A brief introduction on International Accounting Standard (IAS - 16) named as Property, Plant and Equipment, within the introduction disclosure requirements are described.
The second part covers the application of IAS - 16 on Financial Statements of Pakistan Cables
Accounting Standard 1 discusses the disclosure of accounting policies. Accounting policies refer to the specific principles and methods used to prepare financial statements, such as the methods of depreciation, treatment of construction expenditures, currency conversion, and inventory valuation. Disclosing all significant accounting policies together is helpful for readers to understand and compare financial statements. Fundamental assumptions like going concern, consistency, and accrual must be followed. Selection of policies should exhibit a true and fair view while considering prudence, substance over form, and materiality. Changes in policies are allowed if required by statute, compliance with standards, or to provide a more appropriate presentation.
1. The gross and net book values of fixed assets at the beginning and end of the period, along with additions, disposals, and other movements.
2. The depreciation methods and rates used for each class of fixed asset.
3. The amount of borrowing costs capitalized during the period for qualifying assets.
4. Any changes to accounting estimates like useful lives or residual values that affect the calculation of depreciation.
AS - 1 (Disclosure of Accounting Policies)Sai Youdhister
This document discusses the disclosure of accounting policies. It states that accounting policies refer to the principles and methods used in preparing financial statements. The selection of policies is the responsibility of management and varies between entities. Key considerations for selecting policies include prudence, substance over form, and materiality. There must be disclosure of any changes in fundamental accounting policies from the previous year. The disclosure aims to promote understanding of financial statements and should include all relevant information in a single place.
The document discusses key concepts regarding property, plant, and equipment (PPE) accounting. It defines PPE as long-term tangible assets used in operations to generate revenue. The cost of PPE includes purchase price and expenditures to prepare the asset for use. Interest incurred during construction may be capitalized. PPE is depreciated over its useful life to allocate cost against profits. The document provides examples of costs included in PPE for land, buildings, and equipment.
This document summarizes the key principles of IAS 2 regarding the accounting treatment for inventories. It defines inventories as assets held for sale, in production, or as materials/supplies. Inventories must be measured at the lower of cost or net realizable value, where net realizable value is the estimated selling price less costs to complete and sell. Cost includes purchase costs, conversion costs, and other costs to bring inventories to their present condition and location. Certain costs like abnormal losses or selling costs are excluded.
The document discusses key aspects of a statement of cash flows including its four main parts (cash, operating activities, investing activities, financing activities), methods for preparing it (direct vs indirect), uses both internally and externally, limitations, and provides an example cash flow statement for 5 companies. It explains how the statement of cash flows reconciles accrual-based accounting to cash-based transactions and flows.
IFRS are principles-based accounting standards set by the IASB to promote global financial reporting consistency. Ethiopia has adopted IFRS and established the Accounting and Auditing Board of Ethiopia to oversee the implementation of IFRS for public interest entities, small and medium enterprises, and non-profits according to a staged rollout plan concluding in 2019. While IFRS and US GAAP have converged in many areas, differences remain in accounting treatments for items like inventory, contingencies, and classification of financial instruments.
The document discusses capital structure and the advantages and disadvantages of debt versus equity finance. It provides details on:
- The capital structure of a company refers to the mixture of equity and debt used to finance operations.
- Debt provides cheaper financing but increases risk through mandatory interest payments and the potential for default. Equity dividends are discretionary.
- The trade-off theory of capital structure suggests companies balance the costs and benefits of debt versus equity to determine an optimal capital structure.
- Practical considerations like a company's lifecycle, revenue stability, and ability to offer security also impact its ability to take on debt.
Accounting Standard 1 discusses the disclosure of accounting policies. Accounting policies refer to the specific principles and methods used to prepare financial statements, such as the methods of depreciation, treatment of construction expenditures, currency conversion, and inventory valuation. Disclosing all significant accounting policies together is helpful for readers to understand and compare financial statements. Fundamental assumptions like going concern, consistency, and accrual must be followed. Selection of policies should exhibit a true and fair view while considering prudence, substance over form, and materiality. Changes in policies are allowed if required by statute, compliance with standards, or to provide a more appropriate presentation.
1. The gross and net book values of fixed assets at the beginning and end of the period, along with additions, disposals, and other movements.
2. The depreciation methods and rates used for each class of fixed asset.
3. The amount of borrowing costs capitalized during the period for qualifying assets.
4. Any changes to accounting estimates like useful lives or residual values that affect the calculation of depreciation.
AS - 1 (Disclosure of Accounting Policies)Sai Youdhister
This document discusses the disclosure of accounting policies. It states that accounting policies refer to the principles and methods used in preparing financial statements. The selection of policies is the responsibility of management and varies between entities. Key considerations for selecting policies include prudence, substance over form, and materiality. There must be disclosure of any changes in fundamental accounting policies from the previous year. The disclosure aims to promote understanding of financial statements and should include all relevant information in a single place.
The document discusses key concepts regarding property, plant, and equipment (PPE) accounting. It defines PPE as long-term tangible assets used in operations to generate revenue. The cost of PPE includes purchase price and expenditures to prepare the asset for use. Interest incurred during construction may be capitalized. PPE is depreciated over its useful life to allocate cost against profits. The document provides examples of costs included in PPE for land, buildings, and equipment.
This document summarizes the key principles of IAS 2 regarding the accounting treatment for inventories. It defines inventories as assets held for sale, in production, or as materials/supplies. Inventories must be measured at the lower of cost or net realizable value, where net realizable value is the estimated selling price less costs to complete and sell. Cost includes purchase costs, conversion costs, and other costs to bring inventories to their present condition and location. Certain costs like abnormal losses or selling costs are excluded.
The document discusses key aspects of a statement of cash flows including its four main parts (cash, operating activities, investing activities, financing activities), methods for preparing it (direct vs indirect), uses both internally and externally, limitations, and provides an example cash flow statement for 5 companies. It explains how the statement of cash flows reconciles accrual-based accounting to cash-based transactions and flows.
