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PAPER NO. 18 ADVANCED FINANCIAL REPORTING GENERAL OBJECTIVE

This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable him/her account for complex accounting transactions and prepare advanced financial reports.

LEARNING OUTCOMES

A candidate who passes this paper should be able to:

• Prepare financial statements for subsidiaries, associates and jointly controlled entities in compliance with International Financial Reporting Standards (IFRSs) and International Public Sector Accounting Standards (IPSASs) as applicable
• Analyse financial statements for public and private sector entities
• Account for complex accounting transactions
• Apply ethical standards in accountancy work and practice

CONTENT

Framework for preparation and presentation of financial statement

• Importance of the accounting framework
• Steps in developing international financial reporting interpretations IFRIC (excluding detailed IFRICS)
• Ethical and legal issues in financial reporting

Assets and liabilities of financial statement

• Inventories
• Non-current assets held for sale and discontinued operations
• Impairment of assets
• Exploration for and evaluation of mineral resources
• Income taxes – including group aspects
• Share based payments
• Employee benefits with emphasis on post-employment benefits

Preparing financial statements and other reports

• Published financial statements (including group statement of cash flows where a subsidiary is acquired or sold during the year)
• Interim financial statements
• Financial statements of pension schemes/retirement benefit plans
• Operating segment reports
• Earnings per share
• IFRS for small and medium sized entities
• Related parties disclosures
• Effects of inflation and hyper inflationary economies (exclude inflation adjusted financial statements)
• Business combinations and corporate restructuring
• Management commentary (management discussion and analysis)
• Integrated reporting

Accounting and reporting of financial instruments

• Nature and scope of financial instruments
• Equity and financial liabilities
• Recognition and de-recognition of financial instruments
• Hedge accounting
• Other disclosures

Consolidated and separate financial statements

• Accounting for    subsidiaries     including     piece-meal    acquisitions,     several subsidiaries and sub-subsidiaries
• Investments in associates and jointly controlled arrangements
• Foreign entities (subsidiary, associate and jointly controlled entities)
• Disposal of investment in subsidiary (partial and full disposal)

Public sector accounting

Provisions   of   the   following   IPSASs    (emphasis on distinctions with equivalent IASs/IFRSs)

• Effects of changes in foreign exchange rates
• Revenue from exchange and non-exchange transactions
• Hyperinflationary economies (ignore inflation adjusted financial statements)
• Segment reports
• Related party disclosures
• Impairment of cash generating and non–cash generating assets
• Disclosure of information about the general government sector

Current trends

• Reporting on corporate social responsibility
• Reporting on environmental matters
• Corporate governance reports (Directors reports and Chairman’s statements- contents only))
• Sustainability reporting

Emerging issues and trends Click here to Purchase Advanced Financial Reporting notes