Advanced Financial Accounting

Katarzyna Bareja
 Advanced Financial Accounting

Niezbędnik e-sgh / website for the course

- presentations for lectures
- presentations for seminars
- excersises for seminars
- answers to exersises

USOS: syllabus: basic literature

passing the course
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 Rules for passing AFA course

• two midterm tests (MCQ)– to pass seminars you need

20 out of 40 points
• to sit the final exam you have to pass seminars
• final exam (T/F test) – to pass you need 20 out of 40
points
• mark for the course – based on midterm tests and
final exam (max. 80 points)
• additional points (better mark)

AFA K.Bareja
Advanced Financial Accounting
 Advanced Financial Accounting
• PPE
• Intangible Assets
• Impairment of Assets
• Leases
• Revenue
• Provisions
• Financial Instruments
• Deferred Tax
 Advanced Financial Accounting

• IASB -> IAS/IFRS

• www.ifrs.org

AFA K.Bareja
REGULATION (EC) No 1606/2002 OF THE EUROPEAN
PARLIAMENT AND OF THE COUNCIL
In order to contribute to a better functioning of the
internal market, publicly traded companies must be
required to apply a single set of high quality
international accounting standards for the
preparation of their consolidated financial
statements

International Financial Reporting Standards /

International Accounting Standards (IFRS/IAS)

International Accounting Standards Board

AFA K.Bareja
 Advanced Financial Accounting

• What are the components of complete set of

financial statement?

AFA K.Bareja
 The complete set of financial statement:

• Statement of financial position B/S

• Either:
o Statement of profit or loss P/L & statement of other
comprehensive income OCI
o Statement of profit or loss and other comprehensive
income P/L&OCI
• Statement of changes in equity
• Statement of cash flows
• Accounting policy and explanatory notes

AFA K.Bareja
 Financial statement FS

• B/S
➢ Assets (A) = Liabilities (L) + Shareholder’s Equity (SE)
• P/L (OCI)
➢ Revenue – Expenses = Profit (Loss) for the year

AFA K.Bareja
 Asset

• A resource controlled by the entity

• As a result of past events
• From which future economic benefits are expected to
flow

➢ short-term assets vs. long-term assets

➢ current assets vs. non-current assets

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 Current assets

• An entity shall classify an asset as current when:

– it expects to realise the asset, or intends to sell or
consume it, in its normal operating cycle
– it holds the asset primarily for the purpose of trading
– it expects to realise the asset within twelve months
after the reporting period
– the asset is cash or cash equivalent
• An entity shall clasify all other assets as non-current

IAS 1.66

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 Non-current/long-term assets

• property, plant & equipment

• investment property
• intangible assets
• long-term financial assets (e.g. investments in other
companies)

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 ACCEPTABLE FORMATS OF SFP
FORMAT A FORMAT B
ASSETS
NON-CURRENT ASSETS 100 NON-CURRENT ASSETS 100
CURRENT ASSETS 90 CURRENT ASSETS 90
CURRENT LIABILITIES (70)
NET CURRENT ASSETS 20
TOTAL ASSETS LESS 120
CURRENT LIABILITIES
NON-CURRENT (40)
LIABILIETIES
TOTAL ASSETS 190 80
BALANCES TO: BALANCES TO:
EQUITY & LIABILITIES CAPITAL AND RESERVES 80
(incl. RE)
CAPITAL AND RESERVES (incl. RE) 80
NON-CURRENT LIABILIETIES 40
CURRENT LIABILITIES 70
190 80
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 ACCEPTABLE FORMATS OF SofP/L
P/L by function P/L by nature
Revenue Revenue
Changes in inventories of finished goods
Cost of sales
and work in progress
Gross profit Work performed by entity and capitalised
Distribution costs Raw materials used
Administrative expenses Depreciation & amortisation expenses
Staff benefits expenses
Other operating income Other operating income
Other operating expenses Other operating expenses
Profit from operations Profit from operations
Investment income Investment income
Finance costs Finance costs
Profit before tax Profit before tax
Income tax expense Income tax expense
Profit for the year Profit for the year

AFA K.Bareja
Transformation process

inputs outputs

resources

goods & services

profit, income, earnings

AFA K.Bareja