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FR Theory

The document provides a simplified overview of the framework and key standards for financial reporting under Ind AS, covering essential concepts such as the objective of financial reporting, components of financial statements, and specific accounting standards. It includes chapters on presentation, accounting policies, events after reporting periods, related party disclosures, earnings per share, operating segments, revenue recognition, leases, and compliance formats. This compiler serves as a quick reference for understanding the fundamental principles and requirements of financial reporting.

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51 views3 pages

FR Theory

The document provides a simplified overview of the framework and key standards for financial reporting under Ind AS, covering essential concepts such as the objective of financial reporting, components of financial statements, and specific accounting standards. It includes chapters on presentation, accounting policies, events after reporting periods, related party disclosures, earnings per share, operating segments, revenue recognition, leases, and compliance formats. This compiler serves as a quick reference for understanding the fundamental principles and requirements of financial reporting.

Uploaded by

nivasredd432
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

CA Final Financial Reporting - Simple

Theory Compiler
Chapter 1: Framework for Preparation and Presentation of Financial Statements

- Conceptual Framework: Defines objective of financial reporting, qualitative characteristics


(relevance, faithful representation), elements of FS (assets, liabilities, equity), recognition
criteria.

- Underlying Assumptions: Accrual & Going Concern.

- Measurement Bases: Historical cost, current cost, realisable value, present value.

- Capital Maintenance Concepts: Financial vs. Physical capital maintenance.

Chapter 2: Ind AS 1 - Presentation of Financial Statements

- Components of FS: Balance Sheet, Statement of P&L, Statement of Changes in Equity, Cash
Flow Statement, Notes.

- Fair Presentation & Compliance with Ind AS is mandatory.

- Consistency, Materiality, and Offsetting principles.

- Current vs. Non-Current Classification criteria.

Chapter 3: Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors

- Accounting Policies: Follow hierarchy if no specific Ind AS.

- Changes in Accounting Policies: Retrospective application.

- Changes in Estimates: Prospective application.

- Prior Period Errors: Restate comparatives, if practicable.

Chapter 4: Ind AS 10 - Events after Reporting Period

- Adjusting Events: Provide additional evidence of conditions existing at reporting date (e.g.,
settlement of lawsuit).
- Non-adjusting Events: No adjustment, but disclose if material (e.g., fire after year-end).

Chapter 5: Ind AS 24 - Related Party Disclosures

- Related Parties: Key management personnel, subsidiaries, associates, joint ventures, etc.

- Disclosures: Nature of relationship, amount, outstanding balances, commitments.

Chapter 6: Ind AS 33 - Earnings Per Share

- Basic EPS = Profit attributable to equity shareholders / Weighted avg. no. of equity shares.

- Diluted EPS: Adjust profit and shares for potential equity shares (e.g., convertible
debentures).

Chapter 7: Ind AS 108 - Operating Segments

- Segment Reporting based on internal management structure.

- Reportable Segment Criteria: 10% revenue, profit, or asset threshold.

- Disclosure: Segment revenue, results, assets, liabilities.

Chapter 8: Ind AS 115 - Revenue from Contracts with Customers

- 5 Step Model:

1. Identify the contract

2. Identify performance obligations

3. Determine transaction price

4. Allocate transaction price

5. Recognize revenue when performance obligation is satisfied

Chapter 9: Ind AS 116 - Leases


- Lessee Accounting: Recognize ROU asset and lease liability (except for short-term/low-
value).

- Lessor Accounting: Classify as operating or finance lease.

Chapter 10: Schedule III (Division II)

- Format for Ind AS compliant companies.

- Specific heads for presentation: Equity, Non-current/Current liabilities & assets.

- Disclosure requirements: Contingent liabilities, CSR, trade receivables ageing.

Note: This is a simplified compiler for concept brushing. Refer ICAI material for detailed
explanations & examples.

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