Financial Reporting and Ethics - The Institute of Chartered ...

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FINANCIAL REPORTING AND ETHICS(f)(g)(h)IAS 36 sets out the requirement for recognizing and measuringthe impairment loss of(i) an individual asset(ii) a cash generating unit, and(iii) goodwill.According to IAS 36, if the carrying amount of an asset is greaterthan the recoverable amount of the asset, then the asset isimpaired. The impairment loss is the excess of the carryingamount over the recoverable amount. The asset should bereduced to its recoverable amount and the impairment lossshould be charged as an expense in the income statement.However, the impairment loss of a revalued asset should be tradedas a revaluation decrease in accordance with the relevant IAS.What this mean is that the impairment loss on a revalued assetshould be taken to the revaluation reserve to the extent of therevaluation surplus on that asset. If the impairment loss isgreater than the revaluation surplus, the excess should becharged to the profit and loss account. When the asset is writtendown, depreciation of the impaired asset should be calculatedto write off the impaired value over the asset’s remaining life.5.2.11 Intangible AssetsRelevant Standards are:(a) Statement of Accounting Standard 22: Research and DevelopmentCosts(b) International Accounting Standard 38: Intangible AssetsThese standards address the following matters:(a)(b)According to the two Standards, Research and Development areactivities directly related to long-range planning. The effectivenessof research and development expenditure may be assessed onlyin relation to the attainment of goals specified in the long-rangeplan. The spending of millions of Naira on research anddevelopment which invariably leads to all kinds of new productsand services is important for the survival of most businesses.The world’s level of development is the product of research anddevelopment. Usually, there is a long lead time between costsincurred and benefits received.The importance of research and development to any businesscannot be over emphasized as many industries’ survival andgrowth depend to a great extent on it. The measurement andtreatment of the associated costs also affect the entity significantly.Some entities treat all research and development costs as expense104
ACCOUNTING STANDARDSin the year incurred; other entities in the same business treat thecost as intangible assets to be amortized over future years. Thesedivergent practices, no doubt, prevent the financial statementsof different entities from being readily comparable.(c)(d)(e)The entities that are adopting the practice of writing off the costof research and development rely on the provisions of Section8(2) of schedule 2 to the Companies and Allied Matters Act, 1990which stipulates that research and development costs shall notbe treated as assets in any entities’ balance sheet. However, thoseopposed to this practice opine that research and developmentcosts are so significant that writing them off in one accountingyear will distort the information content of the financialstatements of the entity. They further argue that it will be adisincentive to investors who are really interested in thedevelopment of the economy.A review of the financial statements of some entities reveals thatonly a few entities carry the cost of research and developmentactivities as asset in their financial statements whilst others donot. This, no doubt, creates problems of uniformity and comparabilityin financial reporting. Therefore, these Statements are expectedto provide an acceptable and uniform accounting practice forreporting research and development costs.The two Standards, especially IAS 38, also made adequateprovisions on the accounting treatments of intangible assets suchas goodwill, website costs, brand, etc.5.2.12 Investment PropertyRelevant Standards are:(a)(b)Statement of Accounting Standard 13: Accounting forInvestmentsInternational Accounting Standard 40: Investment PropertyThese standards address the following matters:(a)(b)Organisations, in the course of their business operations, applyall or some of their resources in acquiring assets to be held forcapital appreciation, income generation, or other purposes suchas securing trading advantages.Many financial statements published in Nigeria do not discloseadequate information about the investment held by the reportingenterprises. These statements, therefore, seek to provide a guidefor the accounting treatment of investment transactions and their105
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FINANCIAL REPORTING AND ETHICS1.3.3
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ACCOUNTING AND REPORTING POLICIESsu
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ACCOUNTING AND REPORTING POLICIES(j
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ACCOUNTING AND REPORTING POLICIES(i
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ACCOUNTING AND REPORTING POLICIES2.
