Higher Colleges of Technology

Assessment 3: Group Project_20% and Presentation 15%

Names
Student ID
Topic/Project:
Date:
Assessor:
Overall Grade:

Assessment 3: Group Project_20% and Presentation 15% Due Date: Week 13 Weight:
35%

Description of Assessment 3

Students in groups will study the accounting treatment for selected issues on financial reporting
and make necessary recommendations to improve financial reporting
(Outcomes: 1,2,3& 4)

CLO 1: Explain the relevance of IFRS in the current financial reporting environment
CLO 2: Apply IFRS principles to selected items of the balance sheet
CLO 3: Analyze selected issues on financial reporting of listed companies
CLO 4: Recommend an accounting treatment for selected issues on financial reporting

Requirment Weight Presentatio Weigh Total

Requirment 1 Total
2 n t
Marks allocated 70 30 100 20% 15 15% 35%

Marks earned

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Requirement 1) Students form groups of three at maximum. They should select three companies
from one industry sector (list of industry sectors and companies are attached in the guide)

My 3 chosen companies’ names are:

1. Emirates NBD Bank
2. Saudi Awwal Bank
3. Commercial Bank of Dubai

For each company selected, the comparative financial statements for the 2020/2021 is to be
examined for this project purposes.

Each group to submit a report includes answers for the following questions:

Answer the following questions based on the selected companies:

1. When the company has adopted the application of IFRS

Emirates NBD Bank: The bank adopted IFRS in Year 2010 (Pg-04).
Saudi Awwal Bank: This bank has adopted the application of IFRS from the financial
year 2009 (Pg-29).
Commercial Bank of Dubai: The bank has adopted IFRS in Year of 2015 (Pg-12)

2. What is IFRS standard the company use to present its financial statements?
Banks IAS/ IFRS
Emirates NBD Bank IAS-1 (Pg-53)

Saudi Awwal Bank IAS-1 (Pg-67)

Commercial Bank 0f Dubai IAS-1 (Pg-49)

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3. Select three standards that are applied by the company, your selection should be from the
following standards and depends on what standard is used by the selected companies.
Leases IFRS 16
Accounting Policies _IAS 8
Non-Current Assets Held For Sale_IFRS5
Revenue from contracts with customers_IFRS 15
Share Based Payment_ IFRS 2
Earnings Per Share_IAS 33
Financial Instruments Presentation_IAS 32
Compare the three annual reports of the selected companies for the following points

A. List your selected standards in the selected companies.

Banks Emirates NBD Bank Saudi Awwal Bank Commercial Bank of Dubai
IFRS-15 IAS-8 IAS-8
IFRS/ IFRS-16 IFRS-16 IFRS-15
IAS - IFRS-21 IFRS-16

B. What is the revenue amount for each company?

Banks Revenues
Emirates NBD Bank 4,765,571

Saudi Awwal Bank 9,650,228

Commercial Bank of Dubai 4,937,927

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 C. Where is the numbers related to the selected standards are presented? (Balance sheet,
income statement, or equity statement)
IAS-08 Accounting Policies: This is covered in the statement of income together with
accounting principles because it has to do with evolving accounting practices. The
income statement is impacted by adjusted depreciation, whereas the balance sheet is
affected by accumulated depreciation.

IFRS-15 Revenue from contracts: It states that contract-related data is shown on the
balance sheet as either contract liabilities or contract assets. With the goal of offering a
comprehensive model for reporting income from customer contracts, the International
Accounting Standards Board has developed IFRS 15. The purpose of this standard is to
improve comparability between industries and various contract forms. The primary
goals of IFRS 15 are to provide rules that organizations must abide by and to give users
of financial statements important details regarding the amount, nature, timing, and risk
of revenue and cash inflows resulting from customer contracts.

IFRS-16 Leases: Leases are recorded as lease assets on the balance sheet because IFRS
16 is partially related to leases. It addresses both financial obligations and the growth of
leased assets.

IAS-21 Changes in Foreign Exchange Rates: The item relates to exchange rates and is
noted in the yearly report's financial statements' comments, income statement,
summary of cash flows, and statement of financial position. It applies to businesses that
openly trade their stock to foreign or direct importers.

