IFRS FOR SMEs ACCT 311

AIM

This course aims to develop the ability to prepare a complete set of financial statements for an individual company in accordance with IFRS for SMEs. A core competence of bachelor degree graduates is the ability to prepare a set of financial statements for a company. In Cambodia, national regulations require companies to follow either CIFRS or CIFRS for SMEs, which are wholly identical to IFRS and IFRS for SMEs. Cambodia has an agreement with the IASB to use IFRS and IFRS for SMEs. Therefore, CamEd bachelor degree graduates will be preparing, auditing, or using financial statements prepared in accordance with either of these two standards. While financial reporting is significantly developed in other courses, those other courses teach IFRS and often teach IFRS for larger businesses.
  • COURSE DESCRIPTION
  • ROLE IN CURRICULUM
  • LEARNING OUTCOMES
  • STUDY PLAN
  • TEACHING METHODS
  • ASSESSMENT AND GRADING
  • TEXTBOOKS AND REFERENCES

COURSE DESCRIPTION

This course on IFRS for SMEs complements the IFRS based courses and completes the financial reporting education needed by an accountant or auditor in Cambodia. Moreover, this course focuses on accounting for individual medium sized businesses of the sort that would use IFRS for SMEs, thereby complementing the IFRS courses that teach accounting for larger businesses. This course excludes topics for larger companies that are sufficiently covered in other coursework, such as consolidation and investment in financial instruments.

Credits: 5
Lecture Hours: 75

Self-Study Hours:

  • Reading: 48 (143 pages of technical reading)      
  • Review:   50 (4 short case studies, final case study)
  • Assignment: 52 (field research, analysis, writing)
    150

Total Study Hours: 225

ROLE IN CURRICULUM

 

Prerequisites

Students must have successfully passed Financial Accounting I (ACCT 211) before attempting this course.

 

LEARNING OUTCOMES

The learning outcomes for this course cover two main areas: The individual IFRS for SMEs sections, and preparation of a financial report in accordance with IFRS for SMEs. On successful completion of this course, students will be able to:

1  Knowledge

Level of Learning PLO CLO Learning Outcome
Understand PK5 CK1 Describe the objective, scope, applicability and development of IFRS for SMEs.

2  Cognitive Skills

Level of Learning PLO CLO Learning Outcome
Apply PC7 CC1 Apply IFRS for SMEs to transactions and recognition and measurement assets and liabilities common to SMEs in Cambodia.
Create PC7 CC2 Construct a general purpose financial report for an individual business in Cambodia in compliance with IFRS for SMEs.

3  Communication, Information Technology, and Numerical Skills

Level of Learning PLO CLO Learning Outcome
Apply PCIT2 CCIT1 Prepare loan and amortisation schedules based on the effective interest rate using a spreadsheet.
Evaluate PCIT4 CCIT2 Critique business performance of a Cambodian SME with reference to IFRS for SMEs financial statements.

4   Interpersonal Skills and Responsibilities

Level of Learning PLO CLO Learning Outcome
Evaluate PIP1 CIP1 Work in accordance with the ethics and professionalism required by the ACCA Code of Ethics and Conduct.

STUDY PLAN

The course targets the 50 lessons in the study plan below. Each lesson is 1.5 class hours each; there are a total of 75 class hours. The study plan below describes the learning outcome for each lesson, described in terms of what the student should be able to do at the end of the lesson. Readings should be done by students as preparation before the start of each class. Implementation of this study plan may vary somewhat depending on the progress and needs of students.

