Tag: Financial Reporting

Osmania University B.com Notes

Accounting Standards Osmania University B.com 6th Semester Notes

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Unit 1 Introduction: {Book}
Introduction to Accounting, Concept of Accounting Theory VIEW VIEW VIEW
Role of Accounting theory VIEW
Classification of Accounting Theory VIEW
Deductive and inductive approach in theory formulation VIEW
Accounting Principles VIEW
Accounting Concepts and Conventions VIEW
Accounting Standard: Concept, Evolution VIEW VIEW

 

Unit 2 Standards Relating to Financial Reporting & Disclosure {Book}
Ind AS-101: First time adoption of Indian Accounting Standards VIEW
Ind AS-1: Presentation of Financial Statements VIEW
Ind AS-7: Cash Flow Statements VIEW VIEW
Ind AS-8: Accounting Policies, Changes in Accounting Estimates and Errors VIEW
Ind AS-10: Events after the Balance Sheet Date VIEW
Ind AS-24: Related Party Disclosures VIEW
Ind AS- 34: Interim Financial Reporting VIEW
Ind AS-105: Non-Current assets held for sale and discontinued operations VIEW
Ind AS- 108: Operating Segments VIEW

 

Unit 3 Standards Providing Guidance on Financial Statement Items {Book}
Ind AS-2: Inventories VIEW
Ind AS-11: Construction contracts VIEW
Ind AS-12: Income taxes VIEW
Ind AS-16: Property, Plant and Equipment VIEW
Ind AS-17: Leases VIEW
Ind AS-18: Revenue VIEW
Ind AS-20: Accounting for Government Grants and Disclosure of Government Assistance VIEW
Ind AS-23: Borrowing Costs VIEW
Ind AS-38: Intangible Assets VIEW

 

Unit 4 Standards Relating to Business Acquisitions and Consolidations {Book}
Ind AS-28: Investments in Associate and Joint Ventures VIEW
Ind AS-103: Business Combinations VIEW
Ind AS-110: Consolidated Financial Statements VIEW
Ind AS-111: Joint Arrangements VIEW
Ind AS-112: Disclosure of interest in other entities VIEW

 

Unit 5 Financial Reporting {Book}
Financial reporting Concept VIEW
Development in Financial reporting objectives VIEW
True Blood Report (USA) VIEW
The Corporate Report (UK) VIEW
Stamp Report (Canada) VIEW
Objectives of Financial Reporting VIEW
Qualities of Financial Reporting VIEW
Recent trends in Corporate Reporting in India VIEW

 

Osmania University B.com Notes

Financial Accounting-2 Osmania University B.com 2nd Semester Notes

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Unit 1 Bills of Exchange {Book}
Bills of Exchange Definition VIEW
Distinction between Promissory note and Bill of exchange VIEW
Accounting Treatment of Trade Bills VIEW
Books of Drawer and Acceptor VIEW
Honor and Dishonor of Bills VIEW
Renewal of Bills VIEW
Retiring of Bills under Rebate VIEW
Accommodation Bills VIEW
Unit 2 Consignment Accounts {Book}
Consignment Meaning, Features VIEW
Proforma invoice, Account sales, Del credere commission VIEW
Accounting treatment in the Books of the Consignor and the Consignee VIEW
Valuation of Consignment stock VIEW
Treatment of Normal and Abnormal Loss VIEW
Invoice of Goods at a Price higher than the cost price VIEW
Unit 3 Joint Venture Accounts {Book}
Joint Venture, Meaning, Features VIEW
Difference between Joint Venture and Consignment VIEW
Accounting Procedure VIEW
Methods of Keeping Records for Joint Venture Accounts VIEW
Method of Recording in co-ventures books VIEW
Separate Set of Books Method VIEW
Joint Bank Account VIEW
Memorandum Joint Venture Account VIEW
Unit 4 Accounts from Incomplete Records {Book}
Single Entry System Meaning, Features, Defects VIEW VIEW
Difference between Single Entry and Double Entry Systems VIEW
Books and Accounts maintained VIEW
Ascertainment of Profit VIEW
Statement of Affairs VIEW
Conversion method VIEW
Unit 5 Accounting for Non-Profit Organizations {Book}
Non-Profit Organization Meaning, Features VIEW
Receipts and Payments Account VIEW
Income and Expenditure Account VIEW
Balance Sheet VIEW

