Accounting Disclosures under IFRS

Course Overview

It is now more than six years since IFRS became mandatory for the consolidated financial statements of EU-listed groups, yet the superficially uncontroversial issue of disclosures continues to pose widespread problems to preparers and auditors alike.  Difficulties in disclosure may be caused by:

• the sheer volume of information required;
• considerations of confidentiality (e.g. operating segments);
• the difficulty of application to real-world business; or
• inherent complexity in the associated accounting standard itself (e.g. financial instruments).

A particular difficulty is posed by the novel principle of ‘as seen through the eyes of management’.  This plays a prominent part in the two relatively recent standards devoted entirely to disclosure: IFRS 7 Financial Instruments: Disclosures and IFRS 8 Operating Segments.  This principle, taken together with the key role played by management intentions in the application of the underlying standard, can create unique problems for auditors.

A further problem is the mixed messages coming from analysts and other users.  We still hear the familiar message that as long as the information is ‘somewhere’ in the report and accounts, informed users do not really mind how it is presented.  But there is now a growing interest (actively encouraged by the FRS) not only in what information is disclosed but also in how, where and how prominently it is disclosed, as a means of gaining a deeper insight into management thinking.  In short, for a PLC genuinely concerned to engage with investors, mere compliance with the disclosure regime is no longer sufficient.

The course will proceed by giving a quick overview of the disclosure regimes for each of the principal standards, before focusing in a more interactive mode on the main problem areas encountered by participants and by preparers generally.  For the benefit of those not entirely familiar with the specific rules, and for ease of reference during the sessions, comprehensive summaries of the disclosure provisions for each standard covered by the course are included in the course documentation.

The course is usually divided into two parts.  The first part covers the ‘all-purpose’ standards which apply, more or less across-the board, to all listed groups.  The second part focuses on any areas of special interest to particular industries and sectors. 

Throughout the course, we draw heavily on comparative case studies of how real-life companies operating in the same or different sectors address the disclosure requirements.  Finally, we try to draw out of our discussion of each standard a working model of what constitutes ‘emerging best practice’.

Course Content

Part One: ‘All-purpose’ standards

• IAS 1 Presentation of Financial Statements, with special reference to (a) ‘Nature vs function’ in income statement, and/or (b) disclosures in notes to other comprehensive income
• IAS 12 Income Taxes, with special reference to deferred tax disclosures
• IAS 16 Property, Plant and Equipment
• IAS 17 Leases
• IAS 36 Impairment of Assets, with special reference to allocation of goodwill to CGUs
• IAS 37 Provisions, Contingent Liabilities and Contingent Assets
• IFRS 8 Operating Segments, with special reference to the correspondence with CGUs

Part Two: ‘Special interest’ standards

• IAS 19 Employee Benefits, with special reference to defined-benefit pension schemes
• IAS 33 Earnings per Share
• IAS 38 Intangible Assets, with special reference to revaluation and to capitalisation of R&D expenditure
• IFRS 2 Share-based Payment, with special reference to valuation methodology
• IFRS7 Financial Instruments: Disclosures, with special reference to fair valuation hierarchy, hedge accounting, credit risk and market risk

Delivering this course in-house for you to a number of participants could be very cost effective. Please call us on 020 7387 4484 to discuss this further.

If you have any questions about this seminar please write to us at post@redcliffetraining.co.uk.