ACCA F7
FINANCIAL REPORTING
NOTES
M TUKADIYA
0
,Table of Contents
1. INTRODUCTION TO PUBLISHED ACCOUNT ........................................................ 2
2. TANGIBLE NON-CURRENT ASSET......................................................................... 3
3. INTANGIBLE ASSET ................................................................................................... 11
4. IMPAIRMENT OF ASSET ............................................................................................ 14
5. NON-CURRENT ASSET HELD FOR SALE ................................................................ 20
6. CONCEPTUAL FRAMEWORK, MEASUREMENT ................................................... 25
7. IAS 10 AND IAS 37 ....................................................................................................... 29
8. FOREIGN CURRENCY ................................................................................................ 35
9. OTHER STANDARDS ................................................................................................... 37
10. FINANCIAL ASSETS AND FINACIAL LIABILITIES .............................................. 44
11. LEASES ....................................................................................................................... 53
12. REVENUE ................................................................................................................... 56
13. TAXATION .................................................................................................................. 62
14. GROUP ACCOUNTING .............................................................................................. 64
15. CONSOLIDATED STATEMENT OF FINANCIAL POSITION ................................ 66
16. CONSOLIDATED STATEMENT OF PROFIT OR LOSS .......................................... 68
17. ASSOCIATES .............................................................................................................. 70
IAS AND IFRS................................................................................................................... 79
• 1
, 1. INTRODUCTION TO
PUBLISHED ACCOUNT
IAS 1 PRESENTATION OF FINANCIAL STATEMENT
1. Statement Of Profit or Loss
2. Statement Of Change in Equity
3. Statement Of Cash Flow
4. Statement Of Financial Position
5. Accounting Policies and Explanatory Notes
EXCEPTIONAL ITEMS
• Write down of inventory at net realised value
• Impairment of PPE
• Gain or loss on disposal of property
• Reconstructing cost
• Discontinued project
• Litigation settlements
• Reversed provisions
[ Inspection or overhaul cost is amount that is treated as
expense in SoPL after revaluation of property’s loss. When
revaluation surplus isn’t enough to cover up the revalued loss,
left amount is shown in statement of profit or loss impairment
loss. Also, if impairment loss is inspection charge or for long
term then its depreciable.]
• 2
, 2. TANGIBLE NON-CURRENT
ASSET
[ IAS 16 ]
IAS 16 PROPERTY, PLANT AND EQUIPMENT
• PPE should initially measure at its cost.
• Initial cost like delivery cost, borrowing cost,
preparation of site, instalment cost and dismantle cost
should be capitalised. [IAS 23]
• Depreciation is charged from the day asset starts giving
economic benefit to organisation. Depreciation is
charged on overall capitalised amount of asset.
• Overhaul cost or major inspection cost is also
depreciable over its life, which will be treated as same
method in SoPL. [IAS 16]
• On dismantle cost, each year some interest has to be
charged which will be treated as finance cost.
• Formula: - 1/(1+i) ⁿ
• 3
FINANCIAL REPORTING
NOTES
M TUKADIYA
0
,Table of Contents
1. INTRODUCTION TO PUBLISHED ACCOUNT ........................................................ 2
2. TANGIBLE NON-CURRENT ASSET......................................................................... 3
3. INTANGIBLE ASSET ................................................................................................... 11
4. IMPAIRMENT OF ASSET ............................................................................................ 14
5. NON-CURRENT ASSET HELD FOR SALE ................................................................ 20
6. CONCEPTUAL FRAMEWORK, MEASUREMENT ................................................... 25
7. IAS 10 AND IAS 37 ....................................................................................................... 29
8. FOREIGN CURRENCY ................................................................................................ 35
9. OTHER STANDARDS ................................................................................................... 37
10. FINANCIAL ASSETS AND FINACIAL LIABILITIES .............................................. 44
11. LEASES ....................................................................................................................... 53
12. REVENUE ................................................................................................................... 56
13. TAXATION .................................................................................................................. 62
14. GROUP ACCOUNTING .............................................................................................. 64
15. CONSOLIDATED STATEMENT OF FINANCIAL POSITION ................................ 66
16. CONSOLIDATED STATEMENT OF PROFIT OR LOSS .......................................... 68
17. ASSOCIATES .............................................................................................................. 70
IAS AND IFRS................................................................................................................... 79
• 1
, 1. INTRODUCTION TO
PUBLISHED ACCOUNT
IAS 1 PRESENTATION OF FINANCIAL STATEMENT
1. Statement Of Profit or Loss
2. Statement Of Change in Equity
3. Statement Of Cash Flow
4. Statement Of Financial Position
5. Accounting Policies and Explanatory Notes
EXCEPTIONAL ITEMS
• Write down of inventory at net realised value
• Impairment of PPE
• Gain or loss on disposal of property
• Reconstructing cost
• Discontinued project
• Litigation settlements
• Reversed provisions
[ Inspection or overhaul cost is amount that is treated as
expense in SoPL after revaluation of property’s loss. When
revaluation surplus isn’t enough to cover up the revalued loss,
left amount is shown in statement of profit or loss impairment
loss. Also, if impairment loss is inspection charge or for long
term then its depreciable.]
• 2
, 2. TANGIBLE NON-CURRENT
ASSET
[ IAS 16 ]
IAS 16 PROPERTY, PLANT AND EQUIPMENT
• PPE should initially measure at its cost.
• Initial cost like delivery cost, borrowing cost,
preparation of site, instalment cost and dismantle cost
should be capitalised. [IAS 23]
• Depreciation is charged from the day asset starts giving
economic benefit to organisation. Depreciation is
charged on overall capitalised amount of asset.
• Overhaul cost or major inspection cost is also
depreciable over its life, which will be treated as same
method in SoPL. [IAS 16]
• On dismantle cost, each year some interest has to be
charged which will be treated as finance cost.
• Formula: - 1/(1+i) ⁿ
• 3
