Introduction to Advanced Financial Reporting

1. 01
ADVANCED FINANCIAL
REPORTING

2. COURSE OVERVIEW
• Property, Plant & Equipment (IAS 16)
• Intangible Assets (IAS 38)
• Investment Property (IAS 40)
• Biological Assets (IAS 41)
• Effect of Government Grants (IAS 20)
• Effect of Borrowing Cost (IAS 23)
• Impairment of Assets (IAS 36)
• Leases (IAS 17)
• Earning per share (IAS 33)
The above are already covered in FR, and will be revised.

3. NEW TOPICS
• Provisions, Contingent Liabilities (IAS 37)
• Change in accounting policies (IAS 8)
• Events after Balance Sheet date (IAS 10)
• Revenue from contracts with customers (IAS 18, IAS
11 and now IFRS 15)
• Deferred Taxation (IAS 12)
• Cash Flows (IAS 7)
• Consolidation of financial statements (IFRS 10 etc.)

4. FINANCIAL STATEMENTS
Shareholder BODInformation
1. Annual Report
2. Half yearly financial statements (for listed cos.)
3. Quarterly financial statements (for listed cos.)
Annual Report includes:
• Financial Statements
• Audit Report on Financial
Statements
• Statement of Compliance – CCG
• Audit Report on SC-CCG
• Financial Highlights
• Organogram
• CEO’s message
• Shareholding Pattern
• CSR report
• Statement of value addition

5. ACCOUNTING STANDARDS (IAS vs. IFRS)
• IAS stands for International Accounting Standards, while
IFRS refers to International Financial Reporting
Standards
• IAS standards were published between 1973 and 2001,
while IFRS standards were published from 2001
onwards
• IAS standards were issued by the IASC, while the IFRS
are issued by the IASB, which succeeded the IASC
• Principles of the IFRS take precedence if there’s
contradiction with those of the IAS, and this results in
the IAS principles being dropped

6. REPORTING FRAMEWORK
General Purpose Financial Statements: caters to common
financial information needs of a wide range of users
Special Purpose framework: caters to the special needs of
specific users of financial statements i.e. financial statements
prepared using cash basis, or guidelines provided by
regulatory bodies under specific situations. i.e. as demanded
by tax authorities or at the time of liquidation (Assets can be
booked at NRV & liabilities at NSV during liquidation)
IFRS is general or special purpose framework?

7. REVIEW
• Asset is a RESOURCE:
1. Controlled by entity
2. as a result of past events
3. from which future economic
benefits are expected
Property Plant
& Equipment
IAS 16
Production /
Supply / Rental
(Machines) /
used for more
than one year
Investment
Property
IAS 40
Land or Building
only – Rentals
or capital
Appreciation
Intangible
Assets
IAS 38
Non-monetary
assets without
physical
substance
Biological
Assets
IAS 41
Living Animal or
Plant
Inventory
IAS 2
Assets held for
sale in ordinary
course of
business
Financial Asset
IAS 32
Cash / Equity
Instrument /
Contractual right
to receive cash
or any other
financial Asset

8. MODELS
1. Cost
2. Revaluation
3. Fair Value
4. NRV
5. PV of MLP / Net Inv.
6. Amortized Cost
Property Plant
& Equipment
IAS 16
Cost /
Revaluation
Investment
Property
IAS 40
Cost / Fair Value
Intangible
Assets
IAS 38
Cost /
Revaluation
Biological
Assets
IAS 41
Fair value less
cost to sell
Inventory
IAS 2
Cost / Net
Realizable value
Financial Asset
IAS 32
Fair value /
Amortized cost
Lease
Accounting
IAS 17
Fair value / PV
of MLP / Net
Investment in
lease

9. Cost Revaluation Fair value
N/A for PPE
Historic cost
Increase in value is not
recorded
Increase in value is
recorded
Increase in value is
recorded
Impairment is recorded Impairment is recorded Impairment is recorded
Not required every year Required every year
Gains are recorded as
revaluation reserve through
other comprehensive
income
Gains / losses are
charged to P&L
Impairment losses goes
to P&L
Losses goes to P&L after
writing off existing
revaluation reserves
Models used for recognition of Assets