(Lecture vid 1) - overview of accounting
BASIC ACCOUNTING CONCEPTS
1. double-entry system
2. going concern
3. separate entity
4. stable monetary unit
5. time period
6. materiality concept
7. cost-benefit
8. accrual basis of accounting
9. historical cost concept
10. concept of articulation
11. full disclosure principle
12.consistency concept
13. matching
14. residual equity theory
15. fund theory
16. realization
17. prudence
COMMON BRANCHES OF ACCOUNTING
1. Financial accounting
2. Management accounting
3. cost accounting
4. auditing
5. tax accounting
6. government accounting
4 SECTORS IN THE PRACTICE OF ACCOUNTING
1. Practice of public accountancy
2. practice in commerce and industry
3. practice in education/academe
4. practice in government
ACCOUNTING STANDARDS IN THE PHILIPPINES
1. PFRS
2. PAS
3. Interpretations
(Lecture vid 2)- conceptual framework for financial reporting
PRIMARY USERS
1. existing and potential investors
2. lenders and other creditors
QUALITATIVE CHARACTERISTICS
1. Fundamental qualitative characteristics
2. enhancing qualitative characteristics
FUNDAMENTAL QUALITATIVE CHARACTERISTICS
1. relevance
2. faithful representation
RELEVANT INFORMATION
1. predictive value
2. confirmatory value
FAITHFUL REPRESENTATION
1. Completeness
2. neutrality
3. free from error
ENHANCING QUALITATIVE CHARACTERISTICS
1.Comparability
2. verifiability
3. timeliness
4. understandability
ELEMENTS OF FINANCIAL STATEMENTS
1. assets
2. liability
3. equity
4. income
5. expenses
ASSET
1. right
2. potential to produce economic benefits
3. control
LIABILITY
1. obligation
2. transfer of an economic resource
3. present obligation as a result of past events
CONTRACTS
1. executory contract
2. executed contract
RECOGNITION
1. meets the definition A,L,Eq,I,Ex
2. provide useful information
DERECOGNITION
1. removal of A or L
2. ceases to meet definition of A or L
MEASUREMENT BASIS
1. historical cost
2. current value
CURRENT VALUE
1. fair value
2. value in use and fulfillment value
3. current cost
ENTRY VALUES
1. current cost
2. historical cost
EXIT VALUES
1. fair value in use and fulfillment value
CONCEPTS OF CAPITAL AND CAPITAL MAINTENANCE
1. financial concept of capital
2. physical concept of capital
(LAecture vid 3) - PAS 1, 2, 7
PAS 1 presentation of financial statements
FINANCIAL STATEMENTS
1. general purpose financial statements
2. special purpose financial statements
COMPLETE SET OF FINANCIAL STATEMENTS
1. Statement of Financial position
2. statement of profit or loss and other comprehensive income
3. statements of changes in equity
4. statements of cashflows
5. notes
6. additional statement of financial position
GENERAL FEATURES
1. fair presentration and compliance with PFRSs
2. going concern
3. accrual basis of accounting
4. materiality and aggregation
5. offsetting
6. frequency of reporting
7. comparative information
8. consistency of presentation
BALANCE SHEET / STATEMENT OF FINANCIAL POSITION
1. classified
2. unclassified (based on liquidity)
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
1. single statement of sp/l ang oci (combination)
2. two statements (a) sp/l (b) oci (separate)
TOTAL COMPREHENSIVE INCOME
1. P/L
2. OCI
PRESENTATION OF EXPENSES
1. nature of expense method
2. function of expense method (more familiar)
PAS 2 Inventories
INVENTORIES ARE ASSETS
1. Finished goods
2. work in process
3. raw materials and manufacturing supplies
MEASUREMENT OF INVENTORIES (if what is lower, you choose it)
1. Lower of cost
2. net realizable value
COST OF INVENTORIES
1. cost of purchase
2. cost of conversion
3. other cost
COSTS THAT ARE EXPENSED WHEN INCURRED
1. abnormal amounts
2. selling costs
3. administrative overhead
4. storage costs
