Programme Overview
 
Accounting standards set out the measurement principles for all assets included in the statement of financial position. The initial recognition of an asset may simultaneously give rise to the recognition of other items in the financial statements such as a liability and this may affect the valuation of the assets.
 
The value of assets is influenced by a myriad of factors in practice such as the cost of purchase, borrowing costs, decommissioning costs, commissioning costs, foreign exchange, taxation, hedging activities, nature of acquisition contracts etc. Standard setters have issued numerous accounting standards to tackle the valuation of an asset both on initial recognition and on subsequent measurement. The value of assets can also be impaired by unfavourable future operating conditions that are highly judgemental and controversial.
 
Programme Objective
 
This seminar takes a holistic approach towards accounting for the measurement of all assets and aims to enhance participants’ understanding of the following areas:
 

• Measurement principles of assets and its interrelationship with liabilities

• Various methods and options that are permitted for managing value of assets under accounting Standards

• Use of discounted cash flow techniques to measure assets such as:

• Leases, decommissioning costs, impairment of assets, fair value measurement, amortise cost accounting etc

• Classification and measurement of financial assets

Programme Outline

GENERAL MEASUREMENT PRINCIPLES UNDER “THE FRAMEWORK”
 

• Measurement bases
  • Historical cost; Current cost; Realisable value; Present value; Fair value
  • Dealing with initial and subsequent measurement

 
Specific measurement issues for each of the following assets
 

• Property, plant and equipment (PPE)
  • How to determine the measurement unit for PPE by distinguishing between items of PPE and parts of PPE
  • Transfer and reclassification of PPE and its impact on valuation
  • Accounting for depreciation:
    • Determining useful life; depreciation method; residual value
  • Accounting treatment for PPE using the cost model and revaluation model
  • Changes in value of PPE due to ‘Changes in Existing Decommissioning, Restoration Liabilities’
  • How to value PPE when it is transferred from the customer
• Investment property
  • The distinction between accounting for property “held to earn rental” and “held for rental to others”
  • The impact of fair value model and cost model
  • Accounting for the value of leasehold property- classified as operating lease or finance lease for lessor
  • How transfers to/from investment property to other categories of assets can affect the valuation of assets
• Leasehold property (lessee and lessor)
  • Interaction between leasehold property, property under PPE and investment property
  • Classifying and measuring leasehold land and building as an operating lease or a finance lease
  • Measuring leasehold property classified as investment property
• Leased assets of a lessee
  • Measuring right-of-use assets
• Intangible assets
  • Valuation of intangible assets
  • Amortisation of intangible assets with finite and indefinite useful life
  • Accounting for intangible assets using cost model and revaluation model
  • How to recognise and value web site costs
• Non-current assets held for sale and held for distribution
  • Determining lower of carrying amount and fair value less cost of disposal
  • Determining the value of non-current assets held for sale
  • Determining the value of non-current assets to be abandoned
  • Determining the value of non-current assets held for distribution
  • How to measure assets that are reclassified from held for sale or distribution
• Measuring financial assets
  • Dealing with measurement of the following:
    • Receivables, deposits, advances, amount due from related companies, investments in equity and fixed income instruments
  • Interrelationship between classification and measurement of financial assets
  • Relationship between fair value and amortised cost accounting
  • Measurement options for investment in subsidiary and associates

Other standards affecting the value of assets

• Procedures for capitalisation of borrowing costs into assets
• Fair value measurement
• The effect of foreign exchange in the valuation of assets

Managing impairment to value of assets

General impairment principles

• Determining “recoverable amount”:
• How to derive “fair value less cost to sell”
• How to calculate “value in use”
• Impairment of investment in subsidiaries and consolidated goodwill
• Reversal of impairment loss

Impairment of specific asset

• Financial assets, contract assets, contract cost etc

  
Training Methodology

Lecture style, with practical illustrations, technical flow-charts, conceptual “mind maps” and interactive discussions. The course also uses mini case studies to illustrate the interrelationships between assets and other items in the financial statements, as well as practical guides to enhance understanding of the salient features of each standard listed in the outline above.


Closing Date for Registration

1 week before programme or until full enrolment
 

Intended For

This programme is suitable for Finance Professionals and Audit Professionals such as Finance Managers, Accountants, Audit Managers, Audit Seniors and Associates.

Programme Facilitator(s)