International Financial Reporting A Practical Guide, 8e Alan Melville (Solution Manual)

List of international standards xi Part 1 Introduction to Financial Reporting 1 The regulatory framework 3 The need for regulation 4 Sources of regulation 4 Generally accepted accounting practice 6 The ...

List of international standards xi Part 1 Introduction to Financial Reporting 1 The regulatory framework 3 The need for regulation 4 Sources of regulation 4 Generally accepted accounting practice 6 The International Accounting Standards Board 7 The IASB® standard-setting process 9 The purpose of accounting standards 10 Worldwide use of international standards 11 First-time adoption of international standards 12 The International Sustainability Standards Board 14 2 The IASB conceptual framework 17 Purpose and status of the IASB Conceptual Framework 18 Objective of general purpose financial reporting 19 Qualitative characteristics of financial information 21 Financial statements and the reporting entity 24 Elements of financial statements 25 Recognition of the elements of financial statements 27 Measurement of the elements of financial statements 28 Presentation and disclosure 30 Concepts of capital and capital maintenance 30 Discounting and present value 34 3 Presentation of financial statements 37 Purpose of financial statements 38 Components of financial statements 38 General features 39 Structure and content of financial statements 41 The statement of financial position 42 The statement of comprehensive income 46 The statement of changes in equity 51 The notes to the financial statements 53 Interim financial reporting 54 Management commentary 55 Making materiality judgements 56 Exposure Draft ED/2019/7 58 4 Accounting policies, estimates and errors 68 Accounting policies 68 Accounting estimates 73 Prior period errors 73 Part 2 Financial Reporting in Practice 5 Property, plant and equipment 83 Definition of property, plant and equipment 84 Recognition of property, plant and equipment 85 Initial measurement of property, plant and equipment 87 Subsequent measurement of property, plant and equipment 88 Depreciation 90 Disclosure requirements 94 Borrowing costs 95 Government grants 97 Investment property 100 IFRS13 Fair Value Measurement 103 6 Intangible assets 108 Definition of an intangible asset 109 Initial recognition and measurement of intangible assets 110 Subsequent measurement of intangible assets 114 Amortisation of intangible assets 116 Derecognition 118 Disclosure requirements 118 Goodwill 119 IFRS3 Business Combinations 120 7 Impairment of assets 126 Indications of impairment 127 Recoverable amount 128 Recognition and measurement of an impairment loss 131 Cash-generating units 132 Reversal of impairment losses 136 Disclosure requirements 137 8 Non-current assets held for sale and discontinued operations 142 Classification of non-current assets as held for sale 143 Measurement of non-current assets held for sale 145 Presentation of non-current assets held for sale 149 Discontinued operations 150 9 Leases 156 Definition of a lease 157 Lease accounting by lessees 158 Lease accounting by lessors 162 Sale and leaseback transactions 165 10 Inventories 170 Inventories 171 Cost of inventories 171 Cost formulas 173 Net realisable value 176 Disclosures relating to inventories 177 11 Financial instruments 181 Definitions 182 Classification of financial instruments 183 Recognition and measurement 186 Initial measurement of financial assets and liabilities 186 Subsequent measurement of financial assets 187 The effective interest method 188 Subsequent measurement of financial liabilities 190 Disclosure requirements 191 12 Provisions and events after the reporting period 196 Recognition of a provision 197 Measurement of a provision 199 Application of the recognition and measurement rules 200 Contingent liabilities and contingent assets 202 Disclosure requirements 203 Events after the reporting period 204 13 Revenue from contracts with customers 210 Purpose and scope of IFRS15 211 The five-step model 211 Identifying the contract 212 Identifying performance obligations 214 Determining the transaction price 215 Allocating the transaction price 217 Satisfaction of performance obligations 218 Contract costs 219 Presentation and disclosure 220 Guidance to the application of IFRS15 222 14 Employee benefits 226 Short-term employee benefits 227 Post-employment benefits 229 Accounting for defined contribution plans 229 Accounting for defined benefit plans 230 Other long-term employee benefits 235 Termination benefits 235 Share-based payments 236 15 Taxation in financial statements 242 Current tax 243 Deferred tax 245 The tax base concept 247 IAS12 requirements with regard to deferred tax 252 Disclosure requirements 252 16 Statement of cash flows 259 Cash and cash equivalents 260 Classification of cash flows by activity 261 Interest, dividends and taxes 262 Reporting cash flows from operating activities 263 Disclosures 270 Exposure Draft ED/2019/7 271 17 Financial reporting in hyperinflationary economies 285 Historical cost accounting and its weaknesses 286 Strengths of historical cost accounting 291 Alternatives to historical cost accounting 292 Hyperinflationary economies 293 The restatement of financial statements 293 Disclosures required by IAS29 298 Part 3 Consolidated Financial Statements 18 Groups of companies (1) 303 Requirement to prepare consolidated financial statements 304 Group statement of financial position at date of acquisition 305 Group statement of financial position in subsequent years 309 Partly-owned subsidiaries 312 Preference shares 315 Elimination of intra-group balances 317 Unrealised profits 318 Reporting period and accounting policies 319 Disclosure requirements 319 19 Groups of companies (2) 328 Group statement of comprehensive income 329 Group statement of changes in equity 329 Subsidiary acquired part way through an accounting period 335 20 Associates and joint arrangements 345 Associates and significant influence 346 The equity method 347 Application of the equity method 347 Joint arrangements 354 Disclosure requirements 355 21 Related parties and changes in foreign exchange rates 361 Related parties 362 Definition of related party and related party transaction 362 Disclosures required by IAS24 364 Foreign exchange accounting 365 Reporting foreign currency transactions 366 Translation to a presentation currency 368 Part 4 Analysis of Financial Statements 22 Ratio analysis 375 Accounting ratios 376 Profitability ratios 377 Liquidity ratios 381 Efficiency ratios 383 Investment ratios 386 Limitations of ratio analysis 393 Multivariate ratio analysis 394 23 Earnings per share 404 Significance of EPS 404 Calculation of basic EPS 405 Shares issued during the accounting period 407 Bonus issues 409 Rights issues 410 Calculation of diluted EPS 413 Presentation and disclosure requirements 415 24 Segmental analysis 421 Operating segments 422 Reportable segments 422 Disclosures required by IFRS8 424 Part 5 Small and Medium-sized Entities 25 The IFRS for SMEs® Standard 433 Small and medium-sized entities 434 Concepts and pervasive principles 435 Financial statement presentation 436 Statement of financial position 437 25 The IFRS for SMEs Standard (cont.) Statement of comprehensive income and income statement 437 Statement of changes in equity and Statement of income and retained earnings 438 Statement of cash flows 438 Notes to the financial statements 438 Consolidated and separate financial statements 439 Accounting policies, estimates and errors 439 Financial instruments 440 Inventories 440 Investments in associates and joint ventures 440 Investment property 441 Property, plant and equipment 441 Intangible assets other than goodwill 442 Business combinations and goodwill 442 Leases 442 Provisions and contingencies 442 Liabilities and equity 443 Revenue 443 Government grants 444 Borrowing costs 444 Share-based payment 444 Impairment of assets 444 Employee benefits 445 Income tax 445 Foreign currency translation and Hyperinflation 445