financial statements 20 - 30 2 © OmniPro OmniPro Education & Training 172 of 414
  176. 176. OmniPro Sample Medium/Large Company Limited Year Ended 30th June 2011 Directors and Other InformationDirectors1 Mr A Director Ms B Director Mr C DirectorSecretary Mr A DirectorAuditors Compliant Accountant & Co, Registered Auditors, Accountants Row, Any CountyBankers Any Big Bank PLC, Money Street, Moneysville, Any County Deep Pockets Bank, Financial Services Sector, Ballycash, Any CountySolicitors Legal Eagles & Co., Court Place, Judgestown Any CountyRegistered Office Construction Place, Builders Lane, Dunblock Any County1 State nationality of directors if not Irish 3 © OmniPro OmniPro Education & Training 173 of 414
  177. 177. OmniPro Sample Medium/Large Company Limited Year Ended 30th June 2011 Directors’ ReportThe directors present their annual report and audited financial statements for the yearended 30th June 2011.Principal Activities, Business Review and Future DevelopmentsThe principal activity of the company is the provision of construction services to boththe private and commercial sectors. From their operations base and depot inConstruction Place, Builders Lane, Dunblock, Any County they also sell pre-castconcrete products to private individuals and the construction industry. The company issupplied with the pre-cast concrete products by a wholly owned subsidiary company,which operates independently from a separate location.The company has continued to improve performance in recent years sustainingexcellent profitability levels in a challenging and rapidly changing industry.The directors have indicated their intention to capitalise on industry shifts bycontinuing to review and focus their operations accordingly in the future. The directorsare not expecting to make any significant changes in the nature of the business in thenear future.Results and DividendsThe retained profit for the financial year amounted to €244,883 (2010: €276,132). Thedirectors have not declared a dividend for the year.OrAn interim dividend of €xx.xx (2010: €xx.xx) per ordinary share, amounting to €xx,xxx(2010: €xx,xxx) was paid on 1 December 2010. A final dividend of €xx.xx (2010:€xx.xx) per ordinary share, amounting to €xx,xxx (2010: €xx,xxx) is proposed and, ifapproved, will be paid on 30 September 2011.2Principal Risks and UncertaintiesIn common with all companies operating in Ireland in this sector, the company facesincreasing energy and material costs. The directors are of the opinion that thecompany is well positioned to manage these costs.OmniPro Sample Medium/Large Company operates in a cyclical industry and isaffected by factors beyond the control of the company for example level ofconstruction activity.2 Amend as appropriate depending on the payment of dividend or not 4 © OmniPro OmniPro Education & Training 174 of 414
  178. 178. OmniPro Sample Medium/Large Company Limited Year Ended 30th June 2011 Directors’ Report (Cont’d)OmniPro Sample Medium/Large Company faces strong competition in the market andif the company fails to compete successfully market share may decline.Financial Risk ManagementThe company’s operations expose it to a variety of financial risks that include pricerisk, credit risk, liquidity risk and interest rate risk.To maintain stable cash out flows the company maintains 100% (2010: 100%) of itsdebt at fixed rate and to maintain 50% of its debt payable within one year. Thecompany does not use derivative financial instruments to manage financial risk and nohedge accounting is applied.Price RiskThe company is exposed to the price risk of commodities through its operations. Thedirectors believe that the cost of managing this risk is in excess of the potentialbenefits given the size of the company. The directors, however, review theappropriateness of this policy on an annual basis.Credit RiskThe company requires that appropriate credit checks are carried out on newcustomers before sales are made. All customers have individual credit limits that arereviewed on an ongoing basis by the board. Provisions for bad debts are made basedon historical evidence and any new events which might indicate a reduction in therecoverability of cash flows.Liquidity RiskThe company maintains a mix of long and short term finance to ensure the companyhas sufficient funds available to meet obligations as they fall due.Interest Rate RiskThe company holds both interest bearing assets and liabilities. Assets include cashbalances which earn a fixed rate of interest. The company policy is to maintain debt ata fixed rate to ensure future interest cash flows.DirectorsThe directors who held office during the year are listed on page 3. Mr. A Director andMs. B Director retire from the board by rotation in accordance with the Articles ofAssociation and, being eligible, offer themselves for re-election. 5 © OmniPro OmniPro Education & Training 175 of 414
  179. 179. OmniPro Sample Medium/Large Company Limited Year Ended 30th June 2011 Directors’ Report (Cont’d)Directors interests 3The director’s interests in the company at the beginning and end of the year were asfollows; Mr A Director Ms B Director €1 ordinary shares €1 ordinary shares Total At the beginning of the year 550 250 800 At the end of the year 550 250 800OrDetails of directors’ shareholdings, transactions and related interests are set out inNote XX to the financial statements.Events after the Balance Sheet dateThere have been no significant events affecting the company since the year-end.Research and DevelopmentThe company did not engage in any research and development activity during theyear.Political donations4The company made the following political donations in the current year:  Party A - €xx,xxx  Party B - €xx,xxx  Party C - €xx,xxxPayment of CreditorsThe directors acknowledge their responsibility for ensuring compliance with theprovisions of the EC (Late Payment) Regulation 2002. It is the company’s policy toagree payment terms with all suppliers and to adhere to those payment terms.3 Directors Interest’s can also be disclosed by way of note to the accounts, if disclosed by way of note a referenceis required in the director’s report.4 Disclosure is required if political donations are in excess of €5,078.95 in the year. 6 © OmniPro OmniPro Education & Training 176 of 414
