This is a complete summary of the first half (up until Lecture 5: Tax Accounting) of the KU Leuven course “D0R50a: International Accounting” in . This is a summary of all the slides used in class added with course notes.
International Accounting
Academic Year 2023-2024 – Course 1 Introduction – 02.10.2023
Koen Neijens – Nico Houthaeve – Bianca Chang
This is a complete summary of the first half (up until Lecture 5: Tax Accounting) of the KU Leuven course
“D0R50a: International Accounting” in 2023-2024. This is a summary of all the slides used in class
added with course notes.
Course Introduction
(facilitators, objectives, materials, format, exam)
Chapter 1 – regulatory framework
Chapter 2 – conceptual framework for financial reporting
Chapter 3 – presentation of financial statements (IAS1)
Chapter 4 – accounting policies, accounting estimates and errors (IAS8)
Overall objectives of the course
• The objective of this course is to illustrate how IFRS accounting standards and the judgment used
within the IFRS accounting framework affect financial statements.
• As a user, ask the right questions when analysing the financial statements of a company
• Be critical when comparing financial statements of different companies
Key learning outcomes
• Improved understanding of IFRS accounting standards
• Be able to demonstrate how accounting standards (IFRS) influence the accounting fundamentals
and the financial statements
• Be able to show how the level of judgment used within an accounting framework influence the
main accounting fundamentals (earnings and equity).
• Prerequisite: basic knowledge of accounting concepts
Other materials
E-learnings of the IFRS/IAS standards:
https://www.deloitteifrslearning.com/
Useful website addresses:
• IASB: http://www.ifrs.org/Pages/default.aspx
• Deloitte: http://www.iasplus.com/en
• EY: http://www.ey.com/BE/en/Issues/IFRS
• KPMG: http://www.kpmg.com/global/en/topics/global-ifrs-
institute/Pages/default.aspx
, • PwC: https://www.pwc.com/gx/en/services/audit-assurance/ifrs-reporting.html
Teaching format
• Lectures
o Standard format / topic
o IFRS standard and the judgment needed
• Exercises/examples to get familiar with the topic
• E-learnings of the IFRS/IAS standards
• Assessment method
o Open book exam
o All materials can be brought to the exam (handbook, slides, other)
• Typical structure of the exam:
o Multiple choice
o Exercises/Open questions
INTRODUCTION
Usefulness of accounting
• A firm’s financial statements support the decision making of different stakeholders as the primary
objective of financial statements
o Acquisitions or mergers
o Buying/Selling shares
o Getting a loan
o …
• Stakeholders: owners, employees, suppliers, banks, …
Remember the objectives of the course
• Illustrate how IFRS accounting standards and the judgment used within the IFRS accounting
framework affect financial statements.
• Ask the right questions when analysing the financial statements of a company
• Be critical when comparing financial statements of different companies
Let’s look at an example…
Specific example – beer industry
• AB InBev
• Heineken
• Molson Coors
• Benchmarking useful and necessary:
o cross-sectional (comparing different companies)
o time series analysis (one company over a longer period)
• Ratio analysis is a common tool to provide useful information for decision making
Financial Ratios
, • Profitability ratios (reasonable profit level)
o Is a company successful at generating profits over a time period?
o A reasonable profit margin for long term survival
• Liquidity (short-term ability to pay debt)
o Does a company have the short-term ability to pay its maturing obligations?
o Essential for short-term survival
• Leverage (appropriate long-term debt level)
o A protection for long-term creditors and investors
o A firm should have an appropriate level of borrowing
Financial ratios: some examples
• Return On Equity = profit / equity
• Return On Assets = EBIT (=operating profit) / total assets
• Current ratio = current assets / current liabilities
• Debt / equity ratio
• Price / earnings ratio
• Earnings per share
Numerical data – but what are we looking at?
• In comparing the different financial ratios of those firms some crucial fundamentals are ignored
o What are the underlying fundamentals used in preparing the financial statements?
▪ First question: consolidated or individual company accounts?
▪ Second question: accounting standards used?
▪ Third question: level of judgment used given certain accounting standards?
• Notes to the financial statements important!
1) First question: consolidated or individual company accounts?
2) Second question: accounting standards used?
• What are the accounting standards used to prepare the financial statements?
o IFRS
o US GAAP
o Local GAAP
• IFRS (International Financial Reporting Standards) are set by the IASB (International Accounting
Standards Board)
• US GAAP are set by the FASB (Financial Accounting Standards Board)
, Differences between accounting standards (IFRS vs US GAAP)
3) Third question: level of judgment used given certain accounting standards?
Les avantages d'acheter des résumés chez Stuvia:
Qualité garantie par les avis des clients
Les clients de Stuvia ont évalués plus de 700 000 résumés. C'est comme ça que vous savez que vous achetez les meilleurs documents.
L’achat facile et rapide
Vous pouvez payer rapidement avec iDeal, carte de crédit ou Stuvia-crédit pour les résumés. Il n'y a pas d'adhésion nécessaire.
Focus sur l’essentiel
Vos camarades écrivent eux-mêmes les notes d’étude, c’est pourquoi les documents sont toujours fiables et à jour. Cela garantit que vous arrivez rapidement au coeur du matériel.
Foire aux questions
Qu'est-ce que j'obtiens en achetant ce document ?
Vous obtenez un PDF, disponible immédiatement après votre achat. Le document acheté est accessible à tout moment, n'importe où et indéfiniment via votre profil.
Garantie de remboursement : comment ça marche ?
Notre garantie de satisfaction garantit que vous trouverez toujours un document d'étude qui vous convient. Vous remplissez un formulaire et notre équipe du service client s'occupe du reste.
Auprès de qui est-ce que j'achète ce résumé ?
Stuvia est une place de marché. Alors, vous n'achetez donc pas ce document chez nous, mais auprès du vendeur Student813. Stuvia facilite les paiements au vendeur.
Est-ce que j'aurai un abonnement?
Non, vous n'achetez ce résumé que pour €5,39. Vous n'êtes lié à rien après votre achat.