D. What are the disclosures points that have been listed in the companies’ notes?

Banks Standard Description

IFRS-15 Revenue from This has to do with how the
Bank makes money from fees
Contracts
from the many services it
provides to its customers. The
criteria for reporting profits
are derived from IFRS 15,
Emirates NBD Bank which is the norm for
"Contractual revenue from
customers." The Bank records
income when it allows an end
user to use a good or service.
IFRS-16 Leases This pertains to; Determining
whether a lease agreement
exists or not. Then

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 Analyze the likelihood of
exercising a termination or
extension option. Classifying
leases (in cases when the
organization serves as a
lessor) and then analyzing if
an asset related to the right
of use has
deteriorated. Determining the
appropriate rate of discount
for the lease repayments.
IAS-08 Accounting Policies This outlines the criteria for
selecting and modifying
accounting policies in
addition to the procedure for
accounting and disclosure for
revisions to accounting
estimates.

IFRS-16 Leases IFRS 16 Leases describes the

information about leases that
a reporter for IFRS needs to
identify, assess, convey, and
show. Lessees are subject to a
single accounting model
under this standard, which
Saudi Awwal Bank
requires them to
recognize liabilities as well as
assets for all leases
except those connected with
low-value assets or those
with lease periods of 12
months or less. Lessor
accounting practices under
IFRS 16 are essentially like
those under IAS 17, with
lessors still categorizing the
leases they hold as either
operational or financial.
IFRS-21 Changes in Foreign This covers the disclosures
about foreign currency and
Exchange Rates
exchange rates. Whether
foreign currencies are

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 revealed in financial accounts,
how they are computed, and
which ones are used in trade.

IAS-8 Accounting Policies The initials of the pertinent

document ruling that initially
triggered the modification.
The difference is based on
how the fundamental and
diluted profit per share is
adjusted.
IFRS-15 Revenue from Any asset's value is calculated
by the amount spent
Contracts
Commercial Bank of Dubai acquiring or carrying out an
end-user contract. Decisions
are taken and evaluations are
modified when proposals are
applied to such contracts.
IFRS-16 Leases Thus, it stands to reason that
a lease's total may vary.
Expenses associated with
cheap assets, Gains, or losses
from acquired leasing
contracts, Depreciation of the
right of use asset by the
underlying asset

E. What are major shortcomings in the disclosure notes for your selected companies
(indicate if there are any missing disclosure requirement based on the IFRS requirements
for the selected standard)?

Bank Standard Shortcomings

IFRS-15 Revenue from Information on losses is not
given. It also has some
Contracts
misleading information that
Emirates NBD Bank is there for financial gain.
IFRS-16 Leases Although both parties to the
agreement are not
mentioned, this relates to
contracts that are signed

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 with clients.

Bank Standard Shortcomings

IAS-8 Accounting Policies
IFRS-16 Leases
Saudi Awwal Bank
lessees are required by policy
IFRS-21 Changes in Foreign
Exchange Rates
Insufficient justification is
provided for the managerial
evaluation of the suitability
of accounting procedures as
well as the reasoning behind
financial estimates and
disclosures.
For lessees, this standard
offers a single accounting
method. Except in situations
where the term of the lease
is less than a year or the
asset's worth is negligible,
to recognize duties and
assets for every lease. As a
result, the standard fails to
offer any information
regarding the accounting
handling of leases having
duration of less than a year.
It shrinks the extensive data
on international currency
rates. How they are
computed and used in
imports of direct material
and international trade.

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 Bank Standard Shortcomings
IAS-8 Accounting Policies The shortcomings include the
amount of modification for all
impacted line items in the
financials; the details of new
accounting methods; an
explanation of how new
temporary provisions would
operate, such as any possible
Commercial Bank of
effect on subsequent periods;
Dubai and the implementation of
changes to any accounting
policy.

IFRS-15 Revenue from Conditions of its client

agreement.
Contracts

IFRS-16 Leases Subleasing is the use of an

asset to make money,
partially covering lease
payments, an increase in the
usage right's value, and a
profit or loss from the lease-
purchase transaction.

F. Based on your answers above what is your recommendation regarding the level of details
in the three companies?

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 Banks Emirates NBD Bank Saudi Awwal Bank Commercial Bank 0f
Dubai

Recommendations It is necessary to It ought to do Any changes made to

identify the everything in its accounting rules
contract's parties. power to give its must be explained,
Anything related to users financial data.
along with the way
financial gain should It should declare the
they will be applied
be shared. It is insurance contracts.
necessary to be clear and how they will
when better affect financial
accounting policy statements.
changes will take Additionally, give
effect. more details about
the suppliers to help
the buyer
understand cash
flows, time, quantity,
etc.

