About this Course

Introduction

Total equity is presented in a statement of changes in equity under FRS1 and can be broadly categorised into the following five components:

1. Issued share capital component, 

2. Accumulated other comprehensive income component, 

3. Accumulated profit or loss component, 

4. Other equity component and 

5. Non-controlling interest component.

There are interactions between each of the components of equity as well as interrelationship with other elements of financial statements such assets, liabilities, income and expense. Accounting and presenting each component of equity are complex, for example accounting for accumulated other comprehensive income components are related to the presentation of other comprehensive income with deferred tax element in the statement of profit or loss and other comprehensive income, its movements in subsequent periods such as changes in value and derecognition may result in reclassification adjustments in the statement of profit or loss and other comprehensive. Other complex issues are the distinction between equity and liability financing, equity liability swaps, use of own equity instruments to settle an obligation or to purchase goods and services, changes in value between non-controlling interest and other components of equity etc.

This seminar concentrates on two main objectives: First is the complex issue of distinguishing equity and liability and; Second, the accounting of various components of equity and their interrelationship with other components of equity as well as other elements of financial statements.

Programme Outline 

• Movement between component of equity:
  

              - Direct movement between components of equity

              - Reclassification of components of equity to profit or loss

• Effect of taxation on components of equity
  
• Distinction between equity and liability and their effect on financial ratios
  
• How to prepare statement of changes in equity in accordance with FRS1
  
• Dealing with ‘non-controlling interest’ (NCI) in consolidated financial statements and movements between NCI and other components of equity
  
• Hedge accounting
  

              - Fair value hedge:

                     - How to account for fair value hedge reserve and its subsequent movement to other elements

              - Net investment hedge:

                     - The effect on equity in parent’s separate financial statement

                     - The effect on equity in consolidated financial statements

• Accounting for raising finds through:
  

              - “issued share capital” or

              - “Other components of equity” or

              - “Liability”

• Treatment of treasury shares
  
• Share-based payment
  
• Equity and liability swap
  
• The effect of changes in fair value through OCI:
  

              - Revaluation reserve in FRS16, FRS38; FRS39

• The effect of changes in fair value through profit or loss
  

              - FRS40; FRS41; FRS39

• Distribution of dividends and their effect on equity and liability:
  

              - In cash

              - In kind (non-cash dividend)

• Foreign exchange translation differences recognised in OCI and the related ‘Foreign exchange translation reserves”
  
• Corrections of prior period errors and changes in accounting policies under FRS8 and their effect on equity
  

Intended For

This Intermediate to Advanced Level programme is suitable for Practising Accountants, Non-Practising Accountants and Audit Professionals.

Those who are keen to seek clarity and achieve a deeper understanding of the complex issues of accounting of equity and liabilities are welcome to attend.

Training Methodology

Practical case studies and interactive discussions

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