Additional Information
Book Details
Abstract
This market leading text provides comprehensive coverage of financial accounting and reporting to enable you to discuss and apply IFRS compliant financial statements. With the balance of theoretical principles and practical applications, this book will aid you in the advancement of your studies and professional career.
Table of Contents
| Section Title | Page | Action | Price |
|---|---|---|---|
| Cover\r | Cover | ||
| Brief Contents\r | v | ||
| Contents\r | vii | ||
| Preface | xxi | ||
| Publisher’s acknowledgements | xxvii | ||
| Part 1 Introduction to accounting on a cash flow and accrual accounting basis | 1 | ||
| 1 Accounting and reporting on a cash flow basis | 3 | ||
| 1.1 Introduction | 3 | ||
| 1.2 Shareholders | 3 | ||
| 1.3 What skills does an accountant require in respect of external reports? | 4 | ||
| 1.4 Managers | 4 | ||
| 1.5 What skills does an accountant require in respect of internal reports? | 5 | ||
| 1.6 Procedural steps when reporting to internal users | 5 | ||
| 1.7 Agency costs | 8 | ||
| 1.8 Illustration of periodic financial statements prepared under the cash flow concept to disclose realised operating cash flows | 8 | ||
| 1.9 Illustration of preparation of statement of financial position | 13 | ||
| 1.10 Treatment of non-current assets in the cash flow model | 14 | ||
| 1.11 What are the characteristics of these data that make them reliable? | 15 | ||
| 1.12 Reports to external users | 16 | ||
| Summary | 17 | ||
| Review questions | 18 | ||
| Exercises | 18 | ||
| Notes | 20 | ||
| 2 Accounting and reporting on an accrual accounting basis | 21 | ||
| 2.1 Introduction | 21 | ||
| 2.2 Historical cost convention | 22 | ||
| 2.3 Accrual basis of accounting | 22 | ||
| 2.4 Mechanics of accrual accounting – adjusting cash receipts and payments | 23 | ||
| 2.5 Reformatting the statement of financial position | 24 | ||
| 2.6 Accounting for the sacrifice of non-current assets | 24 | ||
| 2.7 Published statement of cash flows | 27 | ||
| Summary | 28 | ||
| Review questions | 28 | ||
| Exercises | 29 | ||
| Notes | 30 | ||
| Part 2 Preparation of internal and published financial statements | 31 | ||
| 3 Preparation of financial statements of comprehensive income, changes in equity and financial position | 33 | ||
| 3.1 Introduction | 33 | ||
| 3.2 Preparing an internal statement of income from a trial balance | 33 | ||
| 3.3 Reorganising the income and expenses into one of the formats required for publication | 36 | ||
| 3.4 Format 1: classification of operating expenses and other income by function | 37 | ||
| 3.5 Format 2: classification of operating expenses according to their nature | 40 | ||
| 3.6 Other comprehensive income | 40 | ||
| 3.7 How non-recurring or exceptional items can affect operating income | 41 | ||
| 3.8 How decision-useful is the statement of comprehensive income? | 43 | ||
| 3.9 Statement of changes in equity | 43 | ||
| 3.10 The statement of financial position | 44 | ||
| 3.11 The explanatory notes that are part of the financial statements | 45 | ||
| 3.12 Has prescribing the formats meant that identical transactions are reported iden-tically? | 48 | ||
| 3.13 Fair presentation | 51 | ||
| 3.14 What does an investor need in addition to the primary financial statements to make decisions? | 52 | ||
| Summary | 56 | ||
| Review questions | 57 | ||
| Exercises | 58 | ||
| Notes | 68 | ||
| 4 Annual report: additional financial disclosures | 70 | ||
| 4.1 Introduction | 70 | ||
| 4.2 IAS 10 Events after the Reporting Period | 70 | ||
| 4.3 IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors | 73 | ||
| 4.4 What do segment reports provide? | 75 | ||
| 4.5 IFRS 8 Operating Segments | 75 | ||
| 4.6 Benefits and continuing concerns following the issue of IFRS 8 | 79 | ||
