corporation: and

organization
capital stock transactions:

in ter ms is called Artificial Judicial Person CAJP)

-company
tax

f ro m shareholders limited

entity liability.
-separate owners have

legal
in contemplation of
existing
l aw

-only
held have traded

publicly
corporation can stockholders and their shares a re in

many
an

exchange.
has held
publicly
few shareholders is
privately
held corporation smaller then corporation

charac terstics of
corporation:

①
seperate
egal entity
②
liability
limited

③ Transferable ownership

④ Able capital
generate
to m o re

⑤
Perpetual sucesion

⑧ Goverment
regulations.
⑦
Double taxation

Types:

By
purpose:

① o re i n re d
Profit

② Non-profit Oreinted.

By
ownership:

① private limited

② public limited

By
Formation status:

I chartered
by king queen
approval
company:
or

② formation
Statutory company:
approval parliment
to
by
③ (SECP)
Registered company:security
commision Pakistan
exchange
company
struc ture:

Rights
or
s h a re h o l d e rs :

①vor election avore

requiring
General stockholder

meeting
in the
at Annual (now) on ac tion approval

② income
or dividends.

through
Share

③ keep
rights
same; of when stocks a re issued (pre-emptive
company
new

④ share in
liquidation
Assers upon

Issuance of shares:s h a re capital

SSUE
↓ Va I u :

①PAR va l u e :F i xe d value to record s h a re capital

② Market va l u e
v a l u e :c u r re n t at w h i ch stock is traded

I
sonance:

① Direc t.F ro m the

company
②
Banking.
Indirec t:F ro m investment

Authorizd:

while would issue to e f fe c t balance sheet

registering goverment calculation,

to show h ow shares we on

many
capital:
working
for operations of
required
daily
the

company.
cash

paid in capital:

by
Assers, paid in for
equity.
cash

exchange
stockholders
company's
 of

Advantages
cor poration:

①
seperate
legal entity
② limited
liability
ofsto c k h o l d e rs

③ Transferable
rights
ownership

④
Ability
capital
acquire
to

⑥ continous life

of

Disadvantages
cor poration:

①
seperation of
managment
② sover ment
regulations
③ In d i re c t taxes

capital owned:

①ordinary,
common

② Prefrence

capital awed:

Deb+ /l8 an sto c k / S u b u k

stocks:

Treasury
is the stock corporation issued but ib
t ack. Th e
price become the PAR PAR

original
I t purchase
buys
value and the

value becomes ir relevant.

Reason
acquire
to stock:
treasury
① issue bonus

employees
to to as

②
trading security
Increase in m a r ke t

③ Have additional shares companies.

acquire
to other

④ increase per (EPS)

earning
To share
 section of Financial position:
Equity
paid in capital:

Capital S t o c k : S &

94preference stack, BION PAR s h are authorized, 6,000 issued

outstanding
value, 18,000 and

common stack, I S DAR value, 500,000 authorized, 400,000 shares issued, 390,000
outstanding.
shares shares

Total capital STOCK

Additional paid in capital:

In EXCESS OF PAR Prefered STOCK

In Excess of PAR Common Stack

From

treasury
st a c k

Total additional paid in Capital

To t a l paid in capital

Retained
earnings
paid in capital and retained

earnings
Total

Treasury
sto c k

stockholders
equity
Total

Accepted Principles (CAAD) (IFRS)

Accounting Reporting
International Financial standards

Generally
① Stock ①share capital
ordinary
Common

② Stock h ol d e rs ② Shareholders

③ PAR va l u e Nominal/Face
③ val u e

& Authorized stock ④ Authorized share capital

⑤
P re fe re d STOCK ⑤ s h are capital -
Prefrence.