 No Lesson Learning Outcomes Teaching and Learning Activities, Assessment
1

Small and Medium-Sized Entities

  1. Distinguish between entities that may and may not apply IFRS for SMEs (CK1)
  2. Describe the components of a financial report prepared in accordance with IFRS for SMEs (CC2)
  3. Explain the advantages of IFRS for SMEs compared to IFRS (CK1)
 Lecture KahootReading: IFRS for SMEs, Preface pp 6-9, Section 1 pp 10-11, Section 3 pp 22-26 Reference: Modules 1, 3
2

Statement of Financial Position

  1. Organize accounts in a statement of financial position according to IFRS for SMEs’ format (CC2)
  2. Prepare a statement of financial position in accordance with IFRS for SMEs (CC2)
 Lecture Group case study DiscussionReading: IFRS for SMEs, Section 4 pp 27-30 Reference: Modules 4
3

Statement of Comprehensive Income

  1. Explain the acceptable formats and classification in the statement of income or statement of income and retained earnings (CK1)
  2. Classify expenses by nature and function (CC2)
 Lecture Group case study Discussion KahootReading: IFRS for SMEs, Section 5 pp 31-33, Section 6 34-35 Reference: Module 5
4

Concepts and Pervasive Principles, Notes to the Financial Statements

  1. Describe the pervasive principles of IFRS for SMEs  ( CK1)
  2. Explain how the objective of IFRS for SMEs influences application of IFRS for SMEs (CK2)
  3. Identify the role, components and location of notes within the financial report (CC2)
  4. Distinguish between relevant and irrelevant information for deciding on inclusion in the notes  (CC2)
 Lecture KahootReading: IFRS for SMEs, Section 2 pp 12-13, 18, Section 8 pp 41-42, Section 10 page 50 Reference: Module 8
5

ACCA Code of Ethics and Conduct

  1. Describe the fundamental principles of the ACCA Code of Ethics and Conduct (CIP2)
  2. Apply the fundamental principles of the ACCA Code of Ethic and Conduct to resolve ethical dilemmas arising in financial reporting (CIP2)
 Lecture Group case study KahootReading: ACCA Code of Ethics and Conduct, pp 18-23 Reference: ACCA Code of Ethics and Conduct pp 24-31
6

Accounting Policies, Estimates and Errors

  1. Define and distinguish changes in accounting policies, changes in estimates, and errors (CK1)
  2. Determine the correct way to report changes in accounting policies, changes in estimates and errors  (CC2)
 Lecture Group case studyReading: IFRS for SMEs, Section 10 pp 50-54 Reference: Module 10
7

Basic Financial Instruments

  1. Describe the types of financial instruments covered by IFRS for SMEs section 11. (CK1)
  2. Calculate the amount a financial instrument should be recorded on initial recognition.(CC1)
 Lecture Group case studyReading: IFRS for SMEs, Section 11 pp 55-59 Reference: Module 11
8

Basic Financial Instruments – Bad Debts

  1. Estimate bad debts for a company (CC1)
  2. Prepare the journal entries to account for bad debts (CC1)
  3. Prepare the disclosure note for receivables (CC2)
 Lecture Group case studyReading: IFRS for SMEs, Section 11 pp 62-65 Reference: Module 11
9

Accounting for Loans Payable

  1. Prepare an amortisation schedule for a loan using Excel. (CCIT1)
  2. Prepare the journal entries for a loan. (CC1)
 Demonstration using Excel Group case study using ExcelReading: IFRS for SMEs, Section 11 pp 60-62 Reference: Module 11
10

Controlled Case Study 1

  1. Review and assess learning outcomes of lecture 1-8
 Controlled case study
11

Accounting for Loans Payable – Effective Interest Rate

  1. Calculate the effective interest rate using Excel or Google Sheets (CCIT1)
  2. Account for borrowing costs in accordance with section 25 (CC1)
  3. Prepare the disclosure note for loans payable (CC2)
 Demonstration of the amortized cost method using Excel Group problems using Excel DiscussionReading: IFRS for SMEs, Section 11, pp 60-62, 68-70 Reference: Module 11
12

Business and Industry Analysis – Porter’s Five Forces

  1. Prepare a business analysis using Porter’s Five Forces and sources of competitive advantage. (CC2)
 Lecture Discussion PresentationReading: Harvard Business Review, pp 25-39
13

Inventories – Part 1

  1. Determine the components of cost to include in inventory (CC1)
  2. Distinguish between normal and abnormal costs  ( CC1)
 Lecture Group problems DiscussionReading: IFRS for SMEs, Section 13 pp 79-81 Reference: Module 13
14