| 4.7 Discontinued operations – IFRS 5 Non-current Assets Held for Sale and Discon-tinued Operations | 82 | ||
| 4.8 Held for sale – IFRS 5 Non-current Assets Held for Sale and Discontinued Op-erations | 83 | ||
| 4.9 IAS 24 Related Party Disclosures | 85 | ||
| Summary | 90 | ||
| Review questions | 90 | ||
| Exercises | 91 | ||
| Notes | 101 | ||
| 5 Statements of cash flows | 102 | ||
| 5.1 Introduction | 102 | ||
| 5.2 Development of statements of cash flows | 102 | ||
| 5.3 Applying IAS 7 (revised) Statements of Cash Flows | 103 | ||
| 5.4 Step approach to preparation of a statement of cash flows – indirect method | 106 | ||
| 5.5 Additional notes required by IAS 7 | 109 | ||
| 5.6 Analysing statements of cash flows | 110 | ||
| 5.7 Approach to answering questions with time constraints | 116 | ||
| 5.8 Preparing a statement of cash flows when no statement of income is available | 118 | ||
| 5.9 Critique of cash flow accounting | 120 | ||
| Summary | 120 | ||
| Review questions | 121 | ||
| Exercises | 121 | ||
| Notes | 128 | ||
| Part 3 Regulatory framework – an attempt to achieve uniformity | 129 | ||
| 6 Financial reporting – evolution of global standards | 131 | ||
| 6.1 Introduction | 131 | ||
| 6.2 Why do we need financial reporting standards? | 131 | ||
| 6.3 Why do we need standards to be mandatory? | 132 | ||
| 6.4 Arguments in support of standards | 134 | ||
| 6.5 Arguments against standards | 135 | ||
| 6.6 Standard setting and enforcement by the Financial Reporting Council (FRC) in the UK | 135 | ||
| 6.7 The International Accounting Standards Board | 138 | ||
| 6.8 Standard setting and enforcement in the European Union (EU) | 139 | ||
| 6.9 Standard setting and enforcement in the US | 142 | ||
| 6.10 Advantages and disadvantages of global standards for publicly accountable entities | 144 | ||
| 6.11 How do reporting requirements differ for non-publicly accountable entities? | 145 | ||
| 6.12 IFRS for SMEs | 146 | ||
| 6.13 Why have there been differences in financial reporting? | 146 | ||
| 6.14 Move towards a conceptual framework | 150 | ||
| Summary | 151 | ||
| Review questions | 151 | ||
| Exercises | 152 | ||
| Notes | 153 | ||
| 7 Concepts – evolution of an international conceptual framework | 155 | ||
| 7.1 Introduction | 155 | ||
| 7.2 Different countries meant different financial statements | 155 | ||
| 7.3 Historical overview of the evolution of financial accounting theory | 156 | ||
| 7.4 Framework for the Preparation and Presentation of Financial Statements | 158 | ||
| 7.5 Conceptual Framework for Financial Reporting 2010 | 159 | ||
| 7.6 Chapter 4 content | 163 | ||
| 7.7 The Conceptual Framework for Financial Reporting – latest developments | 164 | ||
| 7.8 Current developments – concept of materiality | 167 | ||
| Summary | 169 | ||
| Review questions | 170 | ||
| Exercises | 170 | ||
| Notes | 172 | ||
| 8 Ethical behaviour and implications for accountants | 173 | ||
| 8.1 Introduction | 173 | ||
| 8.2 The meaning of ethical behaviour | 173 | ||
| 8.3 The accounting standard-setting process and ethics | 174 | ||
| 8.4 The IFAC Code of Ethics for Professional Accountants | 175 | ||
| 8.5 Implications of ethical values for the principles – versus rules-based approaches to accounting standards | 178 | ||
| 8.6 Ethics in the accountant’s work environment – a research report | 181 | ||
| 8.7 Implications of unethical behaviour for stakeholders using the financial reports | 183 | ||
| 8.8 The increasing role of whistle-blowing | 188 | ||
| 8.9 Legal requirement to report – national and international regulation | 190 | ||
| 8.10 Why should students learn ethics? | 191 | ||
| Summary | 192 | ||
| Review questions | 193 | ||
| Exercises | 195 | ||
| Notes | 197 | ||
| Part 4 Income and asset value measurement systems | 199 | ||
