Application of IFRS - Workshops

Objectives and advantages

• To apply advanced accounting principles and techniques in a practical context.
• To evaluate and apply various international standards.
• To analyse, interpret and report on financial statements and related information to different user groups.
• To ensure that preparers and users of financial statements are up-to-date with current amendments and requirements of IFRS.

About the Workshops

Structure

Materials 

Participants receive comprehensive course notes in Polish, which include a theoretical component summarizing the key elements of IFRS as well as practical tests and solutions.

200 zł + 23% VAT - the cost of materials for the whole programme

Examination

The programme finishes with a two and a half hour written examination. After passing the exam with a positive result (at least 50% of the total marks), those students who have attended the whole course receive an EY Academy of Business diploma.The examination will cover only the topics discussed at the course. 

Programme

Module 1

Introduction to International Financial Reporting
Standards (IFRS)

• Basic historical background to financial reporting and accounting internationally.
• Structure of the International Accounting Standards Board including current developments and discussion of the work of the International Financial Reporting Interpretations Committee.
• Role of International Financial Reporting Standards in European Union countries and the United States.
• IFRS Conceptual Framework with emphasis on basic accounting concepts and the definitions of assets, liabilities, revenue, costs and equity.

Presentation of Financial Statements

• The current format of financial statements.
• The operating cycle relevant to specific business activities and the classification of assets and liabilities into current/non current.
• Minimum requirements regarding the presentation of items in the income statement/statement of comprehensive income and statement of financial position/balance sheet; presentation of illustrative formats.
• Statement of changes in equity.
• Interim reporting.

Module 2

Statement of Cash Flows

• The need for a statement of cash flows and how it is prepared from information contained in the income statement/statement of comprehensive income, balance sheet/statement of financial position and notes to the financial statements.
• Definition of cash and cash equivalents; examples of items classified as both of the above.
• The indirect and direct methods of constructing the cash flow statement.
• Practical exercises to prepare a cash flow statement in an Excel spreadsheet.
• The most common mistakes made when creating cash flow statements.

Module 3

Property, Plant and Equipment

• Measurement at recognition: costs to be capitalized at initial recognition (purchase price, production cost, costs of removing the asset at the end of its useful economic life).
• Definition of depreciable amount; various depreciation methods: straight-line, diminishing balance, sum of digits, units of production.
• Component accounting.
• Measurement after recognition: cost model and revaluation model.
• Accounting for revaluations and disposals of non current assets.
• Changes in depreciation methods and revisions of useful life.
• Presentation and disclosure of non current assets.

Borrowing Costs (loans, credits)

• Definition of borrowing costs
• Accounting treatment of borrowing costs under the revised IAS 23
• Key issues related to capitalization: qualifying assets, capitalization period and capitalization rate.

Module 4

Investment Properties

• Definition and measurement at recognition of investment properties.
• Criteria for classification as investment property; reclassification rules.
• Valuation methods: cost model and fair value model; conditions for applying the fair value model, accounting for changes in fair value.

Inventories

• Measurement at recognition: purchase price, cost of conversion, other costs included in the valuation of inventory.
• Net realizable value – definition and practical examples of valuation.

Module 5

Revenue from Contracts with Customers

• Scope of IFRS 15
• Identifying the contract and modifications
• Identifying performance obligations: distinct goods or services, promises in contracts with customers, principal vs. agent.
• Determining the transaction price: Variable consideration, significant financing component, consideration payable to a customer.
• Allocating the transaction price to performance obligations
• Satisfaction of performance obligations: over time or at a point in time
• Incremental costs of obtaining a contract
• Disclosures

Module 6

Provisions, Contingent Liabilities and Contingent Assets

• Definitions of provisions, contingent liabilities and contingent assets
• Obligating events: legal and constructive obligations
• Provisions for future operating losses and onerous contracts.
• Measurement rules: defining the expenditure required to settle the obligation, discounting and unwinding of the discount.
• Conditions for recognizing provisions for restructuring expenses.
• Discussion of criteria for recognition in the statement of financial position or in the notes to the financial statements.

Events after the Reporting Date

• Defining the period during which events after the reporting date arise.
• Adjusting and non-adjusting events – practical examples and accounting treatment.

Accounting Policies, Changes in Accounting Estimates and Errors

• Hierarchy of sources for choosing accounting policies.
• Definition of past period errors and the accounting treatment applied to correction of errors.
• Accounting estimates and their changes.

