Share Based Payments

In this article, Steve Collings outlines the requirements of IFRS 2 ‘Share-Based Payment’ and considers the implications on the financial statements of an entity entering into such a transactions.

The objective of IFRS 2 is to outline the financial reporting requirements that an entity who engages in share-based payment transactions should comply with in their financial statements. It outlines the requirements an entity is to reflect in both its profit and loss account (statement of comprehensive income) and its balance sheet (statement of financial position) that the effects of share-based payments has on the entity’s financial statements.

IFRS…

The UK Companies Act and Accounts

In the UK, the Companies Act 2006 contains provisions which govern the requirements companies are required to comply with in terms of their accounts and bookkeeping.

This article looks at some of the main provisions and is relevant to students studying F4 ‘Corporate and Business Law’. The next article concerning the Companies Act 2006 will look at the various disclosure requirements.

The Companies Act 2006 repealed and restated most of the statutory provisions regarding accounts and audit for accounting periods commencing on or after 6 April 2008, notably:

• the thresholds for determining whether a company is…

Deferred Tax Considerations

As accountants, we are all familiar with accounting for taxes. A UK resident company is chargeable to corporate tax on its profits wherever they arise, other than dividends received from other UK companies and this liability is accounted for as a current liability – very straight forward.

The complexities seem to arise when deferred tax appears on the scene and with more and more companies taking advantage of HMRC’s £50,000 Annual Investment Allowance, deferred tax issues may become a material component of a company’s financial statements.

This article looks at the concept of deferred tax and…

Where has all the money gone?

Students of financial reporting papers will need to develop a sound understanding of the primary statement known as the ‘Statement of Cash Flows’. The statement of cash flows is renowned for causing varying degrees of problems with students because depending on the level of financial reporting paper you are sitting will depend on the level of complexity you are expected to deal with when dealing with this primary financial statement.

This article looks at the key aspects of the statement of cash flows and will also look at how the statement differs depending on which GAAP you are sitting.…

Revenue Recognition

The concept of revenue recognition can be a complex issue and in recent years has been the subject of some high profile accounting restatements – particularly in the US. Undeniably, there can be a temptation to manipulate revenue for various reasons and it is for this reason that standard setters are particularly keen on the principles of revenue recognition.

This article looks at the issue concerning revenue recognition. Revenue recognition is dealt with in IAS 18 ‘Revenue’, Application Note G (ANG) to FRS 5 ‘Reporting the Substance of Transactions’ and in FRSSE. For the purposes of this article we will…