ICBI 2015

Permanent URI for this collectionhttp://repository.kln.ac.lk/handle/123456789/10527

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End date: 2015Subject: search.filters.subject.Sri Lanka Accounting Standards

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    Misclassification of Investment Property: A Case Study on Selected Sri Lankan Company
    (Faculty of Commerce and Management Studies, University of Kelaniya, 2015) Silva, N.K.L.
    Accounting doesn’t make corporate earnings or statement of financial position more volatile. Accounting just increases the transparency of volatility in earnings. Therefore, Accounting increases the effectiveness & transparency of the information that a company communicate to its all stakeholders. So every business organization should need to prepare and present the financial statements in accordance with IFRSs and IASs to provide information regarding the true financial position and performance of the business to the users of financial information in order to enable them to make effective economic decisions. In this case study report it analyzes an accounting issue of including Investment Property under the category of Property, Plant & Equipment which violate Sri Lanka Accounting Standards. In such situation, Investment Property should be disclosed separately in the statement of financial position according to LKAS 40 and how it can be done is also explained in this case study report.
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    Income recognition of a loan with increasing rentals (Stepping up Loans): A case study on a selected Sri Lankan company
    (Faculty of Commerce and Management Studies, University of Kelaniya, 2015) Kawshalya, P.; Perera, P.
    In consequence to introduction of Sri Lanka Accounting Standards (SLFRS and LKAS) compatible with International Financial Reporting Standards (IFRS), by the Institute of Chartered Accountants of Sri Lanka with effect from 1st January 2012, The Company being a registered finance company with public accountability, is required to apply provisions of the full set of accounting standards and in the preparation of the financial statements in compatible with these new accounting standards, company has encountered numerous issues regarding the deviations from the requirements of the accounting standards. Out of them, this case study discuses in detailed one of the main issues that was identified during the preparation of financial statements of this company. This company provides range of different types of loans to its customers and among them it was identified a loan category with a specific feature. This loan type is called as “Stepping Up” loans and the special feature in this loan is its monthly installment changes (increases) in every 12 months. Therefore the monthly installments in first few years are relatively lower than the monthly installments of the final years of the loan agreement. In the interest income recognition of these types of loans company has encountered a problem because Sri Lanka Accounting Standard (LKAS) 39 – ‘Financial Instruments: Recognition and Measurement’ requires recognizing the interest income of loans using effective interest method where in the first two years of the loan agreements the monthly rental is not even enough to recover the interest of these loans which is calculated using effective interest method.
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    Error of Converting Trade Mark at Closing Rate instead of Valuing at Historical Cost using the Rate at the Date of Transaction: A Case Study on Selected Sri Lankan Company
    (Faculty of Commerce and Management Studies, University of Kelaniya, 2015) Silva, N.K.L.
    Accounting and reporting concerns often impact many decisions made in the evaluation of a deal, including decisions about how to communicate the transaction to a company’s stakeholders. Therefore, accounting and reporting task should be done in effective & standard way by every company. For that every company and organization should prepare the financial statements according to generally accept accounting standards. The purpose of this case study report is to analyze an accounting issue of converting trade mark at closing rate instead of valuing at historical cost using the rate at the date of transaction which violates Sri Lanka Accounting Standards. In such situation, the trade mark has to be identified at historical cost at the date of transaction as it is an intangible, non-monetary asset according to LKAS 38: Intangible Assets and LKAS 21: The Effects of Changes in Foreign Exchange Rates and how it can be done is also explained in this case study report.