| 9 Income and asset value measurement: an economist’s approach | 201 | ||
| 9.1 Introduction | 201 | ||
| 9.2 Role and objective of income measurement | 201 | ||
| 9.3 Accountant’s view of income, capital and value | 204 | ||
| 9.4 Critical comment on the accountant’s measure | 207 | ||
| 9.5 Economist’s view of income, capital and value | 208 | ||
| 9.6 Critical comment on the economist’s measure | 214 | ||
| 9.7 Income, capital and changing price levels | 214 | ||
| Summary | 216 | ||
| Review questions | 216 | ||
| Exercises | 217 | ||
| Notes | 219 | ||
| Bibliography | 219 | ||
| 10 Accounting for price-level changes | 220 | ||
| 10.1 Introduction | 220 | ||
| 10.2 Review of the problems of historical cost accounting (HCA) | 220 | ||
| 10.3 Inflation accounting | 221 | ||
| 10.4 The concepts in principle | 221 | ||
| 10.5 The four models illustrated for a company with cash purchases and sales | 222 | ||
| 10.6 Critique of each model | 226 | ||
| 10.7 Operating capital maintenance – a comprehensive example | 229 | ||
| 10.8 Critique of CCA statements | 240 | ||
| 10.9 Measurement bases | 241 | ||
| 10.10 The IASB position where there is hyperinflation | 241 | ||
| 10.11 Future developments | 242 | ||
| Summary | 244 | ||
| Review questions | 245 | ||
| Exercises | 245 | ||
| Notes | 252 | ||
| Bibliography | 252 | ||
| 11 Revenue recognition | 253 | ||
| 11.1 Introduction | 253 | ||
| 11.2 IAS 18 Revenue | 254 | ||
| 11.3 The issues involved in developing a new standard | 255 | ||
| 11.4 The challenges under both IAS 18 and IFRS 15 | 256 | ||
| 11.5 IFRS 15 Revenue from Contracts with Customers | 257 | ||
| 11.6 Five-step process to identify the amount and timing of revenue | 258 | ||
| 11.7 Disclosures | 269 | ||
| Summary | 270 | ||
| Review questions | 270 | ||
| Exercises | 272 | ||
| Notes | 276 | ||
| Part 5 Statement of financial position – equity, liability and asset measurement and disclosure | 277 | ||
| 12 Share capital, distributable profits and reduction of capital | 279 | ||
| 12.1 Introduction | 279 | ||
| 12.2 Common themes | 279 | ||
| 12.3 Total owners’ equity: an overview | 280 | ||
| 12.4 Total shareholders’ funds: more detailed explanation | 281 | ||
| 12.5 Accounting entries on issue of shares | 283 | ||
| 12.6 Creditor protection: capital maintenance concept | 284 | ||
| 12.7 Creditor protection: why capital maintenance rules are necessary | 284 | ||
| 12.8 Creditor protection: how to quantify the amounts available to meet creditors’ claims | 285 | ||
| 12.9 Issued share capital: minimum share capital | 286 | ||
| 12.10 Distributable profits: general considerations | 286 | ||
| 12.11 Distributable profits: how to arrive at the amount using relevant accounts | 288 | ||
| 12.12 When may capital be reduced? | 288 | ||
| 12.13 Writing off part of capital which has already been lost and is not represented by assets | 288 | ||
| 12.14 Repayment of part of paid-in capital to shareholders or cancellation of unpaid share capital | 294 | ||
| 12.15 Purchase of own shares | 294 | ||
| Summary | 296 | ||
| Review questions | 296 | ||
| Exercises | 297 | ||
| Notes | 302 | ||
| 13 Liabilities | 303 | ||
| 13.1 Introduction | 303 | ||
| 13.2 Provisions – a decision tree approach to their impact on the statement of finan-cial position | 304 | ||
| 13.3 Treatment of provisions | 305 | ||
| 13.4 The general principles that IAS 37 applies to the recognition of a provision | 305 | ||
| 13.5 Management approach to measuring the amount of a provision | 306 | ||
| 13.6 Application of criteria illustrated | 308 | ||
| 13.7 Provisions for specific purposes | 308 | ||
| 13.8 Contingent liabilities | 311 | ||
| 13.9 Contingent assets | 311 | ||
| 13.10 ED IAS 37 Non-financial Liabilities | 312 | ||
| 13.11 ED/2010/1 Measurement of Liabilities in IAS 37 | 319 | ||