  180. 180. OmniPro Sample Medium/Large Company Limited Year Ended 30th June 2011 Directors’ Report (Cont’d)Accounting RecordsThe Directors acknowledge their responsibilities under Section 202 of the CompaniesAct 1990 to keep proper books and records for the company.In order to comply with the requirements of the act, a full time managementaccountant is employed. The books and records of the company are kept at theregistered office and principal place of business at Construction Place, Builders Lane,Dunblock, Any County.AuditorsIn accordance with Section 160 (2) of the Companies Act, 1963, the auditors,Compliant Accountant & Co., Registered Auditors, Accountants Row, Any County willcontinue in office.On behalf of the boardMr A Director Ms B DirectorDirector DirectorDATE 7 © OmniPro OmniPro Education & Training 177 of 414
  181. 181. OmniPro Sample Medium/Large Company Limited Year Ended 30th June 2011 Statement of Directors’ ResponsibilitiesThe directors are responsible for preparing the annual report and the financialstatements in accordance with applicable Irish law and Generally AcceptedAccounting Practice in Ireland, including the accounting standards issued by theAccounting Standards Board and published by Chartered AccountantsIreland/Certified Public Accountants/Institute of Chartered CertifiedAccountants/Institute of Incorporated Public Accountants5.Irish company law requires the directors to prepare financial statements for eachfinancial year/period which give a true and fair view of the state of affairs of thecompany and of the profit or loss of the company for that year/period. In preparingthose financial statements, the directors are required to:- select suitable accounting policies and then apply them consistently;- make judgements and estimates that are reasonable and prudent;- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.The directors confirm that they have complied with the above requirements inpreparing the financial statements.The directors are responsible for keeping proper books of account which disclosewith reasonable accuracy at any time the financial position of the company and toenable them to ensure that the financial statements comply with the Companies Acts1963 to 2009. They are also responsible for safeguarding the assets of the companyand hence for taking reasonable steps for the prevention and detection of fraud andother irregularities.The directors are responsible for the maintenance and integrity of the corporate andfinancial information included on the company’s website. Legislation in the Republicof Ireland governing the preparation and dissemination of financial statements maydiffer from legislation in other jurisdictions.6On behalf of the boardMr A Director Ms B DirectorDirector DirectorDATE5 Amend as required depending on regulating Institute6 Include only if accounts are available on the company website 8 © OmniPro OmniPro Education & Training 178 of 414
  182. 182. Independent Auditors Report to the Members of OmniProMedium/Large Sample Co. Limited for the year ended 30th June 2011We have audited the financial statements of OmniPro Medium/Large Sample CoLimited for the year ended 30th June 2011, which comprises of the Profit and LossAccount, the Balance Sheet, Cashflow Statement and the related notes. Thesefinancial statements have been prepared under the historical cost convention and theaccounting policies set out therein.This report is made solely to the companys members as a body in accordance withSection 193 of the Companies Acts, 1990. Our audit work has been undertaken sothat we might state to the companys members those matters that we are required tostate to them in the audit report and for no other purpose. To the fullest extentpermitted by law, we do not accept or assume responsibility to anyone other than thecompany or the company’s members as a body for our audit work, for this report, orfor the opinions we have formed.Respective responsibilities of directors and auditorsAs described in the Statement of Directors’ Responsibilities the company’s directorsare responsible for the preparation of the financial statements in accordance withapplicable law and Generally Accepted Accounting Practice in Ireland including theaccounting standards issued by the Accounting Standards Board and published bythe Chartered Accountants Ireland/Certified Public Accountants/Institute of CharteredCertified Accountants/Institute of Incorporated Public Accountants7 (GenerallyAccepted Accounting Practice in Ireland).ORAs explained more fully in the Directors’ Responsibilities Statement set out on page 8,the directors are responsible for the preparation of the financial statements and forbeing satisfied that they give a true and fair view. Our responsibility is to audit andexpress an opinion on the financial statements in accordance with applicable law andInternational Standards on Auditing (UK and Ireland). Those standards require us tocomply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors,including “APB Ethical Standard – Provisions Available for Small Entities (Revised)”, inthe circumstances set out in note 22 to the financial statements.8Our responsibility is to audit the financial statements in accordance with relevant legaland regulatory requirements and International Standards on Auditing (UK and Ireland)issued by the Auditing Practices Board (UK and Ireland).We report to you our opinion as to whether the financial statements give a true and fairview in accordance with Generally Accepted Accounting Practice in Ireland and areproperly prepared in accordance with the Companies Acts, 1963 to 2009. We alsoreport to you whether in our opinion: proper books of account have been kept by the7 Amend as required depending on regulating Institute8 Insert this statement if PASE is applied 9 © OmniPro OmniPro Education & Training 179 of 414
