MPF_MUST International Financial Reporting

Faculty of Economics and Administration
Autumn 2024
Extent and Intensity
2/2/0. 6 credit(s). Type of Completion: zk (examination).
In-person direct teaching
Teacher(s)
Mgr. Ing. Filip Hampl, Ph.D., LL.M. (lecturer)
prof. Ing. Eva Horvátová, CSc. (lecturer)
Mgr. Ing. Filip Hampl, Ph.D., LL.M. (seminar tutor)
Guaranteed by
prof. Ing. Eva Horvátová, CSc.
Department of Finance – Faculty of Economics and Administration
Contact Person: Iva Havlíčková
Supplier department: Department of Finance – Faculty of Economics and Administration
Timetable
Thu 12:00–13:50 P106, except Thu 19. 9., except Thu 7. 11.
  • Timetable of Seminar Groups:
MPF_MUST/01: Tue 18:00–19:50 P304, except Tue 17. 9., except Tue 5. 11., F. Hampl
MPF_MUST/02: Tue 16:00–17:50 P102, except Tue 17. 9., except Tue 5. 11., F. Hampl
MPF_MUST/03: Thu 16:00–17:50 P201, except Thu 19. 9., except Thu 7. 11., F. Hampl
Prerequisites
The course assumes knowledge of financial accounting and financial statements within the scope of the course BPF_FIU1 Financial Accounting 1, economic knowledge related to the asset and financial structure of business companies, business financing and financial instruments within the scope of the course BPF_FIMG Financial Management, as well as basic legal knowledge and skills within the scope of the course BPP_ZAPR Introduction to Law.
Course Enrolment Limitations
The course is also offered to the students of the fields other than those the course is directly associated with.
The capacity limit for the course is 85 student(s).
Current registration and enrolment status: enrolled: 89/85, only registered: 1/85, only registered with preference (fields directly associated with the programme): 0/85
fields of study / plans the course is directly associated with
Course objectives
This course aims to acquaint students with the principles and requirements of International Financial Reporting Standards (IFRS), focusing on the recognition, initial and subsequent measurement and derecognition of financial statement items, along with the preparation and presentation of financial statements. Students will develop knowledge of and skills in understanding and applying IFRS standards to evaluate economic transactions and events within a reporting entity, establish accounting policies and prepare, interpret and analyse financial statements. Furthermore, IFRS standards are compared to the accounting harmonisation in the European Union, as outlined in the consolidated Directive 2013/34/EU of the European Parliament and Council.
Learning outcomes
After completing the course, the student should be able to do the following:
1. Discuss and explain the role of International Financial Reporting Standards (IFRS) in achieving global consistency in financial reporting and examine the relationship between IFRS and the harmonisation of financial accounting within the European Union.
2. Understand the theoretical framework for preparing financial statements and evaluate the qualities of useful accounting information.
3. Apply the principles and guidelines of the Conceptual Framework for Financial Reporting and specific IFRS standards for the recognition, initial and subsequent measurement and derecognition of items in financial statements.
4. Develop accounting policies that fairly represent economic transactions and other events in compliance with IFRS standards.
5. Present, interpret and analyse financial statements prepared in accordance with IFRS standards.
Syllabus
  • Lectures
  • 1. Introduction to International Financial Reporting Standards (IFRS), regulatory framework, distinctions between unification and harmonisation in accounting, the IFRS Foundation and the roles of the IASB and ISSB boards. Conceptual Framework for Financial Reporting – objectives, purpose, qualitative characteristics of useful information, elements of financial statements, recognition and derecognition criteria, capital maintenance concept.
  • 2. Measurement principles and bases in the Conceptual Framework for Financial Reporting, fair value under IFRS 13 Fair Value Measurement. Accounting conservatism vs. fair value accounting.
  • 3. Financial statements prepared in accordance with IFRS – standards IAS 1 Presentation of Financial Statements, IAS 7 Statement of Cash Flows, IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors and IAS 10 Events after the Reporting Period. Principles of preparation, components, structure and content of financial statements. Limitations in interpreting and analysing financial statements. Accounting policies, estimates and error corrections in financial statements. Consolidated financial statements.
  • 4. Tangible non-current assets under IAS 16 Property, Plant and Equipment, IAS 40 Investment Property and IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. Requirements for recognition and derecognition, initial and subsequent measurement and disclosure of tangible assets. Disclosure of discontinued operations. Related standards – IAS 20 Accounting for Government Grants and Disclosure of Government Assistance and IAS 23 Borrowing Costs.
  • 5. Intangible non-current assets under IAS 38 Intangible Assets. Recognition criteria for purchased and internally generated intangible assets, measurement and disclosure. Accounting for research and development. Distinguishing goodwill recognised under IFRS 3 Business Combinations from other intangible assets.
