Immersing in audit

  Pension accounting principles depend on the post-retirement scheme. There are two categories of post-retirement benefits: – Defined contribution schemes. – Defined benefit schemes. According to IAS 19, under defined contribution plans the entity’s legal or constructive obligation is limited to the amount that it agrees to contribute to the fund. Under defined benefit plans the entity’s obligation is to provide the agreed benefits to current and former employees and actuarial risk and investment risk fall on the entity. The accounting principes of defined contribution plans are as following: (a)    Contributions to a defined contribution plan should be recognized as an expense in the period they are payable (b) Any liability for unpaid contributions that are due at the end of the period should be recognized as a liability (accrued expense). (c) Any excess contributions paid should be recognized as an asset (prepaid expense), but only to the extent that the prepay...

  Unlike IAS 11 IFRS 15 prescribes treating construction contracts the same way as any other contract with customers. The following are issues that were not covered in IAS 11, but are introduced in IFRS   15 : A ) IFRS 15 sets up the 5-steps model for revenue recognition: Identify contract with the customer. Identify the performance obligations in the contract. Determine the transaction price. Allocate the transaction price to the performance obligations in the contract. Recognize revenue when (or as) an entity satisfies a performance obligation. B) Revenue should be recognized when (or as) the entity satisfies a performance obligation by transferring a promised good or service (ie an asset) to a customer. An asset is transferred when (or as) the customer obtains control of that asset. C) If an entity performs by transferring goods or services to a customer before the customer pays consideration or before payment is du...