COST FORMULAS
1. specific identification
2. FIFO (first in first out)
3. weighted average cost
CHANGES OF PRICE IN INVENTORIES
1. write-downs
2. reversal of write-downs
PAS 7 statement of cash flows
ACTIVITIES
1. operating activities (current assest & liabilities)
2. investing activities (noncurrent assets)
3. financing activities (equity & non current liabilities)
REPORTING CASH FLOWS FROM OPERATING ACTIVITIES
1. direct method
2. indirect method
(Lecture vid 4) - PAS 8, 10, 12, 16
PAS 8 accounting policies, changes in accounting estimates and errors
HIERARCHY OF REPORTING STANDARDS
1. PFRS (standard)
2. Judgement
3. conceptual framework
4. pronouncement issued by other standard-setting bodies
SCOPE OF PAS 8
1. changes in accounting policy
2. changes in accounting estimate
3. correction of prior period error
CHANGES IN ACCOUNTING POLICY
1. transitional provision
2. retrospective application
3. if impracticable, prospective application
CHANGES IN ACCOUNTING ESTIMATE
1. prospective application
ERRORS
1. retrospective restatement
2. if impracticable, prospective application
AN ENTITY SHALL CHANGE ACCOUNTING POLICY IF:
1. required by PFRS
2. results to more relevant and reliable information
PAS 10 events after the reporting period
TWO TYPES OF EVENTS AFTER THE REPORTING PERIOD
1. adjusting events
2. non-adjusting events
PAS 12 income taxes
INCOME TAXES
1. accounting profit or loss
2. taxable profit (loss)
DIFFERENCES
1. permanent differences
2. temporary differences
TEMPORARY DIFFERENCES
1. taxable
2. deductible
PAS 16 PPE property, plant and equipment
CHARACTERISTICS OF PPE
1. tangible assets
2. used in normal operations
3. long-term in nature
ACQUISITION THROUGH EXCHANGE
1. fv of asset Given ip
2. fv of asset Received
3. carrying amt of asset Given up
SUBSEQUENT MEASUREMENT
1. cost model
2. revaluation model
COST MODEL LESS
1. Depreciation
2. impairment
(Lecture vid 5) PAS 19,20,21,23,24,26
PAS 19 employee benefits
4 CATEGORIES OF EMPLOYEE BENEFITS
1. short-term employee benefits
2. post-employment benefits
3. other long-term employee benefits
4. termination benefits
SHORT TERM COMPENSATED ABSENCES
1. accumulating
2. non-accumulating
ACCUMULATING COMPENSATED ABSENCES
1. vesting
2. non-vesting
POST-EMPLOYMENT BENEFITS
1. defined contribution plan
2. defined benefit plan
ACTUARIAL ASSUMPTIONS
1. Demographic assumption
2. financial assumption
PAS 20 accounting for government grants and disclosure of government assistance
RECOGNITION
1. attached conditions will be complied
2. grants will be received
CLASSIFIFCATIONS OF GOVERNMENT GRANTS ACCORDING TO ATTACHED CONDITION
1. grants related to assets
2. grants related to income
INITIAL MEASUREMENT
1. monetary grants
2. non-monetary grants
PRESENTATION OF GOVERNMENT GRANTS RELATED TO ASSETS/INCOME
1. gross presentation
2. net presentation
PAS 21 the effects of changes in foreign exchange rates
TWO WAYS OF CONDUCTING FOREIGN ACTIVITIES
1. foreign currency transactions
2. foreign operations
FOREIGN CURRENCY TRANSACTIONS
1. initial recognition
2. subsequent recognition
PAS 23 borrowing cost
BORROWING COSTS
1. interest
2. exchange differnces
DETERMINING BORROWING COST ELIGIBLE FOR CAPITALIZATION
1. specific borrowing
2. general borrowing
PAS 24 related party disclosures
PARTIES
1. related parties
2. unrelated parties
PAS 26 accounting and reporting by retirement benefit plans
FS OF DEFINED CONTRIBUTION PLAN
1. statement of net assets
2. statement of changes in net assets
3. accompanying notes to FS
(Lecture vid 6) - PAS 27, 28, 29, 32
PAS 27 separate financial statements
PAS 28 investment in associate and joint ventures
SHARES
1. ordinary shares (voting power)
2. preferences shares