Rubric
Q# Marks
1 Student should find the year of IFRS adoption for each 4 Marks, each company 1
company and justify why the company is enforced at mark, justification will be
that date to adopt IFRS. same for all so 1 mark
2 From the notes, students should report the IFRS 3 Marks, each company 1
standard the company use to present its financial mark
statements
3-A List of selected standards in the selected companies. 3 Marks, each company 1
Selected standards should have details in the notes mark

3-B Revenue amount for each company to be presented 3 Marks, each company 1
mark
3-C Student should identify the statement that each selected 3 Marks, each company 1
standard is presented in? (Balance sheet, income mark

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 statement, or equity statement). Three standards, three
companies
3-D The disclosures points that have been listed in the 18 Marks, each company 6
companies’ notes for each standard, student should mark
select disclosures that are specifically related to the
company and explained by numbers, any general listing
of disclosure should not be highlighted.
3-E Students should list major shortcomings in the 18 Marks, each company 6
disclosure notes for their selected companies (at least mark
two shortcomings for each standard should be listed).
3-F Students should list at least two recommendations 18 Marks, each company 6
regarding the level of details in the three different mark
companies, based on the listed shortcomings above.
TOTAL 70

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Requirement 2) each group will select three articles belonging to one group of the following. The
group that would be selected should match one standard of those selected in requirement 1
above

Read the articles together and prepare a summary of 500 words, insure that your summary
includes the paper’s objectives, methodology, findings and implications. The summary should
not be copy paste of the article’s abstract.

Then prepare a table similar to the following, compare the three articles from the following
points:

Article title Objectives Sample Methodolo Variables Findings

gy
IFRS 15 To assess how The This Revenue RECs that
early early adoption sample includes a Net profit decide against
adoption and of IFRS by includes all five-step Cash flow. implementing
accounting Real Estate REC procedure IFRS 15 are not
information: Companies mentioned to assess as important as
case of real (REC) has in DFM the level of the application
estate affected performanc suggested.
companies in e of the
Dubai client-
related
obligation.
Implementin To open the Two The study Implementati The results
g AASB 15 implementatio samples of uses on concerns show how
revenue from n's "black 54.6% and financial crucial it is to
contracts box," which 24.5% was statements apply AASB
with presents considered. to 15.
customers: multiple implement
the preparer perspectives of AASB 15.
perspective an intricate and
thorough

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 accounting
standard
The FASB’s To get rid of a Board for For the Quality of Examined on
and IASB’s significant Internation accounting financial the basis of the
New discrepancy al quality, reporting Income
Revenue that Accountin proxies for comparability Acknowledgme
Be the g earnings among nt Standard's
Effects on Standards quality businesses application by
Earnings and have been the FASB,
Quality, Financial considered. IASB, and
Deferred Accountin Budgetary
Taxes, g Bookkeeping
Management Standards Benchmarks
Compensatio Board.
n, and on
Industry-
Specific
Reporting?

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Group 1 Revenue from contracts with customers_IFRS 15

Davern, M., Gyles, N., Potter, B., & Yang, V. (2019). Implementing AASB 15 revenue from
contracts with customers: the preparer perspective. Accounting Research Journal, (just-
accepted), 00-00.

By examining the implementation of AASB 15 revenue from client contracts, the article
adopting AASB 15 revenue from the preparer perspective seeks to provide insight on the
difficulties, expenses, and advantages that preparers have encountered when adopting this new
and complicated standard. The procedure for implementing AASB 15 into effect. both ex ante
and ex post by global standards-setting authorities. The IASB is required to determine the
benefits and drawbacks of accounting rules. An evaluation of 143 financial statements prepared
with AASB 15 is used in the study. The report highlights the importance that proprietary
expenses play in bringing new standards to reality and advises preparers to approach
compliance more pragmatically than standard-setters. The application of an accounting
standard with the comprehensive requirements and implications of AASB 15 is a significant
issue since organizations frequently lack the competence necessary to carry out an efficient and
successful implementation. PIRs are often carried out after the announcement of the relevant
accounting standard, and they seldom take into consideration every potential roadblock that
companies may face during standard implementation. Many scholarly works have examined the
effects on entities of adopting new accounting standards by using historical data and
explanations of observable occurrences drawn from well-established rational choice theories.
The development, implementation, and evaluation of a new accounting standard all depend on
this cost/benefit analysis, but there isn't a generally acknowledged procedure for carrying it
out. It is clear from the data in this research that there would be little benefit in postponing the
adoption dates of new standards. It implies that instead of presenting standards from a
compliance perspective, standard-setters could motivate businesses by framing standards in
terms of how they benefit the business itself. This research offers a unique viewpoint on the
real-world implementation experiences preparers encountered when implementing a new
standard. This kind of perspective can be beneficial to those who set and establish standards.
The findings unequivocally demonstrate that respondents' concerns center on the new