Inventories – Part 2

  1. Determine inventory cost using the FIFO periodic method (CC1)
  2. Record cost of goods sold following both expense by nature and expense by function (CC1)
  1. Prepare a disclosure note for inventories (CC2)

 

 Demonstration Group problems Discussion Reading: IFRS for SMEs, Section 13 pp 82-83 Reference: Module 13
15

Student Presentation – Porter’s Five Forces

  1. Prepare and present a Porter’s Five Forces business analysis
 Presentation Discussion Reading: Harvard Business Review, pp 25-39
16

Investment Property

  1. Distinguish between investment property and other types of property ( CC1)
  2. Record the gains and losses related to investment property (CC1)
  3. Prepare a disclosure note for investment property (CC2)
 Lecture Group problems Discussion Reading: IFRS for SMEs, Section 16 pp 92-94 References: Module 16
17

Property, Plant and Equipment – Part 1

  1. Calculate the depreciation for property, plant and equipment (CC1)
  2. Determine gains and losses on disposal (CC1)
 Demonstration Group problems Discussion Reading: IFRS for SMEs, Section 17 pp 95-101 Reference: Module 17
18

Property, Plant and Equipment – Part 2

  1. Account for renovation of property, plant and equipment (CC1)
  2. Account for revaluation of property classified as property, plant and equipment (CC1)
 Demonstration Group problem based learning Discussion Reading: IFRS for SMEs, Section 17 pp 95-101 Reference: Module 17
19

Property, Plant and Equipment – Part 3

  1. Prepare a disclosure note for property, plant and equipment (CC2)
 Demonstration Group problem based learning Discussion Reading: IFRS for SMEs, Section 17 pp 95-101 Reference: Module 17
20

Intangible Assets other than Goodwill

  1. Record the purchase or development of software (CC1)
  2. Calculate the amortisation of intangible assets with change in estimated useful life (CC1)
 Lecture Group problem based learning Kahoot Reading: IFRS for SMEs, Section 18 pp 102-106 Reference: Module 18
21

Impairment of Assets – Part 1

  1. Explain when impairment needs to be tested (CC1)
  2. Determine the recoverable amount of a potentially impaired asset (CC1)
  3. Explain why it may not be necessary to determine value in use (CC1)
 Didactic questioning Group problems Discussion Kahoot Reading: IFRS for SMEs, Section 27 pp 163-170 Reference: Module 27
22

Impairment of Assets – Part 2

  1. Calculate impairment expense of an individual asset (CC1)
 Case study Group problem Discussion Reading: IFRS for SMEs, Section 27 pp 163-170 Reference: Module 27
23

Controlled Case Study 2

  1. Review and assess learning outcomes lecture 10 – 17
 Controlled case study
24

Leases – Part 1

  1. Distinguish between operating leases and finance leases (CC1)
  2. Account for operating leases, including transaction costs and discounts (CC1)
   Lecture Group problem Kahoot Reading: IFRS for SMEs,Section 20 pp 113-120 Reference: Module 20
25

Leases – Part 2

  1. Prepare a disclosure note for operating leases (CC2)
 Lecture Group problem Kahoot Reading: IFRS for SMEs,Section 20 pp 113-120 Reference: Module 20
26

Revenue- Part 1

  1. Explain the recognition criteria for revenue  (CC1)
  2. Account for revenue for sale of goods and services (CC1)
 Lecture Group case study Kahoot Reading: IFRS for SMEs Section 23 pp 140-154 Reference: Module 23
27

Controlled Case Study 3

  1. Review and assess learning outcomes lecture 23 – 29
 Controlled case study
28

Revenue – Part 2

  1. Account for deferred income (CC1)
  2. Identify the revenue attributable to services in a bundle of goods and services (CC1)
 Lecture Case study Kahoot Reading: IFRS for SMEs Section 23 pp 140-154 Reference: Module 23
29

Revenue – Part 3

  1. Describe the methods used to account for construction contracts (CC1)
  2. Prepare the journal entries to record a construction contract using the input method (CC1)
  3. Prepare a statement of profit or loss, including revenue  (CC2)
 Lecture Group problems Discussion Reading: IFRS for SMEs Section 23 pp 140-154 Reference: Module 23
30

