ACC206 Study Guide PDF

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ACC206 Study Guide - Summary Financial Reporting...

Description

Course Development Team

Head of Programme

: Prof Ng Eng Juan

Deputy Head of Programme : Dr Ng Kai Teck Course Developer(s)

: Assoc Prof Koh Wei Chern

Technical Writer

: Chin Gui Pei, PO

Video Production

: Assoc Prof Koh Wei Chern, SBIZ

©2019 Singapore University of Social Sciences. All rights reserved.

No part of this material may be reproduced in any form or by any means without permission in writing from the Educational Technology & Production, Singapore University of Social Sciences. ISBN 978-981-4743-51-8 Educational Technology & Production Singapore University of Social Sciences 463 Clementi Road Singapore 599494

How to cite this Study Guide (APA): Koh, W. C. (2019). ACC206 Financial Reporting (Study Guide). Singapore: Singapore University of Social Sciences. Release V1.3

Table of Contents

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Table of Contents

Course Guide 1. Welcome.................................................................................................................. CG-2 2.Course Description and Aims............................................................................ CG-3 3.Learning Outcomes..............................................................................................  CG-6 4.Learning Material................................................................................................. CG-8 5.Assessment Overview.......................................................................................... CG-9 6.Course Schedule..................................................................................................CG-12 7. Learning Mode....................................................................................................  CG-13

Study Unit1:The Standard-Setting Process, the Conceptual Framework and Presentation of Financial Statements (Including Interim Period) Learning Outcomes................................................................................................. SU1-2 Overview................................................................................................................... SU1-3 Chapter1:Standard Setting................................................................................... SU1-4 Chapter2:The Conceptual Framework............................................................... SU1-7 Chapter3:Presentation of Financial Statements (Including Interim Period).....................................................................................................................  SU1-11 Quiz.......................................................................................................................... SU1-15 Summary.................................................................................................................  SU1-25 References............................................................................................................... SU1-26

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Table of Contents

Study Unit2:Revenue Recognition, Measurement and Disclosure, and Fair Value Measurement Learning Outcomes................................................................................................. SU2-2 Overview................................................................................................................... SU2-3 Chapter1:Revenue Recognition, Measurement and Disclosure..................... SU2-4 Chapter2:Fair Value Measurement..................................................................... SU2-9 Quiz.......................................................................................................................... SU2-11 Summary.................................................................................................................  SU2-21 References............................................................................................................... SU2-22

Study Unit3:Assets I - Inventory Cost Measurement, Property, Plant and Equipment, and Intangible Assets Learning Outcomes................................................................................................. SU3-2 Overview................................................................................................................... SU3-4 Chapter1:Inventory Cost Measurement.............................................................SU3-6 Chapter2:Property, Plant and Equipment..........................................................SU3-9 Chapter3:Intangible Assets................................................................................ SU3-13 Quiz.......................................................................................................................... SU3-17 Summary.................................................................................................................  SU3-27 References............................................................................................................... SU3-28

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Table of Contents

Study Unit4:Assets II - Impairment of Assets, Investment Property, Non-Current Assets Held for Sale and Discontinued Operations Learning Outcomes................................................................................................. SU4-2 Overview................................................................................................................... SU4-4 Chapter1:Impairment of Assets.......................................................................... SU4-5 Chapter2:Investment Property............................................................................ SU4-8 Chapter3:Non-current Assets Held for Sale and Discontinued Operations............................................................................................................... SU4-11 Quiz.......................................................................................................................... SU4-14 Summary.................................................................................................................  SU4-24 References............................................................................................................... SU4-25

Study Unit5:Long-Term Debt, Provisions, Contingent Liabilities and Contingent Assets Learning Outcomes................................................................................................. SU5-2 Overview................................................................................................................... SU5-3 Chapter1:Long-Term Debt.................................................................................... SU5-4 Chapter2:Provisions, Contingent Liabilities and Contingent Assets............. SU5-7 Quiz.......................................................................................................................... SU5-10 Summary.................................................................................................................  SU5-18 References............................................................................................................... SU5-19

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Table of Contents

Study Unit6:Accounting Policies, Changes in Accounting Estimates and Errors and Events After the Reporting Period Learning Outcomes................................................................................................. SU6-2 Overview................................................................................................................... SU6-3 Chapter1:Accounting Policies, Changes in Accounting Estimates and Errors.........................................................................................................................  SU6-4 Chapter2:Events after the Reporting Period..................................................... SU6-6 Quiz.......................................................................................................................... SU6-10 Summary.................................................................................................................  SU6-20 References............................................................................................................... SU6-21

