CORPORATE FINANCIAL REPORTING FINAL - icmai.in

1 FINAL : PAPER -17 FINALSTUDY NOTES (Incorporating IND-AS) CORPORATE FINANCIAL REPORTINGThe Institute of Cost Accountants of IndiaCMA Bhawan, 12, Sudder Street, Kolkata - 700 016 SYLLABUS - 2016 First Edition : August 2016 Reprint : January 2018 Revised : November 2018 Revised Edition : January 2019 Edition : August 2019 Published by :Directorate of StudiesThe Institute of Cost Accountants of India (ICAI)CMA Bhawan, 12, Sudder Street, Kolkata - 700 at :M/s. Aravali Printers & Publishers (P) , Okhla Industrial Area, Phase-IINew Delhi - 110 020 Copyright of these Study Notes is reserved by the Institute of Cost Accountants of India and prior permission from the Institute is necessary for reproduction of the whole or any part 17: CORPORATE FINANCIAL REPORTING (CFR)Syllabus Structure The syllabus comprises the following topics and study weightage:AGAAP and Accounting Standards20%BAccounting of Business Combinations & Restructuring20%CConsolidated FINANCIAL Statements20%DDevelopments in FINANCIAL Reporting25%EGovernment Accounting in India15%B20%A20%C20%D25%E15%ASSESSMENT STRATEGYT here will be written examination paper of three understand the recognition, measurement, disclosure and analysis of information in an entity s FINANCIAL statements to cater the needs of the Aims The syllabus aims to test the student s ability to.

2 Demonstrate the FINANCIAL statements for understanding of stakeholders ; Analyze the impact of GAAP and its application for REPORTING and compliance ; Evaluate FINANCIAL statements for strategic decision - making ; Interpret and apply the ongoing developments for FINANCIAL set required Level C: Requiring skill levels of knowledge, comprehension, application, analysis, synthesis and A : GAAP and Accounting Standards20%1. Accounting StandardsSection B : Accounting of Business Combinations & Restructuring20% of Business Combinations & RestructuringSection C : Consolidated FINANCIAL Statements (Ind AS)20% FINANCIAL StatementsSection D : Developments in FINANCIAL REPORTING and other item of Reporting25% Trends in FINANCIAL , Accounting and REPORTING of FINANCIAL Instruments and others (Ind AS) Based Payments (Ind AS) through XBRL (Extended Business REPORTING Language)Section E : government Accounting in India15% Accounting Procedure and StandardsSyllabus- 2016 SECTION A: GAAP AND ACCOUNTING STANDARDS [20 MARKS ]1.

3 Accounting Standards (a) Generally Accepted Accounting Principles in India (b) Overview of Accounting Standards (AS) (c) International FINANCIAL REPORTING Standards (d) Over View of Ind ASSECTION B: ACCOUNTING OF BUSINESS COMBINATIONS & RESTRUCTURING [20 MARKS ]2. Accounting of Business Combinations & Restructuring (as per Ind AS) (a) Relevant Terms, Types of merger, methods of accounting, treatment of Goodwill arising on merger, Purchase consideration and settlement (b) Accounting in books of vendor/ transferor and transferee (c) Accounting for investment in subsidiary (d) Accounting for Mergers / Acquisitions (including chain holdings, cross holdings, multiple holdings) (e) CORPORATE FINANCIAL restructuring, Reconstruction Schemes, De-merger, Reverse merger (g) Notes to Accounts & related disclosures under amalgamationSECTION C: CONSOLIDATED FINANCIAL STATEMENTS [20 MARKS ]3.

4 Group FINANCIAL Statements (a) Concept of a group, Purposes of consolidated FINANCIAL statements, Consolidation procedures, Non-controlling interest, Goodwill, Treatment Pre-acquisition profit and Postacquisition profit and concept of Fair value at the time of acquisition. (b) Consolidation with two or more subsidiaries, consolidation with foreign subsidiary. (c) Consolidated Income Statement, balance Sheet and Cash Flow Statements for Group of companies. (d) Impact on group FINANCIAL statements at the point of acquisition (e) Treatment of investment in associates in consolidated FINANCIAL statements. Compare and contrast acquisition and equity methods of accounting (f) Treatment of investment in joint ventures in consolidated FINANCIAL statementsSECTION D: DEVELOPMENTS IN FINANCIAL REPORTING AND OTHER ITEM OF REPORTING [25 MARKS ]4. Recent trends in FINANCIAL REPORTING (a) Sustainability REPORTING (b) Tripple Bottom Line REPORTING (c) CORPORATE Social Responsibility REPORTING (CSR REPORTING ) (d) Fair Value Measurement (e) Integrated REPORTING (IR) (f) Business Responsibility Reporting5.

5 Valuation, Accounting and REPORTING of FINANCIAL Instruments and others (a) Recognition & Valuation FINANCIAL Instruments (Ind AS) (b) GST Accounting (c) NBFC Provisioning Norms and Accounting (d) Valuation of Shares (e) Valuation of Goodwill6. Share Based payments transactions (Ind AS)7. REPORTING Through XBRL (Extended Business REPORTING Languate) SECTION E: government ACCOUNTING IN INDIA [15 MARKS]8. government Accounting (a) General Principles and comparison with commercial accounting (b) Role of Comptroller and Auditor General of India (c) Role of Public Accounts Committee, Review of Accounts (d) government Accounting Standards issued by government Accounting Standards Advisory Board (GASAB) (e) government Accounting and ReportingSECTION A GAAP AND ACCOUNTING STANDARDSS tudy Note 1 : Accounting Generally Accepted Accounting Principles in India Overview of Accounting Standards International FINANCIAL REPORTING Standards Applicability of Indian Accounting Standards Overview of Indian Accounting Standards (Ind AS) 93 SECTION B ACCOUNTING OF BUSINESS COMBINATIONS & RESTRUCTURINGS tudy Note 2 : Accounting of Business Combinations and Restructuring Introduction Types of Meger Concept of Business Combination Ind AS.

