MIDLANDS STATE UNIVERSITY

FACULTY OF COMMERCE
DEPARTMENT OF ACCOUNTING
ACCOUNTING FOR COMPANIES: ACC217
A. Preamble:
This module provides candidates with knowledge and skills necessary for the drawing
up of annual financial statements for companies in line with the legal framework ,
specific International Accounting Standarsds (IASs) and International Financial
Reporting Standards (IFRSs).
B. Prereqisites:
Candidates must have acquired basic skills in financial accounting related to ACC107
and ACC108. Ideally this module may be taken concurrently with Company Law and
Tax Law and Practice.
C. Learning objectives:
The mastery of content of this module embraces:
(i) Knowledge and comprehensive of facts, methods, processes and structures
(ii) Application of knowledge, rules, principles, techniques to a problem leading
to a common solution
(iii) Ability to analyse, interpret, synthesise and evaluate financial data. This calls
for independent thought in problem solving
D. Module content:
1. Introduction to company annual financial statements
Background to the theory behind the annual financial statements: the origin of
GAAP, types of companies, accounting concepts and bases, powers relating to
pre-incorporation contracts, users of annual financial statements
2. Framework for accounting
What the framework entails, its scope, objectives and components of the financial
statements, underlying assumptions and recognition criteria.
3. Presentation of financial statements ( IAS1)
Scope and authority of GAAP and the standards setting process, objectives and
components of the annual financial statements, fair presentation and compliance
with IFRS, going concern, accrual basis, materiality, aggregation and offsetting,
consistency of presentation.
4. Statement of Profit or Loss and other Comprehensive Income, Statement of
Changes in equity including notes
Drawing up of these incorporating notes for companies
5. Statement of financial position and relevant notes
Noncurrent assets, PPE, investment property, available for sale financial assets,
other financial assets, current assets, inventories, trade and other receivables, cash
and cash equivalents, equity components, differed tax, financial liabilities,
provisions and other items contained in this statement
6. Financial instruments
Background to these instruments, financial assets and liabilities, equity, disclosure
and presentation (IAS 32 &39) recognition and disclosure IRFS 9
 7. Property plant and equipment ( IAS 16)
Nature of PPE, recognition criteria, initial and subsequent measurement,
dismantling, removal and restoration costs, exchange of PPE, use of depreciation
methods, revaluation methods, revaluation methods- gross replacement value and
net replacement value methods
8. Investment property ( IAS 40)
Nature of IP. Recognition, initial and subsequent measurement- cost model and
fair value model. Disclosure requirements
9. Impairment of assets (IAS 36)
Nature of impairment, measurement of recoverable amount, recognition of
impairment losses. Disclosure in annual financial statements and through notes
10. Inventories (IAS 2)
Nature of inventories, measurement, use of cost formulae, NRV and disclosure in
the annual financial statements.
11. Provisions, contingent liabilities and contingent assets (IAS 37)
Their identification, recognition and measurement and disclosure
12. Events after reporting period (IAS 10)
Nature of such events, going concern, application to various cases, disclosure
13. Revenue from contracts with customers ( IFRS 15)
What revenue is, revenue from contracts and other revenue from other sources
other than contracts, measurement, recognition, contracts with customers resulting
in obligations and types of contacts and changes in contracts. Measurement and
disclosure.
14. Financial Reporting in a Hyperinflationary Economies- IAS 29
Define a Hyperinflationary Economy,background, characteristics of a
hyperinflationary economy,restatement of financial statements,rules of
restatement,gains or lossesfrom restatement,disclosure.

Recommended reading list

 GAAP, Becker and Wingard Latest edition
 Company Financial Statements – Cilliers Roussouw et al
 Introduction to IFRS
 Oppermann, H.R.B eta al, (2015) Accounting Standards,Lansdowne: Juta.
 UNISA Module,Financial Reporting for Companies,FAC2601