⑧ paid in capital ⑧ Issued/allocated s h are capital

·

⑦ of Share
premium-ordinary
paid in capital in excess DAR-common sto c k

⑧ paid in capital in excess of DAR-prefered sto c k & s h are premium-Prefrence

⑨ ⑧ Retained
earnings/retained
Retained Profits.
earnings
⑩ Retained deficit ⑩ Accumulated losses

earnings
⑪ Accumulated other comprehensive income ⑪ General Reserve other re s e r ve accounts.
corporation: Dividends, retained income

earning reporting:
an d

Dividend:

Disturbation of cash/stock to stockholders on Pro Mata basis

Types:
①
cash

& Stock

calculation:

① Dividend per share (DPS):# of shares x DPS

② capital
percentage:
s h a re

xyage
Application:

Purdinary (varys
or common

② Prefrence Fixed:

as c u m u l a t i ve :sto c k h o l d e r be paid and prior unpaid dividend.

year
m u st cu r re n t

years
b) Non-cumala t i ve :stockholder m u sb e paid c u r re n t dividend.
only
t

year
In te ri m :

paid
during
Dividend

year
the

Final:

Dividend paid end of the

year
at

T8 c 1:
+

I n + ex i m + final dividend

Stock dividend:

giving
is prorata disturbation or
cor porates stack stockholders. issues instead or dividend

Company
-It a to stock

in retained decreased paid in capital increase. issues dividend:

earnings Company
This re s u l ts to to stock

④
satisfy
dividend without

spending
To expec tation cash.

② o ft h e of

marketibility
To
increase, p r i c e , share
d e c re a s e .
outstanding
increase stack. I s h a re m a r ke t

③ re-invested
equity.
is show stockholder

company
h as

dividend va l u e d dividend PA R

assigned
stack is m a r ke t stock

large
-small at at value.
Stock Split:

like o f dividend, except

marketibility
It is stock it re s u l ts in reduc tion of
PA R va l u e . Purpose is to increase

What shades
by lowering
or
stock Par paid in

change
m a r ke t price. val u e : s to c k does
spit n ot to t a l capital,

earnings,
retained stockholder

equity.

Retained
earnings:
retains in business. Claim or
s to c k h o l d e r re t a i n e d

earnings
income
Net is

company
on to t a l assets

actually
Retained restric tion:

earning
① re t a i n e d due purchased.
Legal: earnings
stock
require
restric t

treasury
States to

company
to

② debt condition for

require
earnings
contrac tual:

long
ter m c o n t r a c ts restric t loan.

company
to as

③ B o ard of
D i re c to rs (BOD) can re st r i c t i o n
put for purpose.
voluntary:
fo r
I accou n t retained
earnings:

Retained st at m e n t :
earnings
$

Balance)
Copening
Balance x
x X

cor rec tion of

o ve r in
st a t m e n t Prior period xx
x

Balance adjusted x X X

Net
income x x X

x x X

cash dividend/stock dividend x

x X

Balance Balance

closing
x x X

equity:
Retur n On Stockholder

Net incommonretinas
widenequity
per earned dollar invested.

by
dollar income per los
Avera
g
presentation of
Income st a t m e n t :

Sales REVENUE x xX

of <xxx)
goods
cost sold

Gross profit xxx

cxxx)

operating
expenses

Income from operations x xX

gains
Other revenue x xX

other expenses, losses [xxx)

Income before Income Taxes x

x X

In com e tax expense (xxx)

Net income x XX

share (EPS):
Earning
per

earned
profitibility by
of holder
company.
used to eva l u a te the Income each share

Net income -
prefered dividends

weightage Average outstanding

common share

payout
ratio:

m e a s u r m e no
t fh o w much dividends paid as of
ex t income

age
a re

dividend
decided incomelommon stock xlod
cash

Book-value per s h a re :

in or
Equity
holder has corporation.

standing
#foromonee
common stock not
ass e ts

liabilities:
Long
team

Bond S:

bearing
and

by
Form 8F interest issued corporations sold in denomic
goverments. They
n o te s

payable
are

nation.
 Secure d unsecured

Assets of called debenture bonds, issued

pledged
specific Also
against
issues as c o l l a te r a l . a re

good
bond. A
by
bond
A secured real is credit
ofthe borrower companies with
mortgage general
estate

secured
bond
by specific assets set
aside to redeem credit
rating
use bond
extensively,
Cretire) bond called fund bond.
sinking
the is a

ConvertibIE Callab1Z

be converted bonds redeem

issuing
Bonds that
can into common stock at the
that can
company
back stated
buy
the bondholders This feature is attractive dollar
option. to at
a amount
prior to

bond
buyers maturity.
conventional Islamic (S4(zu(z)

bond purchaser Secured

purchasing
is loaned, issues is ass e t .
acting
consumer as as an

fixed cribal r ented.

recipant.
only.
a loan Loan has r a re
i n te re st Asset
notsold but

secured unsecured both, of Asset

gurantee

given

Face va l u e :A m o u n t
ofprincipal due date

maturity
at

d a t e :D a te final is due investor

maturity
which

payment
at to

contrac tual Rate:Amount

of i n te re st i nve s t o r
that will be paid.