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List of Lesson Recordings

List of Lesson Recordings Standard Setting............................................................................................................  SU1-4 FRS Conceptual Framework....................................................................................... SU1-9 FRS 1 Presentation of Financial Statements............................................................SU1-12 FRS 34 Interim Financial Reporting.........................................................................SU1-13 Revenue Recognition under FRS 115.........................................................................SU2-6 FRS 113............................................................................................................................ SU2-9 Inventory Cost Measurement under FRS 2.............................................................. SU3-7 FRS 16 PPE................................................................................................................... SU3-10 FRS 38 Intangible Assets........................................................................................... SU3-15 FRS 36 Impairment of Assets......................................................................................SU4-6 FRS 40 Investment Property....................................................................................... SU4-9 FRS 105 Non-Current Assets Held for Sale and Discontinued Operations........ SU4-12 Financial Instruments (Long-term Debt).................................................................. SU5-5 FRS 37 Provisions, Contingent Liabilities and Contingent Assets........................ SU5-8 FRS 8...............................................................................................................................  SU6-4 FRS 10.............................................................................................................................  SU6-7

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List of Lesson Recordings

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Course Guide

Financial Reporting

ACC206

Course Guide

1.Welcome

Presenter: Assoc Prof Koh Wei Chern This streaming video requires Internet connection. Access it via Wi-Fi to avoid incurring data charges on your personal mobile plan.

Click here to watch the video. i

Welcome to the course ACC206 Financial Reporting, a 5 credit unit (CU) course. This Study Guide will be your personal learning resource to take you through the course learning journey. The guide is divided into two main sections – the Course Guide and Study Units. The Course Guide describes the structure for the entire course and provides you with an overview of the Study Units. It serves as a roadmap of the different learning components within the course. This Course Guide contains important information regarding the course learning outcomes, learning materials and resources, assessment breakdown and additional course information.

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https://d2jifwt31jjehd.cloudfront.net/ACC206/IntroVideo/ACC206_Intro_Video.mp4

CG-2

ACC206

Course Guide

2.Course Description and Aims ACC206 Financial Reporting expands the skills, knowledge and understanding that students have gained in ACC201e Financial Accounting. Note that ACC201e is a prerequisite for ACC206 and students are assumed to have background knowledge in the accounting standards previously covered in ACC201e and these are potentially examinable. The aim of ACC206 is to provide a firm professional and conceptual grounding in financial reporting. The standard setting processes and requirements of the International Financial Reporting Standards (IFRSs) and Singapore Financial Reporting Standards (FRSs)1 will be introduced. Thereafter, the course goes into a few standards proper. First, we examine the revenue accounting standard and the measurement of revenue at transaction price. In the same study unit, we also examine the fair value accounting standard. Thereafter, we move to the assets-related accounting standards, namely: (i) the inventory accounting standard, (ii) property, plant and equipment (“PPE”) accounting standard, and, (iii) intangible assets accounting standard. For (ii) and (iii), we examine the possibility of impairment of such assets and how to account for it. Then, we wrap up the assets-related accounting standards by examining the accounting standard relating to investment property and non-current assets held for sale and discontinued operations. Then, we move to standards surrounding financial liabilities and non-financial liabilities. Finally, the course is rounded up by examining standards surrounding accounting policy changes, changes in accounting estimates and accounting errors as well as events after the reporting period.

Course Structure This course is a 5-credit unit course presented over 6 weeks.

1

The Accounting Standards Council refers to them as SFRSs and distinguishes this from the SFRS-(I)s. The details of this distinguishment are provided in subsequent chapters of the study guide.

CG-3

ACC206

Course Guide

There are six Study Units in this course. The following provides an overview of each Study Unit.

Study Unit 1 – The Standard Setting Process, the Conceptual Framework and Presentation of Financial Statements (including interim period) This unit helps you understand the standard-setting process, both at the international level and within Singapore, and how both processes are inter-related. We then explore the politics behind standard setting and some of the recent trends and challenges facing the standard setters. In order to understand standard-setting, it is important to understand the conceptual framework, which sets out concepts that guide the standard setters in the standard-setting process. Thereafter, we extend the knowledge gained in earlier courses relating to preparation and presentation of general purpose financial statements.