  183. 183. Respective responsibilities of directors and auditors (cont’d)company; whether, at the balance sheet date, there exists a financial situationrequiring the convening of an extraordinary general meeting of the company; andwhether the information given in the Directors’ Report is consistent with the financialstatements. In addition, we state whether we have obtained all the information andexplanations necessary for the purposes of our audit and whether the Balance Sheetand Profit and Loss are in agreement with the books of account.We also report to you if, in our opinion, any information specified by law regardingdirectors’ remuneration and directors’ transactions are not given, and wherepracticable, include such information in our report.We read the Directors’ Report and consider the implications for our report if webecome aware of any apparent misstatement within it.Basis of audit opinionWe conducted our audit in accordance with International Standards on Auditing (UKand Ireland) issued by the Auditing Practices Board. An audit includes examination,on a test basis, of evidence relevant to the amounts and disclosures in the financialstatements. It also includes an assessment of the significant estimates andjudgements made by the directors in the preparation of the financial statements, andof whether the accounting policies are appropriate to the company’s circumstances,consistently applied and adequately disclosed.We planned and performed our audit so as to obtain all the information andexplanations which we considered necessary in order to provide us with sufficientevidence to give reasonable assurance that the financial statements are free frommaterial misstatement, whether caused by fraud or other irregularity or error. Informing our opinion we also evaluated the overall adequacy of the presentation ofinformation in the financial statements.We have undertaken the audit in accordance with the requirements of the APB EthicalStandards – Provisions Available to Small entities under the circumstances set out inNote 22 to the financial statements.9OpinionIn our opinion the financial statements give a true and fair view, in accordance withGenerally Accepted Accounting Practice in Ireland, of the state of the company’saffairs as at 30 June 2011 and of its profit for the year then ended and have beenproperly prepared in accordance with the Companies Acts 1963 to 2009.We have obtained all the information and explanations we consider necessary for thepurpose of our audit. In our opinion, the company has kept proper books of account.The company’s financial statements are in agreement with the books of account.9 Insert this statement if PASE is applied 10 © OmniPro OmniPro Education & Training 180 of 414
  184. 184. Opinion (Cont’d)In our opinion, the information given in the Directors’ Report is consistent with thefinancial statements.The net assets of the company, as stated in the balance sheet are more than half ofthe amount of its called up share capital and, in our opinion, on that basis there did notexist at 30th June 2011 a financial situation which, under section 40(1) of theCompanies (Amendment) Act 1983, would require the convening of an extraordinarygeneral meeting of the company.Signed by: 10Personal name of auditor (Senior Registered Auditor)For and on behalf of:Compliant Accountant & CoAccountants & Registered Auditors,Accountants Row,Any CountyDATE10 For financial years ending on or before 19 May 2011, the format will be as follows:Compliant Accountant & CoAccountants & Registered Auditors,Accountants Row,Any CountyDATE 11 © OmniPro OmniPro Education & Training 181 of 414
  185. 185. OmniPro Sample Medium/Large Company Limited Year Ended 30th June 2011 Accounting PoliciesThe significant accounting policies adopted by the Company and applied consistentlyare as follows:Basis of AccountingThe Financial Statements are prepared on the going concern basis, under thehistorical cost convention, as modified by the revaluation of certain tangible fixedassets and comply with the financial reporting standards of the Accounting StandardsBoard, as published by Chartered Accountants Ireland/Certified PublicAccountants/Institute of Chartered Certified Accountants/Institute of IncorporatedPublic Accountants11 and the Companies Acts1963 to 2009.ConsolidationThe company and its subsidiaries combined meet the size exemption criteria for agroup and the company is therefore exempt from the requirement to prepareconsolidated financial statements by virtue of Regulation 7 of the EuropeanCommunities (Companies: Group Accounts) Regulations, 1992. Consequently, thesefinancial statements deal with the results of the company as a single entity.TurnoverTurnover represents net sales to customers and excludes trade discounts and ValueAdded Tax.GoodwillGoodwill represents the excess of consideration paid for the acquisition of shares inassociates and joint ventures over the fair value of the identifiable assets