IFRS are principles-based accounting standards set by the IASB to promote global financial reporting consistency. Ethiopia has adopted IFRS and established the Accounting and Auditing Board of Ethiopia to oversee the implementation of IFRS for public interest entities, small and medium enterprises, and non-profits according to a staged rollout plan concluding in 2019. While IFRS and US GAAP have converged in many areas, differences remain in accounting treatments for items like inventory, contingencies, and classification of financial instruments.
The document discusses capital structure and the advantages and disadvantages of debt versus equity finance. It provides details on:
- The capital structure of a company refers to the mixture of equity and debt used to finance operations.
- Debt provides cheaper financing but increases risk through mandatory interest payments and the potential for default. Equity dividends are discretionary.
- The trade-off theory of capital structure suggests companies balance the costs and benefits of debt versus equity to determine an optimal capital structure.
- Practical considerations like a company's lifecycle, revenue stability, and ability to offer security also impact its ability to take on debt.
This document provides an overview of International Financial Reporting Standards (IFRS). It discusses that IFRS are a global set of accounting standards developed by the IASB to provide consistency in how public companies report financial information. It also outlines the importance of IFRS in allowing easier comparison between companies, as well as advantages like increased investment and disadvantages like increased costs of transition and potential differences in interpretation. Finally, it lists the key components required in IFRS financial statements and provides a listing of the individual IFRS standards.
Fixed tangible assets include land, buildings, plant and machinery, equipment, furniture, vehicles, and leasehold improvements. The cost of fixed assets includes the purchase price plus any additional expenditures incurred until the asset is ready for its intended use. Fixed assets are depreciated over their useful lives to match the cost to the periods benefited from use. Depreciation methods include straight line and written down value and aim to reflect the asset's declining value each year.
The document discusses revenue recognition principles under GAAP. It defines revenue as the gross inflow of cash or other consideration from business activities. Revenue recognition is the process of recording revenue in the financial statements. There are different types of revenue recognition transactions including sale of products, rendering of services, permitting use of an asset, and sale of assets other than inventory. The document also discusses revenue measurement, generation of sales and service revenues, classification of expenditures as capital or revenue items, and types of revenue and deferred revenue expenditures.
Hi Everyone,
In this Powerpoint Presentation I have discussed about the Accounting Standard-10 on Property, Plant & Equipment issued by ICAI. I have covered all the major topics such as measurement of PPE, Depreciation(Which was previously covered under AS-6 now deleted), Initial Recognition, Subsequent Recognition etc.
The document analyzes the business and financial performance of Panasonic and Sony over the period of 2008 to 2011. It includes sections on information gathering, accounting techniques used, and an analysis of the companies' financial performance based on ratios calculated from income statements, balance sheets, and cash flow statements. Key metrics examined include profitability, asset utilization, working capital, debt levels, and changes in owners' equity. The analysis provides a comparison of the financial positions and performance trends of the two electronics companies over the three-year period.
The document discusses the concept of cost of capital. It defines cost of capital as the minimum required rate of return on funds committed to a project or firm based on the riskiness of cash flows. It then covers the basic aspects of cost of capital including it representing a rate of return rather than an actual cost, and comprising a risk-free rate, business risk premium, and financial risk premium. The document also discusses approaches to calculating the cost of different sources of capital like equity, debt, and retained earnings, as well as weighted average cost of capital and marginal cost of capital.
Introduction to Business Valuation, Fair Market Value, reasons and elements of business valuation, methodologies of business valuation, case study on net asset value.
The presentation discusses the profitability index (PI), which is a capital budgeting technique used to evaluate investment projects based on their profitability. The PI is calculated as the discounted cash inflows divided by the initial cash outflow. A PI greater than or equal to 1 indicates the project is profitable. The presentation provides an example calculation of the PI for a project with an initial investment of $200,000 and cash flows of $40,000, $30,000, $50,000 and $20,000 over 4 years with a 10% discount rate, resulting in a PI of 1.1235.
This document is a project report submitted by Hitesh M Vekhande, a student of M.Com Part 1 at Ssss Arts, Commerce & Science College in Wada, India. The project is on International Financial Reporting Standards (IFRS) under the guidance of Dr. J.K. Kavtekar. It includes a declaration, acceptance, acknowledgements, table of contents and introduction on IFRS. The objectives of IFRS and elements of financial statements such as assets, liabilities and equity are discussed.
IND AS 116 replaces the accounting standard for leases, IND AS 17. Under IND AS 116, lessees will recognize most leases on their balance sheets as lease liabilities, with corresponding right-of-use assets. For lessors, the accounting stays almost the same. The standard provides some exemptions for short-term leases and leases of low-value items. The new standard will result in lessees reporting higher assets and liabilities. It will also affect financial ratios and may lower earnings before interest, taxes, depreciation and amortization (EBITDA).
This document provides an overview of business valuation. It discusses the common reasons valuations are performed, including buying/selling a company, estate planning, financing, and litigation. The accepted valuation methodologies are also reviewed, including the income approach using discounted cash flow and capitalization of cash flows methods, market approach using comparable companies and precedent transactions, and asset-based approach. Key valuation concepts like standards of value, levels of value, and determining discount rates are also summarized.
This document provides an overview of Accounting Standard 10 (AS 10) regarding accounting for fixed assets in India. AS 10 applies to companies listed on a recognized stock exchange and large commercial enterprises. It defines fixed assets as assets used for producing goods and services, not held for sale. It discusses the components that make up the cost of a fixed asset, treatment of improvements and repairs, and disclosure requirements regarding fixed assets in financial statements.
This document provides an overview of financial statement analysis. It discusses evaluating business prospects and risks through credit analysis, equity analysis, accounting analysis, and financial analysis. These analyses examine a company's liquidity, solvency, profitability, and cash flows. Ratio analysis and valuation methods are also covered. The purpose is to evaluate a company's performance and financial position over time using its financial statements and additional information.
