Delivered at:: School of Finance

Course type:: Elective course

When:: 2 year, 1, 2 module

Instructors

Evdokimova, Mariia

Malofeeva, Tatyana

Full Syllabus

Abstract

The course is designed to introduce a number of theoretical approaches to financial accounting and develop background for preparing financial statements of the company under International Financial Reporting Standards (IFRSs). The course describes a number of regulatory issues relating to financial accounting and explores the detailed issues and problems of financial reporting. It provides basic skills in recording and interpretation of financial data and covers basic techniques of financial analysis. The course requires the knowledge of basics of accounting and microeconomics. This is a one-semester course designed to give students basic knowledge about IFRS.Learning Objectives: the student should be able to prepare consolidated financial statements for the group of companies, and also use financial, accounting and other information contained in the statements of enterprises of various forms of ownership, organizations, departments, etc., for making management decisions.

Learning Objectives

Recognition and measurement principles for non-current assets (including tangible and intangible), revenue, inventory and biological assets, financial instruments, leases, provisions, contingent liabilities and contingent assets, impairment calculation and reporting.
Single entity financial statements preparation techniques.
Consolidated financial statement preparation techniques.

Expected Learning Outcomes

1. Describe what is meant by a conceptual framework of accounting
2. Discuss whether a conceptual framework is necessary and what an alternative system might be
3. Discuss what is meant by relevance and faithful representation and describe the qualities that enhance these characteristics
4. Discuss whether faithful representation constitutes more than compliance with accounting standards
5. Discuss what is meant by understandability and verifiability in relation to the provision of financial information
6. Discuss the importance of comparability and timeliness to users of financial statements
7. Discuss the principle of comparability in accounting for changes in accounting policies
8. Define what is meant by 'recognition' in financial statements and discuss the recognition criteria
9. Apply the recognition criteria to assets and liabilities and income and expenses
10. Understand the role of the regulatory system including the roles of the: — International Financial Reporting Standards Foundation (IFRSF) — International Accounting Standards Board (IASB) — International Financial Reporting Standards Advisory Council (IFRSAC) — International Financial Reporting Standards Interpretations Committee (IFRSIC)
11. Understand the role of International Financial Reporting Standards (IFRS)
12. Explain why a regulatory framework is needed, also including the advantages and disadvantages of IFRS over a national regulatory framework
13. Explain why accounting standards on their own are not a complete regulatory framework
14. Distinguish between a principles based and a rules based framework and discuss whether they can be complementary
15. Describe the IASB's Standard setting process including revisions to and interpretations of Standards
16. Explain the relationship of national standard setters to the IASB in respect of the standard setting process
17. Define and compute the initial measurement of a non-current (including a self-constructed and borrowing costs) asset
18. Identify subsequent expenditure that may be capitalised, distinguishing between capital and revenue items
19. Discuss the requirements of relevant accounting standards in relation to the revaluation of non-current assets
20. Account for revaluation and disposal gains and losses for non-current assets
21. Compute depreciation based on the cost and revaluation models and on assets that have two or more significant parts (complex assets)
22. Discuss why the treatment of investment properties should differ from other properties
23. Apply the requirements of relevant accounting standards for investment property
24. Discuss the nature and accounting treatment of internally generated and purchased intangibles
25. Distinguish between goodwill and other intangibles
26. Describe the criteria for the initial recognition and measurement of intangible assets
27. Describe the subsequent accounting treatment, including the principle of impairment tests in relation to goodwill
28. Indicate why the value of purchase consideration for an investment may be less than the value of the acquired identifiable net assets and how the difference should be accounted for
29. Describe and apply the requirements of relevant accounting standards to research and development expenditure
30. Define an impairment loss
31. Identify the circumstances that may indicate impairments to assets
32. Describe what is meant by a cash generating unit
33. State the basis on which impairment losses should be allocated, and allocate an impairment loss to the assets of a cash generating unit
34. Explain and apply the principles of recognition of revenue: i.Identification of contracts ii.Identification of performance obligations iii.Determination of transaction price iv.Allocation of the price to performance obligations v.Recognition of revenue when/as performance obligations are satisfied
35. Explain and apply the criteria for recognising revenue generated from contracts where performance obligations are satisfied over time or at a point in time.
36. Describe the acceptable methods for measuring progress towards complete satisfaction of a performance obligation.
37. Explain and apply the criteria for the recognition of contract costs.
38. Apply the principles of recognition of revenue and specifically account for the following types of transaction: – Principal versus agent – Repurchase agreements – Bill and hold arrangements – Consignments
39. Prepare financial statement extracts for contracts where performance obligations are satisfied over time.
40. Apply the provisions of relevant accounting standards in relation to accounting for government grants.
41. Explain the need for an accounting standard on financial instruments
42. Define financial instruments in terms of financial assets and financial liabilities
43. Indicate for the following categories of financial instruments how they should be measured and how any gains and losses from subsequent measurement should be treated in the financial statements: –Amortised cost –Fair value (including option to elect to present gains and losses on equity instruments in comprehensive income)
