Course Detail(BF078 : Financial Mathematics & Applied Economics for Financial Reporting)

BF078 : Financial Mathematics & Applied Economics for Financial Reporting

7.00 CPE Hours (Others)
Classroom

Introduction
Information contained in financial statements is generally determined based on established economic theories. These theories underpinned the mathematics used to measurement financial value of elements of financial statements. A sound understanding of practical economic theories and mathematical models used in measuring assets and liabilities are essential to practicing accountants. Much of these theories and mathematics are now being incorporated into FRS/IFRS in areas such as financial instruments, impairment of assets, share-based payments, fair value measurement etc.
 
Programme Objective
This course introduces you to the essential financial mathematics as well as certain important economic theories that are commonly used in the financial reporting. The course illustrates the complex mathematics used in the measurement of assets and liabilities in accordance with FRS/IFRS.  After attending the course you should have a better understand of the practical aspect of economic theories that influence financial reporting environment and the ability to use the essential mathematical models in practice

Programme Outline

The fundamental concepts and tools of financial mathematics

  • Relationship between economic, finance and financial reporting
  • Time value of money: The mathematical relationship between risk and return
    • Using single period model
    • Multi period financial market model
  • The use of net present value concept in practice
  • Development of formulae for calculating present values and future values
  • Case studies: Calculation of present value for various types of cash flow patterns 

 
Understanding structures of interest rates

  • The theories of term structure of interest rates
  • Constructing a yield curve
  • Determining Spot interest rate
  • Finding forward interest rates

 
Understanding the mathematics for contractual cash flows

  • Basic character of bonds
  • How to calculate yield to maturity
  • Finding fair value of bonds
  • Bond price sensitivity (the credit risk factor)
  • Price/yield relationship
  • Applying to IAS39/FRS39 Financial Instruments:
    • Determining original effective interest rate
    • The mathematical relationship between fair value and amortised cost
  • The effect of transaction cost on calculation of original effective interest rates

 
Understanding inflation, interest rates and foreign exchange rates

  • The Theory of one price
    • Purchasing power parity (inflation rate)
    • Interest rate parity
    • International Fisher parity
    • Foreign exchange rate expectation
    • Fisher effect
  • Application to IAS29/FRS29 Financial Reporting in Hyperinflationary Economies
  • How inflation affects cash flow projection and its relationship with discount rate used in present value calculation in IAS36/FRS36.

 
Cost of capital

  • Discount rate determination
  • The required return and risk
  • Capital Assets Pricing Model
    • How to use beta
    • Gearing and ungearing beta
    • Risk adjusted beta
  • Determining and using weighted average cost of capital
  • Handling inflation by adjusting discount rate
  • Applying to IAS36/FRS36 Impairment of Assets:
    • Determining discount rate (finding value in use)

 
Introduction to the fundamental mathematics used in pricing derivatives

  • Basic understanding of pricing derivatives

 
Training Methodology
Lecture style, with practical illustrations, technical flow-charts, conceptual “mind maps” and interactive discussions.


Closing Date for Registration
1 week before programme or until full enrolment

Intended For

This programme is suitable for all Finance Professionals, Audit Professionals, Members of Audit Committee, Finance Directors and Regulators. Those who are keen on attending a practical course that provides a basic understanding of economic theories that underpinned the various mathematical models used in practice to value assets and liabilities are welcome to attend.

Competency Mapping

Others = 7.00 Hours

Schedule & Fees

Date & Time

17 Sep 2020 (9:00 AM - 5:00 PM)

Fee (inclusive of GST)

For Members: $ 345.61
For Non-Members: $ 415.16

Programme Facilitator(s)

Danny Tan

Venue

60 Cecil Street
ISCA House
Singapore 049709

Date & Time

24 Sep 2019 (9:00 AM - 5:00 PM)

Registration is closed

Programme Facilitator(s)

Danny Tan

Date & Time

24 Sep 2018 (9:00 AM - 5:00 PM)

Registration is closed

Programme Facilitator(s)

Danny Tan

Date & Time

18 Dec 2017 (9:00 AM - 5:00 PM)

Registration is closed

Programme Facilitator(s)

Danny Tan

Testimonial

Funding

No funding Available!

Programme Facilitator(s)


Danny Tan

Danny has over 30 years of experience in public practice, commerce and industry. He was trained with a firm of Chartered Accountants in London where he worked for over 10 years in the audit and consultancy. He also held the positions of business development and business operation manager with two UK multinational companies based in London for 5 years. Danny specialises in International Financial Reporting Standards (IFRSs) and in the last 15 years he is a partner of a firm providing training and consulting in the areas of preparing and presenting financial statements in accordance with IFRSs.