By www.ProfitableInvestingTips.com
What is Intrinsic Stock Value?
In the aftermath of the stock market crash of 1929 in the early days of the Great Depression Benjamin Graham introduced the concept of value investing. No longer would those buying and selling stocks need to act like they were at the casino. With the concepts of intrinsic value and margin of safety Graham taught investors a rational means of investing in stocks. With this in mind just what is intrinsic stock value? And how does this concept help with profitable stock investing?
What Is Intrinsic Stock Value?
The dictionary definition of intrinsic stock value is its fundamental value. It is obtained by adding up predicted future income of a stock and subtracting current price. It can also be seen as actual value of an equity versus its book value or market value. The concept of fundamental analysis of equities evolved from this concept. Using fundamental analysis the intrinsic value of a stock is the expected company cash flow discounted to current dollars. It is a discounted cash flow valuation. An inherent weakness in this concept is that too often the medium and long term prospects of a company and its stock price are not clear. So, what is intrinsic stock value of a company if the future is uncertain? The ability to see into the future to see how well a company will manage its assets, products, costs, R&D, and marketing is of utmost importance in calculating intrinsic stock value as a means of deciding whether or not to purchase a stock.
What is Intrinsic Stock Value as a Formula?
Mr. Graham presented investors with a formula for calculating intrinsic stock value in 1962 and modified it in 1974. The 1974 version considers the following:
• Earnings per share, EPS, for the preceding twelve months
• A constant of 8.5 representing an expected price to earnings ratio, P/E ratio, for a company that is not growing
• An estimate of long term growth, five years = g
• A constant of 4.4 which was the average yield of high grade corporate bonds in the early 1960 decade
• The current yield of AAA corporate bonds = Y
• Where V = intrinsic value
The formula is as follows:
V = (EPS x (8.5 + 2g) x 4.4)/Y
The way the investors were encouraged to use intrinsic value was to derive what is referred to as a Relative Graham Value, RGV. This is to divide the calculated intrinsic value of the stock by its current price. If the result, the RGV, is less than one the stock is overvalued and a bad investment and if the ratio is above one it is undervalued and may be a good investment.
What is Intrinsic Stock Value as an Investing Tool?
There are a couple of difficulties in using the simple calculation above to determine the forward looking earnings of a stock and therefore its intrinsic value. First of all the formula does not account for inflation. Thus one could use the formula and end up with a stock valued higher in dollars but in dollars that are inflated.
The business valuation process involves establishing the standard of value, purpose and valuation date through an engagement letter. It then requires gathering company and industry data, analyzing and normalizing financial statements, and implementing accepted valuation methods like the income, market and asset methods. The process concludes with drafting and reviewing a narrative report that determines the fair value or price of a business.
This document provides an overview of basic financial statements including the balance sheet, income statement, statement of retained earnings, and statement of cash flows. It explains the purpose and key components of each statement. The balance sheet presents a company's assets, liabilities, and equity on a given date. The income statement shows revenues and expenses over a period of time. The statement of retained earnings tracks changes in retained earnings. The statement of cash flows reports cash inflows and outflows from operating, investing, and financing activities. Notes to the financial statements provide additional important information.
IAS-1: Presentation of Financial StatementsAmit Sarkar
IAS 1 Presentation of Financial Statements sets out the overall requirements for financial statements, including how they should be structured, the minimum requirements for their content and overriding concepts such as going concern, the accrual basis of accounting and the current/non-current distinction. The standard requires a complete set of financial statements to comprise a statement of financial position, a statement of profit or loss and other comprehensive income, a statement of changes in equity and a statement of cash flows.
This document discusses various methods for valuing a corporate business, including:
1. The discounted cash flow method, which values a business based on its future free cash flows discounted at the firm's weighted average cost of capital.
2. Relative valuation methods like comparable company analysis and comparable transaction analysis, which derive valuation multiples from similar public companies or M&A transactions.
3. Other methods like the net asset value approach and Tobin's Q, which value a business based on its asset book values.
The document provides steps and considerations for each method to determine a company's economic worth based on its financials, industry, and investment characteristics.
Ias 16 property plant and equipment-presentationShadabAhmadFaiq
The document discusses the key aspects of IAS 16 Property, Plant and Equipment including:
- The objective is to prescribe the accounting treatment for property, plant and equipment.
- Scope outlines what is excluded like IFRS 5 and IAS 40.
- Definitions for terms like PPE, carrying amount, depreciation.
- Recognition criteria that future benefits are probable and cost can be reliably measured.
- Measurement includes initial cost and subsequent cost model or revaluation model.
- Depreciation is systematically allocated over useful life.
- Impairment is assessed using IAS 36.
- Derecognition occurs from disposal or no future benefits are expected.
This document provides contact information for four office locations of a company called Altacit in Chennai, Bangalore, Coimbatore, and Hyderabad. It also includes their email and website. The overhead is attributed to Parvathi. V.
IAS 16 provides guidance on accounting for property, plant and equipment. It requires initial recognition of assets at cost and subsequent measurement using either the cost model or revaluation model. It also provides guidance on depreciation, derecognition, and disclosures of property, plant and equipment. Some key differences from Indian GAAP include requirements for regular revaluation, a component approach for depreciation, and capitalization of certain subsequent expenditures.
This document provides an overview of a presentation on accounting for property, plant, and equipment under IAS 16. The presentation covers the definition of key terms, recognition, initial and subsequent measurement, impairment testing, and disclosure requirements. It includes 9 slides on the topics to be discussed, with the final two slides reserved for questions and thanks.
This document provides an overview of International Financial Reporting Standards (IFRS). It discusses that IFRS are a global set of accounting standards developed by the IASB to provide consistency in how public companies report financial information. It also outlines the importance of IFRS in allowing easier comparison between companies, as well as advantages like increased investment and disadvantages like increased costs of transition and potential differences in interpretation. Finally, it lists the key components required in IFRS financial statements and provides a listing of the individual IFRS standards.