| Summary | 319 | ||
| Review questions | 320 | ||
| Exercises | 320 | ||
| Notes | 325 | ||
| 14 Financial instruments | 326 | ||
| 14.1 Introduction | 326 | ||
| 14.2 Financial instruments – the IASB’s problem child | 326 | ||
| 14.3 IAS 32 Financial Instruments: Disclosure and Presentation | 329 | ||
| 14.4 IFRS 9 Financial Instruments | 335 | ||
| 14.5 IFRS 7 Financial Instruments: Disclosure | 345 | ||
| Summary | 351 | ||
| Review questions | 351 | ||
| Exercises | 352 | ||
| Notes | 358 | ||
| 15 Employee benefits | 359 | ||
| 15.1 Introduction | 359 | ||
| 15.2 Greater employee interest in pensions | 359 | ||
| 15.3 Financial reporting implications | 360 | ||
| 15.4 Types of scheme | 360 | ||
| 15.5 Defined contribution pension schemes | 363 | ||
| 15.6 Defined benefit pension schemes | 363 | ||
| 15.7 IAS 19 (revised 2011) Employee Benefits | 364 | ||
| 15.8 The asset or liability for pension and other post-retirement costs | 364 | ||
| 15.9 Changes in the pension asset or liability position | 365 | ||
| 15.10 Comprehensive illustration | 368 | ||
| 15.11 Multi-employer plans | 369 | ||
| 15.12 Disclosures | 369 | ||
| 15.13 Other long-service benefits | 370 | ||
| 15.14 Short-term benefits | 370 | ||
| 15.15 Termination benefits | 371 | ||
| 15.16 IFRS 2 Share-based Payment | 372 | ||
| 15.17 Scope of IFRS 2 | 373 | ||
| 15.18 Recognition and measurement | 373 | ||
| 15.19 Equity-settled share-based payments | 373 | ||
| 15.20 Cash-settled share-based payments | 376 | ||
| 15.21 Transactions which may be settled in cash or shares | 377 | ||
| 15.22 IAS 26 Accounting and Reporting by Retirement Benefit Plans | 377 | ||
| Summary | 380 | ||
| Review questions | 380 | ||
| Exercises | 381 | ||
| Notes | 385 | ||
| 16 Taxation in company accounts | 386 | ||
| 16.1 Introduction | 386 | ||
| 16.2 Corporation tax | 386 | ||
| 16.3 Corporation tax systems – the theoretical background | 387 | ||
| 16.4 Corporation tax and dividends | 388 | ||
| 16.5 Corporation tax systems – avoidance and evasion | 389 | ||
| 16.6 IAS 12 – accounting for current taxation | 393 | ||
| 16.7 Deferred tax | 394 | ||
| 16.8 A critique of deferred taxation | 402 | ||
| 16.9 Value added tax (VAT) | 404 | ||
| Summary | 405 | ||
| Review questions | 405 | ||
| Exercises | 406 | ||
| Notes | 409 | ||
| 17 Property, plant and equipment (PPE) | 410 | ||
| 17.1 Introduction | 410 | ||
| 17.2 PPE – concepts and the relevant IASs and IFRSs | 410 | ||
| 17.3 What is PPE? | 411 | ||
| 17.4 How is the cost of PPE determined? | 412 | ||
| 17.5 What is depreciation? | 414 | ||
| 17.6 What are the constituents in the depreciation formula? | 415 | ||
| 17.7 Calculation of depreciation | 417 | ||
| 17.8 Measurement subsequent to initial recognition | 421 | ||
| 17.9 IAS 36 Impairment of Assets | 423 | ||
| 17.10 IFRS 5 Non-current Assets Held for Sale and Discontinued Operations | 428 | ||
| 17.11 Disclosure requirements | 429 | ||
| 17.12 Government grants towards the cost of PPE | 430 | ||
| 17.13 Investment properties | 432 | ||
| 17.14 Effect of accounting policy for PPE on the interpretation of the financial statements | 433 | ||
| Summary | 435 | ||
| Review questions | 435 | ||
| Exercises | 436 | ||
| Notes | 442 | ||
| 18 Leasing | 443 | ||
| 18.1 Introduction | 443 | ||
| 18.2 Need for an accounting standard on leasing | 444 | ||
| 18.3 Distinction between finance leases and operating leases | 447 | ||
| 18.4 Reason for a replacement standard for IAS 17 | 448 | ||
| 18.5 IFRS 16 Leases – the criteria that determine whether it’s a lease | 449 | ||
| 18.6 Leases in the financial statements of lessees | 451 | ||
| 18.7 Leases in the financial statements of lessors | 455 | ||
| 18.8 Sale and leaseback transactions | 457 | ||
| 18.9 An evaluation of the new IFRS 16 | 460 | ||
