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?
Voordelen van het kopen van samenvattingen bij Stuvia op een rij:
√ Verzekerd van kwaliteit door reviews
Stuvia-klanten hebben meer dan 700.000 samenvattingen beoordeeld. Zo weet je zeker dat je de beste documenten koopt!
Snel en makkelijk kopen
Je betaalt supersnel en eenmalig met iDeal, Bancontact of creditcard voor de samenvatting. Zonder lidmaatschap.
Focus op de essentie
Samenvattingen worden geschreven voor en door anderen. Daarom zijn de samenvattingen altijd betrouwbaar en actueel. Zo kom je snel tot de kern!
Veelgestelde vragen
Wat krijg ik als ik dit document koop?
Je krijgt een PDF, die direct beschikbaar is na je aankoop. Het gekochte document is altijd, overal en oneindig toegankelijk via je profiel.
Tevredenheidsgarantie: hoe werkt dat?
Onze tevredenheidsgarantie zorgt ervoor dat je altijd een studiedocument vindt dat goed bij je past. Je vult een formulier in en onze klantenservice regelt de rest.
Van wie koop ik deze samenvatting?
Stuvia is een marktplaats, je koop dit document dus niet van ons, maar van verkoper Student813. Stuvia faciliteert de betaling aan de verkoper.
Zit ik meteen vast aan een abonnement?
Nee, je koopt alleen deze samenvatting voor €5,39. Je zit daarna nergens aan vast.