Fixed tangible assets include land, buildings, plant and machinery, equipment, furniture, vehicles, and leasehold improvements. The cost of fixed assets includes the purchase price plus any additional expenditures incurred until the asset is ready for its intended use. Fixed assets are depreciated over their useful lives to match the cost to the periods benefited from use. Depreciation methods include straight line and written down value and aim to reflect the asset's declining value each year.
The document discusses revenue recognition principles under GAAP. It defines revenue as the gross inflow of cash or other consideration from business activities. Revenue recognition is the process of recording revenue in the financial statements. There are different types of revenue recognition transactions including sale of products, rendering of services, permitting use of an asset, and sale of assets other than inventory. The document also discusses revenue measurement, generation of sales and service revenues, classification of expenditures as capital or revenue items, and types of revenue and deferred revenue expenditures.
Hi Everyone,
In this Powerpoint Presentation I have discussed about the Accounting Standard-10 on Property, Plant & Equipment issued by ICAI. I have covered all the major topics such as measurement of PPE, Depreciation(Which was previously covered under AS-6 now deleted), Initial Recognition, Subsequent Recognition etc.
The document analyzes the business and financial performance of Panasonic and Sony over the period of 2008 to 2011. It includes sections on information gathering, accounting techniques used, and an analysis of the companies' financial performance based on ratios calculated from income statements, balance sheets, and cash flow statements. Key metrics examined include profitability, asset utilization, working capital, debt levels, and changes in owners' equity. The analysis provides a comparison of the financial positions and performance trends of the two electronics companies over the three-year period.
The document discusses the concept of cost of capital. It defines cost of capital as the minimum required rate of return on funds committed to a project or firm based on the riskiness of cash flows. It then covers the basic aspects of cost of capital including it representing a rate of return rather than an actual cost, and comprising a risk-free rate, business risk premium, and financial risk premium. The document also discusses approaches to calculating the cost of different sources of capital like equity, debt, and retained earnings, as well as weighted average cost of capital and marginal cost of capital.
Introduction to Business Valuation, Fair Market Value, reasons and elements of business valuation, methodologies of business valuation, case study on net asset value.
The presentation discusses the profitability index (PI), which is a capital budgeting technique used to evaluate investment projects based on their profitability. The PI is calculated as the discounted cash inflows divided by the initial cash outflow. A PI greater than or equal to 1 indicates the project is profitable. The presentation provides an example calculation of the PI for a project with an initial investment of $200,000 and cash flows of $40,000, $30,000, $50,000 and $20,000 over 4 years with a 10% discount rate, resulting in a PI of 1.1235.
This document is a project report submitted by Hitesh M Vekhande, a student of M.Com Part 1 at Ssss Arts, Commerce & Science College in Wada, India. The project is on International Financial Reporting Standards (IFRS) under the guidance of Dr. J.K. Kavtekar. It includes a declaration, acceptance, acknowledgements, table of contents and introduction on IFRS. The objectives of IFRS and elements of financial statements such as assets, liabilities and equity are discussed.
IND AS 116 replaces the accounting standard for leases, IND AS 17. Under IND AS 116, lessees will recognize most leases on their balance sheets as lease liabilities, with corresponding right-of-use assets. For lessors, the accounting stays almost the same. The standard provides some exemptions for short-term leases and leases of low-value items. The new standard will result in lessees reporting higher assets and liabilities. It will also affect financial ratios and may lower earnings before interest, taxes, depreciation and amortization (EBITDA).
This document provides an overview of business valuation. It discusses the common reasons valuations are performed, including buying/selling a company, estate planning, financing, and litigation. The accepted valuation methodologies are also reviewed, including the income approach using discounted cash flow and capitalization of cash flows methods, market approach using comparable companies and precedent transactions, and asset-based approach. Key valuation concepts like standards of value, levels of value, and determining discount rates are also summarized.
This document provides an overview of Accounting Standard 10 (AS 10) regarding accounting for fixed assets in India. AS 10 applies to companies listed on a recognized stock exchange and large commercial enterprises. It defines fixed assets as assets used for producing goods and services, not held for sale. It discusses the components that make up the cost of a fixed asset, treatment of improvements and repairs, and disclosure requirements regarding fixed assets in financial statements.
This document provides an overview of financial statement analysis. It discusses evaluating business prospects and risks through credit analysis, equity analysis, accounting analysis, and financial analysis. These analyses examine a company's liquidity, solvency, profitability, and cash flows. Ratio analysis and valuation methods are also covered. The purpose is to evaluate a company's performance and financial position over time using its financial statements and additional information.
By www.ProfitableInvestingTips.com
What is Intrinsic Stock Value?
In the aftermath of the stock market crash of 1929 in the early days of the Great Depression Benjamin Graham introduced the concept of value investing. No longer would those buying and selling stocks need to act like they were at the casino. With the concepts of intrinsic value and margin of safety Graham taught investors a rational means of investing in stocks. With this in mind just what is intrinsic stock value? And how does this concept help with profitable stock investing?
What Is Intrinsic Stock Value?
The dictionary definition of intrinsic stock value is its fundamental value. It is obtained by adding up predicted future income of a stock and subtracting current price. It can also be seen as actual value of an equity versus its book value or market value. The concept of fundamental analysis of equities evolved from this concept. Using fundamental analysis the intrinsic value of a stock is the expected company cash flow discounted to current dollars. It is a discounted cash flow valuation. An inherent weakness in this concept is that too often the medium and long term prospects of a company and its stock price are not clear. So, what is intrinsic stock value of a company if the future is uncertain? The ability to see into the future to see how well a company will manage its assets, products, costs, R&D, and marketing is of utmost importance in calculating intrinsic stock value as a means of deciding whether or not to purchase a stock.