Danny holds an Honours Degree in Economics (major in finance and investment) from Manchester Metropolitan University (UK), MBA from Heriot-Watt University (UK) and Master in Advance Business Practice from University of South Australia. He is a fellow member of Chartered Instituted of Management Accountants, a fellow member of Association of Chartered Certified Accountants, a member of Malaysian Institute of Accountants and an associate member of Chartered Tax Institute of Malaysia.
 

Introduction
Information contained in financial statements is generally determined based on established economic theories. These theories underpinned the mathematics used to measurement financial value of elements of financial statements. A sound understanding of practical economic theories and mathematical models used in measuring assets and liabilities are essential to practicing accountants. Much of these theories and mathematics are now being incorporated into FRS/IFRS in areas such as financial instruments, impairment of assets, share-based payments, fair value measurement etc.
 
Programme Objective
This course introduces you to the essential financial mathematics as well as certain important economic theories that are commonly used in the financial reporting. The course illustrates the complex mathematics used in the measurement of assets and liabilities in accordance with FRS/IFRS.  After attending the course you should have a better understand of the practical aspect of economic theories that influence financial reporting environment and the ability to use the essential mathematical models in practice

Programme Outline

The fundamental concepts and tools of financial mathematics

  • Relationship between economic, finance and financial reporting
  • Time value of money: The mathematical relationship between risk and return
    • Using single period model
    • Multi period financial market model
  • The use of net present value concept in practice
  • Development of formulae for calculating present values and future values
  • Case studies: Calculation of present value for various types of cash flow patterns 

 
Understanding structures of interest rates

  • The theories of term structure of interest rates
  • Constructing a yield curve
  • Determining Spot interest rate
  • Finding forward interest rates

 
Understanding the mathematics for contractual cash flows

  • Basic character of bonds
  • How to calculate yield to maturity
  • Finding fair value of bonds
  • Bond price sensitivity (the credit risk factor)
  • Price/yield relationship
  • Applying to IAS39/FRS39 Financial Instruments:
    • Determining original effective interest rate
    • The mathematical relationship between fair value and amortised cost
  • The effect of transaction cost on calculation of original effective interest rates

 
Understanding inflation, interest rates and foreign exchange rates

  • The Theory of one price
    • Purchasing power parity (inflation rate)
    • Interest rate parity
    • International Fisher parity
    • Foreign exchange rate expectation
    • Fisher effect
  • Application to IAS29/FRS29 Financial Reporting in Hyperinflationary Economies
  • How inflation affects cash flow projection and its relationship with discount rate used in present value calculation in IAS36/FRS36.

 
Cost of capital

  • Discount rate determination
  • The required return and risk
  • Capital Assets Pricing Model
    • How to use beta
    • Gearing and ungearing beta
    • Risk adjusted beta
  • Determining and using weighted average cost of capital
  • Handling inflation by adjusting discount rate
  • Applying to IAS36/FRS36 Impairment of Assets:
    • Determining discount rate (finding value in use)

 
Introduction to the fundamental mathematics used in pricing derivatives

  • Basic understanding of pricing derivatives

 
Training Methodology
Lecture style, with practical illustrations, technical flow-charts, conceptual “mind maps” and interactive discussions.


Closing Date for Registration
1 week before programme or until full enrolment

Intended For

This programme is suitable for all Finance Professionals, Audit Professionals, Members of Audit Committee, Finance Directors and Regulators. Those who are keen on attending a practical course that provides a basic understanding of economic theories that underpinned the various mathematical models used in practice to value assets and liabilities are welcome to attend.

Competency Mapping

Others = 7.00 Hours

Programme Facilitator(s)

Danny Tan

Danny has over 30 years of experience in public practice, commerce and industry. He was trained with a firm of Chartered Accountants in London where he worked for over 10 years in the audit and consultancy. He also held the positions of business development and business operation manager with two UK multinational companies based in London for 5 years. Danny specialises in International Financial Reporting Standards (IFRSs) and in the last 15 years he is a partner of a firm providing training and consulting in the areas of preparing and presenting financial statements in accordance with IFRSs.


Danny holds an Honours Degree in Economics (major in finance and investment) from Manchester Metropolitan University (UK), MBA from Heriot-Watt University (UK) and Master in Advance Business Practice from University of South Australia. He is a fellow member of Chartered Instituted of Management Accountants, a fellow member of Association of Chartered Certified Accountants, a member of Malaysian Institute of Accountants and an associate member of Chartered Tax Institute of Malaysia.
 

Upcoming Schedule

Date & Time

17 Sep 2020 (9:00 AM - 5:00 PM)

Fee (inclusive of GST)

For Members: $ 345.61
For Non-Members: $ 415.16

Programme Facilitator(s)

Danny Tan

Venue

60 Cecil Street
ISCA House
Singapore 049709