Financial Statements and International Reporting Standards

This programmed provides the essential skills required to prepare, present and analyze financial statements in accordance to IFRS in order to:

• Evaluate past performance
• Identify business Strengths, Weaknesses, Opportunities and Threats
• Improve decision making and future financial performance
• Implement and evaluate performance measures
• Aid the Strategic Planning Process

In addition it establishes the Case for Corporate Governance and International Financial Reporting Standards by examining the Creative Methods of Accounting adopted and the case of Enron.

## Course Objectives

• Be able to Prepare and Present Financial Statements in accordance with IFRS:
  • Income Statement
  • Balance Sheet
  • Accompanying notes
  • EITHER a Statement of Changes in Equity OR A Statement of Recognized Income or Expense ("SORIE")
  • Cash Flow Statement
  • Notes, including a Summary of the Significant Accounting Policies
• Be able to Prepare Cash Budgets
• Develop an understanding of the role and responsibilities of financial analysis and management as part of the Strategic Planning Process
• Be able to identify the key success factors/critical factors in their industry/division
• Be able to evaluate and analyze financial statements and the impact of IFRS using Excel® and the very latest techniques/methods of Financial Analysis focusing on profitability and cash flow
• Understand the limitations of Financial Analysis
• Improve Decision Making relating to future:
• Divisional/Individual Performance
• Capital Expenditure
• Investment Opportunities
• SWOT Analysis
• LE PESTE & Co Analysis
• Porter's Analysis
• Asset valuations
• Earnings valuations
• Market valuations
• Evaluate future market/competitive trends using:
• Be able to value businesses and evaluate/analyze business valuations based on:
• Become aware of the Case for Corporate Governance and International Financial Reporting Standards
• Identify the Creative Methods adopted by companies when preparing their financial statements
• Appreciate the Lessons Learnt from the Enron Case
• Gain an understanding of the major IFRS
• Become aware of the International Adoption of IFRS, Current Issues/IFRS Convergence Projects and the Problems of Convergence

## Course Outline

Preparing Income Statements and Balance Sheets together with accompanying notes

• Preparing Financial Statements:

• The Profit & Loss Account (Income Statement)

• The Balance Sheet

• Accompanying notes

• Key Elements - Defined and Explained

• Profit

• Revenue & Capital Expenditure

• Assets - Fixed & Current

• Liabilities - Current & Long-term

• Reserves - Capital & Revenue

• Working Capital

• Net Worth

• An introduction to IFRS, International Financial Reporting Standards

• Annual Reports & Accounts

• Book Value versus Market Value

Preparing Cash Flow Statements and Cash Budgets

• Profit and Cash - what is the difference?

• The Cash Flow Cycle

• Working Capital – Analysis and Management

• Cash Flow Statements

• Preparations

• Roles

• Interpretation

• Cash Budgets

• Preparation

• Role

• Interpretation

• The Analysis of Financial Statements

The Role and Methods of Financial Analysis

• Financial Analysis as part of the Strategic Planning Process

• The Role & Responsibilities of Financial Analysis and Management

• Identifying key success factors in your industry sector

• Financial review compared to targets and expectations and Variance Analysis

• Financial performance measurement systems

• Methods of Financial Analysis

• Common Size Statements

• Trend Analysis

• Ratio Analysis

• Du-Pont Analysis

• Z scores

• Investment Ratios

• Cash flow Analysis

• Peer Group/Industry comparison

• Sensitivity & Scenario Analysis

• Establishing the need for both Financial and Non-Financial Analysis

• Non-Financial Analysis

• SWOT Analysis

• LE PESTE & Co Analysis

• Porter's Analysis

• Techniques/Models Combining Financial and Non-Financial Analysis

Analyzing and Evaluating Financial Performance

• The Analysis and Evaluation of various Case Studies using Excel® in order to:

• Assess past performance

• Identify Strengths, Weaknesses, Opportunities and Threats

• Improve Decision Making relating to Future

• Divisional/Individual Performance

• Capital Expenditure

• Investment Opportunities

• Implement and Evaluate Performance Measures

• Aid the Strategic Planning Process

Valuation and Business Performance

• Definitions of Value

• Methods of Business Valuation

• Asset Based

• Earnings Based

• Market

• Value to the Investor

• Managing for Shareholder Value

• Creating Value in Restructuring and Combinations

• Business Valuation for Merger & Acquisition

• Business Restructuring and Reorganizations

Corporate Governance and International Financial Reporting Standards (IFRS)

• Establishing the Case for Corporate Governance and International Financial Reporting Standards

• Creative Accounting

• Enron and the Lessons Learnt

• Corporate Governance

• The Structure of IFRS:

• International Financial Reporting Standards

• International Accounting Standards

• Interpretations

• Standing Interpretations Committee

• The International Adoption of IFRS

• Current Issues/IFRS Convergence Projects

• The Problems of Convergence

The Framework for the Preparation and Presentation of Financial Statements

• Purpose and Status

• Scope

• Objective

• Underlying Assumptions

• Qualitative Characteristics of Financial Statements

• Elements of Financial Statements

• Recognition of Elements of Financial Statements

• Measurement of the Elements of Financial Statements

The Presentation of Financial Statements in accordance with IFRS

• Balance Sheet

• Income Statement

• EITHER A Statement of Changes In Equity OR A Statement of Recognized Income or Expense ("SORIE")

• A Cash Flow Statement

• Notes, including a Summary of the Significant Accounting Policies

The Interpretation of Financial Statements and the impact of IFRS

• Financial Analysis

• Common Size Statements

• Trend Analysis

• Ratio Analysis

• Du-Pont Analysis

• Z scores

• Investment Ratios

• Cash Flow Ratios

• Peer Group/Industry comparison

• Sensitivity & Scenario Analysis

• International Accounting Diversity

• Comparative analysis of companies adopting IFRS and those not adopting IFRS

• The Impact of IFRS on accounting diversity

• The Case for further IFRS