Unit 03 : Advanced Accounting
lists i'is s
a
Standards
sit iii s
in
Accounting standardscovered underthisunitinclude
Businesscombinations
Noncurrentassetsheldforsale or discontinuedoperations
Leases
IFRS3 Businesscombinations
Business combination is when one entityobtainscontrolover anotherentity
Enis anentitycontrolledbyanotherentity calledparent 50
int
inaiyfiuenmn
Fmi subsidiary
Associate an entity in which an investorh assignificantinfluencewhich is notsubsidiar
I IEiiIi i in or ajointventure to so
material new
transactions einuate
investor
interchangem anagementp ersonnel
into
a mential
provision
AcquisitionMethod subsidiaries
Consolidatedaccounts
maybepreparedbyaddingtogether the assets liabilities
of
iii iii iii iii iiiiiii.is intiii iianomnentity it
includes powerovertheentity
acquirers management dominatescombined entity
acquirerhaslarge no ofvotingrights
exposetovariablereturns ability to affectthosereturns
Determination
ofAcquisitionDate theacquisition dateisthedateatwhich acquirer
obtainscontrol over acquiree Thisis thedate at which goodwillmustbecomputed
Recognising MeasuringIdentifiableAssets liabilities theymustbemeasuredat their
fairvalues on acquisitiondate
RecogniseGoodwill Gainon Bargain Purchase
Purchaseconsideration xxx
Purchaseconsideration
tight tape Fuadit
in
, Noncontrolling interest
goodwillis
tested
forimpairment FVofNetassets
FV Adjustments
Goodwill GainonBargainpurchase
Y
computation ofNoncontrolling interest noncontrollinginterest canbecomputedby2
methods fairvalue fullgoodwillmethod Parentsgoodwill NCIgoodwill
proportionate method ofFVofNA
proportionateshare DOA
IASOS NonCurrentAssetsheldforsale discontinuedoperations
An entityclassifies an asset as heldforsale ifitsvaluewillberecoveredmainlyby
selling itratherthanusing it Forthisit mustmeetthefollowingcriteria
saleishighlyprobable
condition
iii iii iii iii iii iment
activelylocatingbuyers fortheasset
saleis expectedtobe completedwithin12mfrom suchclassification
Ithaca salebi
for Measurement itemsclassifiedforsaleis measured at lowerof
gaining
realm Éiiiiiii carryingamount or
FV CTS
Theentitymust ceasedepreciation or amortisation on theasset
Reversal classification
of ifthesaleoftheassetis notcomplete within12monthsofsuc
management shouldreviewitsstatus
nea or
ToN ea for
need sale
classification
iftheassetstillfallsunderthiscriteria
Toson
creverse it cancontinueunderIFRSOS else it is reclassified asNoncurrentAsset Thevalueofso
a transactionwillbe CVondateoftransfer depreciation
Discontinuedoperations a discontinued operation is a ofequity thathas
component
eitherbeendisposedoff or classified as heldforsaleandeither
, represents a major lineofbusiness or geographical areaofoperation
subsidiary acquiredexclusively forresale
Onthefaceofthefinancialstatements SOPL OCI a singleamountcomprisingofthe
posttax P Lofdiscontinuedoperations netcashflowattributable
IFRSIS Revenuefrom contracts
Revenue arises inthecourse
ofan entity'sordinary activities Revenueismainlyrecognised
whenthereis a transferofcontrol tothecustomerfromtheentitysupplyinggoods services
itispresented in SOPL shouldnotincludeproceedsfromsaleofnoncurrentassets or tax
Revenuerecognition follows a 5stepprocess
Identifycontractwithcustomer acontractiswithinthescopeofIFRSwhen
haveapproved committedtocontract
parties oralw rittenimplied
rightsofthepartiescanbeidentified
contracthascommercials ubstance risk flows
timing futurecash
entitycanidentifypaymentterms
hasability intention
customer topay
probablethatentitywillcollectconsideration
Identify Performance Obligation anentityshouldidentifythegoods servicespromised in a
contract identifyperformance obligation
DetermineTransactionPrice whiledeterminingtransactionprice anentity shouldconsidert he
following significantf inancialcomponent
variablecomponent
noncashcomponent
discounts rebates refunds
AllocatingTransactionpriceto Performance Obligation thetransactionpriceisallocated toeach
separateperformance obligation in proportionto standalonesellingprice
Recogniserevenuewhenperformanceobligation is satisfied a performance obligation issatisfied
whentheentitytransfers a promisedgood orserviceto a customer