Osmania University B.com Notes

Financial Accounting-1 Osmania University B.com 1st Semester Notes

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Unit 1 Accounting process {Book}
Financial Accounting: Introduction, Definition, Evolution VIEW
Financial Accounting Scope VIEW
Financial Accounting Functions VIEW
Financial Accounting Advantages and Limitations VIEW
Users of Accounting Information VIEW
Branches of Accounting VIEW
Accounting Principles, Concepts and Conventions VIEW VIEW
Accounting Standards Meaning, Importance VIEW
List of Accounting Standards issued by ASB VIEW
Accounting System, Types of Accounts VIEW
Accounting Cycle VIEW
Journal VIEW VIEW
Ledger VIEW
Trial Balance VIEW VIEW

 

Unit 2 Subsidiary Books {Book}
Subsidiary Books Meaning, Types VIEW
Purchases Book, Purchases Returns Book, Sales Book, Sales Returns Book VIEW
Bills Receivable Book, Bills Payable Book VIEW
Cash Book: Single Column, Two Column, Three Column VIEW
Petty Cash Book VIEW
Journal Proper VIEW

 

Unit 3 Bank Reconciliation Statement {Book}
Bank Reconciliation Statement Meaning, Need VIEW
Reasons for differences between Cash book and Pass book balances VIEW
Favourable and over Draft balances VIEW
Ascertainment of correct cash book balance VIEW
Preparation of Bank Reconciliation Statement VIEW

 

Unit 4 Rectification of Errors and Depreciation {Book}
Capital and Revenue Expenditure VIEW
Capital and Revenue Receipts Meaning and Differences VIEW VIEW
Differed Revenue Expenditure VIEW
Errors and their Rectification VIEW
Types of Errors VIEW
Suspense Account VIEW
Effect of Errors on Profit VIEW
Depreciation (AS-6): Meaning Causes VIEW
Difference between Depreciation, Amortization and Depletion VIEW
Objectives of providing for depreciation VIEW
Factors affecting depreciation VIEW
Accounting Treatment of depreciation VIEW VIEW
Methods of depreciation:
Straight Line Method VEW
Diminishing Balance Method VIEW

 

Unit 5 Final Accounts {Book}
Final Accounts of Sole Trader: Meaning, Uses VIEW
Preparation of Manufacturing Account VIEW
Preparation of Trading Account VIEW
Preparation of Profit & Loss Account VIEW
Balance Sheet Adjustments VIEW VIEW
Closing Entries VIEW
Bangalore University BBA Notes

Financial Accounting

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Unit 1 introduction to IFRS {Book}
Need for IFRS: Features of IFRS VIEW
Applicability of IFRS, Beneficiaries of Convergence with IFRS VIEW

 

Unit 2 Accounting for Hire Purchase {Book}
Meaning of Hire Purchase, Installment Purchase System VIEW
Hire Purchase, Installment Purchase System; Legal provisions VIEW
Calculation of interest: VIEW
when rate of interest and cash price is given
when cash price and total amount payable is given
when rate of interest and installments amount are given but cash price is not given
Calculation of cash price under annuity method VIEW
Journal Entries and Ledger Accounts in the books of Hire Purchaser and Hire Vendor (Asset Accrual Method only). VIEW

 

Unit 3 Royalty Accounts {Book}
Royalty Accounts Introduction, Meaning VIEW
Technical terms:  Royalty, Landlord, Tenant, Minimum rent, Short Workings, Recoupment within the life of a lease VIEW
Recoupment of short working under; fixed period; floating Period VIEW VIEW
Treatment of strike, stoppage of work and sub-lease VIEW
Accounting treatment in the books of lessee(tenant): when royalty is less than minimum rent, When royalty is equal to minimum rent, when the right of recoupment is lost VIEW
When minimum rent account method is followed VIEW
Passing journal entries and Preparation of Ledger Accounts VIEW
Royalty account, Landlord account, Short workings account VIEW
Minimum rent when minimum rent account is followed in the books of lessee only VIEW

 

Unit 4 Sale of the Partnership Firm {Book}
Introduction, Need for conversion VIEW VIEW
Meaning of purchase consideration, Methods of calculating purchase consideration, Net payment method, Net asset method VIEW
Passing of journal entries and preparation of ledger accounts in the books of vendor VIEW VIEW
Treatment of certain items:
Dissolution expenses VIEW
Unrecorded assets and liabilities VIEW
Assets and liabilities not taken over by the purchasing company VIEW
Contingent liabilities VIEW VIEW
Non- assumption of trade liabilities in the books of purchasing company VIEW
Passing of incorporation entries, Treatment of security premium VIEW
Fresh issue of shares and debentures to meet working capital VIEW VIEW
issue of shares debentures to meet working capital VIEW VIEW
Preparation of Balance Sheet as per ‘Companies Act’ 2013 under Vertical format VIEW

