Morsheda Akter Monir Hossain

ID: BBA 18056 ID: BBA 18041

Group 02

Taposhi Rani Ghosh Nur Alam

ID: BBA 18034 ID: BBA 18016
 Welcome to the Presentation on

IAS 10: Events after the Reporting Period

Brought to you by

Morsheda Akter
ID: BBA 18056
 Agenda

Overview
Scope
Adjusting and Non-adjusting items
Example
Application of IAS 10 with Beximco and Square Pharmaceuticals
Ltd.
 Overview
IAS 10 Events After The Reporting Period contains requirements
for when events after the end of the reporting period should be
adjusted in the financial statements. Adjusting events are those
providing evidence of conditions existing at the end of the
reporting period, whereas non-adjusting events are indicative of
conditions arising after the reporting period (the latter being
disclosed where material).

IAS 10 was reissued in December 2003 and applies to annual

periods beginning on or after 1 January 2005.
 Events after Reporting Period

End of Reporting Shareholders

Authorizes for issue
Period Approval

1 July 2021 to 30 June 2022 1 July 2022 to 30 Sep 2022 1 Oct 2022 to 31 Oct 2022

Events after Reporting

period
 Adjust

Treatments of Disclosure
events after
reporting period
Do nothing
 Scope

Events after
Reporting Period

Does it affect an existing

event or condition?

Yes No

Adjust amount Disclose Yes

Is the event
recognized in the material?
financial statements.
Do Nothing No
 Adjusting Events Non-Adjusting Events
•Evidence in permanent diminution in •Abnormally large change in the price
property value prior the year-end. of assets or foreign exchange rate.
•Settlement of court case outstanding at •Announcing a plan to discontinue
the statement of financial position of operations.
data. •Changes in tax-rate or tax law.
•Sale of inventory after the reporting •Entering into major commitments such
period for less than its carrying value at as guarantee.
the year end. •Major ordinary share transactions.
•Insolvency of a customer with a •Destruction of a major production
balance owing at the year end. plant by fire.
• Evidence of a permanent diminution • If market value of investments decline
in the value of long-term investment after reporting period.
prior to the year end. •Litigation commenced after the
•Diminution after the year-end sale or reporting period.
purchase price of assets sold or •If dividends are declared after
purchased. reporting period.
•Discovery of error or fraud which shows
financial statements are incorrect.
42.00 Events after the Reporting Period

(a) Subsequent to the Statement of Financial Position date, the directors

recommended 30% cash dividend (i.e. Tk. 3.00 per share) for the year
ended 30 June 2022. The dividend proposal is subject to shareholders’
approval at the forthcoming annual general meeting.

(b)Except the above fact, no circumstances have arisen since this statement
of Financial Position date which would require adjustments to, disclosure
in, the financial statements or notes thereto.
3.28 Events After Reporting Period
Events after the reporting period that provide additional information about the
Group’s position at the reporting date are reflected in the financial statements.
Material events after the reporting period that are not adjusting events are
disclosed by way of note. There is no significant event other than normal activities
between the Financial Year end and Financial Statements approval date.

Impact of Fire Incident:

On 23rd May 2022, the Large Volume Parenteral (LVP) plant at the factory premises
in Gazipur was heavily damaged by a fire that left the plant in a dilapidated
condition with zero casualties. The plant was fully insured under the Industrial All
Risk Policy coverage. The total insured value of the plant including its building,
machinery, and inventories was Tk. 171 crore. The Company has claimed the entire
damage amount, but the insurers have not completed the assessment of the claim
as of the approval date of these financial statements.

As a result of the fire incident, the Company shall lose annual revenue and profit of
Tk. 50 crore and Tk. 8 crore respectively. Depreciation of the plant ceased on 23rd
May 2022 (the date on which the fire incident occurred). Any gain or loss out of the
insurance claim will be recognized in the financial statements after the claim
settlement.
Monir Hossain
ID: BBA 18041

Overview of IAS 12 (Income Taxes)

 Overview of IAS 12 (Income Taxes)

IAS 12 Income Taxes implements a so-called 'comprehensive balance sheet method' of accounting for income
taxes which recognizes both the current tax consequences of transactions and events and the future tax
consequences of the future recovery or settlement of the carrying amount of an entity's assets and liabilities.
Differences between the carrying amount and tax base of assets and liabilities, and carried forward tax losses
and credits, are recognized, with limited exceptions, as deferred tax liabilities or deferred tax assets, with the
latter also being subject to a 'probable profits' test.
 Objective of IAS 12

The objective of IAS 12 (1996) is to prescribe the accounting treatment for income taxes.

