程序代写案例-ACCT 90012

ACCT 90012
Corporate Reporting
1
Lecture 12a
Course Review
(Weeks 1 – 6)
Fair Value Measurement
PPE, Intangibles, Asset Impair
ment
Leases
Accounting for Income Tax
Revenue Recognition
Financial Instruments
Lecture 1:
AASB 13 FAIR VALUE MEASUREMENT
AASB 13 Fair Value Measurement provides a framework for measuring fair value and
requires disclosures about fair value measurement.
The Standard defines fair value on the basis of an 'exit price' notion and uses a 'fair
value hierarchy'.
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Measurement follows a 4 step approach (for Assets)
1. Determine the asset that is the subject of measurement
Considers the characteristics that market participants would use when pricing an
asset
2. Determine the valuation premise that is appropriate
Consider the intended use by the market participant - highest and best use of the
asset (HBU) and these uses must be physically possible, legally permissible and
financially feasible. 2 valuation premises for HBU - In combination valuation
premise or Stand-alone valuation premise.
3. Determine the principal or most advantageous market
4. Determine the appropriate valuation technique(s).
3 possible valuation techniques: Market approach, Cost approach , Income approach
AASB 13 Fair Value Measurement
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Lecture 2: AASB116 PPE & AASB 136 Impairment of assets
At recognition = Cost +
directly attributable
costs
After recognition
Cost model FV model
Check for impair’t
RA< CA
Dr: IL
Cr: AD & IL
Revaluation increase Revaluation decrease
Dr: AD
Cr: NCA
Write back dep
Dr: NCA
Cr: Gain on reval (OCI)
Dr: Gain on reval (OCI)
Cr: ARS
Rev↓foll prior Rev ↑
Dr: AD
Cr: NCA
Write back dep
Dr: LoR (P&L)
: LoR (OCI)
Cr: NCA
Reval. Decrease
Dr: ARS
Cr: LoR of NCA
Dr: AD
Cr: NCA
Write back dep
Dr: LoR
Cr: NCA
Rev ↑reversing prior Rev

Dr: AD
Cr: NCA
Write back dep
Dr: NCA
Cr: Gain on Reval (P&L)
Cr : Gain on Reval. (OCI)
Reval. Increase
Dr: Gain on Reval (OCI)
Cr: ARS
IL of individual
asset CA> RA
Treated as a reval dec
Note: CA cannot be
reduced below the
HIGHEST of (a) FV – costs
to disposal (b) VIU and
(c ) $0
Reversal of IL restricted
(increased CA shall not
exceed the CA if no IL
had been det.)
IL of CGU
Recog. IL
1. Goodwill
2. Pro-rata on CA of each
asset
CA cannot be reduced below
the HIGHEST of (a) FV – costs to
disposal (b) VIU and
(c ) $0
Reversal of IL of CGU
- Reversal restricted
IL of goodwill cannot be
reversed
Pro-rata allocation but CA of
any asset cannot be increased
above:
Its RA; and the CA that would
have been det. had no IL been
recog
Use Lower of FV & RA: This tests for revaluation
& impairment simultaneously
Dr: AD
Cr: NCA
Write back dep
Dr: ARS
Dr: LoR (P&L)
Cr: NCA
Reval. Decrease
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AASB 138 Intangible Assets
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Recognition of intangible assets
a) It is probable that the expected future economic benefits that are
attributable to the asset will flow to the entity; and
b) The cost of the asset can be measured reliably
• Acquisition of intangible assets vs. internally generated
• Research & Development costs
Lecture 3: AASB 16 Leases
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• Identify a lease contract
• From lessee’s perspective:
 Initial recognition and measurement of lease liability and R-O-U asset
 Subsequent measurements during the lease period
A lease is a contract, or part of a contract, that conveys the right to use an asset (the
underlying asset) for a period of time in exchange for consideration
• The right to use the identified asset
• Implicitly or explicitly specified
• Supplier has no substantive substitution right
• Control the use of the identified asset
• Obtain substantially all of the economic benefits from using the asset
• Right to direct the use of the asset (when, how, etc.)
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Lecture 3: AASB 16 Leases
Lease payment schedule
No. Date Payment Interest Principal Balance
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• Initial Lease Liability = PV of future lease payments
• If lessee intends to return the asset:
FV of leased asset at the end of the lease term < Guaranteed residual value, add the
difference between the two into initial lease liability
• If lessee intends to purchase the asset: include bargain purchase option
• Lease payment schedule
Lecture 3: AASB 16 Leases
• Initial R-O-U asset = Initial lease liability + initial lease payment + directly attributable costs
• R-O-U asset needs to be subsequently depreciated
Lecture 3: AASB 16 Leases
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Date Item Dr Cr
On inception Right-of-Use Asset xx
Lease Liability xx
Depreciation Depreciation
if intend to purchase (Cost – RV)/Useful life
If no intention to purchase (Cost)/Lease term
Accumulated Depreciation
Lease payment Lease Liability
Lease Interest
Bank
Journal entries to account for leases from inception to date the right of use asset
is returned or option to purchase is exercised
Lecture 4: AASB 112
Accounting for Income Taxes
Movement in the deferred tax
assets and liabilities for the
period recognised in profit or
loss.