Study Unit 2 – Revenue Recognition, Measurement and Disclosure, and Fair value measurement This unit will first focus on the recognition, measurement and disclosure of revenue in various revenue-related transactions. Next, as the concept of fair value will permeate through several study units in this and in future courses, we also study the concepts of fair value as elaborated in FRS 113 Fair Value Measurement.

Study Unit 3 – Assets I – Inventory Cost Measurement, Property, Plant and Equipment, and Intangible Assets The aim of this study unit is to study various accounting standards related to assets. We first study the following: (i) What determines the cost of inventories?; (ii) How do we determine the cost of ending inventory based on the lower of cost and net realisable value rule?; and (iii) How do we estimate the cost of ending inventory when a physical count of the inventory is not done, for example, during interim reporting? Next, we extend our knowledge on PPE and then, on intangibles.

CG-4

ACC206

Course Guide

Study Unit 4 – Assets II – Impairment of Assets, Investment Property, Noncurrent assets held for sale and discontinued operations This unit will cover the accounting for impairment of PPE and other kinds of assets and the reversal of such impairment under the accounting standard. Then, we move on to study two other asset classes - investment property and non-current assets classified as held for sale and discontinued operations.

Study Unit 5 – Long-Term Debt, Provisions, Contingent Liabilities and Contingent Assets This unit describes the accounting for long-term debt that are issued above and below par under the applicable FRS. Then, we move on to study FRS 37 Provisions, Contingent Liabilities and Contingent Assets and apply the recognition and measurement standards in FRS 37 to future operating losses, onerous contracts and restructuring costs.

Study Unit 6 – Accounting Policies, Changes in Accounting Estimates and Errors and Events after the Reporting Period This unit covers FRS 8 Accounting Policies, Changes in Accounting Estimates and Errors. While we prepare financial statements for the reporting period or as at the financial yearend date, there could be events occurring after the reporting period but prior to the date when the financial statements were finally authorised for issue. Hence, we also study FRS 10 Events after the Reporting Period which prescribe the accounting treatment for the above.

CG-5

ACC206

Course Guide

3.Learning Outcomes Knowledge & Understanding (Theory Component) By the end of this course, you should be able to: 1.

Examine the history and structure of financial reporting and the development of the International Accounting Standards Board/Accounting Standards Council.

2.

Describe the purpose and objective of financial reporting and the qualitative characteristics of the financial statements.

3.

Apply the presentation requirements of the financial accounting standards (including FRS 1 and FRS 34).

4.

Determine the fair value of various elements on the financial statements.

5.

Explain the recognition, measurement and disclosures of different types of revenue items.

6.

Illustrate the recognition, measurement and disclosures of various revenue items and inventories.

7.

Demonstrate the recognition, measurement and disclosures of property, plant and equipment.

8.

Demonstrate the recognition, measurement and disclosures of intangibles.

9.

Assess the impairment losses and reversal of impairment losses for assets.

10.

Show the recognition, measurement and disclosures of investment property.

11.

Illustrate the recognition, measurement and disclosures of non-current assets held for sale and discontinued operations.

12.

Illustrate the recognition, measurement and disclosures of long-term financing.

13.

Examine the provisions and contingencies and prepare appropriate accounting entries and disclosures with respect to provisions and contingencies.

14.

Discuss the nature of and accounting for changes in accounting policies, changes in accounting estimates and accounting errors.

CG-6

ACC206

Course Guide

15.

Illustrate the accounting treatment for adjusting events and non-adjusting events after the reporting period.

Key Skills (Practical Component) By the end of this course, you should be able to: 1.

Develop the essential knowledge and interpersonal skills to work effectively in a team.

2.

Demonstrate written proficiency.

CG-7

ACC206

Course Guide

4.Learning Material The following is a list of the required learning materials to complete this course.

Required Textbook(s) Lam, N., and Lau, P. (2017). Intermediate Financial Reporting: An IFRS Perspective (3rd ed.). McGraw Hill.

Other recommended study material (Optional) The following learning materials may be required to complete the learning activities:

Website(s): 1.

http://www.asc.gov.sg 2

2.

http://www.ifrs.org/Pages/default.aspx (Students are encouraged to regis...