分析复习课件f7-11ias

1、5-1Topic 3 Revenue recognition and substance over formIAS 18 Revenue recognition Revenue is defined as the gross inflow of economic benefits (cash, receivables, other assets) arising from the ordinary operating activities of an enterprise (such as sales of goods, sales of services, interest, royalti

2、es and dividends).5-2Topic 3 Revenue recognition and substance over formIAS 18 Revenue recognition Recognition of revenue when selling goods Revenue arising from the sale of goods should only be recognized when all of the following criteria have been satisfied:risk and rewards of ownership has been

3、transferred from seller to buyerManagement involvementRevenue and expense can be reliably measuredEconomic benefits will flow to the seller5-3Topic 3 Revenue recognition and substance over formIAS 18 Revenue recognition Recognition of revenue when rendering of service Revenue arising from rendering

4、of service, should only be recognized when all of the following criteria have been satisfied:Stage of completion Management involvementRevenue and expense can be reliably measuredEconomic benefits will flow to the seller5-4Topic 3 Revenue recognition and substance over formIAS 18 Revenue recognition

5、 Recognition of revenue for interest, royalties, and dividends For interest, royalties and dividends, provided that it is probable that the economic benefits will flow to the enterprise and the amount of revenue can be measured reliably, revenue should be recognized as follows:Interest: on a time pr

6、oportion basisRoyalties: on an accruals basisDividends: when the shareholders right to receive payment is establised.5-5Topic 3 Revenue recognition and substance over formIAS 18 Revenue recognition Measurement of revenue Revenue should be measured at the fair value of the consideration receivable. A

7、n exchange for goods or services of a similar nature and value is not regarded as a transaction that generates revenue. If the inflow of cash or cash equivalents is deferred, the fair value of the consideration receivable is less than the nominal amount cash and cash equivalents to be received, and

8、discounting is appropriate.5-6Topic 3 Revenue recognition and substance over formIAS 18 Revenue recognition DisclosureAccounting policy for recognizing revenueAmount of each of following types of revenue:Sale of goodsRendering of servicesInterestRoyaltiesDividendsWithin each of the above categories,

9、 the amount of revenue from exchanges of goods or services.5-7Topic 3 Revenue recognition and substance over formSubstance over form A key objective of IAS 1 is to ensure that an entity reports the true commercial effect of all its transactions. A traditional approach to revenue may be inadequate to

10、 deal with complex situations where the commercial substance of a transaction may not be the same as its strict legal form. In practice this objective is achieve by considering the effect of the transaction on the assets and liabilities of the enterprise.5-8Topic 3 Revenue recognition and substance

11、over formSubstance over form Consignment stock This area has been of greatest relevance to the car industry. When a dealer holds stock from a manufacture on a sale or return basis legal title passes when there is a sale to a third party or after a predetermined period of time.In keeping with general

12、 principles this will depend on whether it is the dealer or the manufacture who bears the risk and benefits from the rewards of ownership. 5-9Topic 3 Revenue recognition and substance over formSubstance over form Sale and repurchase agreement Although the owner of an asset transfer legal title to an

13、other party, in exchange for an amount equal to the market value of the asset or a percentage of that value, an option to reacquire legal title at a later date is retained.If the owner intends to exercise the option to reacquire legal title the transaction should not be accounted for as a sale and s

14、ubsequent purchase but as a loan with associated finance costs.5-10Topic 3 Revenue recognition and substance over formSubstance over form Sale and lease back This is an example of a sale a repurchase agreement. The first step is to identify whether the lease is an operating lease or finance lease in

15、 line with IAS 17.5-11Topic 3 Revenue recognition and substance over formSubstance over form Sale and lease back Finance lease back: the lessee retains the risk and benefits attaching to the asset. The substance is a LOAN secured on the asset, rather than a sale. The asset remains on the statement o

16、f financial position at its original value and the amount received on the sale is treated as a loan. The lease payments are treated as usual, allocated between interest and capital. Operating lease back: If the sale price is significantly less than the FV of the asset and operating lease rentals are

17、 below the market rate the gain or loss on disposal should be calculated using the fair value of the asset and the operating lease rentals should be increased to the market rate each year.5-12Topic 3 Revenue recognition and substance over formSubstance over form Factoring of debts Debt factoring tak

18、es place when a company decides to sell its debtors to a factoring company to help improve cash flow or reduce the cost of administering the sales ledger. 5-13Topic 3 Revenue recognition and substance over formSubstance over form Factoring of debts The key point in the analysis will be who bears the risk and benefit by the receivable.Where the sale of receivable is for a single non-returnable fixed sum without being held liable for irrecoverab