6 103 Business Combination Scheme of Reconstruction Business Combination under Common Control Demerger Concpet Reverse Acquisition 209 SECTION C CONSOLIDATED FINANCIAL STATEMENTSS tudy Note 3 : Consolidated FINANCIAL Holding Company Transactions and Accounting Ind AS 110: Consolidated FINANCIAL Statement Summarised Accounting Requirements Equity Preparation of Group Cash Flow Statement Ind AS 27: Separate FINANCIAL Statements Ind AS 28: Investments in Associates and Joint Ventures Ind AS 105: Non-current Assets held for sale and Discontinued Operations Ind AS 111: Joint Arrangements Ind AS 112: Disclosure of Interests in Other Entities 256 SECTION D DEVELOPMENTS IN FINANCIAL REPORTING AND OTHER ITEM OF REPORTINGS tudy Note 4 : Recent Trends in FINANCIAL Sustainability REPORTING Concept of Triple Bottom Line (TBL) Concept of Triple Bottom Line REPORTING Benefits of Triple Bottom Line REPORTING Implementation of Triple Bottom Line REPORTING Forms of TBL REPORTING Users of TBL REPORTING FINANCIAL REPORTING vis- -vis Triple Bottom Line REPORTING Challenges of Triple Bottom Line REPORTING Framework CORPORATE Social Responsibility REPORTING (CSR REPORTING ) Ind AS 113: Fair Value Measurement Integrated REPORTING (IR) Business Responsibility REPORTING 271 Study Note 5 : Valuation, Accounting and REPORTING of FINANCIAL Instruments and Recognition & Valuation of FINANCIAL Instruments (Ind AS-32, Ind AS-107 & Ind AS-109) Goods and Services Tax (GST) Accounting NBFC - Provisioning Norms and Accounting Valuation of Shares Valuation of Goodwill 324 Study Note 6.

7 Share Based Introduction Share Based Payment Employee Share Based Payment Plans Share Based Payment Transaction Recognition of Share Based Payment in FINANCIAL Statement Measurement of Share Based Payment Disclosure Accounting335 Study Note 7 : REPORTING through XBRL (Extended Business REPORTING Language)7. 1 Concept of XBRL Meaning of XBRL Definition of XBRL Important XBRL Related Concepts Myths Regarding XBRL Features of XBRL REPORTING Benefits of XBRL REPORTING Users of XBRL XBRL International XBRL in India 350 SECTION E government ACCOUNTING IN INDIAS tudy Note 8 : government government Accounting an Overview General Principles of government Accounting Comparison between government Accounting and Commercial Accounting government Accounting & REPORTING Comptroller and Auditor General of India (C&AG) Public Accounts Committee ( ) Review of Accounts government Accounting Standards Advisory Board (GASAB) government Accounting Standards Issured by government AccountingStandards Advisory Board (GASAB) Indian government Accounting Standards (IGAS) Indian government FINANCIAL REPORTING Standards (IGFRS) 379 Section AGAAP and Accounting Standards(Syllabus - 2016)

8 THE INSTITUTE OF COST ACCOUNTANTS OF INDIA 1 Study Note - 1 ACCOUNTING STANDARDSThis Study Note Generally Accepted Accounting Principles in Overview of Accounting International FINANCIAL REPORTING Applicability of Indian Accounting Overview of Indian Accounting Standards (Ind AS)INTRODUCTIONA ccounting is the language of business. The primary function of the discipline of accounting is to provide FINANCIAL information to the users of the FINANCIAL statements. For this purpose, it is required to record the transactions entered into by a concern during an accounting period in different books of accounts. However, different organisations may practice it in different ways. Thus, to ensure uniformity among different entities and to ensure consistency over a period of time, a framework has been developed over the time period. This framework is referred to as Generally Accepted Accounting Principles (GAAP).

9 Indian GAAP is nothing but a set of accounting standards that every company operating in India has to follow when REPORTING its FINANCIAL results. Generally Acceptable Accounting Standards differ for each country as they incorporate policies and procedures that have to be followed for FINANCIAL disclosures as per the standards set in each of Chartered Accountants of India (ICAI), Ministry of CORPORATE Affairs (MCA) are the bodies in India that have set the Accounting standards(Indian Accounting Standards) that need to be followed while FINANCIAL REPORTING , So Indian Accounting Standards are termed as Indian OF ACCOUNTINGA ccounting may be defined as the process of recording, classifying, summarising, analysing and interpreting FINANCIAL transactions and communicating the results thereof to the users interested in such communication. In other words, accounting can be defined as an information system that provides information to users about the economic activities and condition of an entity for the purpose of the above definition, the following attributes of accounting can be observed: Identification of monetary transactions and events.

10 Measurement of the identified transactions and events. Recording of such transactions. Classifying and summarising of the recorded transactions. Obtaining the results of operations. Analysing and interpreting the results to help in decision-making. Communicating such information to the users (both, internal and external).Primarily the focus of Accounting is limited upto to the preparation of FINANCIAL statement, later on the communicating function was incorporated in the definition of accounting. It is a service activity to provide qualitative FINANCIAL information and it is useful in making economic FINANCIAL REPORTING2 THE INSTITUTE OF COST ACCOUNTANTS OF INDIA GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN INDIAMEANING OF GAAPThe various factors that have led to difference in accounting practices comprise widely of the culture, traditions, economic development, economic growth mode, inflation, legal system diversity demands unification to the extent possible to develop Generally Accepted Accounting Practices (GAAP).