andliabilities. Goodwill is amortised to the profit and loss account on a straight line basisover its estimated useful life. The estimated useful lives of goodwill on acquiredbusinesses are up to 20 years. Useful life is determined by reference to the periodover which the values of the underlying businesses are expected to exceed the valuesof their identifiable net assets.Goodwill is reviewed for impairment at the end of the first full financial year followingacquisition and in other periods if events or changes in circumstances indicate that thecarrying value may not be recoverable.Other Intangible AssetsAcquired intangible assets are capitalised at cost and are amortised using the straight-line basis over their useful lives up to a maximum of 20 years.11 Amed as required depending on regulating Institute 12 © OmniPro OmniPro Education & Training 182 of 414
  186. 186. OmniPro Sample Medium/Large Company Limited Year Ended 30th June 2011 Accounting PoliciesIntangible assets acquired as part of a business acquisition are capitalised separatelyfrom goodwill if the fair value can be measured reliably. Internally generatedintangible assets are only recognised where they have a readily ascertainable marketvalue.Intangible assets are reviewed for impairment at the end of the first full financial yearfollowing acquisition and in other periods if events or changes in circumstancesindicate that the carrying value may not be recoverableInvestment PropertiesInvestment properties are not held for consumption but for investment are revaluedannually and are not depreciated or amortised. The directors believe that the nondepreciation of investment properties is necessary in order for the financial statementsto give a true and fair view.Gains on revaluation are taken to the statement of total recognised gains or lossesand where the valuation indicates an impairment the impairment is transferred to thestatement of total recognised gains and losses to a maximum of the sum of theprevious revaluation gains. The remainder is charged to the profit and loss account.Investments in subsidiary undertakingsInvestments in subsidiary undertakings are shown at cost less provision forimpairments in value.Other investmentsOther investments are shown at cost less provision for impairments in value.Tangible Fixed AssetsTangible fixed assets are recorded at historic cost. Cost includes prime cost,overheads and interest incurred in financing the construction of tangible fixed assets.Capitalisation of interest ceases when the asset is brought into use.Freehold land and buildings are revalued on the basis of open market value.Revaluation gains are recognised in the profit and loss account to the extent that theyreverse previously recognised revaluation losses on the same assets. All otherrevaluation gains are recognised in the statement of total recognised gains and losses.The company undertakes a review for impairment of a fixed asset if events or changesin circumstances indicate that the carrying amount of the fixed asset may not berecoverable. Revaluation losses are recognised in the statement of total recognisedgains and losses until the carrying amount reaches its depreciated historical cost and 13 © OmniPro OmniPro Education & Training 183 of 414
  187. 187. OmniPro Sample Medium/Large Company Limited Year Ended 30th June 2011 Accounting Policiesthereafter in the profit and loss account. An exception is where the recoverableamount of the asset is greater than its revalued amount. In this case the loss isrecognised in the statement of total recognised gains and losses to the extent that therecoverable amount is greater than its revalued amount.DepreciationDepreciation is calculated in order to write off the cost of tangible fixed assets overtheir estimated useful lives as follows: Machinery and equipment 15% straight line on cost Motor vehicles 20% straight line on cost Office equipment 15% straight line on cost Buildings 2% straight line on costAn amount equal to the excess of the annual depreciation charge on revalued assetsover the notional historical cost depreciation charge on those assets is transferredannually from the revaluation reserve to the profit and loss reserve.Government grantsGrants are recognised when there is reasonable assurance that the grant will bereceived and all attaching conditions have been complied with. Grants awarded toassist with capital expenditure are credited to deferred income and are released to theprofit and loss account on a straight line over the expected useful life of the relatedassets. Grants awarded to assist with revenue expenditure are released to the profitand loss account as the related expenditure is incurred.Stocks and Work in ProgressStocks are valued at the lower of cost and net realisable value. Full provision hasbeen made for damaged, deteriorated, obsolescent or unusable materials. In the caseof finished goods and work in progress, cost is defined as the aggregate cost of rawmaterial, direct labour and attributable proportion of direct production overheads.Net realisable value comprises the actual or estimated selling price less all furthercosts to completion or to be incurred in marketing, selling and distribution.Leased Assets and Hire Purchase CommitmentsTangible fixed assets acquired under finance leases are included in the balance sheetat their equivalent capital value and are depreciated over the shorter of the lease termand their useful lives. The corresponding liabilities are recorded as a creditor and theinterest element of the finance lease rentals is charged to the profit and loss account 14 © OmniPro OmniPro Education & Training 184 of 414

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