Day 1
Introduction to IFRS
• Brief background of IFRS history and development
• Currently issued pronouncements and their effective dates
– Standards: IAS and IFRS
– Interpretations: SIC and IFRIC
• The IFRS Framework: elements, recognition and measurement
• Applying the hierarchy of international standards
• Current status of global convergence – worldwide IFRS application
• U.S. convergence projects and their impact on IFRS
• How to research and stay up to date on IFRS
CASE STUDY: Applying the IFRS Framework Principles in Real-world Situations
Financial Statements and Presentation Issues
Presentation
IAS 1 Presentation of Financial Statements
– Statement of Financial Position
– Statement of Comprehensive Income
– Statement of Changes in Equity
IAS 7 Statement of Cash Flows
IFRS 5 Non-current Assets Held for Sale and Discontinued Operations
Policies and Adjustments
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
IAS 10 Events after the Reporting Period
Other Disclosure and Reporting Issues
IFRS 8 Operating Segments
CASE STUDIES:
• Review the New Disclosure and Presentation Requirements using Real World Financial Statements
• Determine the Treatment of Events after the Reporting Period
Day 2
Revenue Recognition
IAS 18 Revenue
- Definitions
- Revenue measurement, including gross vs. net reporting
- Exchange transactions (barter)
- Revenue from sale of goods, including recent recognition issues
- Revenue from services – recognition criteria and applications
- Revenue from interest, dividends and royalties
CASE STUDY: Practical Revenue Recognition and Application Scenarios
Inventory
IAS 2 Inventory
- Definition
- Inventory measurement – determining cost
- Allocating overheads
- Write-downs to net realizable value and reversal considerations
Tangible and Intangible Assets
• IAS 16 Property, Plant and Equipment
• IAS 23 Borrowing Costs
• IAS 38 Intangible Assets
• IAS 40 Investment Property
• IFRS 5 Non-current Assets Held for Sale and Discontinued Operations
- Initial recognition and measurement, including asset retirement costs
- Treatment of subsequent expenditures
- Valuation methods
- Depreciation, including composite asset accounting
- Assets held for sale
- Interest capitalization, including NEW requirements
- Investment property identification and accounting, including alternatives
- Treatment of internally generated intangible assets, including exceptions
- Accounting for research and development
CASE STUDIES:
• Property, Plant and Equipment – Recognition, Measurement and Revaluation
• Accounting for Asset Retirement Obligations
• Investment Property – Recognition, Valuation and Changes in Use
• Intangible Assets –Recognition, Measurement, and Subsequent Expenditures
Day 3
Impairment of Tangible and Intangible Assets
IAS 36 Impairment of Assets
- Identifying an asset that may be impaired
- Determining the recoverable amount
- Measuring and recognizing an impairment loss
- Identifying cash-generating units (CGU) and assigning assets
- Allocating losses to individual assets
- Reversing impairment losses
CASE STUDY: Evaluating the Impairment Testing of Goodwill and Determining Whether Impairment Should be recognized
Provisions and Contingencies
IAS 37 Provisions, Contingent Liabilities and Contingent Assets
- Understanding liabilities, contingencies and commitments
- Recognizing and measuring provisions, including changes in estimate
- Applying contingency disclosure requirements
CASE STUDIES:
- Distinguishing Between Liabilities, Provisions and Contingent Liabilities
- Applying Recognition and Measurement Concepts to Determine Appropriate Accounting Treatment
- Calculating the Correct Amount of Provision to Record in Various Situations
Employee Benefits
IAS 19: Employee Benefits
- Short-term employee benefits
- Post-employment benefits – identifying plan types
- Accounting for defined contribution plans
- Accounting for defined benefit plans
- Recognizing actuarial gains & losses, including the alternative treatments
- Financial statement recognition and requirements
CASE STUDY: Defined Benefit Plan Accounting
Leases
IAS 17 Leases
- What is a lease according to IFRS?