What is Intrinsic Stock Value as a Formula?
Mr. Graham presented investors with a formula for calculating intrinsic stock value in 1962 and modified it in 1974. The 1974 version considers the following:
• Earnings per share, EPS, for the preceding twelve months
• A constant of 8.5 representing an expected price to earnings ratio, P/E ratio, for a company that is not growing
• An estimate of long term growth, five years = g
• A constant of 4.4 which was the average yield of high grade corporate bonds in the early 1960 decade
• The current yield of AAA corporate bonds = Y
• Where V = intrinsic value
The formula is as follows:
V = (EPS x (8.5 + 2g) x 4.4)/Y
The way the investors were encouraged to use intrinsic value was to derive what is referred to as a Relative Graham Value, RGV. This is to divide the calculated intrinsic value of the stock by its current price. If the result, the RGV, is less than one the stock is overvalued and a bad investment and if the ratio is above one it is undervalued and may be a good investment.
What is Intrinsic Stock Value as an Investing Tool?
There are a couple of difficulties in using the simple calculation above to determine the forward looking earnings of a stock and therefore its intrinsic value. First of all the formula does not account for inflation. Thus one could use the formula and end up with a stock valued higher in dollars but in dollars that are inflated.
The business valuation process involves establishing the standard of value, purpose and valuation date through an engagement letter. It then requires gathering company and industry data, analyzing and normalizing financial statements, and implementing accepted valuation methods like the income, market and asset methods. The process concludes with drafting and reviewing a narrative report that determines the fair value or price of a business.
This document provides an overview of basic financial statements including the balance sheet, income statement, statement of retained earnings, and statement of cash flows. It explains the purpose and key components of each statement. The balance sheet presents a company's assets, liabilities, and equity on a given date. The income statement shows revenues and expenses over a period of time. The statement of retained earnings tracks changes in retained earnings. The statement of cash flows reports cash inflows and outflows from operating, investing, and financing activities. Notes to the financial statements provide additional important information.
IAS-1: Presentation of Financial StatementsAmit Sarkar
IAS 1 Presentation of Financial Statements sets out the overall requirements for financial statements, including how they should be structured, the minimum requirements for their content and overriding concepts such as going concern, the accrual basis of accounting and the current/non-current distinction. The standard requires a complete set of financial statements to comprise a statement of financial position, a statement of profit or loss and other comprehensive income, a statement of changes in equity and a statement of cash flows.
This document discusses various methods for valuing a corporate business, including:
1. The discounted cash flow method, which values a business based on its future free cash flows discounted at the firm's weighted average cost of capital.
2. Relative valuation methods like comparable company analysis and comparable transaction analysis, which derive valuation multiples from similar public companies or M&A transactions.
3. Other methods like the net asset value approach and Tobin's Q, which value a business based on its asset book values.
The document provides steps and considerations for each method to determine a company's economic worth based on its financials, industry, and investment characteristics.
Ias 16 property plant and equipment-presentationShadabAhmadFaiq
The document discusses the key aspects of IAS 16 Property, Plant and Equipment including:
- The objective is to prescribe the accounting treatment for property, plant and equipment.
- Scope outlines what is excluded like IFRS 5 and IAS 40.
- Definitions for terms like PPE, carrying amount, depreciation.
- Recognition criteria that future benefits are probable and cost can be reliably measured.
- Measurement includes initial cost and subsequent cost model or revaluation model.
- Depreciation is systematically allocated over useful life.
- Impairment is assessed using IAS 36.
- Derecognition occurs from disposal or no future benefits are expected.
This document provides contact information for four office locations of a company called Altacit in Chennai, Bangalore, Coimbatore, and Hyderabad. It also includes their email and website. The overhead is attributed to Parvathi. V.
IAS 16 provides guidance on accounting for property, plant and equipment. It requires initial recognition of assets at cost and subsequent measurement using either the cost model or revaluation model. It also provides guidance on depreciation, derecognition, and disclosures of property, plant and equipment. Some key differences from Indian GAAP include requirements for regular revaluation, a component approach for depreciation, and capitalization of certain subsequent expenditures.
This document provides an overview of a presentation on accounting for property, plant, and equipment under IAS 16. The presentation covers the definition of key terms, recognition, initial and subsequent measurement, impairment testing, and disclosure requirements. It includes 9 slides on the topics to be discussed, with the final two slides reserved for questions and thanks.
The document discusses the revaluation of the Chinese yuan currency. It led the U.S. government to pressure China to allow its currency to rise in value due to large Chinese trade surpluses. A revaluation would make Chinese goods more expensive abroad but also raise standards of living in China by making imports cheaper. It would hurt Chinese commodity producers and U.S. consumers and retailers but benefit commodity exporters, U.S. exporters, Chinese consumers, and Chinese tourists traveling overseas. Oil prices may also rise from reduced Chinese demand.
This standard provides guidance on accounting for property, plant, and equipment. It defines property, plant, and equipment as tangible items held for use in production, rental, or administration that are expected to be used for more than one period. An item qualifies as an asset when future benefits are probable and cost can be reliably measured. After initial recognition at cost, items are carried either using the cost model (at cost less depreciation and impairment) or revaluation model (at fair value less depreciation and impairment). Depreciation is allocated systematically over an asset's useful life, and the carrying amount is derecognized when disposed of or no future benefits are expected.
Use of Revaluation Model for Valuation of Property, Plant and Equipment (PPE)...Sajal Maheshwari
This document discusses accounting standards regarding the revaluation model for valuation of property, plant, and equipment (PPE) under International Financial Reporting Standards (IFRS). Key points include: PPE is initially measured at cost; after initial recognition, an entity can choose to carry PPE using either the cost model or revaluation model; if using the revaluation model, revaluations must be done frequently enough to ensure the carrying amount does not differ materially from fair value; revaluation surpluses increase equity but deficits first reduce any related surpluses with any remaining deficit recognized in profit or loss; the revaluation reserve can be utilized by transferring amounts to retained earnings as the related asset is used up.