In meeting this objective, IAS 12 notes the following:

•It is inherent in the recognition of an asset or liability that that asset or liability will be recovered or settled,
and this recovery or settlement may give rise to future tax consequences which should be recognized at the
same time as the asset or liability
• An entity should account for the tax consequences of transactions and other events in the same way it
accounts for the transactions or other events themselves.
 Current tax

Current tax for the current and prior periods is recognized as a liability to the extent that it has not yet been
settled, and as an asset to the extent that the amounts already paid exceed the amount due. [IAS 12.12] The
benefit of a tax loss which can be carried back to recover current tax of a prior period is recognized as an asset.
[IAS 12.13]
Current tax assets and liabilities are measured at the amount expected to be paid to (recovered from) taxation
authorities, using the rates/laws that have been enacted or substantively enacted by the balance sheet date.
[IAS 12.46]
 Beximco Pharmaceuticals Ltd

Deferred Tax
Deferred tax is recognized in compliance with IAS 12: Income Taxes, providing for temporary
differences between the carrying amounts of assets and liabilities for financial reporting purposes
and amounts used for taxation purposes. Deferred tax is measured at the tax rates that are
expected to be applied to the temporary differences based on the laws that have been enacted or
substantively enacted by the date of statement of financial position. Deferred tax assets and
liabilities are off set if there is a legally enforceable right to off set current tax liabilities and assets,
and they relate income taxes levied by the same tax authority on the same taxable entity.
 SQUARE Pharmaceuticals Ltd.

Measurement of Deferred Tax Liability

The Group reported deferred tax liability totaling Taka 1,178,740,290 as at 30 June 2022. Significant
judgement is required in relation to deferred tax liability as it is dependent on forecasts of future
profitability over a number of years.
• We assessed the adequacy of the Company’s disclosures setting out the basis of deferred tax
liability balances and the level of estimation involved;
• We also assisted in evaluating the tax implications, the reasonableness of estimates and
calculations determined by management; and
• Finally assessed the appropriateness and presentation of disclosures as per IAS 12 Income Taxes
 SQUARE Pharmaceuticals Ltd.

Unrealized Gain/(Loss) on FVOCI Financial Assets

• It derives mainly due to the changes in the market price of the Marketable Securities. The
Company has reported unrealized gain/(loss) from Marketable Securities as Other Comprehensive
Income in the Statement of Profit or Loss and Other Comprehensive Income and in the Statement
of Changes in Equity in conformity with IAS 12 – Income Taxes and IFRS 9 – Financial Instruments.
As per SRO no.: 196-Act/ income tax/2015, any Capital gain arising from Marketable Securities
(Stocks/Debentures listed with Stock Exchanges) is subject to Tax @ 10%. Gains that are realized
during the year have been accounted for accordingly through the statement of profit or loss.
 Tax bases

IAS 12 provides the following guidance on determining tax bases:

•Assets. The tax base of an asset is the amount that will be deductible against taxable economic benefits from
recovering the carrying amount of the asset. Where recovery of an asset will have no tax consequences, the tax
base is equal to the carrying amount. [IAS 12.7]
• Revenue received in advance. The tax base of the recognized liability is its carrying amount, less revenue
that will not be taxable in future periods [IAS 12.8]
• Other liabilities. The tax base of a liability is its carrying amount, less any amount that will be deductible for
tax purposes in respect of that liability in future periods [IAS 12.8]
• Unrecognized items. If items have a tax base but are not recognized in the statement of financial position, the
carrying amount is nil [IAS 12.9]
• Tax bases not immediately apparent. If the tax base of an item is not immediately apparent, the tax base
should effectively be determined in such as manner to ensure the future tax consequences of recovery or
settlement of the item is recognized as a deferred tax amount [IAS 12.10]
• Consolidated financial statements. In consolidated financial statements, the carrying amounts in the
consolidated financial statements are used, and the tax bases determined by reference to any consolidated tax
return (or otherwise from the tax returns of each entity in the group). [IAS 12.11]
IAS 16 PROPERTY, PLANT AND EQUIPMENT

Taposhi Rani Ghosh

BBA18034
 OVERVIEW

IAS 16 Property, Plant and Equipment outlines the accounting treatment for most types of
property, plant and equipment. Property, plant and equipment is initially measured at its
cost, subsequently measured either using a cost or revaluation model, and depreciated so
that its depreciable amount is allocated on a systematic basis over its useful life.
OBJECTIVE
To prescribe the accounting treatment for property, plant and equipment.

