Download Borrowing Costs Foreign Exchange

Financial Statement Presentation
 Fair presentation
 Complete set of financial statements
 Going Concern
 Accrual
 Comparatives
 Consistency
1
Borrowing Costs
2
Foreign Exchange
 Borrowing costs are recognized as expense immediately
 Transaction is translated into functional currency at the spot rate at the date of the transaction
 Monetary assets and liabilities are translated using the closing rate as of the FS date.
3
4
Employee Benefits
Foreign Exchange
 Retirement benefit expense includes:
 Current service costs
 Interest costs
 Amortized past service costs
 Expected return on plan assets
 Biological assets are living plants and animals.
 Initial measurement‐ Cost
 Subsequent measurement


Cost less accumulated depreciation and impairment losses
Lower of cost and estimated selling price less cost to sell and cost to complete
5
Investment Property
Biological assets
 Investment property shall be accounted for using
the cost-depreciation-impairment model.
 Biological assets are living plants and animals.
 Initial measurement‐ Cost
 Subsequent measurement


6
Cost less accumulated depreciation and impairment losses
Lower of cost and estimated selling price less cost to sell and cost to complete
7
8
Property, plant and equipment
Financial instruments
 PPE shall be accounted for using the Cost
 Debt instruments – at amortized cost
Model
 Revaluation of land is allowed but subject to the
approval of CDA
 Short‐term debt instruments‐ undiscounted amount
 Investments in publicly‐ traded securities – at fair value with changes in fair value recognized in profit and loss
 Investments in non publicly‐traded securities mutual funds, as well as other externally‐managed funds – at cost less impairment
9
Intangible Assets
10
Provisions and Contingencies
 Intangible asset shall be accounted for using the Cost Model
 Provision is recognized when  the entity has a present obligation;  it is probable that an outflow of economic resources will be required; and
 a reliable estimate of the amount of obligation can be made
 Contingent assets and liabilities are not recognized
 Organizational costs are recognized as expense immediately  Research and development costs are recognized as expense immediately
 All intangible assets shall be amortized. 11
12
Leases
Impairment of assets
 Operating Lease
 Rental income/expense is recognized on a straight‐line basis over the lease term.
 Advance rent is recognized as a liability
 An impairment loss is recognized in the statement of operations whenever the carrying amount of an asset is greater than its recoverable amount.
 Finance Lease
 Rental payments are treated as installment payments for the acquisition of asset
 Depreciation and interest expense is recognized by the lessee
13
14
Donations and grants
Revenue
 Donations and grants are treated as increase in
 Sale of goods‐ upon delivery
equity
 Sale of services‐ when services are performed

 Interest revenue‐ earned and collected

15
Donations in the form of PPE shall be recognized
as income over the life of the asset
Donations for working capital purposes shall
remain in the equity
16
Accounting changes
Statement of Financial Condition
 Accounting estimates‐ current and prospective
 Cash and cash equivalents
 Trade and other payables
 Trade and other receivables
 Financial liabilities
 Change in accounting policy‐ current
 Financial assets
 Liabilities/Assets for current taxes
 Correction of prior‐period errors‐ current
 Inventories
 Deferred tax liabilities/assets
 Property, plant and equipment
 Provisions
 Investment property
 Members’ share capital
 Intangible assets
 Donation and grants
 Biological assets carried at cost less
 Statutory funds
accumulated depreciation
 Investment in associates
 Investment in jointly controlled
entities
 Revaluation surplus
17
Statement of Cash Flows
Statement of Operations








18
 Classify changes in cash and cash equivalents for a period as
Revenue
Cost of sales/services
Marketing costs
Administrative costs
Finance costs
Other income and expenses
Tax expense (if applicable)
Allocation of distribution of net
surplus among:
to operating, investing or financing activities
 Cash flows must be split into operating, investing and
financing activities.
 Operating activities may be presented using either the direct
or indirect approach.
 Disclose interest on share capital and patronage refund paid
 Disclose other interest paid and received.
 Statutory fynds
 Interest on share capital
 Patronage refund
19
20
Statement of Changes in Equity
Show a reconciliation between the carrying amount at the beginning and the end of the period, separately disclosing changes resulting from:
 Amounts of investments by, and distributions to, members, showing separately issues of shares , and treasury share transactions
 Donations and grants
 Movements in Statutory Funds (includes allocation of Net Surplus as reconciled with amounts per Statement of Operations)
 Movements in revaluation surplus
21
22