Changes in financial reporting requirements have transformed the fixed asset accounting framework. International Financial Reporting Standards (IFRS) require fixed assets to be recorded at cost, but there are two accounting models – the cost model and the revaluation model. So what’s the difference, and when should you use each? This session will address fixed asset accounting and reporting under both models and how each is accounted for in Release 12.
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Preparation Of Financial Statements In Xbrl Formatguest962c2
The document provides instructions for preparing financial statements in XBRL format using ACRA FS Manager. It outlines the steps to create or load financial statements, enter company information, complete the statements and notes, and save the statements in XBRL format. Singapore companies must file financial statements in XBRL or partial XBRL format, with some exempted categories. ACRA FS Manager is a free online tool to help companies prepare and manage financial statements in XBRL.
This document provides an introduction to accounting and bookkeeping. It defines accounting as recording, classifying, and summarizing financial transactions and events to determine a business's financial position. Bookkeeping is the fundamental process of accurately recording business transactions, while accounting analyzes and interprets the summarized financial information. The key users of accounting information are internal management as well as external potential investors, creditors, and tax authorities. The objectives and advantages of accounting are maintaining financial records, calculating profits and losses, and providing information to users about a business's performance and financial position.
This document provides a tutorial on preparing three basic financial statements: the income statement, statement of retained earnings, and balance sheet. It explains the purpose and format of each statement. The income statement reports revenues, expenses and net income for a period. The statement of retained earnings shows the changes in retained earnings from net income and dividends. The balance sheet reports assets, liabilities, and equity as of a point in time. The tutorial also discusses the accounts that make up each statement and the order they should be prepared.
1) The conceptual framework provides the theoretical basis for accounting standards and financial reporting. It establishes the objectives of providing useful information to decision makers and the qualitative characteristics of relevant, faithful, comparable, and understandable information.
2) The framework outlines key elements of financial statements including assets, liabilities, equity, revenues, and expenses. It also establishes recognition and measurement assumptions, principles like cost and revenue recognition, and constraints like materiality.
3) The framework is intended to guide standard setting and ensure financial reports meet the needs of users in decision making.
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3.
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This document summarizes Accounting Standard 6 on depreciation accounting in India. It defines depreciation and outlines the key aspects of depreciation accounting such as depreciable assets, useful life, methods of calculating depreciation, and changes in depreciation rates. The standard provides guidance on determining depreciable amounts, selecting depreciation methods, calculating depreciation on additions/extensions, and disclosure requirements for depreciation in financial statements.
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IAS 16 establishes the principles for recognizing and measuring property, plant and equipment. It requires assets to be recorded at cost and outlines two models for subsequent measurement - the cost model and revaluation model. It also provides guidance on derecognition and disclosures such as depreciation methods, useful lives, and reconciliations of carrying amounts.
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The document discusses the treatment of non-financial assets under IAS 16, 17, and 40. It provides an overview of key principles for property, plant, and equipment (PPE), investment property, and leases. For PPE, it covers recognition, measurement, depreciation, and derecognition. It also discusses asset retirement obligations. For investment property, it discusses definitions, initial and subsequent measurement, fair value model, and transfers between classes. For leases, it distinguishes between finance and operating leases and how they are classified and accounted for.
ACCT19062 - Term 3, 2014
Assessment 2
Components of the report Guidelines
Executive summary Introduce the purpose of this report here
State the methods/steps (how you proceeded)
Indicate key findings
No need for separate introduction after exc summary
Response to req 1 Give a title. Refer to relevant accounting
standards:IFRS/AASB 13
Response to req 2 Give a title. Visit web sites of AASB, FASB and IASB
Search journal articles
Response to req 3 Give a title. Refer to AASB 13 and the relevant
accounting standards (eg., a/standards for
intangibles, financial instruments, and Property, plant
& equipment)
Search journal articles
Response to req 4 Give a title. See what were the fair value practices in
the collapse companies like Enron, HIH, etc.
Search journal articles
Demonstrate your critical thinking
Response to req 5 Give a title. Download an annual report (financial
statements) from ASX 300 (Annual report as on 31
Dec 2013 or as on any date in 2014)
Examine fair value reporting practices
Prepare in index of FV measurement & disclosure
practices
See general accounting principles and those for
intangibles, financial instruments, and Property, plant
& equipment
Provide your opinion as to FV practices
Conclusions and suggestions Provide what was the purpose, what did you find in
details and what you would like to recommend or
suggest
I am a Cost & Management Accountants (CMA) .I am also Associate member of Institute of Cost accountants of India .I have 9.0 years (Approx) working experience in different organization Costing (Prepared product wise cost, customer wise profit and loss, monthly closing stock valuation, calculation gross value addition net value addition department wise cost analysis, department wise fixed cost calculation, Prepare Budget, Variance Analysis, Make & Buy Decision, Department wise Costing, Inventory Management.) Account (Daily account maintain, team handles, quarterly financials statement, monthly Mis report, ledger reconciliation, fund management, Brs preparation, various ledger reconciliation and report to management etc), taxation(GST, vat, cst, wct, ptax, entry tax, Esi, pf, tds, service tax,advance taxes, income tax, online return, online payments etc) and Audit ( cost audit, internal audit and concurrent audit) & Banking ( Project Report, CMA Data, LC BG, Working Capital, Renewal of various Document) in various manufacturing and services industry with depth knowledge of account and taxation tools, procedure and transportation.
