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Principles of The consolidated Statement of Profit or Loss ( Income Statement) PRINCIPLES OF THE CONSOLIDATED STATEMENT OF PROFIT OR LOSS The consolidated statement of profit or loss shows the profit generated by all resources disclosed in the related Consolidated statement of financial position, i.e. the net assets of the parent company ( P) and its subsidiary (S). The consolidated
Continue reading Accounting for Returns, Discounts and Sales Tax Learning Objectives I. Recording sales and purchases returns II. Accounting for Trade Discounts III. Accounting for Settlement /Cash Discounts IV. Accounting for Sale Tax ——————————————————————————- I. Recording sales and purchases returns It is normal for customers to return unwanted goods to a business; equally the business will occasionally have cause to return unwanted
Continue reading Accounting for Account Receivable | Trade Receivable Learning Objectives I. Cash and credit sales II. Accounting for irrecoverable debts III. Allowance for receivables ———————————————————- I. Cash and credit sales Cash Sales If a sale is for cash, the customer pays for the goods/services at the point of sale. The double entry for cash sales is: Dr Cash……………..xx Cr Sales revenue…………xx
Continue reading CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND ASSOCIATES Learning Objectives Introduction The Basic Principles for Consolidating the Statement of Profit or Loss Non-Controlling Interest Intra-Group Trading Mid-Year Acquisitions IAS 28 Investments in Associates and Joint Ventures Trading with the Associate ………………………………………………………………………………………….. I. Introduction The consolidated statement of profit or loss presents the financial performance of all group entities (i.e.
Continue reading CONSOLIDATED STATEMENT OF FINANCIAL POSITION LEANRING OBJECTIVE 1. What is group? 2. Requirement to prepare consolidated financial statement 3. The basic method of preparing a consolidated statement of financial position 4. The mechanics of consolidation 5. Goodwill 6. How to include fair value in consolidation workings ………………………………………………. I. What is a group? A group exists where on entity, the parent,
Continue reading IAS 7 STATEMENT OF CASH FLOWS LEARNING OBJECTIVE I. OPERATING ACTIVITY UDNER DIRECT METHOD II. INDIRECT METHOD III. INVESTING ACTIVITY IV. FINANCING ACTIVITY ………………………………………………… I. OPERATING ACTIVITY UDNER DIRECT METHOD Operating activities are the principal revenue-producing activities of the business, and this is further adjusted to deduct interest paid and tax paid. Investing activities are cash spent on on-current assets,
Continue reading IAS 38 Intangible Assets LEARNING OBJECTIVE 1.DEFINITION 2.MEASUREMENT AFTER INITIAL RECOGNITION 3.GOODWILL, R&D …………………………………………… 1. DEFINITION An intangible asset is an identifiable non-monetary asset without physical substance. Intangible assets include items such as: -Licences -Intellectual property, e.g. patents and copyrights -Brand names -Trademarks -Goodwill For an asset to be identifiable, it must fall into one of two categories: 1.It is
Continue reading CAPITAL STRUCTURE AND FINANCE COSTS LEARNING OBJECTIVES I.THE CAPITAL STRUCTURE OF A LIMITED LIABILITY COMPANY II.ORDINARY SHARE CAPITAL III.RIGHTS ISSUES IV.BONUS ISSUES ……………………………………………………… I. THE CAPITAL STRUCTURE OF A LIMITED LIABILITY COMPANY Finance is provided by the capital invested in the business. There are a number of ways that a business can attract financial capital but each has its own
Continue reading IAS 37 – PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS LEARNING OBJECTIVES I.DEFINITIONS II.PROVISION RECOGNITION III.THRESHOLD of IAS 37 IV. EXAMPLE FOR IAS 37 ………………………………………………………… I. DEFINITIONS A provision is a liability where the timing or the amount is uncertain. A contingent liability is a liability that may result, but depends (or is contingent) on the outcome of uncertain events. For
Continue reading IAS 16 PROPERTY, PLANT AND EQUIPMENT LEARNING OBJECTIVES 1.Definition 2.Recognition 3.Initial Measurement 4.Subsequent Expenditure 5.Subsequent Measurement 6.Depreciation …………………………………………………………….. Definition: Property, plant and equipment are tangible assets held by an entity for more than one accounting period for use in the production or supply of goods or services, for rental to others, or for administrative purchases. Recognition: Cost of asset can
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