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3AMALGAMATION, ABSORPTION ANDRECONS
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AMALGAMATION, ABSORPTION AND RECONS
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Page 113 and 114: 6ETHICAL FRAMEWORK, CONCEPTSAND VAL
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Page 147 and 148: 7THE ENVIRONMENT: CORPORATE,PROFESS
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THE ENVIRONMENT: CORPORATE, PROFESS
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8PROFESSIONAL ETHICS8. 0 LEARNING O
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PROFESSIONAL ETHICSobjectivity are
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PROFESSIONAL ETHICS(c)(d)The type o
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PROFESSIONAL ETHICSabout conflicts
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PROFESSIONAL ETHICS(d)(e)Confidenti
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PROFESSIONAL ETHICSA. III onlyB. II
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9DECISION MAKING IN ETHICS9. 0 LEAR
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DECISION MAKING IN ETHICS9.2 A FRAM
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ETHICAL THREATS AND SAFEGUARDS(d)We
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DECISION MAKING IN ETHICS4. A perso
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10ETHICAL THREATS TS AND SAFEGUARDS
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ETHICAL THREATS AND SAFEGUARDS(iv)(
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ETHICAL THREATS AND SAFEGUARDSto th
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ETHICAL THREATS AND SAFEGUARDSpayab
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ETHICAL THREATS AND SAFEGUARDS(a)Fi
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ETHICAL THREATS AND SAFEGUARDSimmin
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ETHICAL THREATS AND SAFEGUARDSHowev
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ETHICAL THREATS AND SAFEGUARDS(iii)
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11CORPORATE GOVERNANCE11.0 LEARNING
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CORPORATE GOVERNANCE11.3.1 Nature(a
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CORPORATE GOVERNANCEThe company sho
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CORPORATE GOVERNANCEtrust, possible
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CORPORATE GOVERNANCEAn agent has im
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CORPORATE GOVERNANCE(a)(b)(c)(d)(e)
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CORPORATE GOVERNANCE11.6.1 The law
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CORPORATE GOVERNANCEILLUSTRAUSTRATI
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CORPORATE GOVERNANCEimitated. They
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CORPORATE GOVERNANCE(a)(b)Greenbury
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CORPORATE GOVERNANCE11.9.2 Boards d
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CORPORATE GOVERNANCErelationship wi
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CORPORATE GOVERNANCE(e)(f)(g)(h)(i)
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CORPORATE GOVERNANCE(vi)Inquisitive
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CORPORATE GOVERNANCE(e)ConsultancyA
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CORPORATE GOVERNANCEThe incoming au
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CORPORATE GOVERNANCEIn summary, acc
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CORPORATE GOVERNANCEAccording to Th
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CORPORATE GOVERNANCE3. A body corpo
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12SOCIAL AND ENVIRONMENTALISSUES IN
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SOCIAL AND ENVIRONMENTAL ISSUES IN
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APPENDIX ISUGGESTED SOLUTIONS TO RE
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SUGGESTED SOLUTIONS TO REVISION QUE
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SUGGESTED SOLUTIONS TO REVISION QUE
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APPENDIX IICOMPREHENSIVE QUESTIONS
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COMPREHENSIVE QUESTIONS AND SUGGEST
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APPENDIX IIICASE STUDY 1Karsashi, a
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CASE STUDIES(iii)(iv)The floor sale
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CASE STUDIESShare price and dividen
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CASE STUDIESSUGGESTED SOLUTION(A) A
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CASE STUDY 3The following informati
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CASE STUDIESCASE STUDY 4Ologobojo i
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APPENDIX IVTable 1:SUMMARY OF INTER
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SUMMARY OF INTERNATIONAL ACCOUNTING
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APPENDIX VGLOSSARY OF TERMSAbsorpti
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GLOSSARY OF TERMSEthical Objectivis
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APPENDIX VIBIBLIOGRAPHYChambers Ham
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APPENDIX VIISTUDY AND EXAMINATION T
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STUDY AND EXAMINATION TECHNIQUES7.3
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INDEXAAbsorption, 17, 19, 39, 40, 4
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INDEXProfessional Behaviour, 136, 1
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