| Summary | 460 | ||
| Review questions | 461 | ||
| Exercises | 462 | ||
| Note | 464 | ||
| 19 Intangible assets | 465 | ||
| 19.1 Introduction | 465 | ||
| 19.2 Intangible assets defined | 465 | ||
| 19.3 Accounting treatment for research and development | 468 | ||
| 19.4 Why is research expenditure not capitalised? | 469 | ||
| 19.5 Capitalising development costs | 470 | ||
| 19.6 Disclosure of R&D | 471 | ||
| 19.7 IFRS for SMEs’ treatment of intangible assets | 471 | ||
| 19.8 Internally generated and purchased goodwill | 472 | ||
| 19.9 The accounting treatment of goodwill | 472 | ||
| 19.10 Critical comment on the various methods that have been used to account for goodwill | 474 | ||
| 19.11 Negative goodwill/badwill | 476 | ||
| 19.12 Brands | 477 | ||
| 19.13 Accounting for acquired brands | 479 | ||
| 19.14 Intellectual capital disclosures (ICDs) in the annual report | 480 | ||
| 19.15 Review of the implementation of IFRS 3 | 481 | ||
| 19.16 Review of the implementation of identified intangibles under IAS 38 | 481 | ||
| Summary | 483 | ||
| Review questions | 483 | ||
| Exercises | 485 | ||
| Notes | 491 | ||
| 20 Inventories | 493 | ||
| 20.1 Introduction | 493 | ||
| 20.2 Inventory defined | 493 | ||
| 20.3 The impact of inventory valuation on profits | 494 | ||
| 20.4 IAS 2 Inventories | 495 | ||
| 20.5 Inventory valuation | 496 | ||
| 20.6 Work in progress | 502 | ||
| 20.7 Inventory control | 504 | ||
| 20.8 Creative accounting | 505 | ||
| 20.9 Audit of the year-end physical inventory count | 507 | ||
| 20.10 Published accounts | 509 | ||
| 20.11 Agricultural activity | 510 | ||
| Summary | 513 | ||
| Review questions | 513 | ||
| Exercises | 514 | ||
| Notes | 518 | ||
| 21 Construction contracts | 519 | ||
| 21.1 Introduction | 519 | ||
| 21.2 The need to replace IAS 11 Construction Contracts | 519 | ||
| 21.3 Identification of contract revenue under IAS 11 | 521 | ||
| 21.4 Identification of contract costs under IAS 11 | 521 | ||
| 21.5 IFRS 15 treatment of construction contracts | 524 | ||
| 21.6 An approach when a contract can be separated into components | 526 | ||
| 21.7 Accounting for a contract – an example | 527 | ||
| 21.8 Illustration – loss-making contract using the step approach | 529 | ||
| 21.9 Public–private partnerships (PPPs) | 531 | ||
| Summary | 534 | ||
| Review questions | 535 | ||
| Exercises | 535 | ||
| Notes | 542 | ||
| Part 6 Consolidated accounts | 543 | ||
| 22 Accounting for groups at the date of acquisition | 545 | ||
| 22.1 Introduction | 545 | ||
| 22.2 Preparing consolidated accounts for a wholly owned subsidiary | 545 | ||
| 22.3 IFRS 10 Consolidated Financial Statements | 545 | ||
| 22.4 Fair values | 547 | ||
| 22.5 Illustration where there is a wholly owned subsidiary | 548 | ||
| 22.6 Preparing consolidated accounts when there is a partly owned subsidiary | 549 | ||
| 22.7 The treatment of differences between a subsidiary’s fair value and book value | 552 | ||
| 22.8 The parent issues shares to acquire shares in a subsidiary | 553 | ||
| 22.9 IFRS 3 Business Combinations treatment of goodwill at the date of acquisition | 554 | ||
| 22.10 When may a parent company not be required to prepare consolidated ac-counts? | 554 | ||
| 22.11 When may a parent company exclude or not exclude a subsidiary from a con-solidation? | 555 | ||
| 22.12 IFRS 13 Fair Value Measurement | 555 | ||
| 22.13 What advantages are there for stakeholders from requiring groups to prepare consolidated accounts? | 557 | ||
| Summary | 557 | ||
| Review questions | 557 | ||
| Exercises | 558 | ||
| Notes | 564 | ||
| 23 Preparation of consolidated statements of financial position after the date of acquisition | 565 | ||
| 23.1 Introduction | 565 | ||
| 23.2 Uniform accounting policies and reporting dates | 565 | ||
