Performance Reporting

Question 1

When can we change accounting policies

Answer 1

When demanded by the standard or it gives a truer and fairer view of the business performance

Question 2

How to deal with a change in accounting policy and estimate

Answer 2

Policy - Retrospectively, Estimate - Prospectively

Question 3

What are the three elements of a policy?

Answer 3

Recognition (Do we include and what included as)
Presentation (Where does it appear in FS)
Basis of Measurement

Question 4

Should a change in the depreciation method be applied retrospectively or prospectively?

Answer 4

Prospectively as an estimate

Question 5

What else may lead to a retrospective adjustment

Answer 5

Material error in prior period results

Question 6

How does IFRS 8 - Operating Segments work

Answer 6

Reportable Segment
Split by Geographical Region, Customers, Business Unit
Any one of 10% Rule (Revenue, Assets, Profit)
Discrete financial info available and;
Reviewed regularly by chief decision makers

Must ensure at least 75% separately reporting
Maximum 10 segments

Question 7

What is required for IFRS 1 - First Time Adoption?

Answer 7

Transformation from GAAP to IFRS

Reconciliation to new IFRS from prior periods:
Balance Sheet
Income Statement

Question 8

How is transition to IFRS made easy

Answer 8

Exemptions!
Where info not held:
Allowing entity to use Fair Value as deemed cost
Business combinations made easy (such as goodwill)

Borrowing costs, FX gains/losses

Question 9

What is required under IAS34 - Interim Reporting

Answer 9

Condensed:
SOFP
IS
Cash Flow
SOCIE

Disclosure Notes

Question 10

Which ratios governed by any accounting standards?

And what must we think about when using ratios

Answer 10

None - Aside from Earnings per Share

Care must be taken due to seasonality and imperfections, therefore need to be conscious and mindful (think about the company specifics and industry they operate in, what is important)

Question 11

What is the purpose of management commentary

Answer 11

How the company will manage risks and achieve strategic goals

Helps company share information which can not be captured within the financial statements

WARNING: Narrative is not precise and can be used emotively

Question 12

Give an outline of Environmental Reporting

Answer 12

It is not yet governed, growing and developing space

Can again be objective and used as a PR tool. Guidance generally that report should include SMART targets, highlight not only successes but where targets have not been met and where improvements will be made

Environment, staff, stakeholders all encompassed

Helps brand perception and accountability of actions, global citizen