PRINCIPAL ISSUES
 Recognition of assets
 Determination of their carrying amounts
 Depreciation changes to be recognized
 Impairment losses to be recognized
Scope
IAS 16 applies to all property, plant and equipment, except:
• Assets classified as held for sale in accordance with IFRS 5
• Biological assets related to agricultural activity accounted for under IAS 41
• Exploration and evaluation assets recognized in accordance with IFRS 6
• Mineral rights and mineral reserves such as oil, natural gas and similar non-
regenerative resources.
Initial Recognition
Property, plant and equipment should only be recognized as an asset if
 The future economic benefits associated with the asset will flow to the entity, and
 The cost and the asset can be reliably measured.

Measurement after initial recognition

IAS 16 permits two accounting models for measurement of asset such as,
1. Cost Model
2. Revaluation Model
 Derecognition

An asset should be removed from the statement of financial position on

disposal or when it is withdrawn from use and no future economic benefits
are expected from its disposal. The gain or loss on disposal is the difference
between the proceeds and the carrying amount and should be recognised in
profit and loss.
 Disclosure
IAS 16 requires an entity to disclose in its financial statement for each class of property, plant and
equipment;
 The basis for measuring carrying amount
 The depreciation methods used
 The useful lives or depreciation rates used
 The gross carrying amount and other impairment losses
Square Pharmaceuticals Ltd.

Property, plant and equipment

At the reporting date, the carrying value of the Group’s property, plant and equipment amounted to Tk.
27,182,672,428 of which (Net book value of PPE Tk. 20,273,491,886; PPE in Transit Tk. 521,564,753; Building
under construction Tk. 2,066,237,283 and Capital work in progress Tk. 4,321,378,506). The valuation of
property, plant and equipment was identified as a key audit matter due to the significance of this balance to the
financial statements. Expenditures are capitalized if they create new or enhance the existing assets, and
expensed if they relate to repair or maintenance of the assets. Classification of the expenditures involves
judgment. The useful lives of PPE items are based on management’s estimates regarding the period during
which the asset or its significant components will be used. The estimates are based on historical experience.
IAS 24 Related Party Disclosures

NUR ALAM
ID: BBA 18016
 IAS 24 Related Party Disclosures

1. Overview

2. Objective of IAS 24

3. Who are Related Party?

4. What Disclosures Required?

 Overview

IAS 24 Related Party Disclosures requires disclosures about transactions and

outstanding balances with an entity's related parties. The standard defines
various classes of entities and people as related parties and sets out the
disclosures required in respect of those parties, including the compensation of
key management personnel.

IAS 24 was reissued in November 2009 and applies to annual periods beginning
on or after 1 January 2011.
 Objective of IAS 24

The objective of IAS 24 is to ensure that an entity's financial statements contain

the disclosures necessary to draw attention to the possibility that its financial
position and profit or loss may have been affected by the existence of related
parties and by transactions and outstanding balances with such parties.
 3. What Disclosures Required?

1. Name of the Related Party

2. Nature of Related Party Relationship

3. Name of Transaction with Related Party

4. Amount of Transaction with Related Party

5. Outstanding Balance with Related Party and their terms/conditionas and

guarantees

6. Allowance and expenses for doubtful debts

7. Key management personnel compensation in total.

What are related party transactions?
A related party transaction is a transfer of resources, services, or obligations
between related parties, regardless of whether a price is charged. [IAS 24.9]
Disclosure
Relationships between parents and subsidiaries. Regardless of whether there have been
transactions between a parent and a subsidiary, an entity must disclose the name of its
parent and, if different, the ultimate controlling party. If neither the entity's parent nor
the ultimate controlling party produces financial statements available for public use, the
name of the next most senior parent that does so must also be disclosed. [IAS 24.16]
 .

Examples of the kinds of transactions that are disclosed if they are with a related party

.
•purchases or sales of goods
• purchases or sales of property and other assets
• rendering or receiving of services
• leases
• transfers of research and development
• transfers under licence agreements
• transfers under finance arrangements (including loans and equity contributions in cash or in kind)
• provision of guarantees or collateral
• commitments to do something if a particular event occurs or does not occur in the future, including
executory contracts (recognised and unrecognised)
• settlement of liabilities on behalf of the entity or by the entity on behalf of another party
Related Party Transactions
The company carried out a number of transactions with related parties in the normal course of business
and on arms’ length basis.
The nature of transactions and their total value is shown below