| 23.3 Pre- and post-acquisition profits/losses | 565 | ||
| 23.4 The Bend Group – assuming there have been no inter-group transactions | 566 | ||
| 23.5 Inter-company transactions | 568 | ||
| 23.6 The Prose Group – assuming there have been inter-group transactions | 569 | ||
| Summary | 571 | ||
| Review questions | 572 | ||
| Exercises | 572 | ||
| Notes | 578 | ||
| 24 Preparation of consolidated statements of income, changes in equity and cash flows | 579 | ||
| 24.1 Introduction | 579 | ||
| 24.2 Eliminate inter-company transactions | 579 | ||
| 24.3 Preparation of a consolidated statement of income – the Ante Group | 580 | ||
| 24.4 The statement of changes in equity (SOCE) | 582 | ||
| 24.5 Other consolidation adjustments | 582 | ||
| 24.6 A subsidiary acquired part-way through the year | 584 | ||
| 24.7 Published format statement of income | 586 | ||
| 24.8 Consolidated statements of cash flows | 587 | ||
| Summary | 589 | ||
| Review questions | 589 | ||
| Exercises | 590 | ||
| Notes | 600 | ||
| 25 Accounting for associates and joint arrangements | 601 | ||
| 25.1 Introduction | 601 | ||
| 25.2 Definitions of associates and of significant influence | 601 | ||
| 25.3 The treatment of associated companies in consolidated accounts | 602 | ||
| 25.4 The Brill Group – group accounts with a profit-making associate | 602 | ||
| 25.5 The Brill Group – group accounts with a loss-making associate | 605 | ||
| 25.6 The acquisition of an associate part-way through the year | 607 | ||
| 25.7 Joint arrangements | 608 | ||
| 25.8 Disclosure in the financial statements | 612 | ||
| 25.9 Parent company use of the equity method in its separate financial statements | 613 | ||
| Summary | 615 | ||
| Review questions | 615 | ||
| Exercises | 616 | ||
| Notes | 626 | ||
| 26 Introduction to accounting for exchange differences | 627 | ||
| 26.1 Introduction | 627 | ||
| 26.2 How to record foreign currency transactions in a company’s own books | 628 | ||
| 26.3 Boil plc – a more detailed illustration | 630 | ||
| 26.4 IAS 21 Concept of Functional and Presentation Currencies | 631 | ||
| 26.5 Translating the functional currency into the presentation currency | 633 | ||
| 26.6 Preparation of consolidated accounts | 633 | ||
| 26.7 How to reduce the risk of translation differences | 637 | ||
| 26.8 Critique of the use of presentational currency | 638 | ||
| 26.9 IAS 29 Financial Reporting in Hyperinflationary Economies | 638 | ||
| Summary | 640 | ||
| Review questions | 640 | ||
| Exercises | 641 | ||
| Notes | 648 | ||
| Part 7 Interpretation | 649 | ||
| 27 Earnings per share | 651 | ||
| 27.1 Introduction | 651 | ||
| 27.2 Why is the earnings per share figure important? | 651 | ||
| 27.3 How is the EPS figure calculated? | 652 | ||
| 27.4 The use to shareholders of the EPS | 653 | ||
| 27.5 Illustration of the basic EPS calculation | 654 | ||
| 27.6 Adjusting the number of shares used in the basic EPS calculation | 654 | ||
| 27.7 Rights issues | 657 | ||
| 27.8 Adjusting the earnings and number of shares used in the diluted EPS calcula-tion | 662 | ||
| 27.9 Procedure where there are several potential dilutions | 664 | ||
| 27.10 Exercise of conversion rights during the financial year | 666 | ||
| 27.11 Disclosure requirements of IAS 33 | 666 | ||
| 27.12 The Improvement Project | 668 | ||
| 27.13 The Convergence Project | 668 | ||
| Summary | 669 | ||
| Review questions | 669 | ||
| Exercises | 670 | ||
| Notes | 676 | ||
| 28 Review of financial ratio analysis | 677 | ||
| 28.1 Introduction | 677 | ||
| 28.2 Overview of techniques for the analysis of financial data | 678 | ||
| 28.3 Ratio analysis – a case study | 679 | ||
| 28.4 Introductory review | 680 | ||
| 28.5 Financial statement analysis, part 1 – financial performance | 683 | ||
