Indicators of going concern uncertainty
- Lack of cash and eq
- Major debt repayments within 12 months
- Increase level of overdrafts or short term borrowings
- Negative cash flows, especially relating to operating activities
5.disclosures or provisions relating to material legal claims - Large impairment losses
- A rise in payable days
8.increased levels of gearing
What means presenting disclosures in systematic order
- Giving prominence to the most relevant areas
- Grouping items measured in similar ways, such as assets held at FV
- Following the order in which items are presented in SPL and SFP
Accounting policies are likely to be material if
- Entity changed it’s accounting policy during the reporting period or
- Entity chose it’s policy from one or more portions, or policy was developed in the absence of specific IFRS standard
- The policy relates to an area where significant judgements are required,or
- The accounting treatment of transactions is complex
Source of uncertainty
Must disclose key sources of estimation uncertainty that may cause material adjustments to assets and liabilities within the next year
NCA held for sale and discontinued operations
DO is component of entity that is sold or which is classified as held for sale and which is
1. Separate line of business ( BC it has different operations or location)
2. Part of a plan to dispose of a separate line of a business
3. A subsidiary acquired colelt for the purpose of resale
Held for sale if it’s carrying amount will not be recovered principally by continuing operation
Presentation of discontinued operation
- A single amount presented in SPLOCI: 1. post tax profit or loss of discontinued oepration
- Post tax gain or loss on the measurement to FV- costs to sell or on disposal of dO
- Analysis of the single amount
- If decided to DO before FS issuance but after year end it is non-adjsuting event and disclosed in the notes
Discuss judgement when selecting accounting polciy
- Entities should select and apply their accounting policies consistently for similar transactions
- If specific IFRS permits different policies for categories of similar items and appropriate policy should be applied for.each category. Ex different classes of PPE, some maybe at FV and some at HC
- Conceptual framework = guidance when an accounting standard offers a choice of measurement base. Preparers should ensure that measurement base should provide relevant information and offer a faithful representation of underlying asset. To provide RI- consider nature of A or L and how it generates CF. A m. Base that has a very high level of measurement uncertainty maynot provide a faithful representation. Such decisions involve exercise of judgment
What if no transitional arrangements
Changes in accounting policy should be applied retrospectively. The entity adjusts the OB of each affected component of equity, and the comparative figures are presented as if the new policy had always existed
Estimate
Monetary amounts that involve degree of measurement uncertainty
Change in accounting estimate
Must be recognised prospectively
Choice of depreciation method
Is an estimate
