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Financial Accounting for Companies (University of South Africa)
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FAC2601
LEARNING UNIT 3
PRESENTATION &
DISCLOSURE OF ANNUAL
FINANCIAL STATEMENTS –
IFRS 18
Financial Accounting
for Companies
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CONTENTS
Page
LEARNING UNIT 3: PRESENTATION OF ANNUAL FINANCIAL STATEMENTS – IFRS 18 ................... 1
3.1 Introduction to IFRS 18 ....................................................................................................... 4
3.2 Key concepts and terms used in IFRS 18 ............................................................................. 7
3.3 Income statement structure ............................................................................................... 6
3.4 Analysis of operating expenses ........................................................................................... 9
3.5 Income and expenses totals and subtotals ......................................................................... 9
3.6 Management defined performance measures (MPMs) .....................................................
3.7 Aggregation and disaggregation .........................................................................................
3.8 Other changes for the financial statements ....................................................................... 17
3.9 Schematic representation of IFRS 18 .................................................................................. 22
3.10 Purpose of Annual Financial Statements ............................................................................ 22
3.11 Structure and content ......................................................................................................... 23
3.12 Comprehensive example..................................................................................................... 28
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Learning outcomes
Learners should be able to prepare general purpose annual financial statements using the
structure and content of IFRS 18 in order to improve comparability with the entity’s own
annual financial statements of previous periods and with annual financial statements of
other entities.
Assessment criteria
After having studied this learning unit, you should be able to
state the purpose of, and responsibility for, preparing annual financial statements
explain and describe the overall considerations to be taken into account during
the preparation of the annual financial statements
prepare a comprehensive set of annual financial statements from given information
in accordance with the requirements of IFRS 18
Overview
This learning unit is divided into the following:
3.1 Introduction to IFRS 18
3.2 Key concepts and terms used in IFRS18
3.3 Income statement structure
3.4 Analysis of operating expenses
3.5 Income and expenses total and subtotals
3.6 Management define performance measures (MPMs)
3.7 Aggregation and disaggregation
3.8 Other changes for the financial statements
3.9 Schematic representation of IFRS 18
3.10 Purpose of Annual Financial Statements
3.11 Structure and content
3.12 Comprehensive Example
Categories of companies
STUDY
Section 8 of the Companies Act 2008 states that two types of companies may be formed and incorporated
under the Act, namely non-profit companies (reflected as NPC) and profit companies.
Non-profit companies (reflected as NPC) are incorporated for public benefit or other object relating to one
or more cultural or social activities, or communal or group interest.
Profit companies are incorporated for provision of financial gain for shareholders. Profit companies have
4 types, namely, state-owned company (reflected as SOC Ltd), public company (reflected as Ltd), private
company (reflected as (Pty) Ltd) and personal liability company (reflected as Inc).
3
Downloaded by Nompumelelo Keitumetse ()
study material or notes
Financial Accounting for Companies (University of South Africa)
Scan to open on Studocu
Studocu is not sponsored or endorsed by any college or university
Downloaded by Nompumelelo Keitumetse ()
, lOMoARcPSD|24986124
FAC2601
LEARNING UNIT 3
PRESENTATION &
DISCLOSURE OF ANNUAL
FINANCIAL STATEMENTS –
IFRS 18
Financial Accounting
for Companies
Downloaded by Nompumelelo Keitumetse ()
, lOMoARcPSD|24986124
CONTENTS
Page
LEARNING UNIT 3: PRESENTATION OF ANNUAL FINANCIAL STATEMENTS – IFRS 18 ................... 1
3.1 Introduction to IFRS 18 ....................................................................................................... 4
3.2 Key concepts and terms used in IFRS 18 ............................................................................. 7
3.3 Income statement structure ............................................................................................... 6
3.4 Analysis of operating expenses ........................................................................................... 9
3.5 Income and expenses totals and subtotals ......................................................................... 9
3.6 Management defined performance measures (MPMs) .....................................................
3.7 Aggregation and disaggregation .........................................................................................
3.8 Other changes for the financial statements ....................................................................... 17
3.9 Schematic representation of IFRS 18 .................................................................................. 22
3.10 Purpose of Annual Financial Statements ............................................................................ 22
3.11 Structure and content ......................................................................................................... 23
3.12 Comprehensive example..................................................................................................... 28
Downloaded by Nompumelelo Keitumetse ()
, lOMoARcPSD|24986124
Learning outcomes
Learners should be able to prepare general purpose annual financial statements using the
structure and content of IFRS 18 in order to improve comparability with the entity’s own
annual financial statements of previous periods and with annual financial statements of
other entities.
Assessment criteria
After having studied this learning unit, you should be able to
state the purpose of, and responsibility for, preparing annual financial statements
explain and describe the overall considerations to be taken into account during
the preparation of the annual financial statements
prepare a comprehensive set of annual financial statements from given information
in accordance with the requirements of IFRS 18
Overview
This learning unit is divided into the following:
3.1 Introduction to IFRS 18
3.2 Key concepts and terms used in IFRS18
3.3 Income statement structure
3.4 Analysis of operating expenses
3.5 Income and expenses total and subtotals
3.6 Management define performance measures (MPMs)
3.7 Aggregation and disaggregation
3.8 Other changes for the financial statements
3.9 Schematic representation of IFRS 18
3.10 Purpose of Annual Financial Statements
3.11 Structure and content
3.12 Comprehensive Example
Categories of companies
STUDY
Section 8 of the Companies Act 2008 states that two types of companies may be formed and incorporated
under the Act, namely non-profit companies (reflected as NPC) and profit companies.
Non-profit companies (reflected as NPC) are incorporated for public benefit or other object relating to one
or more cultural or social activities, or communal or group interest.
Profit companies are incorporated for provision of financial gain for shareholders. Profit companies have
4 types, namely, state-owned company (reflected as SOC Ltd), public company (reflected as Ltd), private
company (reflected as (Pty) Ltd) and personal liability company (reflected as Inc).
3
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