This session is delivered via live webinar (zoom platform).

Programme Overview
 
The Financial Reporting Standards (FRSs) pose significant challenges not just to the preparers of financial statements and external auditors, but also to management of business entities. Management make a plethora of business decisions: from  acquiring assets, committing to debt obligations, managing financial risks, to entering into sales and purchases contracts, etc. However, the decisions taken by management in the course of business may not be reflected in the financial statements as what management originally intended. Hence, a good understanding of how FRSs report business decisions in the financial statements is crucial in order to manage balance sheet values and profit and loss results.
 
Programme Objective
 

• This course aims to highlight to participants the importance of incorporating FRSs into business decisions by:
  • Understanding the principles of the FRSs
  • Explaining how to incorporate FRS into operational policies
  • Explaining how contractual terms can affect the application of FRSs
  • Explaining how operational results may not be reported as expected by management
  • Understanding asset management in accordance with FRSs
  • Increasing awareness of the inherent risk in applying FRSs in practice

Programme Outline

 

• Understanding the business environment and contractual terms
  • The way how contracts or contractual terms are made can significantly impact the accounting under FRSs
  •  A single contract may trigger the application of several FRSs such as recognition of:
    • Performance obligation and timing of revenue recognition
    • Provision for obligation
    • Lease liability and right-of-use assets
    • Financial instruments

 

• Understanding and analysing the sources of risks arising from FRSs:
  • Inherent risk: Examine the interpretation of FRS principles and highlight the divergence of interpretation in practice.
  • Measurement risk: Estimation of future cash flows, use probability, use of present value, fair value and complex mathematics
  • Presentation risk: Presenting income and expense, assets and liabilities, offsetting or aggregating, selective use of headings, total and subtotal
  • Market information risk: Availability of market input data to be applied in mathematical model to obtain a value
  • Users’ perception risks: Information may be misinterpreted by users of financial statements due to a lack of understanding of the FRS principles

 

• Managing what the users see
  • How to present performance
    • Presenting the results - “The bottom line” or “bottom lines”
    • “Profit or loss” Vs. “other comprehensive income”
  • How to present financial position
    • Forms and formats of presenting assets, liabilities and equity

 

• How to manage value of assets:
  • Managing acquisition value of assets
  • Use of hedge accounting to manage value of assets
  • Managing impairment for various types of assets

 

• Managing obligations:
  • Business decisions that give rise to obligations such as contractual obligations (implicit or explicit), performance obligations, constructive obligations, statutory obligation etc
  • How these obligations give rise to liabilities to be recognized in the balance sheet or may resulted in ‘contingent liabilities’ which are off the balance sheet

 

• Managing contractual terms that give rise to recognition of financial instruments
  • Understanding business contracts that give rise to “financial instruments” and those that do not
  • The importance of distinguishing contracts that give rise to liability and equity classification

 

• The ‘red flags’
  • The dos and don’ts when interpreting and applying the FRS principles in practice

 
Pre-requisite

Please take note of the following admission requirements:

• Trainings will be conducted on Zoom platform, thus video camera and microphone are compulsory
• Mandatory for video camera to be turned on throughout the course
• Display your official name (as per NRIC) in Zoom, to facilitate attendance taking
   

Training Methodology
 
Lecture style, with practical illustrations, technical flow-charts, conceptual “mind maps” and interactive discussions with the use of published financial statements
 
Closing Date for Registration

1 week before programme or until full enrolment

Intended For

This programme is particularly suitable for Business Manager with little FRS knowledge. Those who are keen on attending a practical course that examines how business contracts can have impact on financial performance, financial position and cash flows of a company are welcome to attend.

Programme Facilitator(s)