AC 17-2 Financial Reporting - Majan University College
Learning outcome 1: Develop understanding of relevant accounting principles and various rules/regulations applicable for preparation of financial statements as per international financial reporting standards (IFRSs).
Learning outcome 2: Develop the ability to identify and apply IFRSs principles in a variety of scenarios thus leading to fair presentation of financial performance
The recognition and disclosure of provisions require the interpretation of probabilities, key assumptions and estimation uncertainty. Therefore recognition of provisions can play an important role in the preparation of financial reporting. A contingency may give rise to a contingent liability, disclosed and communicated through the notes included in financial reports. Therefore, financial statements must include all the information necessary for an understanding of the company's financial position
International Accounting Standards (IAS) 37 deals with Provisions, Contingent Liabilities and Contingent Assets and the objective of this Standard is to define provisions, contingent liabilities and contingent assets, identify the circumstances in which provisions should be recognized, how they should be measured and the disclosures that should be made about them. The Standard also requires that certain information be disclosed about contingent liabilities and contingent assets in the notes to the financial statements to enable users to understand their nature, timing and amount.
You are required to write a report covering the following points:
• A brief introduction of IAS 37 Provisions, Contingent liabilities and Contingent Assets and explain why an accounting standard on provisions is necessary.
• An analysis of Recognition criteria for Provisions and Contingent liabilities in IAS 37 with suitable examples. Support your discussion with Decision Tree which gives a summary of its requirements concerning provisions and contingent liabilities.
• Critical explanation on measurement of provisions in IAS 37.
• Analyse financial statements of any FIVE listed companies on Muscat Securities Market (MSM) for the year 2019, to study the application of IAS 37 in terms of recognition and measurement of provisions and evaluate the financial effect of provisions on financial performance and financial position of chosen companies. Support your discussion with relevant calculations.
• Discuss the recent amendments to IAS 37 regarding onerous contracts.
• Appropriate conclusion.
• All discussion should be supported by adequate recent literature review.
Attachment:- Financial Reporting.rar