FAR410 CHAPTER 6 RECEIVABLES AND PAYABLES.pptx

FAR410 CHAPTER 6 RECEIVABLES AND PAYABLES.pptx - CURRENT...

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CURRENT ASSETS AND CURRENT LIABILITIES Trade receivables & Trade payables MFRS 101
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Topic Outcome At the end of the topic, students should be able to: Apply the concepts and principles in current assets and current liabilities Estimate and apply professional judgement: Initial recognition and measurement Subsequent measurement Derecognition. Presentation and Disclosure
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ITEMS OF CURRENT ASSETS AND CURRENT LIABILITIES Inventories Work in progress Trade and other receivables Bank Trade and other payables Short term borrowings Current taxation Dividends payables Current Assets Current Liabilities
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MFRS 101-PRESENTATION OF FINANCIAL STATEMENTS Standard requires that “an entity shall present current and non-current assets , current and non-current liabilities ,as separate classification in the Financial Statements…. “
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MFRS 101 -REQUIREMENTS Expected to be realised, intended for sale or consumption in the entity’s normal operating cycle. For the purpose of trading Expected to be realised within 12 months after the date of the Statement of Financial Position. Cash or cash equivalent unless restricted from being exchange/used to settle a liability for at least 12 months after the date of financial position. Expected to be settled in the entity’s normal operating cycle. For the purpose of being traded. Due to be settled within 12 months after the date of the Statement of Financial Position. The entity does not have an unconditional right to defer settlement of the liability for at least 12 months after the date of CURRENT ASSETS CURRENT LIABILITIES
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OFF-SETTING STANDARD Only permitted if required by other MFRS. Example : Bank overdraft cannot be set-off by a bank balance Accounts receivable cannot be set-off by an accounts payable…
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INITIAL RECOGNITION AND MEASUREMENT OF TRADE RECEIVABLES Trade receivables are accounts arising from the sales of goods and services on credit in the ordinary course of business. The relevant journal entries : 1. To recognise sales or services when earned Debit Trade receivables a/c Credit Sales a/c or Service revenue a/c *The amount recorded for each sale or service transaction shall be based on the gross invoice amount less trade or other discounts and allowances.
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  • Fall '17
  • Balance Sheet, Generally Accepted Accounting Principles, Financial Position

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