INHOUD
Usefulness of accounting ...................................................................................................................................... 11
REMEMBER THE objectives of the course ............................................................................................................. 11
Specific example – beer industry ...................................................................................................................... 11
financial ratio’s ...................................................................................................................................................... 12
Financial ratio’s: some examples ...................................................................................................................... 12
Numerical data .............................................................................................................................................. 12
numerical data – but what are we looking at? .............................................................................................. 13
conclusion ......................................................................................................................................................... 17
chapter 1: the regulatory framework.................................................................................................................... 18
THE NEED FOR REGULATION ............................................................................................................................. 18
SOURCES OF REGULATION ................................................................................................................................ 18
generally accepted accounting practice (GAAP) ............................................................................................... 19
IASB’s regulatory structure ........................................................................................................................... 19
The international accounting standards board (iasb) ....................................................................................... 19
The standard-setting process (informatief!) ..................................................................................................... 20
the structure of an internatinal standard.......................................................................................................... 20
Purpose of accounting standards ...................................................................................................................... 20
IFrs 1: first time adoption of irfs ........................................................................................................................ 21
transaction schedule ..................................................................................................................................... 22
chapter 2: a conceptual framework for financial reporting .................................................................................. 23
definition ........................................................................................................................................................... 23
purpose of the iasb conceptual framework ...................................................................................................... 23
scope of the IASB conceptual framwork ........................................................................................................... 23
conceptual framework for financial reporting .................................................................................................. 24
objective of general purpose financial reporting (1) ......................................................................................... 24
users of general purpose financial reports........................................................................................................ 25
Underlying assumptions .................................................................................................................................... 25
qualitative characteristics of financial information (2) ..................................................................................... 26
elements: financiel position (3) (=balans) ......................................................................................................... 27
elements: financial performance (resultatenrekening) .................................................................................... 27
recognition of the elements of financial standards .......................................................................................... 28
measurements bases (5) ................................................................................................................................... 29
measurement of the elements of financial statements ................................................................................ 29
REPORTING ENTITY (6) ...................................................................................................................................... 30
chapter 3: presentation of financial statements (ias1) ......................................................................................... 31
1
, presentation of financial statements ................................................................................................................ 31
frequency of reporting ...................................................................................................................................... 31
Identification of the financial statements ......................................................................................................... 32
statement of financial position ......................................................................................................................... 32
current and non-current assets ..................................................................................................................... 32
current/non-current liabilities....................................................................................................................... 33
information to be presented in the statement of financial positon ................................................................. 33
to be presented in the statement of financial positon or in the notes ......................................................... 33
statement of comprehensive income ............................................................................................................... 34
information to be presented in the statement of comprhensive income..................................................... 35
statements of changes in equity ....................................................................................................................... 36
notes to the financial statements ..................................................................................................................... 37
chapter 4: accountancy policies, accountancy estimates and errors (ias 8) ......................................................... 38
ACCOUTING POLICIES ........................................................................................................................................ 38
SELECTION OF ACCOUNTING POLICIES ............................................................................................................. 38
CHANGES IN ACCOUNTING POLICIES ............................................................................................................... 39
ACCOUTING FOR A CHANGE IN ACCOUNTING POLICY...................................................................................... 39
disclosure of a change in accounting policy ...................................................................................................... 39
accounting estimates ........................................................................................................................................ 40
accounting estimates <-> change in accounting policy ................................................................................. 41
Prior period errors ............................................................................................................................................. 41
correction of a prior period error ...................................................................................................................... 41
disclosure of prior period errors ....................................................................................................................... 42
prior period erros: example retrospective adjustment ................................................................................. 42
chapter 5: ias 33 – earnings per share .................................................................................................................. 44
INTRODUCTION – significance of eps ................................................................................................................ 44
scope of ias33 .................................................................................................................................................... 44
calculation of basis eps ..................................................................................................................................... 45
calculation of the weighted average number of shares .................................................................................... 45
calculation of diluted eps .................................................................................................................................. 45
why dilutive effect? ....................................................................................................................................... 46
special topic: bonus issues ................................................................................................................................ 47
special topic: right issues................................................................................................................................... 48
bonus elemtents of a right issue ................................................................................................................... 48
ias33 presentation and disclosure requirements .............................................................................................. 48
example eps further disclosures ................................................................................................................... 49
chapter 6: ifrs 8 – segment reporting.................................................................................................................... 50
2
, INTRODUCTION TO SEGMENT ANALYSIS .......................................................................................................... 50
OPERATING SEGMENTS ..................................................................................................................................... 50
