About this Course

FRS poses significant challenges not just for the preparers and external auditors but also to management of companies. Decision made by management in the course of business may not be reflected on the published financial statements as management intended. Management made business decision to acquire assets, to commit to obligations, to manage financial risk, to make sales and purchase contracts, etc. A good understanding of how FRSs report theses business decisions in the financial statements is crucial in order to manage balance sheet value and the results as reported.

To highlight the importance of incorporating FRSs into business decisions:

• Understanding the principles of the FRS
  
• How to incorporate FRS into operational policies
  
• How FRSs can affect contracts with third party
  
• How operational results may not be reported as expected by management
  
• Understanding asset management in accordance with FRS
  
• Beware of the inherent risk in applying FRS in practice
  

Programme Outline 

Managing value in the statement of financial position in accordance with FRS:

• How to manage value of assets:
  
• Managing acquisition value of assets
  
• Use of hedge accounting to manage value of assets
  

Managing impairment for various types of assets

• Managing liabilities:
  
• What are obligated contracts
  
• Business decision that give rise to obligation
  
• Managing “constructive obligations”
  
• Managing “Provision” and “contingent liabilities”
  

• Designing contractual terms for financial instrument
  
• Understanding business contracts that give rise to “financial instruments” and those that do not
  
• The importance of distinguishing contracts that give rise to liability and equity classification
  

Managing what the users see

• Presenting the results of a company - “The bottom line” or “bottom lines”
  
• The difference between “profit of loss” and “other comprehensive income”
  
• Showing equity value of a company
  
• Deciding the format of presenting assets and liabilities
  
• Show how company generate cash flows
  

Understanding and analysing the sources of risks arising from FRSs for management:

• Inherent risk: Examine the interpretation of principles of FRS and to highlight the divergence of interpretation in practice.
  
• Measurement risk: Estimation of future cash flows, use probability, use of present value, fair value and complex mathematics
  
• Presentation risk: presenting income and expense, assets and liabilities, offsetting or aggregating, selective use of headings, total and subtotal
  
• Market information risk: Availability of market input data to mathematical model in order to derive at a value
  
• Users’ perception risks: Information may be misinterpreted by users of financial statements due to lack of understanding of the FRS principles
  

The ‘red flags’

• The “do” and “do not” when interpreting and applying the principles of FRS in practice
  

Intended For

An Intermediate level programme intended for internal control officer, compliance officer, director and business manager.

Training Methodology

Lecture style with practical case studies and illustrations, using published financial statements and interactive discussions.

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