Module 7

Introduction to Group Accounting

• Definitions of a subsidiary, associate, joint arrangements, control, joint-control, significant influence and other definitions relating to group accounting.
• Methods of accounting for investments in individual company accounts and their impact on consolidated financial statements.

Consolidated Statement of Financial Position and Statement of Comprehensive Income

• Step by step guide to the preparation of the consolidated statement of financial position based on discussion of examples.
• Goodwill and gain on bargain purchase.
• Non-controlling interests in the statement of financial position.
• Consolidation adjustments eliminating:
  • equity and investments,
  • intra-group balances (trade, loans),
  • unrealized profit on intra-group transactions arising from the transfer of inventory and non-current assets (including the impact on depreciation),
  • dividends.
• Step by step guide to the preparation of the consolidated statement of comprehensive income based on discussion of examples.
• Eliminating intra-group transactions from the perspective of the statement of comprehensive income (sales, cost of sales, dividends).
• The impact of transactions on non-controlling interests.

Module 8

Deferred Taxation

• Tax base of assets and liabilities.
• Identifying taxable and deductible temporary differences.
• Accounting for deferred tax assets and liabilities using the liability method.
• Measurement and presentation of deferred tax assets and liabilities.
• Deferred taxation in consolidated financial statements.

Module 9

Leases

• Basic concepts: definition of a leasing contract, asset identification, right to direct the use
• Practical problems in determining whether a contract includes a lease:
  • Right to underground parts of the land
  • Transport contracts
  • Right of perpetual usufruct of land
• The date of signing the contract and the start date of the lease
• Agreements for an indefinite period
• Updating the lease term
• Variable lease payments
• Choosing an appropriate discount rate
• Modifications to lease agreements
• Leasing in foreign currencies
• VAT not deductible
• Deferred tax on assets and lease liabilities

Module 10

Impairment of Assets

• Identifying external and internal impairment indicators.
• Measuring recoverable amount and identifying situations in which an impairment loss needs to be recorded.
• Value in use under IAS 36 and how to calculate it.
• Identifying cash generating units (CGUs); allocating impairment losses to specific assets in a CGU.
• Reversal of impairment losses.

Module 11

Intangible Assets

• Discussion of definitions.
• Conditions for recognition of intangible assets: identifiability, control, future economic benefits, reliable measurement.
• Intangible assets identified in business combinations.
• Treatment of research and development costs.

First time adoption of international standards

• The scope of IFRS 1 – definition of entities applying international standards for the first time
• Rules relating to first time adoption of IFRS: defining the reporting date and the date of transition to IFRS, applying compulsory and voluntary exemptions, impact on comparatives.

Module 12

Earnings per Share

• Methods of calculating basic and diluted earnings per share.
• Impact of issue of shares at full market price, share splits, bonus issues and rights issues on the weighted average number of shares and comparatives.
• Treatment of potential ordinary shares: options, convertible preference shares, convertible loans and convertible debentures.
• Determining the order in which potential dilutive factors are included in the calculation of the weighted average number of shares.
• Earnings per share for continuing operations.

Module 13

Segment Reporting

• The necessity for segment reporting.
• Definition of operating segment and Chief Operating Decision Maker.
• Discussion on the criteria for presentation of separate segments.
• Disclosure required for each segment
• Disclosure required for the whole company

Non-current Assets Held for Sale and Discontinued Operations

• Non-current assets held for sale – classification criteria.
• Measurement of non-current assets held for sale at the date of classification.
• Accounting for disposal groups.
• Discussion of when discontinued operations arise and the disclosure requirements in IFRS 5.
• Accounting for discontinued operations in comparatives.

Module 14

Equity Method

• Accounting for associates in the standalone and consolidated financial statements.
• Discussion, based on an example, of the treatment of an investment in the statement of financial position and statement of comprehensive income under the equity method.

Joint Arrangements

• Factors that influence the classification of joint arrangements: legal form, contractual arrangements and other.
• Accounting for joint operations and joint ventures

Business combinations

• Re-measurement of assets, liabilities and contingent liabilities at fair value.
• Impact of remeasurement on the date of acquisition in the consolidated statement of financial position
• Fair value adjustments in subsequent years.
• Deferred and contingent consideration.