REPORTABLE SEGMENTS ................................................................................................................................... 51
THE 10% threshold ............................................................................................................................................ 51
the 75% rule ...................................................................................................................................................... 51
disclosures required by IFRS 8........................................................................................................................... 52
general information ...................................................................................................................................... 52
information about reportable segments ....................................................................................................... 52
reconciliations (= reconciliaties) .................................................................................................................... 52
entity-wide information ................................................................................................................................ 53
EXAMPLE 1 – ahold delhaize ......................................................................................................................... 54
example 2 – carrefour ................................................................................................................................... 54
example 3 – greenyard .................................................................................................................................. 55
chapter 15: income taxes ...................................................................................................................................... 56
INTRODUCTION ................................................................................................................................................. 56
current tax ......................................................................................................................................................... 57
accounting for current tax................................................................................................................................. 57
example 1: facts ............................................................................................................................................ 58
example 1: solution ....................................................................................................................................... 59
example 2: facts ............................................................................................................................................ 59
exmample 2: solution .................................................................................................................................... 60
preliminary conclusions = voorlopige conclusies .............................................................................................. 60
deferred taxes ................................................................................................................................................... 61
what is the problem? .................................................................................................................................... 61
defintion ........................................................................................................................................................ 62
accounting for deferred taxes ........................................................................................................................... 64
examples of temporary diffeences................................................................................................................ 64
two types of temporary differences defined by ias12 ...................................................................................... 66
what is the solution? ..................................................................................................................................... 67
numerical example ........................................................................................................................................ 68
temporary and permanent differences between taxable profit and accounting profit.................................... 70
taxable profit and accounting profit: example .............................................................................................. 70
differences between accouting profit and taxable profit and deferred taxes .................................................. 71
the taks base concept ....................................................................................................................................... 71
taks base of an asset and a liability ................................................................................................................... 73
dererred taxes – calculations steps ................................................................................................................... 73
deffered taxes – temporary differences............................................................................................................ 73
3
, deductible temporary difference ...................................................................................................................... 74
example: deferred taks asset ........................................................................................................................ 74
deferred taxes – in a nutshell ............................................................................................................................ 75
deferred taxes – class exercise ...................................................................................................................... 76
deferred taks assets – special case ................................................................................................................... 77
recognition of DTA on unused tax losses and credits.................................................................................... 77
taks rate changes .............................................................................................................................................. 78
example ......................................................................................................................................................... 78
measurement and recognition under ias12 ...................................................................................................... 79
ias12 requirements (deferred taks)................................................................................................................... 79
ias12 disclosure requirements .......................................................................................................................... 80
example colruyt ............................................................................................................................................. 80
example galapagos ........................................................................................................................................ 81
future of taks reporting – towards greater transparancy ................................................................................. 82
pillar 2................................................................................................................................................................ 83
key elements ................................................................................................................................................. 83
calculation in 5 steps ..................................................................................................................................... 84
chapter 16: statement of cash flows (ias7) ........................................................................................................... 85
PURPOSE OF A STATEMENT OF CASH FLOWS ................................................................................................... 85
CASH AND CASH EQUIVALENTS......................................................................................................................... 85
STATEMENT OF CASH FLOWS............................................................................................................................ 85
EXAMPLE 1 – balance sheet at interim date ................................................................................................ 86
example 2 – biocarts ..................................................................................................................................... 87
classification of cash flows by activity ............................................................................................................... 88
operating activities ............................................................................................................................................ 89
investing activities ............................................................................................................................................. 89
financing activities ............................................................................................................................................. 89
interest, dividends and taxes ............................................................................................................................ 89
reporting cash flows from operating activities ................................................................................................. 90
statements of cashflows – example .................................................................................................................. 91
balance sheet at year-end ............................................................................................................................. 91
the direct method ............................................................................................................................................. 92
the indirect method .......................................................................................................................................... 92
statement of cash flows – class exercise ........................................................................................................... 93
direct method................................................................................................................................................ 94
indirect method................................................................................................................................................. 95
disclosure requirements of ias7 ........................................................................................................................ 97