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Application of ias 16 on pakistan cables
1. Application of International Accounting Standard (IAS-16) on Pakistan Cables
Contents
Introduction............................................................................................................................................................................... 2
Definition:................................................................................................................................................................................... 2
Elements of Property, Plant & Equipment ............................................................................................................... 2
Measuring Cost / Initial Recognition............................................................................................................................... 3
Subsequent Measurement ................................................................................................................................................... 3
Methods of Measurement after Recognition................................................................................................................ 3
Cost Model............................................................................................................................................................................. 4
Depreciation..................................................................................................................................................................... 4
Revaluation Method........................................................................................................................................................... 4
Steps for Revaluation ................................................................................................................................................... 5
Accounting Entries........................................................................................................................................................ 5
Retirement and Disposal...................................................................................................................................................... 6
Disclosures................................................................................................................................................................................. 6
Application of International Accounting Standard - 16 on Pakistan Cables................................................... 7
Introduction of Pakistan Cables.................................................................................................................................... 7
Cost / Revaluation.............................................................................................................................................................. 8
Depreciation ......................................................................................................................................................................... 9
Initial Recognition............................................................................................................................................................10
Measurement......................................................................................................................................................................10
Conclusion................................................................................................................................................................................11
2. Application of International Accounting Standard (IAS-16) on Pakistan Cables
2
Introduction
First of all we will define Property, Plant and Equipment according to the International
Accounting Standard.
Definition:
Property, plant and equipment are the tangible assets that
Are held by an organization for the use in production or supply of goods or services
for rental to others, or for administrative purposes.
Are expected to be used during more than one period.
Elements of Property, Plant & Equipment
Carrying Amount
The Book value of asset by deducting all the accumulated depreciation.
Cost
The Purchase price of asset at the time of acquisition.
Depreciable Amount
The Systematic allocation of depreciable amount of an asset over its useful life.
Fair Value
The amount for which an asset can be exchange between two parties at arm length.
Impairment Loss
The Book value is less than a recoverable amount.
Recoverable Amount
The Value which realizable in the market and value of asset in use.
3. Application of International Accounting Standard (IAS-16) on Pakistan Cables
3
Residual Value
The amount which can be received at the end of an asset life by selling it also known
as Scrap value.
Useful Life
In IAS 16 it refers with the availability of an asset to the organization.
Measuring Cost / Initial Recognition
Property, Plant and equipment should be recognized as an asset when
The Probability of future economic benefits will flow to the business
The cost of the asset can be measured reliably
The asset should initially be measured at its cost
Its purchase price
Any direct / attributable cost which brings the asset in operational position
Any cost which is related with disseminating and removing the asset from one site
to other for restoring which has to be occurred in any case
Subsequent Measurement
Subsequent expenditure should be capitalized when
The expenditure increases the life of an assets.
Replaces any component of an asset and the carrying amount of the component
replaced is derecognized.
Methods of Measurement after Recognition
There are two models which is given by the IAS 16 (Property, Plant and Equipment)
1) Cost Model
2) Revaluation Model
4. Application of International Accounting Standard (IAS-16) on Pakistan Cables
4
Cost Model
Cost model gives the direction to measure the asset at which it is recognized in the books of
accounts.
Depreciation
Depreciation means the allocation of depreciable amount over the useful life of an
asset.
The effects of depreciation in financial statements
i. Income Statement
ii. Balance Sheet (Less from asset)
However while studying the IAS 16 we have to remember that the land will not be
depreciated because the land has infinite life well other fixed assets are to be
depreciated because they have a finite life.
It the residual value is greater than the carrying value, then the depreciation will not
be charged.
Formula
Cost – Residual value
Useful life of an asset
Below are the reasons on which we have to revise the depreciation amount;
Changes in Depreciation Method
Changes in Useful life of an asset
Change in the residual value
Revaluation Method
Revaluation model allow the treatment of assets to be shown at their revalued amount less
accumulated depreciation.
Fair value of assets is usually the market value if an asset is revalued, any accumulated
depreciation at the date of the revaluation should be written off to the revaluation reserve.
5. Application of International Accounting Standard (IAS-16) on Pakistan Cables
5
Steps for Revaluation
There are some steps which must be followed for revaluation, the steps for
revaluation are given in sequence below
1. Restate asset cost to the revalued amount
2. Remove accumulated depreciation provision
3. Transfer the increase to cost amount and the depreciation provision to the
revaluation reserves
4. Recalculate current years depreciation on the revalued amount if applicable
Accounting Entries
When Revaluation surplus is happened
1. Increase in asset value
Asset A/c
Revaluation reserve A/c
2. When asset is sale or disposed off
Revaluation reserve A/c
Retained earnings A/c
Any amount remaining in the revaluation reserve account
3. When revaluation deficit happened
Revaluation reserve A/c
Asset A/c
If any revaluation account has been maintain for the same asset. If not it will be
taken account for the impairment losses.
6. Application of International Accounting Standard (IAS-16) on Pakistan Cables
6
Retirement and Disposal
Any property, plant and equipment item should be eliminated from the financial when it
has been disposed off.
Gain / Loss will be calculated in the following manner;
Gain / Loss = Amount Received – Book value
Any Gain / Loss realized on asset disposal will be charged to income statement.
Disclosures
IAS 16 requires the following disclosure requirement for each class of property, plant and
equipment.
Measurement bases i.e. Cost or revaluation
Depreciation Method
Useful life
Depreciation rate
Carrying value (Beginning / Ending)
Accumulated depreciation balance ( Beginning / Ending)
Revaluation
o Basis of valuation
o Date of valuation
o Whether an independent value was used
o Carrying value if not revaluation had taken place
o Revaluation surplus
Additions in assets
Disposals
Impairment losses
7. Application of International Accounting Standard (IAS-16) on Pakistan Cables
7
Application of International Accounting Standard - 16 on Pakistan Cables
Introduction of Pakistan Cables
Pakistan Cables, the country's oldest and most reputable cable manufacturer, was
established over 5 decades ago in 1953 under the sponsorship of BICC, UK and the Chinoy
family. In the subsequent five decades, Pakistan Cables has earned a reputation as a market
leader in the industry and a company that does not compromise on quality. Consequently,
the company has gained a position as being the premier cable manufacturer in the country.