- Classifying leases
- Accounting for lessee finance leases
- Accounting for lessee operating leases
- Accounting for lessor finance leases
- Accounting for lessor operating leases
- Operating lease incentives
CASE STUDIES: Identifying, Classifying and Accounting for Leases
Day 4
Financial Instruments
• IAS 32 Financial Instruments: Presentation
• IAS 39 Financial Instruments: Recognition and Measurement
• IFRS 7 Financial Instruments: Disclosures
• Overview of NEW IFRS 9 Financial Instruments: Classification and Measurement
- Classifying financial instruments
- Recognizing and measuring financial instruments, both initially and subsequently
- Determining fair value
- Applying reclassification rules
- Derecognizing financial assets and liabilities
- Recognizing, calculating and reversing impairment losses
- Accounting for derivatives
- Identifying and classifying debt and equity instruments
- Meeting the disclosure requirements – IFRS 7 requirements
CASE STUDIES:
• Accounting for Financial Instruments – Classification
• Identifying Liabilities vs. Equity
• Applying the De-recognition Model
• Recognizing and Calculating Impairment
• Applying the Effective Interest Method: Transaction Costs, Amortization and Premiums/Discounts
Consolidations
• IAS 27: Consolidated and Separate Financial Statements
• SIC 12: Consolidation – Special Purpose Entities
- Consolidated financial statement requirements, including exemptions
- Consolidation procedures
- Non-controlling interest presentation
- Accounting in separate financial statements
CASE STUDY: Special Purpose Entity Consolidation
Accounting for Associates
• IAS 28: Investments in Associates
- Identifying significant interest and associates
- Accounting requirements and exemptions
- Application of the equity method
CASE STUDY: Calculating Equity Method Balances
Accounting for Joint Ventures
• IAS 31: Interests in Joint Ventures
- Identifying joint ventures
- Joint venture types
- Accounting and presentation for each type of joint venture
Foreign Currency Issues
• IAS 21 The Effects of Changes in Foreign Exchange Rates
- Definitions
- Determining the functional currency
- Reporting foreign currency transactions and recognizing exchange differences
- Translating foreign entity financial statements
CASE STUDIES:
• Determining Functional Currency
• Identifying Monetary Items
• Measuring and Recognizing Exchange Gains and Losses
• Translating Foreign Entity Financial Statements
Day 5
Optional Sessions:
Transitioning to IFRS (½ day)
Overview of IFRS 1 First-time Adoption of IFRS
– Basic principles of IFRS I
– Important definitions and key considerations
– Preparing the opening statement of financial position
– Recognizing new assets and liabilities
– Derecognizing financial items
– Reclassifying financial statement items
– Re-measuring
Retrospective
Mandatory exceptions from other IFRS
– Optional exemptions
– Presentation and disclosure requirements
Implementing the Transition Process
Learning from past transitions
Managing the transition process
Overall project development
Initial assessment phase
Planning phase
Training needs and considerations
Implementation and testing
Project Closure
CASE STUDIES and ILLUSTRATIONS:
Discussion of participants’ application issues, real-world case studies and supporting materials will be included throughout the program
Business Combinations: Application of the New IFRS 3 (½ day)
Applying the Acquisition Method
Differentiating a business combination from other group asset purchases
Understanding the definition of a business under IFRS 3
Identifying the acquirer
Evaluating which entity has control
Determining the acquisition date
Calculating the cost of the consideration transferred (cost of the acquisition)
Accounting for contingent consideration
Recognizing and valuing the acquired assets, liabilities and contingent liabilities
Understanding the recognition and valuation exceptions
Accounting for a purchase involving non-controlling interests
Calculating goodwill under both alternative methods
Dealing with provisional values and measurement changes after the acquisition date
Other Considerations and Issues
Considering tax implications
Accounting for step acquisitions
Recognizing and recording transactions with non-controlling interests
Applying IFRS 3 requirements to reverse acquisitions
Complying with goodwill allocation and impairment testing requirements
Meeting disclosure and presentation requirements
CASE STUDIES and ILLUSTRATIONS:
• Calculating the acquisition cost, including contingent consideration
• Measuring goodwill under both the full and partial goodwill methods
• Accounting for provisional values and valuation changes
• Review of real-world business combination disclosures