Amount of income tax
payable for the period
(determined from tax return)
recognised in profit or loss.
Total tax expense
(income)
Current tax
expense (income)
Deferred tax
expense (income)
+=
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Tax effect accounting: Tax consequences of transactions that occur during a period
should be ‘recognised as income or an expense in the net profit or loss for the period’
irrespective of when those tax effects will occur.
A transaction may have two tax ‘effects’:
1.Tax payable on the current profit earned for the year may be reduced or increased
because the transaction is not taxable or deductible in the current year (Current tax
worksheet)
2.Future tax payable may be increased or reduced when that transaction becomes
taxable or deductible (Deferred tax worksheet).
This can cause timing differences between tax expense and tax payable
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Lecture 4: AASB 112
Accounting for Income Taxes
AASB 112 Income Taxes
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Current tax worksheet
• Reconcile accounting profit with taxable profit (including permanent differences)
Deferred tax worksheet
• Identify temporary differences (deductible & taxable)
• Future taxable amounts, future deductible amounts
Accounting losses and exempt income treatment
Journal entries
• Current tax paid & payable
• Deferred tax adjustments incl DTL arising from revaluations
Current Tax Worksheet
Accounting profit
Rent received
Interest received
Wages & salaries expense
Annual leave expense
Insurance expense
Doubtful debts expense
Acc depreciation – equipment
Acc depreciation - buildings
Non deductible - entertainment expenses
Non deductible – goodwill impairment
Rent revenue
Interest revenue
Wages & salaries paid
Annual leave paid
Insurance paid
Bad debts written off
Tax depreciation – equipment
Tax depreciation – buildings
Taxable profit
Permanent differences
Add: Assessable income (cash received)
Add: Accounting expense
Less: Accounting revenue
Less: Deductible amount (expenses paid)
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Deferred tax
Assets
Tax base = CA – FTA + FDA
Liabilities
Compare FTA with FDA
FTA < FDA = DTA (deductible TD)
FTA > FDA = DTL (taxable TD)
Tax base = CA + FTA - FDA
Compare FTA with FDA
FTA < FDA = DTA (deductible TD)
FTA > FDA = DTL (taxable TD)
* Check if DA has been claimed. If already claimed, then FDA $0, if not claimed, then the amount that can be claimed in the future.
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Deferred Tax Worksheet (Focus on Balance Sheet)
Item CA FTA FDA TB DTD (DTA) TTD (DTL)
FTA< FDA FTA> FDA
ASSETS
Accounts receivable
Interest receivable
Prepaid insurance
Equipment (CA)
Land
Buildings (CA)
LIABILITIES
Accounts payable
Accrued wages/Provisions
Unearned/Prepaid rent rev
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Lecture 5: AASB 15 Revenue from contract with customers
• When is revenue recognised? 5 step process for recognition
of revenue:
• identify the contract, performance obligations, determine
transaction price, allocate transaction price, recognise
revenue when performance obligations satisfied
• Principal vs. Agent
• Allocation of consideration when services are bundled or
multiple performance obligations present or loyalty points
awarded and redeemed
• Journal entries
· 17 ·
Lecture 6: Financial Instruments
• Define a financial instrument
• Understand how to classify financial instruments into financial assets,
financial liabilities, and equity instruments including compound
financial instruments
• Distinguish between financial liabilities and equity instruments
• Understand the measurement of financial assets and financial
liabilities
• Impairment of financial assets
• Journal entries
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Initial measurement of financial assets
• FV of financial assets + directly attributable transaction costs (not included
if financial asset measured at FVTPL)
Initial measurement of financial liabilities
• FV of financial liabilities - directly attributable transaction costs (not
included if financial liability measured at FVTPL)
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Lecture 6: Financial Instruments
Subsequent measurement: Financial Assets
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Subsequent measurement: Financial liabilities
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Issue a debt instrument – FL; Buy a debt instrument - FA
Amortised cost table
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Options is a derivative financial instrument
• Call and put options
– Buy a call option – FA (holder/buyer will only exercise under favourable conditions)
– Sell/Write a call option – FL (issuer contractually obliged to sell under unfavourable conditions)
– Buy a put option – FA (buyer/holder will only sell under favourable conditions)
– Sell/Write a put option – FL (issuer contractually obliged to buy under unfavourable conditions)
• Subsequent measurement of options at FVTPL
Year Amortised cost atbeginning Interest expense
Cash flows
(fixed amount) Amortised cost at end
Lecture 6: Financial Instruments
ACCT 90012
Corporate Reporting
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Lecture 12b
Course Review
(Weeks 7 – 11)
Business Combinations & Consolidations –
controlled entities
Consolidations – wholly owned entities
Consolidations – Intragroup transactions
Consolidations – Non-controlling interest
Equity accounting & Others
Lecture 7 AASB 3: Business Combinations
Identifying a business combination: Para 3:
An entity shall determine whether a transaction or other event is a business combination …
which requires that the assets acquired and liabilities assumed constitute a business.