44. Distinguish between debt and equity capital
45. Apply the requirements of relevant accounting standards to the issue and finance costs of: –Equity –Redeemable preference shares and debt instruments with no conversion rights (principle of amortised cost) –Convertible debt
46. Account for right of use assets and lease liabilities in the records of the lessee.
47. Explain the exemption from the recognition criteria for leases in the records of the lessee.
48. Account for sale and leaseback agreements.
49. Explain why an accounting standard on provisions is necessary
50. Distinguish between legal and constructive obligations
51. State when provisions may and may not be made and demonstrate how they should be accounted for
52. Explain how provisions should be measured
53. Define contingent assets and liabilities and explain their accounting treatment
54. Define contingent assets and liabilities and explain their accounting treatment
55. Identify and account for: –Warranties/guarantees –Onerous contracts –Environmental and similar provisions –Provisions for future repairs or refurbishments
56. Discuss the principle of comparability in accounting for changes in accounting policies
57. Account for changes in accounting estimates, changes in accounting policy and correction of prior period errors
58. Discuss the importance of identifying and reporting the results of discontinued operations
59. Define and account for non-current assets held for sale and discontinued operations
60. Distinguish between and account for adjusting and non-adjusting events after the reporting date
61. Identify items requiring separate disclosure, including their accounting treatment and required disclosures
62. Explain the difference between functional and presentation currency and explain why adjustments for foreign currency transactions are necessary
63. Account for the translation of foreign currency transactions and monetary/non-monetary foreign currency items at the reporting date
64. Calculate EPS in accordance with relevant accounting standards dealing with: –Bonus issues –Full market value issues –Rights issues
65. Explain the relevance of the diluted EPS and calculate the diluted EPS involving convertible debt and share options (warrants)
66. Explain why the trend of EPS may be a more accurate indicator of performance than a company's profit trend and the importance of EPS as a stock market indicator
67. Calculate EPS in accordance with relevant accounting standards dealing with: –Bonus issues –Full market value issues –Rights issues
68. Discuss the limitations of using EPS as a performance measure
69. Prepare an entity's statement of financial position and statement of profit or loss and other comprehensive income in accordance with the structure prescribed within IFRS and content drawing on accounting treatments as identified within the syllabus
70. Prepare and explain the contents and purpose of the statement of changes in equity
71. Prepare a statement of cash flows for a single entity (not a group) in accordance with relevant accounting standards using the direct method and the indirect method
72. Compare the usefulness of cash flow information with that of a statement of profit or loss or statement of profit or loss and other comprehensive income
73. Interpret a statement of cash flows (together with other financial information) to assess the performance and financial position of an entity
74. Describe the concept of a group as a single economic unit.
75. Explain and apply the definition of a subsidiary within relevant accounting standards.
76. Using accounting standards and other applicable regulation identify and outline the circumstances in which a group is required to prepare consolidated financial statements.
77. Describe the circumstances when a group may claim exemption from the preparation of consolidated financial statements.
78. Explain why directors may not wish to consolidate a subsidiary and when this is permitted by accounting standards and other applicable regulation.
79. Explain the need for using coterminous year ends and uniform accounting policies when preparing consolidated financial statements.
80. Explain the objective of consolidated financial statements.
81. Explain why it is necessary to eliminate intra group transactions.
82. Prepare a consolidated statement of financial position for a simple group (parent and one subsidiary) dealing with pre and post acquisition profits, non-controlling interests and consolidated goodwill
83. Explain and account for other reserves (eg share premium and revaluation reserves)
84. Account for the effects (in the financial statements) of intra-group trading
85. Account for the effects of fair value adjustments (including their effect on consolidated goodwill) to depreciating and non-depreciating non-current assets; inventory; monetary liabilities and assets and liabilities not included in the subsidiary's own statement of financial position, including contingent assets and liabilities
86. Account for goodwill impairment
87. Prepare a consolidated statement of profit or loss and consolidated statement of profit or loss and other comprehensive income for a simple group dealing with an acquisition in the period and non-controlling interest.
88. Explain and illustrate the effect of the disposal of a parent’s investment in a subsidiary in the parent’s individual financial statements and/or those of the group (restricted to disposals of the parent’s entire investment in the subsidiary).
89. Define an associate and explain the principles and reasoning for the use of equity accounting.
90. Prepare consolidated financial statements to include a single subsidiary and an associate.
91. Recognise how the accounting equation and business entity convention underlie the statement of financial position.
92. Understand the nature of reserves and report them in a company statement of financial position.
93. Prepare extracts of a statement of financial position from given information.
94. Understand why the heading 'retained earnings' appears in a company statement of financial position.
95. Prepare extracts of a statement of profit or loss and statement of profit or loss and other comprehensive income from given information.
96. Describe and apply the principles of inventory valuation
97. Apply the requirements of relevant accounting standards for biological assets.

