Advance Accounting

5th of May, 2011 NOTE ACKNOWLEDGEMENT

OF

Dear Reader: I would like to thank Almighty ALLAH, for making this effort worthwhile. I would then like to thank and convey my/our upmost regards to our respected and highly admirable Sir Muahmmad Faisal Majid, the course instructor of Advance Accounting (Elective Course of Finance) in Mohammad Ali Jinnah University Karachi, for his amiable support and guidance throughout the course not only in affairs related to the course but also in helping us understand the real essence and practices of Financial affairs in professional field. It is highly due to him that we had the opportunity of learning and exploring many things related to Finance and specially his efforts in arranging 2 Guest Speaker Sessions from professional field and in particular the first session on Corporate Governance, really helped us a lot to learn and understand many concept, which we would like to explore in future further to develop better understanding on it in the times to come. Mr M. Faisal Majid always welcomed us for any questions and really his efforts and moreover his dedication and sincerity has been an encouraging source for entire class. This dissertation would never have been produced otherwise. I also would really like to thank my other group members, for their efforts and input although it was felt that a more dedicated and sincere efforts from them would have been more appreciated and would have reaped better fruits during the presentation. Sincerely, Saqlain Abbas (FA09-MB-0179) Mohammad Ali Jinnah University Karachi 5th of May, 2011 1

Advance Accounting

Mr Muhammad Faisal Majid Course Instructor Advance Accounting (Sec A) Mohammad Ali Jinnah University, Karachi. NOTE TRANSMITTAL

OF

Highly Respected Sir Muhammad Faisal Majid, A brief report along with the presentation (being submitted on 28th April, 2011) on IAS 01, 02, 08 & 10 is hereby submitted as a Project Report for the elective course of Advance Accounting. The Project Report and the presentation, presented in the class by me and my group members was an effort to reflect some of the elements being illustrated and conceptualized by you and by your Guest Speakers. During the course, our class was strongly motivated and enthusiastically supported by you. Your insightful guidance throughout the course has been vital for the improvement and worthiness for our efforts as an enhanced professionals. Although we and specially myself couldnt obtain the precise amount of benefits and guidance which we should have from a professional and dedicated teacher like you (which really is a rarity to see during our other courses) We really thank you for all what you have been and we really look forward to your guidance in the times to come. Sincerely, For & On Behalf Of Group Members Saqlain Abbas (FA09-MB-0179) Mohammad Ali Jinnah University Karachi

Table of Contents:
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Advance Accounting

Acknowledgement 01 Letter of transmittal 02 Table of Contents 03 A Glance at IAS IAS 01: Presentation of Financial Statements) Page 05 Objectives Financial Statement Consist Of 06 Essentials Elements / Characteristics of Financial Statement 07 IAS 2: INVENTORIES/STOCK Page 09 Some Basic Terminologies 09 Objectives Measurement 10 Cost Included 10 Cost Not Included Cost Measurement Techniques 11 NET REALIZABLE VALUE (NRV): 12 Expense Recognition 13 Disclosures IAS 8: ACCOUNTING POLICIES 14 Objectives & Scope & Accounting Policies 14 Characteristics of an Accounting Policy 15 Accounting Treatment of Change in Accounting Policy 15 Changes in Accounting Policy 16 Disclosure Requirements Of Changes In Accounting Policy Page 16

Page Page Page Page 04 Page 06 Page Page

Page Page 09 Page Page Page 11 Page Page Page Page 13 Page Page Page Page Page

Advance Accounting

Page 17 IAS 10: Events after the Balance Sheet Date Page 18 Definitions, Objectives, Scope Page 18 Recognition and Measurement Page 19 Events after the balance sheet date that do not involve adjustments Page 19 Information Disclosure, Dividends, Effective Date Page 19

Change in Accounting Estimates & Errors