4
Usefulness of accounting ...................................................................................................................................... 11
REMEMBER THE objectives of the course ............................................................................................................. 11
Specific example – beer industry ...................................................................................................................... 11
financial ratio’s ...................................................................................................................................................... 12
Financial ratio’s: some examples ...................................................................................................................... 12
Numerical data .............................................................................................................................................. 12
numerical data – but what are we looking at? .............................................................................................. 13
conclusion ......................................................................................................................................................... 17
chapter 1: the regulatory framework.................................................................................................................... 18
THE NEED FOR REGULATION ............................................................................................................................. 18
SOURCES OF REGULATION ................................................................................................................................ 18
generally accepted accounting practice (GAAP) ............................................................................................... 19
IASB’s regulatory structure ........................................................................................................................... 19
The international accounting standards board (iasb) ....................................................................................... 19
The standard-setting process (informatief!) ..................................................................................................... 20
the structure of an internatinal standard.......................................................................................................... 20
Purpose of accounting standards ...................................................................................................................... 20
IFrs 1: first time adoption of irfs ........................................................................................................................ 21
transaction schedule ..................................................................................................................................... 22
chapter 2: a conceptual framework for financial reporting .................................................................................. 23
definition ........................................................................................................................................................... 23
purpose of the iasb conceptual framework ...................................................................................................... 23
scope of the IASB conceptual framwork ........................................................................................................... 23
conceptual framework for financial reporting .................................................................................................. 24
objective of general purpose financial reporting (1) ......................................................................................... 24
users of general purpose financial reports........................................................................................................ 25
Underlying assumptions .................................................................................................................................... 25
qualitative characteristics of financial information (2) ..................................................................................... 26
elements: financiel position (3) (=balans) ......................................................................................................... 27
elements: financial performance (resultatenrekening) .................................................................................... 27
recognition of the elements of financial standards .......................................................................................... 28
measurements bases (5) ................................................................................................................................... 29
measurement of the elements of financial statements ................................................................................ 29
REPORTING ENTITY (6) ...................................................................................................................................... 30
chapter 3: presentation of financial statements (ias1) ......................................................................................... 31
1
, presentation of financial statements ................................................................................................................ 31
frequency of reporting ...................................................................................................................................... 31
Identification of the financial statements ......................................................................................................... 32
statement of financial position ......................................................................................................................... 32
current and non-current assets ..................................................................................................................... 32
current/non-current liabilities....................................................................................................................... 33
information to be presented in the statement of financial positon ................................................................. 33
to be presented in the statement of financial positon or in the notes ......................................................... 33
statement of comprehensive income ............................................................................................................... 34
information to be presented in the statement of comprhensive income..................................................... 35
statements of changes in equity ....................................................................................................................... 36
notes to the financial statements ..................................................................................................................... 37
chapter 4: accountancy policies, accountancy estimates and errors (ias 8) ......................................................... 38
ACCOUTING POLICIES ........................................................................................................................................ 38
SELECTION OF ACCOUNTING POLICIES ............................................................................................................. 38
CHANGES IN ACCOUNTING POLICIES ............................................................................................................... 39
ACCOUTING FOR A CHANGE IN ACCOUNTING POLICY...................................................................................... 39
disclosure of a change in accounting policy ...................................................................................................... 39
accounting estimates ........................................................................................................................................ 40
accounting estimates <-> change in accounting policy ................................................................................. 41
Prior period errors ............................................................................................................................................. 41
correction of a prior period error ...................................................................................................................... 41
disclosure of prior period errors ....................................................................................................................... 42
prior period erros: example retrospective adjustment ................................................................................. 42
chapter 5: ias 33 – earnings per share .................................................................................................................. 44
INTRODUCTION – significance of eps ................................................................................................................ 44
scope of ias33 .................................................................................................................................................... 44
calculation of basis eps ..................................................................................................................................... 45
calculation of the weighted average number of shares .................................................................................... 45
calculation of diluted eps .................................................................................................................................. 45
why dilutive effect? ....................................................................................................................................... 46
special topic: bonus issues ................................................................................................................................ 47
special topic: right issues................................................................................................................................... 48
bonus elemtents of a right issue ................................................................................................................... 48
ias33 presentation and disclosure requirements .............................................................................................. 48
example eps further disclosures ................................................................................................................... 49
chapter 6: ifrs 8 – segment reporting.................................................................................................................... 50
2
, INTRODUCTION TO SEGMENT ANALYSIS .......................................................................................................... 50
OPERATING SEGMENTS ..................................................................................................................................... 50