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accounting standard's proprietary expenses. Of the respondents, 51.1 percent said it would be
in the entity's best interests to forego making the AASB 15 disclosures, while 54.6 percent
thought the additional disclosures would help competitors. Although these worries are valid in
general, the purpose of the specific disclosures mandated by accounting regulations is to
improve decision-making's comparability and utility. Based on empirical data, there is no
relationship between a practical understanding of compliance and the underlying goals of
putting accounting rules into practice. It provides information about the incentives operating at
the entity level when a new accounting standard is being implemented. In summary, the study
shows that everyone must contribute significantly to ensure meaningful and effective financial
reporting that actually improves business success and guarantees reporting integrity, rather
than being seen as imposing unnecessary bureaucracy and restrictions on preparers.

Rutledge, R. W., Karim, K. E., & Kim, T. (2016). The FASB's and IASB's New Revenue Recognition
Standard: What Will Be the Effects on Earnings Quality, Deferred Taxes, Management
Compensation, and on Industry‐Specific Reporting?. Journal of Corporate Accounting & Finance,
27(6), 43-48.

The New Revenue Recognition Standard, which helps to settle disputes and inconsistencies that
arise in revenue reporting practices across various industries, was approved by the Financial
Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB)
through their combined efforts. The goal of the current study is to investigate how various
nations would be affected by the FASB and IASB's recent adoption of the Income
Acknowledgment Standard. Analysis of the approved costs, profit margin, board compensation,
and certain regulations that are pertinent to the company will all be part of this. It is without a
doubt the case that the companies' financial reporting has advanced significantly with the
replacement of the prior methodology with this one. This standard is highly helpful since it
helps to align revenue recognition standards uniformly. Transparency and comparison were
unattainable in the past due to the varying revenue recognition regulations. The transfer of
products or services to consumers is viewed as the major factor in the new standard, which is
being established by IFRS 15 and ASU 2014-09. It offers a comprehensive way of revenue
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recognition that utilizes a principle-based approach. Important elements of the standard
include the five steps for revenue recognition: contracting clients, performance requirements,
revenue distribution, real transaction price, and revenue recognition once performance
obligations are fulfilled. Before making any decisions, the Budgetary Bookkeeping Benchmarks
Board FASB and IASB thoroughly reviewed the principles and uses of the Income
Acknowledgment Standard. This method places a strong emphasis on keeping accurate records
of the goods or services transferred, monitoring costs, and mandating that revenues be
recognized in accordance with the value provided to clients. At minimum, the standard has two
sides. Even though there are problems and concerns, the goal is to raise the standard of
financial reporting and make businesses more comparable. Another potential obstacle is the
growing application of expert opinion in evaluating transaction costs and performance
guarantees. It is recommended that the transparency protocols be strengthened because more
discretion and tougher disclosure guidelines may be applied. Its significance extends beyond
financial reporting to domains like management compensation schemes and deferred taxes.
While it is required by one accounting principle for revenues to be reported in financial
statements, another principle stipulates that revenues should only be reported for tax purposes
when payment has been received. This could lead to significant sums of deferred tax,
underscoring the importance of cautious planning. While increasing the accuracy of financial
reporting, the deactivated Income Acknowledgment Standard brings up several concerns, such
as the necessity of exercising more prudence and the sustainability of profit control. Variations
in the financial and assessment reporting may lead to a rise in conceded charge amounts.
Impacts on the industry shift, especially in sectors like the pharmaceutical and automotive
industries. Since the consideration is based on examination rather than experimental evidence,
it lacks a defined test measure. Furthermore, management may be encouraged to manipulate
when income is recognized and accomplish the desired results in order to influence an
employee’s pay plan if the standard is developed using a rule-based process.

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Trabelsi, N. S. (2018). IFRS 15 early adoption and accounting information: Case of real estate
companies in dubai. Academy of Accounting and Financial Studies Journal, 22(1), 1-12.

