List of International Accounting Standards (IAS)

 

1.IAS 1. presentation of financial statements

2. IAS 2 Inventories

3. IAS 7 The statement of cash flows

4. IAS 8. Accounting policies, Changes of Accounting Estimates & Errors

5. IAS 10 Events after the reporting period

6. IAS 12 Income Taxes

7. IAS 16 property plant and Equipments

8. IAS 19 Employee Benefits

9. IAS 20 Government Grants and Disclosure of Government Assistance

10. IAS 21 The effects of changes in Foreign exchange Rates

11. IAS 23 Borrowing Costs

12. IAS 24 Related party Disclosure

13. IAS 26 Accounting and Reporting by Retirement Benefit Plans

14. IAS 27 Separate Financial Statements

14. IAS 28 Investments in Associates and joint Ventures

15. IAS 29 Financial Reporting in Hyperinflationary Economics

16. IAS 32 Financial Instruments- Presentation

17. IAS 33 Earnings per Share

18. IAS 34 Interim Financial Reporting

19. IAS 36 Impairment of Assets

20. IAS 37 Provision, Contingent Liabilities and Contingent Assets

21. IAS 38 Intangible Assets

22. IAS 39 Financial Instruments- Recognition and measurement

23. IAS 40 Investment Property

24. IAS 41 Agriculture

How to prepare standard workings for Consolidated Financial statements and journal entry?

 

Workings of Consolidated Financial statements

1. Group structure

                P Ltd

                                80% Share acquired by P ltd.

 

                Subsidiary (S Ltd)

2. Calculation of net Assets of Subsidiary (S ltd).

Particulars	At year end	At Acquisition date	Post acquisition date
Share Capital	******	******	*******
Retained Earnings	******	******	*******
Total	******	********	*******

3. Calculation of Goodwill

Consideration Transferred	*****
Plus: Non-Controlling Interest at acquisition (Based on w2)	*****
Less: Net assets at acquisition (Based on w2)	(*****)
	*****
Impairment to date	(*****)
Balance C/F	*****

 

The double entry to consolidate the subsidiary will be:

 Share of Subsidiary’s net assets Dr          *****

Goodwill                                      Dr           ****

Investment in subsidiary              Cr            ****

 

4. Calculation of Non-controlling Interest (NCI) at year end.

Particulars	Amount
At acquisition (NCI % x net assets based on w-2) or Fair Value	*****
Share of Post-acquisition profits and other reserves (NCI% x Post –acquisition	*****
	******

 

5. Calculate retained Earnings

Particulars	Amount
P Ltd (100%)	*****
S Ltd. (Share of post-acquisition retained earnings (Based on w-2)	*****
Goodwill Impairment to date (based on w-2)	(****)
Group Retained Earnings	******

What is INTERNAL AUDIT? OBJECTIVES OF INTERNAL AUDIT

 

Internal audit checks how well a company maintains operational

 efficiency and manages accounting processes while complying with

 its standard rules and regulations. The role of internal audit is to

 provide independent assurance that an organization's risk

 management, governance and internal control processes are

 operating effectively.

 OBJECTIVES OF INTERNAL AUDIT

Review/Examination:

• accounting and internal control systems.

• design of the systems

• Monitoring the operation of the systems

• Recommending cost-effective improvements

• Financial and operating information.

• Economy, efficiency and effectiveness of operations.

• Compliance with laws, regulations and other external requirements

• Safeguarding of assets.

• Implementation of corporate objectives

• Identification of significant business/financial risk, overall risk management

policy, strategy

• Special investigation into particular area

How to make audit process?

The audit is designed to enable the auditor to obtain sufficient, appropriate audit evidence. The auditor must maintain an attitude of professional skepticism throughout the audit.

 

Summary of audit process

1. Clients acceptance/establishing engagement terms

2.Establish materiality and assess risks

3. plan and design the audit process.

4. Audit of internal control 

5. Tests for evidence

6. Complete the audit and evaluate the results

7. Issue audit report.

International Accounting Standard (IAS) – 2 Inventories

 

Definition:  The raw materials,  work-in-process  goods  and 

 completely finished goods  that are considered to be the portion of

a business's assets and being ready for sale.

·         Valuation: Lower of –

ü  Cost (i.e. purchase cost + cost of conversion + Other cost)

v  Purchase cost = Supplier’s gross price + import duties – trade discounts

v  Cost of conversion = direct material, labour, overheads

v  

Other costs = to bring it into present condition and location

v  It should not include abnormal waste or foreign exchange differences

ü Net realizable value (i.e. estimated selling price – estimated cost to sale)

v  If NRV < Cost, write down inventories and charge in SOPL (i.e. I/S)

Financial statements as per IAS 1

 The financial statements as per IAS 1 Contains

1. Statement of Financial position (Balance Sheet) as at.....

2.  The statement or profit or loss and other Comprehensive income for the period ended.

3. The statement of changes of equity as at.

4. The statement of Cash flows for the period ended

5. notes, comprising a summary of significant accounting policies and other explanatory notes comparative information prescribed by the standard.

The statement of financial position, often called the balance sheet, is a financial statement that reports the assets, liabilities, and equity of a company on a given date. Balance sheets provide the basis for computing rates of return for investors and evaluating a company's capital structure. The balance sheet is one of the three core financial statements that are used to evaluate a business.

The statement of comprehensive income is a financial statement that summarizes both standard net income and other comprehensive income (OCI). The net income is the result obtained by preparing an income statement. The purpose of the statement of profit or loss and other comprehensive income (PLOCI) is to show an entity’s financial performance in a way that is useful to a wide range of users.

An equity statement – also referred to as a statement of owner’s equity or statement of changes in equity – is a financial statement that a company is required to prepare along with other important financial documents at the end of a reporting period. The statement of changes in equity reports changes in the equity (ownership) accounts for a corporation. Equity can be defined as the worth or value to the owners of the company.

The cash flow statement (CFS), is a financial statement that summarizes the movement of cash and cash equivalents (CCE) that come in and go out of a company. Cash flows are classified and presented into operating activities (either using the 'direct' or 'indirect' method), investing activities or financing activities, with the latter two categories generally presented on a gross basis.

Corporate and individual income tax and value added tax measures in Finance Act 2021

 

 

The Finance Act 2021 includes corporate and individual income tax and value added tax (VAT) measures.

• With regard to the rate of corporate income tax, the legislation reflects:
• A decrease from 32.5% to 30% for non-listed companies
• A decrease from 25% to 22.5% for listed companies
• A decrease from 32.5% to 30% for associations of persons
• A decrease from 32.5% to 25% for a one-person company

Among the VAT-related measures are:

• A new definition for mobile banking services
• Repeal of the liability of VAT agents of non-residents
• Amendments to the input VAT mechanism
• A reduction of the advance VAT rate and changes to the withholding VAT payment rules
• New VAT exemptions for manufacturers and extensions of VAT exemptions for certain manufacturer