| 28.6 Financial statement analysis, part 2 – liquidity | 690 | ||
| 28.7 Financial statement analysis, part 3 – financing | 693 | ||
| 28.8 Peer comparison | 695 | ||
| 28.9 Report based on the analysis | 696 | ||
| 28.10 Caution when using ratios for prediction | 697 | ||
| Summary | 699 | ||
| Review questions | 699 | ||
| Exercises | 700 | ||
| Note | 712 | ||
| 29 Analysis of published financial statements | 713 | ||
| 29.1 Introduction | 713 | ||
| 29.2 Improvement of information for shareholders | 714 | ||
| 29.3 Published financial statements – their limitations for interpretation purposes | 716 | ||
| 29.4 Published financial statements – additional entity-wide cash-based performance measures | 717 | ||
| 29.5 Ratio thresholds to satisfy Shariah compliance | 720 | ||
| 29.6 Use of ratios in restrictive loan covenants | 721 | ||
| 29.7 Investor-specific ratios | 724 | ||
| 29.8 Determining value | 727 | ||
| 29.9 Predicting corporate failure | 732 | ||
| 29.10 Professional risk assessors | 736 | ||
| 29.11 Valuing shares of an unquoted company – quantitative process | 737 | ||
| 29.12 Valuing shares of an unquoted company – qualitative process | 740 | ||
| 29.13 Possible effect of ‘Brexit’ on financial statements | 742 | ||
| Summary | 743 | ||
| Review questions | 744 | ||
| Exercises | 745 | ||
| Notes | 753 | ||
| 30 An introduction to digital financial reporting | 755 | ||
| 30.1 Introduction | 755 | ||
| 30.2 The objectives of financial reporting | 755 | ||
| 30.3 Reports and the flow of information pre-XBRL | 757 | ||
| 30.4 What are HTML, XML and XBRL? | 758 | ||
| 30.5 Reports and the flow of information post-XBRL | 759 | ||
| 30.6 Why are companies adopting XBRL? | 760 | ||
| 30.7 What are the processes followed to adopt XBRL for outputting information? | 763 | ||
| 30.8 What is needed when receiving XBRL output information? | 766 | ||
| 30.9 Progress of XBRL development for internal accounting | 771 | ||
| 30.10 Real-time reporting | 771 | ||
| Stakeholder interaction with XBRL data | 772 | ||
| Summary | 773 | ||
| Review questions | 774 | ||
| Exercises | 774 | ||
| Notes | 775 | ||
| Bibliography | 776 | ||
| Part 8Accountability | 779 | ||
| 31 Corporate governance | 781 | ||
| 31.1 Introduction | 781 | ||
| 31.2 A systems perspective | 781 | ||
| 31.3 Different jurisdictions have different governance priorities | 783 | ||
| 31.4 Pressures on good governance behaviour vary over time | 785 | ||
| 31.5 Types of past unethical behaviour | 785 | ||
| 31.6 The effect on capital markets of good corporate governance | 786 | ||
| 31.7 Risk management | 787 | ||
| 31.8 The role of internal control, internal audit and audit committees in corporate governance | 789 | ||
| 31.9 External audits in corporate governance | 790 | ||
| 31.10 Executive remuneration in the UK | 796 | ||
| 31.11 Corporate governance, legislation and codes | 800 | ||
| 31.12 Corporate governance – the UK experience | 801 | ||
| Summary | 810 | ||
| Review questions | 811 | ||
| Exercises | 813 | ||
| Notes | 815 | ||
| 32 Integrated reporting: sustainability, environmental and social | 817 | ||
| 32.1 Introduction | 817 | ||
| 32.2 Environmental and social disasters and the adverse consequences that can follow | 818 | ||
| 32.3 Management accountability for environmental and social responsibility | 821 | ||
| 32.4 Integrated reporting concepts | 825 | ||
| 32.5 The historical context of the evolution of integrated reporting including the driv-ers of this movement | 828 | ||
| 32.6 The efforts on which integrated reporting builds | 832 | ||
| 32.7 The contribution of accountants | 837 | ||
| 32.8 Integrated reporting – its impact on the future development of financial reporting and accounting | 843 | ||
| Review questions | 844 | ||
| Exercises | 846 | ||
| Notes | 851 | ||
| Index | 853 |