Bond indenture:Te r m s of
the bond.

Representation of
Bonds in financial position:

Non liabilities:
cur rent I

Bonds
payable
x x X

unamor tized discounts/unamor tized premium [xxx)/xxx

x xX

Discounts:
carrying
val u e

Bond face value unamor tized discounts total -

Amor tized

(premiuml:
carrying
val u e

Bond face value unamor tized premium total -

Amor tized
Debt to Asset
ratio:

Assets
provided Total "asiss
by
Total creditors

Time interest ear ned:

i n t e re s t become due

company's ability payments they

to meet as

Interrestense
income
Net +
In com e expense
tax

Investments:

① fixed

money
Debt Re t u r n is is retur ned time of

maturity.
at

②
equity:
s h a re s

Reason i nve st :

why
corporate

I
generate earnings
to

①
strategic goals.
to meet

③ To house excess cash until needed.

rade investment
↑

Associate

Parent,
Holding, subsidary

or

type
securities:

①trading Bought
securities: fo r in near ter m income From shoot ter m price differences. Compan-
generate
sale to

adjust
these securities to fair the of
each period. reported from under

changes
i ts va l u e at end The are cost

unrealized h ave n ob een sold. The unrealized bow

gains
the

security
is d i f fe re n ce

gain/loss
or losses as t

fa i r
cost va l u e . The fair va l u e is reported in Balance sheet.

⑦ Held till
ability maturity.
and to hold
security:
I nve s to r has i n te n t

maturity
to
③ Available for sale securities:T h e s e held of
intent in future. It

seeing
a re with them some time i nve s t o r wa n

is in classified cur rent it

year, they recognize gain

to sell them one a re as ass e ts . To or loss, is same as tradit

securities. loss is recorded separate stockholder

gain
in

equity.
as component

ng
The so a

st a t m e n t of cash f l ows :

u s e f u l n e ss of st a te m e n t Cash Flows:

①
Entity's ability
future flows

generate
to cash

&entity's ability
dividends and

obligations
meet

pay
to

③ fo r d i f fe re n c e a provided
by operating
Reason him income
not cash
not ac tivities

⑦
Investing
transac tions

financing
and

classification c a s h f l ows
of (IASI):

D ac tivities:Reve n u e , expenses, a s s e t c u r re n t

operating ability
c u r re n t

② Ac tivities:F i xe d Assets
Investing
③ share holder

Financing liability,
ac tivities:M o n

equity
cu r re n t

EFFECTS of Cash flow in business:

① cashflow re s u l ts in business Failure

Inadequate

②
inability
to collecove
t rd u e invoices fa i l u re to reconcile All recievable will in
result business to S u f fe r.

③ Also affec ts

company ability grow

to

④ more cash, means more re-investment

⑤ cash flow liabilities

Negative pay
means unable to

company
objective (IASI):

historical in cash a cash

changes equilaints.
to show

Fundamental principles (IASI):

of cash flows IFRSS.

required statement it

following
Dentities a re to a
present

period.
during
cash, a

Analysis changes
cash
③ It in
equilaints

③ cash a cash
comprises of:
equivalent
-
cash on hand

-
Demand deposits
 in
highly liquid
c o nve r t i b l e risk
insignificant
investments, cash,
readily changes
-shor t-ter m, to value.

-Guidance indicate of3

notes when cash
equilant has
maturity
months or less.

equity
i nve s t m e n ts are exclu de d, unless substance cash
equilant.
normally
a re in

they
a

repayble
demand, w h i c h form cash included.
entity
of
integral cash,
Bank overdrafts on par t
equitants a re
-

Disclosures:

financing activity.
D from

changes liability
in

② components of
cash, cash
equilaints.