Conditions for a BC
• the assets or net assets acquired must be a business
• Acquirer must obtain control of the business
AASB3/IFRS3 requires that the acquirer apply the acquisition method to account for the
business combination.
• Step 1: Identify the acquirer
• Step 2: Determine the acquisition date
• Step 3: Recognise and measure the FVINA
• Step 4: Recognise goodwill or gain on bargain purchase
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AASB3: Business combinations
Buy assets or net assets directly
Can be either amalgamations or absorptions
Amalgamations: 2 entities combine to form a new company.
Absorptions: when an entity buys another entity, the acquirer company becomes a larger entity and the
target company is liquidated or target company operates with a reduced level of assets.
On amalgamation or absorption, the net assets of the entities are combined.
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AASB10: Consolidated Financial Statements
An investor controls an investee when the investor is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those returns through its power over the
investee.
Relevant activities – determine the relevant activities to identify the driver of variable returns
Control can be passive, that is entity may not be active in decision making and yet we can determine that the
entity has control
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AASB10: Consolidated Financial Statements
An investor can have power with less than a majority of the voting rights of an investee, through contractual
arrangements with other vote holders, potential voting rights etc.
Factors to consider include
• size of the voting interest,
• dispersion of other shareholders,
• level of disorganisation of the remaining shareholders (‘de facto control’)
Potential voting rights are rights to obtain voting rights of an investee (e.g. convertible instruments).
Considered only if they are substantive –
• no barriers to exercise rights,
• whether practical mechanisms exist for collective exercise of rights, and
• whether the holders will benefit from the exercise of those rights
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• AASB 10: Consolidated Financial Statements: Parent / subsidiary / control
• Consolidation adjustments: Eliminations & adjustments
• BCVR adjustments & movements in BCVR
• Pre-acquisition elimination adjustments
• Measurement of NCI using the 3 step process
• Intragroup adjustments:
• Intragroup transactions (goods and services, loans and interest, non-
current assets, tax effects)
• Unrealised gains (inventory, NCA’s, current and prior periods)
• You will only be tested on Consolidation Journal Entries.
Lectures 8 – 10 AASB10: Consolidated Financial
Statements
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Consolidation worksheet journal entries
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Consolidation worksheet journal entries continued
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Investor/Associate relationship (significant influence)
• Significant influence is the power to participate in the financial and operating
policy decisions of the investee but is not control or joint control over those
policies
Equity method accounting
• Acquisition / fair value adjustments
• Share of profit / dividends / revaluations / unrecognised losses
• Adjustments for transactions 2
scenarios
• Investor as a parent entity (cost method to equity method on consolidation)
• Investor is not a parent entity
Impairment testing of Associate: Cease recognition if investor’s share of losses > CA of
Investment, unrecognised losses disclosed in note
Lecture 11: Equity Accounting
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Journal entries
10
Investor is NOT parent entity Investor IS A parent entity Investor IS A parent entity
Equity method Own books (Cost method) Consolidated Accounts
On date of acquisition On date of acquisition
Dr: Investment in Associate
Cr: Bank
(Amount paid as consideration)
Dr: Investment in Associate
Cr: Bank
(Amount paid as consideration)
In current period In current period
Dr: Bank/Dividend receivable
Cr: Investment in Associate
(Share of dividend)
Dr: Investment in Associate
Cr: Share of Associate’s profit
Cr: Opening RE (+ve post-acq profit)
(Share of post-acq. profit)
Dr: Investment in Associate
Cr: Gain on revaluation (OCI)
(Share of post- acq. revaluation)
Dr: Bank/Dividend receivable
Cr: Dividend revenue
(Share of dividend)
Dr: Investment in Associate
Dr: Dividend revenue
Dr: Opening RE (if –ve post-acq)
Cr: Gain on revaluation (OCI)
(post-acq)
Cr: Share of profits (current)
Cr: Op. RE (if +ve post-acq)
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30.6.x1 30.6.x2
Post-acquisition profit after tax bef. dividends & transfer to General Reserve xxx xxx
Additional dep on revalued non-current asset (after tax) (xxx) (xxx)
Unreal. profit after tax on sale of non-current asset *(xxx)
Realised profit through use after tax (recognised in proportion to depreciation of
non-current asset)
xxx xxx
Unreal. profit after tax in closing inv. (xxx)
Realised profit after tax in opening inv. xxx
Unreal. profit after tax in closing inv. (xxx)
xxx xxx
Investor’s share of adj. post-acq. profit before div.
xxx xxx
Investor’s share of Asset revaluation surplus – all post acquisition
Proforma: Determine adjusted profit of Associate
*Assuming that inter-entity sale occurred in 30.6.x1
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AASB 108 deals with
Change in accounting policy - requires retrospective application
Change in accounting estimates are applied prospectively from current period and future periods
Correction of errors - requires retrospective restatement
AASB 110 deals with events that occur after the reporting period.
For adjusting events, the transaction will need to be updated with the new information
For material non-adjusting events, disclosure is required
AASB 124 deals with related party disclosures
Subsidiary, associates etc are related parties
Disclosure is important as it might affect assessments of an entity’s operations by users
Lecture 11: Disclosure issues
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