Employee Benefits – Part 1

  1. Account for basic employee benefits and the related withholding tax (CC1)
 Lecture group problem based learning Discussion Reading: IFRS for SMEs, Section 28 pp 171-172 Reference: Module 28
31

Employee Benefits – Part 2

  1. Determine the withholding tax component of employee benefits (CC1)
 Lecture group problem based learning Discussion Reading: IFRS for SMEs, Section 28 pp 171-172 Reference: Module 28
32

Employee Benefits – Part 3

  1. Prepare disclosure note for employee benefits
 Lecture group problem based learning Discussion Reading: IFRS for SMEs, Section 28 pp 171-172 Reference: Module 28
33

Income Tax – Part 1

  1. Prepare the journal entries to prepayment of income tax (tax on profit) (CC1)
  2. Prepare the journal entries to record withholding taxes that can be deducted from income tax (tax on profit) (CC1)
 Lecture Case study Group problem based learning Discussion Reading: IFRS for SMEs, Section 29 pp 182, 189 Reference: Module 29
34

Income Tax – Part 2

  1. Prepare the year-end journal entry to record income tax payable (tax on profit) (CC1)
  2. Prepare a statement of profit or loss, including tax  (CC2)
 Lecture Case study Group problem based learning Discussion Reading: IFRS for SMEs, Section 29 pp 182, 189 Reference: Module 29
35

Income Tax – Part 3

  1. Distinguish between the carrying amount of net assets and the tax base of net assets (CC1)
  2. Calculate the taxable and deductible differences arising from temporary differences (CC1)
 Demonstration Case study Group problem based learning Discussion Reading: IFRS for SMEs, Section 29 pp 183-186, 188-189 Reference: Module 29
36

Income Tax – Part 4

  1. Prepare the journal entries to record income tax expense, including adjustments to deferred tax (CC1)
  2. Prepare a statement of financial position, including liabilities for current tax and deferred tax  (CC2)
  3. Prepare a disclosure note for income tax and deferred tax (CC2)
 Demonstration Case study Group problem based learning Discussion Reading: IFRS for SMEs, Section 29 pp 189-191 Reference: Module 29
37

Cash Flow Statements – Part 1

  1. Define cash and cash equivalents (CK2)
  2. Explain the difference between the direct and indirect methods of preparing a cash flow statement (CC1)
  3. Explain the meaning of operating cash flows, investing cash flows, and financing cash flows (CC2)
  4. Prepare the operating cash flow portion of a cash flow statement (CC2)
 Didactic questioning Lecture Discussion Reading: IFRS for SMEs, Section 7 pp 36-40 Reference: Module 7
38

Cash Flow Statements – Part 2

  1. Prepare the investing and financing portions of a cash flow statement (CC2)
  2. Present exchange rate changes in foreign currency cash and cash equivalents in the cash flow statement (CC2)
 Demonstration Group problem based learning Discussion Reading: IFRS for SMEs, Section 7 pp 36-40 Reference: Module 7
39

Cash Flow Statements – Part 3

  1. Prepare a full cash flow statement  (CC2)
 Case study Discussion Reading: IFRS for SMEs, Section 7 pp 36-40 Reference: Module 7
40

Cash Flow Statements – Part 4

  1. Prepare a full cash flow statement  (CC2)
 Case study Discussion Reading: IFRS for SMEs, Section 7 pp 36-40 Reference: Module 7
41

Foreign Currency Translation – Part 1

  1. Determine the appropriate exchange rate to record foreign currency income, expense, assets, liabilities (CC2)
  2. Record gains and losses arising from remeasurement and settlement of foreign currency receivables and payables (CC2)
 Lecture Demonstration Group problems Discussion Reading: IFRS for SMEs, Section 30 pp 192-194 Reference: Module 30
42