  • 6. Leases under IFRS 16 Leases. Definition of a lease and identifying a lease in a contract. Lessee accounting and reporting (right-of-use asset, lease liability). Distinguishing finance and operating leases for lessors, including accounting and reporting requirements. Disclosure requirements.
  • 7. Impairment of assets under IAS 36 Impairment of Assets, ensuring that asset carrying amounts accurately represent the economic benefit potential of the assets. Determining recoverable amounts and defining and testing cash-generating units (including goodwill) and corporate assets. Reversal of previously recognised impairment losses. Disposal of a part of a cash-generating unit that includes goodwill.
  • 8. Financial assets and liabilities under IFRS 9 Financial Instruments, IAS 32 Financial Instruments: Presentation and IFRS 7 Financial Instruments: Disclosures. Definitions, classification of financial assets (business model and SPPI tests), accounting and reporting for financial assets measured at amortised cost (AC), fair value through other comprehensive income (FVOCI) and fair value through profit or loss (FVPL). Impairment allowances for expected credit losses (ECL model and provision matrix). Measurement of financial liabilities. Disclosure requirements.
  • 9. Inventories under IAS 2 Inventories in relation to IAS 41 Agriculture – recognition requirements, measurement principles and disclosure of inventories. Provisions, contingent assets and contingent liabilities under IAS 37 Provisions, Contingent Assets and Contingent Liabilities. Recognition, measurement and reporting requirements for provisions. Disclosure of contingent assets and liabilities in the notes.
  • 10. Revenue from contracts with customers according to IFRS 15 Revenue from Contracts with Customers. Five-step model for revenue recognition – identification of contracts with the customers, identification of performance obligations, determination of transaction price (including variable considerations and significant financing component), allocation of the transaction price and recognition of revenue when/as performance obligations are satisfied. Performance obligation satisfied over time – distinguishing between contract assets and contract liabilities.
  • 11. Current and deferred tax under IAS 12 Income Taxes – reasons for deferred tax, purpose and interpretation. Effects of foreign currency exchange rate changes under IAS 21 – functional currency, presentation currency and foreign currency, rules for translating financial statements from functional currency to presentation currency.
  • 12. First-time adoption of IFRS under IFRS 1 First-time Adoption of International Financial Reporting Standards – procedures and date of transition to IFRS, practical simplifications. Non-financial reporting according to IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures.
  • Seminars
  • 1. Harmonisation of financial accounting in the European Union through Directive 2013/34/EU of the European Parliament and Council on annual financial statements, consolidated financial statements and related reports of certain types of undertakings. Definitions of core concepts, optional provisions, preparation of financial statements and sustainability reporting in accordance with the directive.
  • 2. The importance of the Conceptual Framework for Financial Reporting. Definitions of financial statement elements (assets, liabilities, equity, expenses/losses, revenue/gains), measurement bases and the concept of capital maintenance.
  • 3. Determination and calculation of fair value in accordance with IFRS 13 requirements. Application of valuation techniques.
  • 4. Preparation of the statement of financial position, statement of comprehensive income and statement of changes in equity in compliance with IAS 1. Preparation of the cash flow statement in accordance with IAS 7 and restatements for corrections of errors and changes in estimates or policies under IAS 8.
  • 5. Classification of tangible non-current assets under IAS 16, IAS 40 and IFRS 5. Determination of costs, depreciation calculation and application of the historical cost model and revaluation model. Accounting and reporting for asset disposals and government grants. Calculation of capitalisation rate. Comprehensive case study.
  • 6. Reporting of intangible non-current assets, both acquired and internally developed, in accordance with IAS 38. Application of the P-I-R-A-T-E criteria for recognising development and its presentation in the statement of financial position. Comprehensive case studies.
  • 7. Accounting and reporting of leases by lessees and lessors, including calculation of the implicit interest rate. Accounting for right-of-use assets, lease liabilities and lease investments. Preparation of financial statements.
  • 8. Identification of circumstances that may indicate impairments to assets under IAS 36. Determination of recoverable amounts. Testing individual assets, cash-generating units and corporate assets for impairment and recognising impairment losses. Impairment of goodwill. Reversal of impairment losses. Comprehensive case study.
  • 9. Classification of financial assets through business model and SPPI testing. Accounting and reporting of financial assets at amortised cost (AC), fair value through profit or loss (FVPL) and fair value through other comprehensive income (FVOCI). Calculation of allowances under the ECL model and provision matrix. Distinguishing equity and debt instruments, including financing cost differences.
  • 10. Reporting of inventories in financial statements in accordance with IAS 2 and the application of cost formulas. Recognition and calculation of provisions under IAS 37, with distinctions between provisions, contingent assets and liabilities. Comprehensive case study.
