Month: February 2021

OBJECTIVE The objective of IAS 7 is to require the provision of information about the historical changes in cash and cash equivalents of an entity by means of a cash flow statement, which classifies cash flow into: Operating Activities Investing Read More …

INTRODUCTION The purpose of IAS 21The Effects of Changes in Foreign Exchange Rates is to outline the following issues: The definition of functional and presentation currencies Accounting for an entities individual transactions in a foreign currency Translation of the financial Read More …

NON-CONTROLLING INTEREST  If there is a Non-Controlling Interest in a subsidiary, give them their share of the profit after tax of the subsidiary. The Non-Controlling Interest is shown below the consolidated Statement of Comprehensive Income, alongside the share of profit Read More …

INVESTMENTS IN ASSOCIATES AND INTERESTS IN JOINT VENTURES Associates Sometimes the investment in another entity is not enough to give it control, but such is the amount of voting power acquired that the investor exercises significant influence over the investee. Read More …

INTRODUCTION Once the basic concept of consolidating accounts has been understood, the more complicated adjustments can be introduced. The adjustments involve a number of different scenarios, but a theme common to most of them is that they involve amounts that Read More …

INTRODUCTION An entity may expand by acquiring shares in other entities.  Where one entity gains control over another entity, a parent-subsidiary relationship now exists between the two entities. Each will prepare their own individual financial statements, using the IFRS’s in Read More …

INTRODUCTION The Framework for the Preparation and Presentation of Financial Statements, published by the IASB, identifies “comparability” as one of the four qualitative characteristics of financial statements. The Framework recognises the importance of comparing both the financial statements of an Read More …

OBJECTIVE It is a fundamental principle of accounting that all available information must be considered when preparing financial statements. This must include information on relevant events which occur right up to the date on which the financial statements are authorised Read More …

OBJECTIVE The objective of IAS 37 is to ensure that appropriate recognition criteria and measurement bases are applied to provisions, contingent liabilities and contingent assets and that sufficient information is disclosed in the notes to the financial statements to enable Read More …

OBJECTIVE IAS 2 sets out the accounting treatment for inventories.  For many entities, closing inventory can be a highly significant figure and is used in the calculation of profit and also shown as a current asset in the Statement of Read More …