The main strategic report must contain the following sections as per the Companies Act 2006 s414C: (a) a fair review of the company’s business; (b) a description of the principal risks and uncertainties facing the company; (c) the review required is a balanced and comprehensive analysis, consistent with the size and complexity of the business,… Continue reading The main requirements of a strategic report
Category: Accounting standards
Provisions & contingent liabilities and assets
IAS 37 and FRS 102 s21 apply to provisions, contingent liabilities, and contingent assets. They establishe the principles and rules for the recognition, measurement, and disclosure of provisions, contingent liabilities, and contingent assets in the financial statements. Provisions Provisions are liabilities that are recognized in the financial statements when it is probable that an outflow… Continue reading Provisions & contingent liabilities and assets
Related parties
Related parties are entities or persons that are related to the entity preparing the financial statements. Related parties may include the entity’s parent, subsidiaries, associates, joint ventures, and directors, key management personnel, and their immediate families. Related parties may also include entities or persons that have the ability to exercise significant influence over the entity,… Continue reading Related parties
How to account for leases under IFRS 16
To account for leases under IFRS 16, the entity should follow the principles and rules of accounting for leases, which are the principles and rules that govern the recognition, measurement, and disclosure of leases in the financial statements. IFRS 16 is the International Financial Reporting Standard that applies to leases. IFRS 16 replaces the previous… Continue reading How to account for leases under IFRS 16
How to account for an associate
To account for an associate, the entity should follow the principles and rules of accounting for associates, which are the principles and rules that govern the recognition, measurement, and disclosure of associates in the financial statements. The key steps in accounting for an associate are as follows: Identify the associate: The first step in accounting… Continue reading How to account for an associate
How to prepare group accounts
Consolidated accounts are financial statements that present the financial position, performance, and cash flows of a group of entities as if they were a single entity. Consolidated accounts are prepared in accordance with the principles and rules of consolidation, which are the principles and rules that govern the combination of the financial statements of the… Continue reading How to prepare group accounts
Intangible assets (IAS 38)
International Accounting Standard (IAS) 38, “Intangible Assets,” provides guidance on the recognition, measurement, and disclosure of intangible assets. IAS 38 applies to all intangible assets, except for certain intangible assets that are specifically excluded from the scope of the standard, such as financial instruments, deferred tax assets, and assets arising from employee benefits. IAS 38… Continue reading Intangible assets (IAS 38)
Share issue transaction costs
Share issue transaction costs are costs incurred by a company in connection with issuing new shares. Share issue transaction costs can include costs such as legal fees, accounting fees, printing costs, and broker fees. Share issue transaction costs are usually required to be recognized as a deduction from equity (FRS 102 s22.9 and IAS 32… Continue reading Share issue transaction costs
Goodwill
Goodwill is an intangible asset that arises when one entity acquires another entity and pays more than the fair value of the acquired entity’s net assets. Goodwill is typically assigned to a cash-generating unit (CGU), which is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows… Continue reading Goodwill
Restrospective correction of prior period errors
A retrospective correction of prior period errors is a correction of errors that occurred in a previous period, but were not discovered until a subsequent period. Retrospective correction of prior period errors is required by IAS 8 and also FRS 102 s10.21 which state that errors should be corrected retrospectively by adjusting the opening balance… Continue reading Restrospective correction of prior period errors