ESF:MPF_UOKK IFRS 2 - Course Information

MPF_UOKK International Financial Reporting 2

Extent and Intensity

2/2. 6 credit(s). Type of Completion: zk (examination).
In-person direct teaching

Teacher(s)

Mgr. Ing. Filip Hampl, Ph.D., LL.M. (lecturer)
Ing. Martina Sponerová, Ph.D. (lecturer)
Mgr. Ing. Filip Hampl, Ph.D., LL.M. (seminar tutor)
Ing. Martina Sponerová, Ph.D. (seminar tutor)

Guaranteed by

Mgr. Ing. Filip Hampl, Ph.D., LL.M.
Department of Finance – Faculty of Economics and Administration
Contact Person: Kristina Charvátová
Supplier department: Department of Finance – Faculty of Economics and Administration

Prerequisites

MPF_MUST International Financial Reporting 1 && !MPF_FIU3 Financial Accounting 3 && !MPF_UCFI Corporate Accounting
The course assumes knowledge of the International Financial Reporting Standards (IFRS) within the scope of the course MPF_MUST International Financial Reporting 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 and MPF_AFAP Corporate Finance, 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 only offered to the students of the study fields the course is directly associated with.

The capacity limit for the course is 50 student(s).
Current registration and enrolment status: enrolled: 0/50, only registered: 0/50

fields of study / plans the course is directly associated with

• Finance (programme ESF, N-FIN)
• Corporate Finance, Accounting, and Taxes (programme ESF, N-FIN)
• Business Management (programme ESF, N-PEM)

Abstract

This course aims to deepen and broaden students' knowledge acquired in International Financial Reporting 1. The course focuses on the accounting treatment and reporting of more complex economic transactions, other events and accounting concepts, including the reporting of business combinations (M&A) and the first-time adoption of International Financial Reporting Standards (IFRS). Students will develop knowledge of and practical skills in applying IFRS Standards and IFRIC Interpretations when assessing the economic transactions of a reporting entity, exercising professional accounting judgement, and interpreting and analysing accounting policies and their effects on the primary financial statements.

Learning outcomes

After completing the course, the student should be able to do the following:

1. Explain the principles of accounting for revenue, employee benefits and share-based payments, apply the relevant IFRS requirements for their recognition and measurement, and assess their impact on the financial position and performance of the reporting entity.
2. Discuss and explain the importance of deferred tax for users of financial statements.
3. Apply the principles and guidelines of IFRS for the recognition and measurement of derivatives, and business combinations (mergers and acquisitions).
4. Develop accounting policies that faithfully represent economic transactions and other events in accordance with IFRS.
5. Convert financial statements prepared under national accounting rules (national GAAP) to IFRS and analyse the resulting differences.

Key topics

Lectures

1. Revenue recognition under IFRS 15 Revenue from Contracts with Customers. The five-step model for revenue recognition: identifying the contract with a customer, identifying the performance obligations, determining the transaction price, including the effects of variable consideration and a significant financing component, allocating the transaction price, and recognising revenue when a performance obligation is satisfied at a point in time or over time, including the distinction between contract assets and contract liabilities.
2. Employee remuneration under IAS 19 Employee Benefits and IFRS 2 Share-based Payment I. The principle of recognising employee benefit expenses and the classification of employee benefits. Recognition, measurement and presentation of short-term employee benefits and post-employment benefits.
3. Employee remuneration under IAS 19 Employee Benefits and IFRS 2 Share-based Payment II. The principle of recognising employee benefit expenses and the classification of employee benefits. Recognition, measurement and presentation of post-employment benefits, other long-term employee benefits and termination benefits.
4. Employee remuneration under IAS 19 Employee Benefits and IFRS 2 Share-based Payment III. Recognition, measurement and presentation of equity-settled and cash-settled share-based payment transactions, with a focus on employee incentive plans, including ESOPs, RSAs, RSUs and phantom shares.
5. Current and deferred tax under IAS 12 Income Taxes. Reasons for deferred tax, its importance, purpose and interpretation. Calculation, accounting recognition, and reporting of current and deferred tax in financial statements. Disclosure.
6. Effects of foreign currency exchange rate changes under IAS 21 The Effects of Changes in Foreign Exchange Rates. Functional currency, presentation currency and foreign currency, rules for translating financial statements from functional currency to presentation currency. Recognition and measurement of exchange differences from transactions in foreign currencies.
7. Financial derivatives under IAS 32 Financial Instruments: Presentation, IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures I. Defining features of derivatives, introduction to the main types of derivatives and the operating principles of derivative contracts. Explanation of the economic substance of derivatives and their importance for risk management by reporting entities. 
8. Financial derivatives under IAS 32 Financial Instruments: Presentation, IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures II. Principles of accounting for and reporting derivatives that are not designated as hedging instruments for hedge accounting purposes. Recognition, measurement and presentation of foreign currency and interest rate forwards.
9. Financial derivatives under IAS 32 Financial Instruments: Presentation, IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures III. Recognition, measurement and presentation of foreign currency and interest rate swaps. Disclosure requirements. The nature and significance of hedge accounting.
10. Business combinations under IFRS 3 Business Combinations I. Definition of key terms and the scope of the standard in relation to the national legal concept of transformations of business corporations. Identification of a business combination and a business, determination of the acquirer and the acquisition date. Measurement of the consideration transferred and contingent consideration.
11. Business combinations under IFRS 3 Business Combinations II. Recognition and measurement of assets, liabilities and contingent liabilities acquired in a business combination. Definition of a non-controlling interest (NCI), recognition and measurement of goodwill or a gain from a bargain purchase. Impairment testing of goodwill. The effect of a business combination on the acquirer’s primary financial statements. Disclosure requirements.
12. Rules for the first-time adoption of International Financial Reporting Standards when an entity transitions from reporting under national accounting regulations in accordance with IFRS 1 First-time Adoption of International Financial Reporting Standards. The first financial statements prepared in accordance with IFRS, the date of transition to IFRS and the first IFRS reporting period. Preparation of the opening statement of financial position. The principle of retrospective application of IFRS, mandatory exceptions and optional exemptions, including practical expedients, from retrospective application. 