③ Additional a
judging liquidity
financial position o ft h e

entity.
infor mation wo u l d
that a ss i st
u s e rs in

③ of

borrowing
Amount u n d r aw n facilities a restric tions.

⑤
Cash f l ow from interests in joint
v e n t u re s .

⑧ Amou n t a n a t u re or
f estric ted cash balances.

⑦
Reconcilation of Surplus/Deficit with flow from activities when direc t method used
operating
cash
net

Fixed Asset sale proceeds:

Balance bid x said (cost] X &

cost -
Acc.de NBU
=

surplus (bain) Deficit

x (Loss) X ② NBV + c a i n / - Lo ss s
: ale proceeds

Addition x Balance (Id X

Balance bid X

Expense paid

prepaid bid bid

owing, payable
x X

Expense X Bank X

cidx cid
oning, payable prepaid X

X X

bid bid
prepaid
owing' payable
x X

Dividends paid:

retained p ro f i t Dividends: retained

opening earnings closing earnings

+ -
 of
Format Cash Flow CIASI) (Indirect
m ethod):

xxz cash flow star ment

t wo the ended xxxxx
company: year
cash generated ac tivities: S S

operating
from

P rOFit AFES CPAT)

Tax X

expense
Add:I n te re s t X

Income expense
tax X

Non-cash Expenditures:

Depreciation X

Impairment LOSS X

B
ad debt expense X

Lass on Disposal fixed Assets X

Gain on Disposal Fixed Asset (x)

Income from investments -x)

working
capital
changes:

liability (payables/
I n c re a s e in cur rent accrued expenses, prepaid incomel X

(payables,
Decrease accrued expenses, prepaid incomel (x)
viability
in cur rent

expenses/ Accrued incomes

(recievables/Inventory, prepaid
Decrease in c u r re n A
t sset X

expenses/ Accrued incomes

(recievables/Inventory, prepaid
I n c re a s e in Ass e t
cur rent [x)

I n te re st paid (x)

Income tax paid (x) X

Generated
Investing
Cash From ac tivities:

proceed from disposal record price

selling
sale at X

fixed (x)
cost/buying
of Assets record price
purchase at

I
Income
nve s t m e n t recieved X X

Cash Generated From Financial Activities:

premium
equity
in
I n c re a s e shareholder share capital +
X

premium
equity
Decrease in shareholder share capital +
(x)

Dividend paid (x)

(Borrowing
in

viability
I n c re a s e ter m X

long
X
(Repayment)
becrease in (x3
viability
ter m

long
General entries:

①closing entry
for income:
not

summary
Income

Retained

earnings
② for stockholder section:

Losing entry equity

common SHOCK

Retained
earning's
stockholders

equity
③ Issuance of
stack PA R :
at

cash

capital/common
ordinary
snare stock

④ Issuance of
stock P re m i u m / p a i d
at in exceSS:

cash

(common
ordinary
share capital stock

commond stock -
paid in excess of PAR

⑤
I ss u a n c e of for
acquired:
stock services

acquired
service

(common
ordinary
share capital stock

of depend
paid
question
commond stock -
in excess PAR on

⑥ Issuance of for Asset

acquired:
stack

acquired
Asset

(common
ordinary
share capital stock

of depend
paid
question
commond stock -
in excess PAR on
⑦
Iss u an ce of bonus s h are s :

①
S h a re premium

Revaluation re s e r ve

re s e r ve

general
retained
earning
Bonus to shareholder Alc

② Bonus to s h a re h o l d e r A/C

capital, sto c k dividend

ordinary
common

⑧ Issuance of prefered stock:

cash

prefered Stock

Prefered paid in PA R ) depends

question
sto c k -
excess of on

⑨ purchased:

Treasury
sto c k

s h are s
Treasury
cash

⑩ stock re-issued Premium:

Treasury
at

cash

stack
Treasury
share premium a related stock
treasury
to

⑪ stock re-issued discount:

Treasury
at

cash

share re l a te d stocks
treasury
premium to

Retained SIP
earnings
premium
enough
s h a re not

shares

Treasury
⑫ Declaration of Dividend:

Cash Dividend

Dividend
payable
③ ofdividend:

payment
Dividend
payable
cash

⑭ Declaration of
stock dividend:

⑪ metained

earnings
dividend dividend disturbutable
payable,
cash stock

② Stock dividends

common Stock & i8 x0 b u a b l e

+ +

common stock paid in EXCESS OF PAR

⑮ dividend:
payment/
I ss u a n c e of
stock

dividend dividend disturbutable

payable,
cash stock

ordinary
cash, s h a re capital

⑯ bonds PA R

Issuings
at va l u e :

cas h

payable
Bonds

⑰To record accrued

interest PA R :

I n te re st expense

payable
I n te re s t

⑱ To record i n te re st
paid:

payable
In te re st

cash

⑲ bonds discount:
Issuing
at

cash

discount bonds
payable
on

Bonds
payable
⑳ To record a ccrued
i n te re st (Discount):

I n te re s t expense

a mmourization
Discount

payable
I n te re s t
⑪ bonds P re m i u m :
Issuing
at

cash

premium Bonds
payable
on

Bonds
payable
⑳ To record a ccrued
i n te re st (premium):

I n te re s t expense

Premium ammourization

payable
i n te re s t

⑪ is record bands Re t i r m e n (
t l o ss ) :

Bonds
payable
loss on redemption

Cash

⑫ To record bands Re t i r m e n (
t Profit):

Bonds
payable
Profit on redemption

Cash

⑬ bonds into

converting
to common st ack:

payable
Bonds

common S+8212

common stock-paid in EXCESS OF PAR

⑭ record D e b ti nve s t m e n t :
of
acquisition
To

Debti nve s t m e n t

cash

⑮ Accrual beat
of i nve st m e n t :

I n te re s t recievable

Reve n u e
I n te re s t
⑳ Recievable Debt
of investment:

cash

r e c i eva b l e
I n te re st

⑰sale band
of investment (Gain):

cas h

i nve s t m e n t
Debt

Gain on sale of debt

i nve s t m e n t

⑱ sale band
of investment (loss):

cash

Loss on sale of debt

i nve s t m e n t

i nve s t m e n t
Debt

⑲ record s to c k
or investment:
acquisition
To

8 o2R
+
i nve st m e n t

cash

⑧ To record dividend:

& 8%2 0 % :c a s h

dividend reve n u e

& 2 0 % 5 0 % :s t o c k i nve st m e n t
Earning Holding;age
x

Revenue from stock investment

Cash dividend declared

Holding age
Stock investment

⑪sale of
stock ( loss):
investment

s ale price fees)

Brokerage
cash -

1888 8n 8 rock investment

stock investment

⑫ sale of
stock ( Profit):
investment

s ale price fees)

Brokerage
cash -

profit
on stock investment

sto c k investment
⑬ u n re a l i ze d securities:
gain trading
on

Fair va l u e Adjustment

Trading
gain
u n re ali ze d Income

⑭ u n re a l i ze d securities:

trading
loss on

u n re a l i ze d , a s i n co m e

Fair va l u e Adjustment

trading
⑬ unrealized available For
security:
less on sale

unrealized

equity
less

Fair value adjustment

Ava i l a b l e for sale

⑯ unrealized bain available for

security:
on sale

Fair value adjustment

Ava i l a b l e for sale

unrealized

gain equity
⑭To s h ow Decrease in c u r re n t ( cash flows):
Asset

in A/c Re c i va d 1

operating
o c c re a s e

AIC REcieUabI

⑱ To s h ow I n c re a s e in c u r re n t ( cash flows):
Asset

A/ Re c i va b I

in a recievable
operating
I n c re a s e

⑲ (c a s h flows):
liability
To s h ow decrease in c u r re n t

A/C
payable
in All

operating
o c c re a s e

payable
⑱ To s h ow I n c re a s e in c u r re n t ( cash flows):
Asset

in Alc

operating
I n c re a s e
payable
As

payable
⑭P u rc h a s e of (cash flows):
Ass e t

Equipment
purchase

Investing
of
Equipment
⑫ sale of Fixed Asset [CashflowS):

of

Investing Equipment
sale

operating disposal
equipment
l o ss on on

Accumulated depreciation
Equipment

Equipment

⑬ I n c re a s e in common stock (cash flows):

of stack

Financing
I ss u a n c e common

com m on SAOCR

⑭ To re co rd non-cash expense (cash flows):

depreciation expense
operating
Accumulated depreciation
Building
⑮ Record income
not (cash flows):

