ACCA – Wolters Kluwer Joint Event: Accounting and Audit Issues Relating to FRS 36 and FRS 109 – Impairment of Goodwill, Expected Credit Loss of Trade Receivables and Inter-Company Loan

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Description

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This workshop aims to share the common issues accountants and auditors faced when dealing with the impairment of goodwill, applying the expected credit loss model in the assessment of impairment of inter-company loan and trade receivables.

Illustrations and practical cases will be shared to facilitate learning. The Trainer will also share practical pointers on how you can avoid the common pitfalls in these areas.

Programme Outline

Trade receivables impairment

• Using the practical expedient of “provision matrix” to measure lifetime expected credit loss in assessing impairment of trade receivables
• Grouping of trade receivables
• Measuring historical default rates
• Adjusting historical default rates for forward looking information

Inter-company loan

• Classification of inter-company loan:
• Fair value through profit and loss
• Fair value through other comprehensive income
• Amortised cost
• Applying the general approach in FRS 109 to assess impairment of inter-company loan classified as amortised cost
• Assessing credit risk and determining which of the 3 stage the loan belong to:
• Low credit risk
• Significant increase in credit risk
• Credit impaired
• Deciding whether to apply 12 month expected credit loss (ECL) or lifetime ECL
• Calculate ECL using the PD/EAD/LGD model
• Probability of default (PD)
• Expected At Default (EAD)
• Loss Given Default (LGD)

Goodwill Impairment

• Allocation of goodwill to cash-generating-unit (CGU)
• Determining value-in-use
• Using forecast income statement as proxy of cash flow forecast
• Assessing growth rate assumptions
• Assessing discount rate
• Adjusting post-tax discount rate to pre-tax discount rate
• Issues in determining weighted average cost of capital as starting of discount rate
• Dealing with non-controlling interest

This workshop qualifies for 4 CPE hours in Financial Reporting Standards and Pronouncements (Category 1) and 3 CPE hours in Auditing Standards, Pronouncements and Methodology (Category 3) .

Target Audience

Accountants and Auditors who would like to understand practical accounting and audit issues relating to Impairment of Goodwill, Expected Credit Loss of Trade Receivables and Inter-Company Loan, and learn how to avoid the common pitfalls in these areas

Expert Speaker

Chee Hay Kheong Daniel

Daniel holds an Honours degree in Accountancy from the National University of Singapore and is a Certified Information Systems Auditor (CISA). He has more than 13 years of experience in the accounting profession, having worked for one of the Big 4 accounting firms both in Singapore and in the United Kingdom. He has also more than 5 years of senior management experience with MNCs, managing their operations in Singapore and Asia.

Daniel is a highly sought-after seminar trainer. He was an Adjunct Professor in the School of Business, Singapore University of Social Sciences and an Adjunct Associate Professor in the Department of Accounting of the NUS Business School. He served as a committee member of both the IT Committee and the Examination Committee of ISCA, and was a Committee member of the Disciplinary Sub-Committee of Accounting and Corporate Regulatory Authority (ACRA).