Foreign Currency Translation – Part 2

  1. Explain the concept of functional currency (CK1)
  2. Explain the purpose of a presentation currency (CC2)
  3. Prepare a dissure note for functional currency and presentation currency (CCIT1)
  4. Prepare a disclosure note for a presentation currency that is not in compliance with the IFRS for SMEs presentation currency (CC2)
 Lecture Case study Group problems Discussion Reading: IFRS for SMEs, Section 30 pp 195-197 Reference: Module 30
43

Related Party Disclosures

  1. Define a related party according to IFRS for SMEs (CK1)
  2. Identify transactions with a related party that would warrant disclosure in the notes (CC2)
  3. Prepare a related party disclosure note (CC2)
 Didactic questioning Group problems Discussion Reading: IFRS for SMEs, Section 33 pp 204-207 Reference: Module 33
44

Controlled Case Study 4

  1. Review and assess learning outcomes lecture 31 – 38
 Controlled case study
45

Transition to the IFRS for SMEs

  1. Define first time application of IFRS for SMEs (CK2)
  2. Describe the additional disclosures required when an entity applies IFRS for SMEs for the first time (CK2, CC2)
  3. Explain the simplifications allowed on transition to IFRS for SMEs (CK2)
  4. Prepare a full set of financial statements for an entity that transitions to IFRS for SMEs for the first time   (CC2)
 Lecture Case study Group problem based learning Discussion Reading: IFRS for SMEs, Section 35 pp 213-218 Reference: Module 35
46 Review and preparation for final exam – Part 1 Lecture
47 Review and preparation for final exam – Part 2 Lecture
48 Review and preparation for final exam – Part 3 Lecture
49

Financial Statement Analysis 

  1. Analysis the performance and position of an SMEs
 Lecture Kahoot
50 Student Presentations – Financial Statement Analysis Presentation

TEACHING METHODS

This course uses demonstration, lecture, case studies, and group problem solving. Assigned readings support learning and cover material covered in class. During class, approximately 1/2 of the class time will be demonstrations, presentations and questioning (often using online applications such as Kahoot! to allow group responses) from the lecturer, with the other 1/2 of the class for working on and reviewing the solutions to case studies and problem sets. Case studies and problem sets are typically delivered via online applications such as Google Classroom Quiz and Google Sheets.

ASSESSMENT AND GRADING

Grades will be determined based on a grading score, calculated using the following assessments and score allocations:

Assessment Weight of each assessment Learning Outcome Assessed
CLO PLO
Participation 10% CIP1 PIP3
Presentation 5% CK1, CC1, CCIT2 PK5, PC7, PCIT4
Controlled Case Studies (4) 28% CK1, CC1, CC2, CCIT1, CIP1 PK5, PC7, PCIT2, PIP3
Assignment 30% CC1, CC2, CCIT2 PC7, PCIT4
Final Controlled Case Study 27% CK1, CC1, CC2 PK5, PC7
Total grading score 100%  

During the course, there is one assignment:

IFRS for SMEs Financial Reporting Assignment

Work Group: Groups of two
Output format: IFRS for SMEs format Financial Report
Language: English and Khmer
Assignment: Students prepare a set of financial statements in compliance with IFRS for SMEs (to the extent possible given constraints and available data) for a small or medium sized business or not-for-profit organization in Cambodia. The financial report will cover a period of two months. Accompanying the financial statements shall be a brief report assessing the business, its industry, and its financial performance. Drafts and a final report will be first written in English. Once the final report has been finalized, a translation of the financial statements into Khmer language is required.

TEXTBOOKS AND REFERENCES

Textbook

  1. IFRS Foundation, IFRS for SMEs 2015, IFRS Foundation 2015.
  2. Association of Chartered Certified Accounts, Code of Ethics and Conduct, Association of Chartered Certified Accountants, 2021.
  3. Porter, ME, The Five Competitive Forces that Shape Strategy, Harvard Business Review, January 2008.

References

  1. IFRS Foundation, IFRS for SMEs Education Modules, IFRS Foundation 2015 – 2018
  2. Makenzie, Bruce, Tapiwa Njikizana, et all, Applying IFRS for SMEs, Wiley, 2011.

Education Resources