Nei
tn c o m e

operating
Re t ain e d

earnings
⑲ Record ofD i v i d e n d s (cash flows):

payment
metained
earnings
dividends
of
Financing payment
⑰Re c o rd I n c re a s e in cash (cash flows):

cash

I n c re a s e in cas h

⑱ Record d e c re a s e in Cash (cash flows):

Decrease in cas h

cash
 contingent
IAS 37: provisions, liabilities and assets:

Disclosures:

37 from al, a insur

contingencies arising
exc l u d e s Financial instruments CIASBS non-onerous

executory
I ts or IFRS contrac ts

( I F R S 4 ) . But does provisions, for

contingentliability contingent
rance con t rac ts FA S bt a
eg
to ass e ts construc tion

apply
(IAS II), Income t axe s (IAS12), lease CIAS it), benefits CEAS 19)
employee
contrac ts

definations:

Ray
O provision:a of

liability timings
uncer tain or amount

② A future
obligation depending
possible wheather uncer tain

contingentliability:
some

obligation
on event
o c c u rs or a present

is p ro b a b l e t a n n o tb e measured

reliability.
but

payment
not or a m o u nc

③ Ass e t :A existence be

by
from confir med the

contingent
possible that
asset arises e ve n t s , a
past whose will

only
of future
entity.
occurence of

wholly
or non occurence one or more uncer tain events not within control

of

Recognition
p rov i s i o n :

contingentcontingent
Assets &A has of
obligation
liabilities arisen as re s u l t e ve n t
present a past

(95%) ②
Recognize Recognize
is
payment
cer tain probable
virtually
(50-95%) ③
Recognize
Probable be estimated

reliabily.
Disclose Amount
can

Possible (5-50;) Do
nothing
Disclose

(15%)
nothing
Do
Noting
REMOTE Do

of
measurement provisions:

should estimate it Provision off

obligation
we an or as
asset wo u l d appear on balance sheet. of
one eve n ts

measured Provision now of

likely
population measured

probably
most amount. e ve n t s a re

large
are at a
at -

weighted
expected Time of and ris ks into Re of expendi-
money
va l u e . va l u e a re t a ke n account. imbursement

can n ob e
recognised
t u re should be as asset. Amount more provisions.

recognised
an t then

Re- m e a s u re m e n t of
provisions:

If an o u t f l ow does n o ex
t ist, provision should be reversed. Some examples of provision 984:

①
obligating
when eve n t
o c c u rs
warranty:
an

⑦
recognised
Land contamination:P rov i s i o n as contanimation occurs

③ refunds: it

Recognise
provision
company policy
customer is re f u n d .

give
to

⑦ Abodened fo r

recognised
unaviodable

payments
leasehold:p rov i s i o n
 liabilities.

contingent
Entities should not liabilities but
should disclose outflow of economic
recognise contingent
them, u n l e ss an

JESD4OLE is EMO+.

Ass e rs :

contingent
be
contingent recognised
a ss e rs should be
n ot - but
should disclosed when i n f l ow is probable. Wh e n realisation of

virtually
income is certain, is

recognition
then a ss e t appropriate

Disclosures:

for e ach of

reconciling
c l a ss provision:

①Opening
balance

& Additions

③ (amount provisions (
charged against
used

④ unused a m o u n ts reve rs e d

⑤ balance
closing
⑥
Change
in discount
w a re .

reconcilation is
required
A

year
prior not

For each class of provision, a brief description of:

① n a t u re

②
timings
③ uncertanities

& assumptions

⑤ reimbursement, i f

any.
IFRS IS: Revenue from con t rac ts with customers:

Scope:

Applies to all contrac ts with Customers fo r

except lease (IAS it), Financial i n st r u m e n ts (IFRS 19), consolid-

ate d financial statements CIERSIS), joint CIERS IS, separate financial statments CIAS at, I nve s t

arragments
and joint (IAS 28), (IFR S 4) and

monetry exchanges
m e n ts in associate v e n t u re Insurance c o n t r a c ts non bow

entities. I f contract falls in two standards then:

specify
-If
other standard how parts of those seperation
apply
to separate one or m o re contract, then

First.