REPORTABLE SEGMENTS ................................................................................................................................... 51
THE 10% threshold ............................................................................................................................................ 51
the 75% rule ...................................................................................................................................................... 51
disclosures required by IFRS 8........................................................................................................................... 52
general information ...................................................................................................................................... 52
information about reportable segments ....................................................................................................... 52
reconciliations (= reconciliaties) .................................................................................................................... 52
entity-wide information ................................................................................................................................ 53
EXAMPLE 1 – ahold delhaize ......................................................................................................................... 54
example 2 – carrefour ................................................................................................................................... 54
example 3 – greenyard .................................................................................................................................. 55
chapter 15: income taxes ...................................................................................................................................... 56
INTRODUCTION ................................................................................................................................................. 56
current tax ......................................................................................................................................................... 57
accounting for current tax................................................................................................................................. 57
example 1: facts ............................................................................................................................................ 58
example 1: solution ....................................................................................................................................... 59
example 2: facts ............................................................................................................................................ 59
exmample 2: solution .................................................................................................................................... 60
preliminary conclusions = voorlopige conclusies .............................................................................................. 60
deferred taxes ................................................................................................................................................... 61
what is the problem? .................................................................................................................................... 61
defintion ........................................................................................................................................................ 62
accounting for deferred taxes ........................................................................................................................... 64
examples of temporary diffeences................................................................................................................ 64
two types of temporary differences defined by ias12 ...................................................................................... 66
what is the solution? ..................................................................................................................................... 67
numerical example ........................................................................................................................................ 68
temporary and permanent differences between taxable profit and accounting profit.................................... 70
taxable profit and accounting profit: example .............................................................................................. 70
differences between accouting profit and taxable profit and deferred taxes .................................................. 71
the taks base concept ....................................................................................................................................... 71
taks base of an asset and a liability ................................................................................................................... 73
dererred taxes – calculations steps ................................................................................................................... 73
deffered taxes – temporary differences............................................................................................................ 73
3
, deductible temporary difference ...................................................................................................................... 74
example: deferred taks asset ........................................................................................................................ 74
deferred taxes – in a nutshell ............................................................................................................................ 75
deferred taxes – class exercise ...................................................................................................................... 76
deferred taks assets – special case ................................................................................................................... 77
recognition of DTA on unused tax losses and credits.................................................................................... 77
taks rate changes .............................................................................................................................................. 78
example ......................................................................................................................................................... 78
measurement and recognition under ias12 ...................................................................................................... 79
ias12 requirements (deferred taks)................................................................................................................... 79
ias12 disclosure requirements .......................................................................................................................... 80
example colruyt ............................................................................................................................................. 80
example galapagos ........................................................................................................................................ 81
future of taks reporting – towards greater transparancy ................................................................................. 82
pillar 2................................................................................................................................................................ 83
key elements ................................................................................................................................................. 83
calculation in 5 steps ..................................................................................................................................... 84
chapter 16: statement of cash flows (ias7) ........................................................................................................... 85
PURPOSE OF A STATEMENT OF CASH FLOWS ................................................................................................... 85
CASH AND CASH EQUIVALENTS......................................................................................................................... 85
STATEMENT OF CASH FLOWS............................................................................................................................ 85
EXAMPLE 1 – balance sheet at interim date ................................................................................................ 86
example 2 – biocarts ..................................................................................................................................... 87
classification of cash flows by activity ............................................................................................................... 88
operating activities ............................................................................................................................................ 89
investing activities ............................................................................................................................................. 89
financing activities ............................................................................................................................................. 89
interest, dividends and taxes ............................................................................................................................ 89
reporting cash flows from operating activities ................................................................................................. 90
statements of cashflows – example .................................................................................................................. 91
balance sheet at year-end ............................................................................................................................. 91
the direct method ............................................................................................................................................. 92
the indirect method .......................................................................................................................................... 92
statement of cash flows – class exercise ........................................................................................................... 93
direct method................................................................................................................................................ 94
indirect method................................................................................................................................................. 95
disclosure requirements of ias7 ........................................................................................................................ 97
4