lists i'is s
a
Standards
sit iii s
in
Accounting standardscovered underthisunitinclude
Businesscombinations
Noncurrentassetsheldforsale or discontinuedoperations
Leases
IFRS3 Businesscombinations
Business combination is when one entityobtainscontrolover anotherentity
Enis anentitycontrolledbyanotherentity calledparent 50
int
inaiyfiuenmn
Fmi subsidiary
Associate an entity in which an investorh assignificantinfluencewhich is notsubsidiar
I IEiiIi i in or ajointventure to so
material new
transactions einuate
investor
interchangem anagementp ersonnel
into
a mential
provision
AcquisitionMethod subsidiaries
Consolidatedaccounts
maybepreparedbyaddingtogether the assets liabilities
of
iii iii iii iii iiiiiii.is intiii iianomnentity it
includes powerovertheentity
acquirers management dominatescombined entity
acquirerhaslarge no ofvotingrights
exposetovariablereturns ability to affectthosereturns
Determination
ofAcquisitionDate theacquisition dateisthedateatwhich acquirer
obtainscontrol over acquiree Thisis thedate at which goodwillmustbecomputed
Recognising MeasuringIdentifiableAssets liabilities theymustbemeasuredat their
fairvalues on acquisitiondate
RecogniseGoodwill Gainon Bargain Purchase
Purchaseconsideration xxx
Purchaseconsideration
tight tape Fuadit
in
, Noncontrolling interest
goodwillis
tested
forimpairment FVofNetassets
FV Adjustments
Goodwill GainonBargainpurchase
Y
computation ofNoncontrolling interest noncontrollinginterest canbecomputedby2
methods fairvalue fullgoodwillmethod Parentsgoodwill NCIgoodwill
proportionate method ofFVofNA
proportionateshare DOA
IASOS NonCurrentAssetsheldforsale discontinuedoperations
An entityclassifies an asset as heldforsale ifitsvaluewillberecoveredmainlyby
selling itratherthanusing it Forthisit mustmeetthefollowingcriteria
saleishighlyprobable
condition
iii iii iii iii iii iment
activelylocatingbuyers fortheasset
saleis expectedtobe completedwithin12mfrom suchclassification
Ithaca salebi
for Measurement itemsclassifiedforsaleis measured at lowerof
gaining
realm Éiiiiiii carryingamount or
FV CTS
Theentitymust ceasedepreciation or amortisation on theasset
Reversal classification
of ifthesaleoftheassetis notcomplete within12monthsofsuc
management shouldreviewitsstatus
nea or
ToN ea for
need sale
classification
iftheassetstillfallsunderthiscriteria
Toson
creverse it cancontinueunderIFRSOS else it is reclassified asNoncurrentAsset Thevalueofso
a transactionwillbe CVondateoftransfer depreciation
Discontinuedoperations a discontinued operation is a ofequity thathas
component
eitherbeendisposedoff or classified as heldforsaleandeither
, represents a major lineofbusiness or geographical areaofoperation
subsidiary acquiredexclusively forresale
Onthefaceofthefinancialstatements SOPL OCI a singleamountcomprisingofthe
posttax P Lofdiscontinuedoperations netcashflowattributable
IFRSIS Revenuefrom contracts
Revenue arises inthecourse
ofan entity'sordinary activities Revenueismainlyrecognised
whenthereis a transferofcontrol tothecustomerfromtheentitysupplyinggoods services
itispresented in SOPL shouldnotincludeproceedsfromsaleofnoncurrentassets or tax
Revenuerecognition follows a 5stepprocess
Identifycontractwithcustomer acontractiswithinthescopeofIFRSwhen
haveapproved committedtocontract
parties oralw rittenimplied
rightsofthepartiescanbeidentified
contracthascommercials ubstance risk flows
timing futurecash
entitycanidentifypaymentterms
hasability intention
customer topay
probablethatentitywillcollectconsideration
Identify Performance Obligation anentityshouldidentifythegoods servicespromised in a
contract identifyperformance obligation
DetermineTransactionPrice whiledeterminingtransactionprice anentity shouldconsidert he
following significantf inancialcomponent
variablecomponent
noncashcomponent
discounts rebates refunds
AllocatingTransactionpriceto Performance Obligation thetransactionpriceisallocated toeach
separateperformance obligation in proportionto standalonesellingprice
Recogniserevenuewhenperformanceobligation is satisfied a performance obligation issatisfied
whentheentitytransfers a promisedgood orserviceto a customer
