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Cfas 11 15

This document summarizes key aspects of several accounting standards related to policies, estimates, errors, events after reporting period, related parties, inventories, and property, plant and equipment. It discusses accounting policies and changes, accounting estimates and changes, prior period errors, and events after the reporting period. It also outlines disclosure requirements for related parties and key details about standards for inventories and property, plant and equipment.

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Jeck Gulbin
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177 views3 pages

Cfas 11 15

This document summarizes key aspects of several accounting standards related to policies, estimates, errors, events after reporting period, related parties, inventories, and property, plant and equipment. It discusses accounting policies and changes, accounting estimates and changes, prior period errors, and events after the reporting period. It also outlines disclosure requirements for related parties and key details about standards for inventories and property, plant and equipment.

Uploaded by

Jeck Gulbin
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Chapter 11

Accounting policies, estimate and errors


PAS 8

Accounting policies - the specific principles, bases, conventions, rules and practices applied in
the entity when preparing and presenting financial statements. It must be applied consequently
for similar transactions and events.
Change in accounting policy - arises when an entity adopts a generally accepted accounting
principle (GAAP) which is different from the previously used.
Shall be made only when:
a. Required by the accounting standards
b. The change will result in more relevant and faithfully represented information.
How to report a change in accounting policy - a change required by the standards shall be
applied in accordance with the transitional provisions. It may be applied retrospectively or
retroactively.
Retrospectively application - any resulting adjustment shall be reported as adjustment in the
opening balance of retained earnings.
Accounting estimate - normal adjustment of an asset or liability which is the natural result of the
use of an estimate. It may be required for doubtful accounts, inventory obsolescence, useful life
and residual value of an asset, and warranty cost.
How to report change in accounting estimate - shall be recognized prospectively and currently
by including in income or loss of:
a. The period of change if the change affects only the period.
b. The period of change and future period if the change affects both
Prospective recognition - the change is applied from the date of change in estimate.
Prior period errors - omissions and misstatements in the financial statements for one or more
periods arising from a failure to use reliable information. The errors may occur as a result of
mathematical mistakes.
How to treat prior error periods - shall be corrected retrospectively by adjusting the opening
balances of retained earnings and affected assets and liabilities.
____________________________________________________________________________
Chapter 12
Events after reporting period
PAS 10

Events after reporting period - events that occur at the end of reporting period and the date
when the financial statements are authorized for issue. Such events require either adjustment or
disclosure.
Types of event after reporting period:
● Adjusting events - those that provide evidence of conditions that exist at the end of the
reporting period.
● Non adjusting events - those that are indicative of conditions that arise after the end of
the reporting period.
Financial statement authorize for issue - when the board of directors review the financial
statements and authorize them.
____________________________________________________________________________
Chapter 13
Related party disclosures
PAS 24
Related party - it is considered to be related if the party has:
a. Ability to control the other party
b. Ability to exercise significant influence over the other party
c. Joint control over an entity
Examples of related parties
1. Affiliates - parents, subsidiaries, and fellow subsidiaries
2. Associates - entities over party that exercise significant influence
3. Ventures - related to joint venture
Other related parties
1. Key management personnel - persons with managerial positions
2. Close family members of key management personnel
3. Individual or shareholders
4. Post employment benefit plan - for employee’s benefit
Related party transaction - transfer of resources between related parties
Related party disclosure - PAS 24 requires disclosure or parties regardless of transaction
between them.
Disclosure of related party transactions - PAS 24 requires that if related parties have a
transaction the entity shall disclose related parties nature as well as the information about the
transaction.
Key management personnel compensation - this shall disclose for each of the following:
1. Employee benefits
2. Post employment benefits
3. Termination benefits
4. Share based payment transactions
Related party disclosure not required - intragroup related party transactions are eliminated.
Unrelated parties
➔ Two entity simply because they have a director
➔ Providers of finance, banks, etc.
➔ Customer and suppliers
➔ Fellow venturers
____________________________________________________________________________
Chapter 14
Inventories
PAS 2

Click here.
____________________________________________________________________________
Chapter 15
Property, plant, and equipment
PAS 16
Click here.

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