Disclosure of Interests in Other Entities

• The purpose and scope of disclosures
• Disclosures required for significant interests in subsidiaries, joint arrangements and associates
• Other disclosures

Changes in Foreign Exchange Rates and Consolidation of Foreign Subsidiaries

• Functional and presentation currencies.
• Criteria considered in selecting the functional currency.
• Accounting for foreign currency transactions on initial recognition, settlement and balance sheet dates.
• Recognition of exchange differences.
• Translating the results and financial position of foreign subsidiaries included in the consolidated accounts.
• Rules for applying foreign exchange rates to assets, liabilities, equity, income and costs.
• Recognition of exchange differences in consolidated financial statements: share of group and non-controlling interests.
• Elimination of balances and transactions with a foreign entity.
• Translation of goodwill.

Module 15

Financial Instruments

• How the standards on financial instruments have evolved: IAS 32, IAS 39, IFRS 7 and IFRS 9
• Scope of standards
• Definitions of financial assets, liabilities and equity
• Classification of financial instruments under IFRS 9: financial assets at fair value through profit and loss, other comprehensive income and amortised cost
• Fair value measurement
• Amortised cost method using the effective interest rate
• Impairment of financial assets: expected losses model under IFRS 9
• Impairment of financial assets at amortised cost
• Impairment of financial assets at fair value
• Introduction to accounting for derivatives: presentation of the principles of forward, futures, options, swap transactions
• Embedded derivatives
• Hedge accounting
• Disclosures

Module 16

Group Statements of Cash Flows

• Dealing with the various issues that arise on preparation of group statements of cash flows such as investments in associates, dividends paid to non-controlling interests and the acquisition and disposal of subsidiaries during the period.
• Preparing the consolidated statement of cash flows using the indirect method on the basis of information from the consolidated statement of financial position, statement of comprehensive income and notes to the financial statements.

More complex consolidation techniques

• The impact of piecemeal acquisitions on goodwill calculation.
• Accounting for disposals of all or part of a subsidiary: calculating the consolidated profit on disposal; accounting for disposals resulting in a reduction of the shareholding, where a controlling interest remains, an associate or investment remains.
• Consolidation of groups, in which control is exercised indirectly – vertical and mixed groups.
• Piecemeal acquisition under IFRS 10.
• The issues with acquiring and losing control.
• Group reorganisations including discussion on transactions between entities under common control

Module 17

Employee benefits

• Short term employee benefits
  • Bonuses
  • Holiday pay accruals.
• Post-employment benefits
  • Defined benefit pension schemes.
  • Defined contribution pension schemes.
• Termination benefits
• Other long-term benefits
  • Jubilee and retirement bonuses.

Fair value measurement

• Definition of fair value and related terms
• Principal market and the most advantageous market
• Transaction and transport costs
• Highest and best use.
• Valuation techniques.
• Fair value hierarchy disclosures

Module 18

Share Based Payment

• Equity-settled share based payments
• Cash-settled share based payments
• Definition of the grant date, vesting period and vesting date.
• Accounting for market and non-market vesting conditions.
• Impact of modification, cancellation and cancellation with compensation on accounting for equity-settled arrangements.
• Accounting for equity-settled transactions in situations, when the entity or counterparty have the choice of whether to settle in equity or cash.

Module 19

Revision of the most important issues in order to prepare for the final examination.

Date and location

This course is in Polish. 

You can participate in classroom training in Warsaw or ONLINE LIVE from 13 October 2021.

Tutors

Michał Błeszyński FCCA, CIA Manager 

A graduate of the Faculty of Computer Science and Management at the Wrocław University of Technology. He is a certified auditor, he has CIA qualifications (Certifed Internal Auditor) and is a member of ACCA (Association of Chartered Certified Accountants). For five years he worked in the audit department of Ernst & Young and was involved in auditing financial statements of mainly manufacturing companies as well as capital groups operating on the real estate market. He also participated in training new employees of the audit department in the scope of performing external audit tasks. Since 2008, he has been working as a trainer at the EY Academy of Business, where he specializes in the subject of International Financial Reporting Standards, management accounting and in internal audit. 

Maciej Kocon, Senior Trainer 

Contact 

Aleksandra Trych | tel. +48 505 171 636

Please ask me about our corporate rates and about organising this course in-house and in English - I will be happy to discuss your needs and accommodate this course to your timezone.