If
other standards don't then IFRS 15 w i ll be applied
apply,
-

defination:
may
D b ow

obligations.
con t rac t a n s m o re parties c re a t e s encorceable an d

agreement rights
or that

② customer:A contrac ted with that of

goods
obtain

entity
thathas an to or ser vices a re an
output
party
for
entity's ordinary
the ac tivities in consideration

exchange
③ benefits period for m i nv i o u s

during
in economic the in of

accounting
I n c o m e :I n c re a s e the or

of d e cre as e of liabilities i n increase in

equity.
enhancment ass e ts or re s u l t
that an

④ per formance t r a n s fe r.
obligation:
Ap ro m i s e in a with
contrac t a customer to

① Good or ser vice is distinc t.

② od
f istinc t

substantially
series
A or ser vices that

goods
a re the s am e .

⑤
entity's ordinary
Reve n u e :I n c o m e in course or ac tivities.
arising
the

⑧ price.A m o u n t
ofconsideration be in of

exchange
Transac tion which to untitled

entity
to an
expec ts

transfering goods
services.

fo r framework:
Accounting
revenue:F i ve model
requirment step

①Identity
contrac ts with customed and the conditions a re :

A contrac h as been approved both parties

by
t

②
Rights
in re l at i o n a services be transfered
goods
to to

③
Payment
ter ms

& has
contract commercial substance

⑤ o fc o n s i d e r a t i o n

Probability being
collec ted.
③ per for mance
Identify
the

obligation
the in contrac t

① Per for mance satisfied

obligation
should be over time.

② method of
single measuring progress
A is

good
distinct:

①customer benefit available.

good/services
can f ro m

readibly
on i ts ow n or with s o u rc e

&
Entity
transfer
goods/services
p ro m i s e to is separate.

seperately
Fac tors for consideration is not identifiable include:

pentity
of

integrating goods, goods,

does provide service ser vices with other services.
significant
a

② Goods/service

significantly
modify goods.
other

③ Goods/service a re inter plated or independent.

③ transac tion

Determining
the price.

④
selling
Allocate price:

obligations
the transac tion price to the per formance in the contrac ts. To estimate

①
Ad ju ste d approach
a ss e s m e n t
m a r ke t

& Expected approach

margin
c o st
plus

③ Residual approach.

need adjust
time of paid in advance.
entity might
consideration is ar reas or

money
to val u e when

⑤
Recognise recognised
revenue satisfies per for mance Revenue is is passed.
obligation.
when when control

entity
Benefits related that potential cash flows obtained include:
directly.
asset a re be These
indirectly
to that or

may

①using
Assets to produce services
goods
or

② of

using
Asset
to enhance value other assets.

③ assers sette
that liabilities
using
④
Selling
Ass e t
the

exchanging
or

⑤
pledging
asset
to secure a loan

⑥
Holding
Asset

Revenue
recognised
is over time:

D customer re c i e ve s a benefits provided.

simaltonously
consumes all

② performance creates

Entity's
or enhances asset

③
entity
p e r fo r m a n c e does c re a t e
not a ss e w
t ith alte r n at ive use.
Fac tors that snow in
point time which control passes:
way
at

&Entity
has present fo r
right
a the ass e t .

payment
to

② Customer has title of

ass e t .

legal
③ has transfered of
entity physical
posession asset.

⑦
significant
customer has risk a reward to a ss e t
ownership

⑤
Customer has accepted asset.

Bi 8210SUSES:

should disclose a
qualative
infor mation
entity quantative regarding.
① Contrac t with customers

②
significantjudgments, changes judgments, applying guidance
in made in the to those contrac ts.

③ from

Any recognised
ass e t the costs to fulfill contract
Important:

-organization
expensed incur red.

they
cost a5 as a re

-
# of issued s h a re s # of authorized shares

jour nal for authorization of

stock
entry
-
No

in

equity
-common stock dividend disturbutable is added to capital stack stockholder section.

by
eps be increased purchase of stock
treasury
-
can

reported in

gains
-Dividend revenue is under other revenue income statement