  • 11. Application of the five-step revenue recognition model under IFRS 15. Calculation of significant financing components. Measurement of progress for performance obligations satisfied over time. Preparation of financial statements when performance obligations are satisfied over time and at a point in time. Comprehensive case study.
  • 12. Calculation and reporting of deferred tax amounts in accordance with IAS 12. Comprehensive case study on the transition of national financial statements to IFRS using digital tools (i.e. first-time adoption of IFRS).
Literature
    required literature
  • HÝBLOVÁ, Eva and Filip HAMPL. Mezinárodní standardy účetního výkaznictví. Studijní text (International Financial Reporting Standards. Study text). 1., elektronické vydání. Brno: Masarykova univerzita, 2020, 189 pp. ISBN 978-80-210-9580-9. URL URL info
  • HÝBLOVÁ Eva a Filip HAMPL. Mezinárodní standardy účetního výkaznictví. Pracovní sešit. Brno: Masarykova univerzita, 2021. Dostupný online v IS MUNI v interaktivní osnově.
  • ERNST YOUNG. International GAAP 2023. Generally Accepted Accounting Practice under International Financial Reporting Standards. 18. vydání. EY International Financial Reporting Group, 2023. 5868 s., ISBN 9780117094369.
  • Aktuální znění IFRS standardů a IFRIC interpretací dostupné v nařízení Komise (EU) 2023/1803 ze dne 13. srpna 2023, kterým se přijímají některé mezinárodní účetní standardy v souladu s nařízením Evropského parlamentu a Rady (ES) č. 1606/2002 (konsolido
    recommended literature
  • BRAGG, Steven M. IFRS guidebook. Centennial, Colorado: Accounting Tools, 2019, xiv, 433. ISBN 9781642210316. info
  • KRUPOVÁ, Lenka. IFRS : mezinárodní standardy účetního výkaznictví, interpretace a aplikace v podnikové praxi. 3. vydání. Praha: 1. Vox, 2019, iv, 740. ISBN 9788087480700. info
  • DVOŘÁKOVÁ, Dana. Finanční účetnictví a výkaznictví podle mezinárodních standardů IFRS. 5. aktualizované vydání. Brno: BizBooks, 2017, 368 pp. ISBN 978-80-265-0692-8. info
  • ROBERT, Mládek. IFRS and US GAAP: accounting policies and procedures. 2017. ISBN 978-80-7502-194-6. info
Teaching methods
The course includes 2 hours of lectures and 2 hours of seminars each week. Lectures provide theoretical explanations, supplemented by the solving of example problems and accounting scenarios. Seminars emphasise discussion and practical work through exercises and case studies focused on the recognition, valuation and derecognition of assets and liabilities, as well as the recognition of expenses and revenues in accordance with International Financial Reporting Standards (IFRS). Students are required to engage in self-study of the assigned literature during the semester.
Assessment methods
A written exam concludes the course. The requirements to sit for the exam are (i) seminar attendance (max. 3 unexcused absences), (ii) passing the mid-term assessment on the harmonisation of financial accounting in the European Union under Directive 2013/34/EU with a minimum score of 25 points (out of 42 points) and (iii) presentation of the student's assigned problem in the seminar. To complete the course, students must obtain at least 36 points in total from the exam (max. 60 points) and points obtained for active participation in seminars during the semester (max. 12 points). Points from the mid-term assessment are not included in the final evaluation. The exam is focused exclusively on International Financial Reporting Standards (IFRS).

The same requirements for completing the course apply to students studying abroad (e.g. Erasmus) with an individual study plan (ISP), except for compulsory attendance (an alternative assignment is provided). More information on the alternative assignment is given in the course interactive syllabus. Students are required to contact the guarantor in the first teaching week of the semester and arrange the deadlines for fulfilling the assignment.

Caution: Any copying, recording or leaking of the exam; use of unauthorised tools, aids or communication devices; or other disruptions of the objectivity of exams (credit tests) will be considered noncompliance with the conditions for course completion as well as a severe violation of the scholastic rules. A student found in violation will have a grade of F recorded in the Information System of Masaryk University, and the dean will initiate disciplinary proceedings that may result in suspension or expulsion. The aforementioned disciplinary procedure relates to all the activities comprising the final evaluation of the course.
Language of instruction
Czech
Study support
https://is.muni.cz/auth/el/econ/podzim2024/MPF_MUST/index.qwarp
Further Comments
Study Materials
The course is taught annually.
The course is also listed under the following terms Autumn 2009, Autumn 2010, Autumn 2011, Autumn 2012, Autumn 2013, Autumn 2014, Autumn 2015, Autumn 2016, Autumn 2017, Autumn 2018, Autumn 2019, Autumn 2020, Autumn 2021, Autumn 2022, Autumn 2023.
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