2014 saw the release of an essay with the title "IFRS 15 early adoption and accounting
information: case of real estate companies in Dubai." The purpose of this study is to investigate
the consequences of accounting information supplied by Real Estate Companies (REC). The
subject of this study is REC, a business that is listed on the Dubai Financial Market (DFM) and
produced its consolidated financial statements in 2015 using IFRS 15. The accounting figures are
anticipated to change with the implementation of the five-step revenue recognition system. It is
anticipated that the implementation of the five processes to decide when and how revenue should
be recognized will have a major impact on REC's earnings quality. There could have a big
impact on contract capitalization or expensing, timeliness, and profit, which could mean a big
shift in how revenue and profit are determined. For every company included in the research,
financial data and descriptive statistics are presented under the IFRS 15 impact. The major
metrics highlight Emaar and Damac's significance in the UAE real estate market. They account
for 73% of all listed corporations based on total assets. Emaar and Damac held market shares of
38% and 24%, respectively, in terms of sales in 2015. As a result, the early adopters' 2015
financial statements exhibit the following practices: The prior revenue standards (IAS 18 and
IAS 11) were used to produce the accounts for the comparative periods. As of January 1, 2015,
IFRS 15 applied to all contracts. The company acknowledged the cumulative adjustment to the
initial balance of retained earnings for ongoing contracts that it still needs to finish in 2015. It
might be challenging to express financial gains and expenses in words at times. It indicates the
challenge of really implementing the cost restriction. It seems that the early customers
anticipated more costs than benefits from using the complete retrospective technique. They
choose to employ the adjusted strategy. The findings show that REC's early adoption of IFRS 15
significantly enhanced stockholder equity and earnings for every company the study examined.
The standard has two advantages: firstly, income for customer contracts is usually always
recognized over time; secondly, contract expenses are almost always capitalized instead of
expensed. Moreover, the findings demonstrate that every early adopter has chosen to supply
relevant information using the modified retrospective technique. This study demonstrates that the
implementation of IFRS 15 has led to an increase in the measurement of two financial metrics.
Based on a comprehensive analysis of the data that was previously supplied, the research

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findings support the positive accounting hypothesis. Any accounting strategy that managers
voluntarily decide to employ is indicative of their astute actions. The impact of IFRS 15 on
equity measurement and earnings was positively adjusted for all REC that opted to implement it
early.

Group 2 Share Based Payment_ IFRS 2

Alhaj-Ismail, A., Adwan, S., & Stittle, J. (2019). Share-option based compensation expense,
shareholder returns and financial crisis. Journal of Contemporary Accounting &
Economics, 15(1), 20-35.

Steenkamp, G., & Wesson, N. (2018). Changes in South African executive share-based
remuneration. Journal of Economic and Financial Sciences, 11(1), 1-12.

Subramaniam, C., & Tsay, J. (2012). Mandated Recognition of Employee Stock Option Expense–
The Case of C anada. Journal of International Financial Management & Accounting, 23(1), 62-
91.

Group 3 Earnings Per Share_IAS 33

Afrin, K. H., & Islam, M. S. (2019). Earnings per Share: Do We Get Relevant
Information?. Chinese Business Review, 18(2), 68-75.

Kiss, A., & Dékán, I. O. M. T. (2015). THE‟ EPS‟ OF THE IFRS AS A BENCHMARK OF CORPORATE
PERFORMANCE. THE ANNALS OF THE UNIVERSITY OF ORADEA, 944.

Robbetze, N., de Villiers, R., & Harmse, L. (2017). The effect of earnings per share categories on
share price behavior: Some south african evidence. Journal of Applied Business Research, 33(1),
141-152.

Rubric:

Each group of articles worth 10 marks, 2 marks for each title as below

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 Article # Objectives Sample Methodology Variables Findings Marks Marks
Allocated Obtained
1 2 Marks 2 Marks 2 Marks 2 Marks 2 Marks 10 Marks
2 2 Marks 2 Marks 2 Marks 2 Marks 2 Marks 10 Marks
3 2 Marks 2 Marks 2 Marks 2 Marks 2 Marks 10 Marks
TOATAL 30

Report format:
Format: Times new roman, 12 points, 1.5 line spacing
Margins: Normal margins
Submission Mode: Hard Copy
PRESENTATION MARKING GUIDE/RUBRIC (15%)

Student name
Student ID

Time: 10-12 minutes (including questions and answers), power point presentation, and the
group to present together, each student talk about one part.

Score
Criteria

1 Content
Student adequately summarizes all key items included in their projects: /6
• Companies information
• Annual reports are presented
• List of standards selected
• Comparison between required and given disclosures
• Recommendation
• Summary of each article
2 Delivery
• Body language and confidence /3
• Speed of delivery, volume etc.
• General understanding about the project.

3 Visual effects
Presentation visuals are: /2

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 • Appealing and relevant
• Incorporated smoothly into the presentation
4 Language
• Appropriate use of language /4
• Fluent and clear speech
• Student can understand questions and answer correctly
TOTAL
/15
Weight
15%

Date--------------------------- Faculty name -------------------------------------

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