Month: February 2021

 INTRODUCTION IAS 12 deals with the accounting treatment of tax liabilities. In this chapter, it is assumed that the tax liability for the period has already been computed, and the entity now must deal with the treatment of tax in Read More …

OBJECTIVE The objective of IFRS 5 is to outline: Accounting for assets classified as “Held-For-Sale”; and The presentation and disclosure of “Discontinued Operations”   IFRS 5 requires non-current assets and groups of assets (disposal groups”…see below) that are ‘Held-For-Sale’ to Read More …

EXPLANATORY NOTE The need for the disclosure of Earnings Per Share (EPS) is based on the increasing use of the Price/Earnings (P/E) ratio as a standard stock market indicator. The formula for the calculation of the P/E ratio is: Market Read More …

OBJECTIVE Construction contracts, by their nature, usually are completed over more than one accounting period.  Thus, the main issue addressed by IAS 11 is the allocation of the revenue and costs of the contract over this extended time period.   Read More …

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 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 …

INTRODUCTION The purpose of the consolidated income statement is to present the results of the parent company and the subsidiary as if it were a combined/single entity.   NON-CONTROLLING INTEREST   If there is a Non-Controlling Interest in a subsidiary, 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 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 …