Seminars

1. Application of the five-step model for revenue recognition under IFRS 15 I. Calculation of a significant financing component. Application of methods for measuring progress towards the complete satisfaction of performance obligations satisfied over time. Preparation of primary financial statements.
2. Application of the five-step model for revenue recognition under IFRS 15 II. A  case study of recognising different types of revenue in a reporting entity.
3. Employee benefits under IAS 19 I. Classification of employee benefits. Recognition, measurement and presentation of short-term employee benefits and post-employment benefits, specifically defined contribution plans.
4. Employee benefits under IAS 19 II. Recognition, measurement and presentation of post-employment benefits, specifically defined benefit plans, and termination benefits.  Case study.
5. Employee benefits under IFRS 2. Recognition, measurement and presentation of equity-settled share-based payment transactions, with a focus on employee incentive plans, including ESOPs, RSAs, RSUs and phantom shares.  Case study.
6. Current and deferred tax under IAS 12. Calculation of the carrying amount and tax base of assets and liabilities, and calculation and accounting treatment of deferred tax. Presentation of deferred tax in the financial statements and its interpretation for users of financial statements. Case study.
7. The effects of changes in foreign exchange rates under IAS 21. Exchange differences on advance payments. Reporting foreign currency transactions in the functional currency at the reporting date. Preparation of financial statements in the presentation currency.
8. Accounting and reporting of financial derivatives under IFRS 9 I. The economic substance of derivatives and assessment of the effects of entering into derivative contracts on the financial performance and financial position of the reporting entity from the perspective of users of financial statements.
9. Accounting and reporting of financial derivatives under IFRS 9 II. Case study.
10. Accounting and reporting of business combinations under IFRS 3. Identification of a business combination under IFRS 3, determination of a business and its acquirer, and determination of the acquisition date. Distinguishing business combinations within the scope of IFRS 3 from transactions within the scope of other standards.
11. Accounting, measuring and reporting of business combinations under IFRS 3. Recognition and measurement of goodwill or a gain from a bargain purchase. Case study.
12. First-time adoption of IFRS under IFRS 1. Procedure and date of transition to IFRS, and practical expedients. Comprehensive example of converting national financial statements to IFRS using digital tools.

Study resources and literature

required literature
• KRIMPMANN, Andreas. Principles of Group Accounting Under IFRS. 1. vydání. John Wiley & Sons, 2015. 864 s. ISBN 9781118751404.
• RAMIREZ, Juan. Accounting for Derivatives: Advanced Hedging under IFRS 9. 2. vydání. John Wiley & Sons, 2015. 770 s. ISBN 978-1-118-81797-1.
• 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
• 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 (kons. zn.)

recommended literature
• SKÁLOVÁ, Jana. Účetní a daňové souvislosti přeměn obchodních společností. 3. vydání. Praha: Wolters Kluwer, 2019, 227 stran. ISBN 9788075985705. URL 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
• MLÁDEK, Robert. IFRS a US GAAP :postupy účtování. Edited by Robert Mládek. Vydání první. Praha: Leges, 2017, 464 stran. ISBN 9788075021946. 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

Approaches, practices, and methods used in teaching

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 economic transactions and consolidation in accordance with International Financial Reporting Standards (IFRS). Students are required to engage in self-study of the assigned literature during the semester.

Method of verifying learning outcomes and course completion requirements

A written exam concludes the course. The requirements to sit for the exam are (i) seminar attendance (max. 3 unexcused absences), (ii) active participation in the form of presentations of assigned tasks and participation in discussion or problem-solving during the semester (min. 6 points), and (iii) passing the mid-term assessment. To complete the course, students must obtain at least 60 points in total from the exam (max. 80 points) and the mid-term assessment (max. 20 points). When achieving the minimum of 60 points, points obtained for active participation in seminars during the semester (max. 12 points) are also included in the final evaluation.

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.”

Alternate completion

The exact above-mentioned 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.

Language of instruction

Czech

Follow-Up Courses

• MPF_KLIN Accounting and Tax Clinic
• MPF_KOMA Consolidation and Group Management

Further Comments

Study Materials
The course is taught annually.
The course is taught every week.

• Enrolment Statistics (Spring 2027, recent)
  
• Permalink: https://is.muni.cz/course/econ/spring2027/MPF_UOKK