Pakistan Cables has been listed on the Karachi Stock Exchange since 1955. In 2010 General
Cable Corporation, a Fortune 500 company and global leader in cable manufacturing
invested in Pakistan Cables by taking up a 25% equity stake in the company. Pakistan
Cables' manufacturing facilities and head office are located in Karachi on an 11.5 acre site.
This site also houses a 2MW co-generation power plant, which allows the company to be
self-reliant for its electricity needs. Pakistan Cables presently employs over 400 people. It
has regional office in Lahore and branch offices in Rawalpindi, Multan, Abbottabad,
Peshawar and Quetta. The company's distribution network covers more than 55 cities and
towns all over Pakistan. Pakistan Cables is engaged in the manufacture of wires, cables and
conductors in both copper and aluminum. In addition, Pakistan Cables also produces
aluminum sections for architectural applications under the brand name of Alum-Ex. The
company has two other product lines, namely PVC Compound and Copper Rod. Given its
focus on quality, Pakistan Cables continuously reviews and improves the effectiveness of its
Quality Management System in line with objectives of achieving higher productivity,
uncompromising quality and maximum customer satisfaction. Pakistan Cables was the first
cable manufacturer and amongst the first 5 companies in Pakistan to be ISO 9001 certified.
It has recently updated its certification to the ISO 9001:2008 version.
Pakistan Cables Limited is the country’s oldest cables manufacturer engaged in
manufacturing of wires and cables and other engineering products.
The Company was established in 1953 in collaboration with BICC, United Kingdom.
The Company manufactures General Wiring Cables in the range of 250/750 volts. These
cables manufactured in conformity with national and international standards that provides
8. Application of International Accounting Standard (IAS-16) on Pakistan Cables
8
safety and saving in electricity consumption because of the use of pure copper and cable
grade PVC (Plastic Compound Vanile).
The Company provides overhead conductors to the utility companies WAPDA and KESC
which are manufactured from EC grade Aluminum Rod and Copper Rod.
PCL also manufactures telephone, intercom, coaxial cables and various types of special
cables which include air field lighting, control cables, etc.
Alum-Ex is the brand name under which Pakistan Cables manufactures aluminum sections
for the construction and architectural industry.
PCL has also set up a plant to manufacture High Conductivity Oxygen Free 8mm Copper
Rod.
In 2010 / 11, Pakistan Cables had a total turnover of USD 46 million. The Company has
been a regular winner of the Karachi Stock Exchange’s Top 25 Companies Award, most
recently winning the award in 2004, 2006 & 2007. Pakistan Cables has also been
recognized as a winner of the Brands of the Year Award in 2007 & 2008. Protecting the
health and safety of our people and ensuring a healthy working environment is also of
great importance to Pakistan Cables. The Company is committed to working towards
designing a workplace that minimizes work related risks and occupational health and
safety. Pakistan Cables also lays great stress on environment protection. Plant operations
are strictly controlled to maintain safe environment for workers, as well as the surrounding
community. Several measures have been taken to control pollution and to maintain a clean,
green and healthy environment. Pakistan Cables has also achieved in January 2011
certification for its HSE Management Systems conforming to ISO 14001:2004 EMS and
OHSAS 18001:2007.
Cost / Revaluation
Opening
Balance
Addition Revaluation (Disposal) Closing
Leasehold land 590,950 78,050 669,000
Building 265,260 41,084 306,344
Leasehold 19,043 19,043
9. Application of International Accounting Standard (IAS-16) on Pakistan Cables
9
improvements
Plant & machinery 1,321,649 53,655 1,375,304
Office Equipment &
appliance
67,170 9,717 -1,015 75,872
Furniture & fitting 17,332 5,397 22,729
Vehicle 38,703 13,128 -2,171 49,660
Loose tools 1,327 20 1,347
Total 2,302,391 100,960 119,134 -3,186 2,519,299
Depreciation
Opening
Balance
For the
year
(Adjustment/
Disposal)
As at
Closing
Net Book
Value
Rate
Leasehold land 669,000
Building 26,526 13,263 -39,789 306,399 5
Leasehold
improvements
190 190 18,863 12
Plant & machinery 794,030 102,650 896,680 478,624 -81,225
Office Equipment &
appliance
54,665 6,297 -980 60,082 15,790 -1,225,833
Furniture & fitting 10,185 1,683 11,868 10,861 -8,812
Vehicle 16,548 7,005 -1,693 21,860 27,800 20
Loose tools 1,272 30 1,302 45 33
Total 903,226 131,118 -42,462 991,982 1,527,382 -1,315,800
Depreciation has been allocated
Cost of sales 120,407
Selling Cost 4,140
Administrative
Expenses
6,671
131,218
Leasehold land assets the Pakistan Cable Co. have adopted the revaluation model
10. Application of International Accounting Standard (IAS-16) on Pakistan Cables
10
Balance at End 669,000
(-) Balance at Start 590,950
Revaluation 78,050
The revaluation surplus is transferred to the retained earnings. The land is revalued
at regular basis.
The Building has also been revalued and the revaluation surplus
Balance at End 306,344
(-) Balance at Start 265,260
Revaluation
Surplus
41,084
Initial Recognition
All the other assets are recognized on cost
Leasehold improvement
Plant & Machinery
Office equipment
Furniture & Fittings
Vehicle
Loose Tools
Measurement
Depreciation on the entire asset is calculated on the basis of straight line the
accounting entry of depreciation transferring to accumulated depreciation.
Depreciation A/c 131,218
11. Application of International Accounting Standard (IAS-16) on Pakistan Cables
11
Accumulated depreciation A/c 131,218
Conclusion
According to our findings the calculations given in Financial Statements of Pakistan Cables
have been applied according to IAS-16 requirement and all other details relating to IAS-16
which have not been given in the Financial Statements are not examined.