Course Contents

Topic 1. The IFRS Conceptual Framework. The regulatory Framework.
Topic 2. Tangible non-current assets.
Topic 3. Intangible non-current assets. Impairment of assets.
Topic 4. Revenue recognition
Topic 5. Financial instruments
Topic 6. Leases
Topic 7. Provisions, events after the reporting date
Topic 8. Reporting financial performance
Topic 9. Earnings per share.
Topic 10. Presentation of published financial statements
Topic 11. Group accounts: basic principals. Consolidated accounts.
Topic 12. Consolidated statement of financial position
Topic 13. The consolidated statement of profit or loss and other comprehensive income. Group accounts: associates.
The repetition of the basics learned in the course Financial accounting and reporting
Revision lecture 1
Revision lecture 2

Assessment Elements

Home Assignment
Test at class
Class participation
Mid term
Final Exam

Interim Assessment

2024/2025 2nd module
0.075 * Class participation + 0.5 * Final Exam + 0.15 * Home Assignment + 0.2 * Mid term + 0.075 * Test at class

Bibliography

Recommended Core Bibliography

BPP Learning Media (Firm). (2017). ACCA Paper F7 (Vol. Eleventh edition). London: BPP Learning Media. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=1515138

Recommended Additional Bibliography

9781509711352 - BPP Learning Media - Foundations in Accountancy : F3/FFA Financial Accounting: Interactive Text: for Exams From 1 September 2017 to 31 August 2018 - 2017 - BPP Learning Media - https://search.ebscohost.com/login.aspx?direct=true&db=nlebk&AN=1522342 - nlebk - 1522342
Association of Chartered Certified Accountants (Great Britain), & BPP Learning Media (Firm). (2017). Foundations in Accountancy : For Exams From 1 September 2017 to 31 August 2018 (Vol. Sixth edition). London: BPP Learning Media. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=1525702
Bernd Engelmann, & Ha Pham. (2020). Measuring the Performance of Bank Loans under Basel II/III and IFRS 9/CECL. Risks, 8(93), 93. https://doi.org/10.3390/risks8030093
BPP Learning Media (Firm). (2016). Foundations in Accountancy : Practice & Revision Kit: FFA, ACCA: Paper F3: Financial Accounting: for Exams From 1 September 2016 to 31 August 2017: Vol. Fifth edtion. BPP Learning Media.

Authors

MALOFEEVA TATYANA NIKOLAEVNA

Bachelor’s Programme 'Economics and Statistics'

Contacts

International Financial Reporting Standards