 

Unit 5 Accounting for Joint Ventures {Book}
Accounting for Joint Ventures Introduction Meaning Objectives VIEW
Distinction between joint venture and consignment VIEW
Distinction between joint venture and partnership VIEW
Maintenance of accounts in the books of co-venturers VIEW
Maintaining separate books for Joint Venture VIEW

Bangalore University BBA Notes

Accounting for Business

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Unit 1 Introduction to Accounting {Book}
Accounting Meaning VIEW
Book keeping & Accounting VIEW
Need for accounting VIEW
*Accounting Scope VIEW
*Accounting Functions VIEW
(GAAP) Generally Accepted Accounting Principles VIEW
Accounting Concepts and Conventions VIEW VIEW
List of Indian Accounting Standards VIEW
Ind AS-IFRS (Concept only) VIEW

 

Unit 2 Basic Accounting Procedures {Book}
Double Entry System of Book-Keeping VIEW
Journal Books of original entry VIEW VIEW
Ledger Posting Balancing an account VIEW VIEW

 

Unit 3 Subsidiary Books {Book}
Purchase book, Sales book, Returns books VIEW
Bills of exchange VIEW
Bills book VIEW
Journal proper VIEW
Cash Book, Kinds of cash book VIEW
Petty Cash Book Imprest system VIEW

 

Unit 4 Final Accounts of Proprietary Concern {Book}
Classification of Transaction in to revenue and capital VIEW
Preparation of Trial balance VIEW
Rectification of errors in Trial balance VIEW
Parts of Final Accounts VIEW VIEW
Income statement Final Accounts vertical form only VIEW
Balance sheet Final Accounts vertical form only VIEW VIEW

 

Unit 5 Consignment {Book}
Meaning, Definitions and Features, Parties of Consignment VIEW
Consignor and Consignee VIEW
Differences between Consignment and Ordinary Sale VIEW
Special Terminologies in Consignment Accounts:
Proforma Invoice, Invoice Price, Account Sales, Non-recurring Expenses, Recurring Expenses, Ordinary Commission, Overriding Commission, Del Credere Commission, Normal Loss, Abnormal Loss VIEW
Valuation of Closing Stock VIEW
Consignment Accounts in the books of Consignor VIEW
Preparation of Consignment Account VIEW
Preparation of Consignee Account VIEW
Preparation of Goods Sent on Consignment A/c in the books of Consignor VIEW

 

Bangalore University B.com Notes

AC6.6 Financial Reporting and Corporate Disclosures

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Unit 1 Related Party Disclosures (Ind AS 24) [Book]  
Related Party Disclosures, Related Party, Related party Transaction VIEW
Key Management Personnel, Significant influence VIEW
Government related entity VIEW
Purpose of related party disclosures VIEW
Disclosure of related party Transactions VIEW

 

Unit 2 Employee Benefits (Ind AS 19) [Book]  
Employee Benefits Ind AS 19 VIEW
Short-term employee benefits Ind AS 19 VIEW
Post-employment benefits; Defined contribution plans Ind AS 19 VIEW
Defined benefit plans, Other long-term employee benefits Ind AS 19 VIEW
Termination benefits Ind AS 19 VIEW

 

Unit 3 Accounting for Leases (Ind AS 17) [Book]  
Accounting for Lease Ind AS 17 VIEW
Finance Lease, Operating Lease Ind AS 17 VIEW
Non-cancellable lease Ind AS 17 VIEW
Commencement of Lease term, Minimum Lease Payments, Fair Value Ind AS 17 VIEW
Classification of Lease Ind AS 17 VIEW
Leases in the Financial Statements of Lessees Ind AS 17 VIEW
Leases in the Financial Statements of Lessors Ind AS 17 VIEW

 

Unit 4 Financial Instruments [Book]  
Presentation of Financial Instruments (Ind AS 32) Meaning VIEW
Financial Assets, Financial Liabilities Ind AS 32 VIEW
Recognition and Measurement of Financial Instruments (Ind AS 39), Initial Recognition, Subsequent recognition of Financial assets and Liabilities VIEW
Derecognition of Financial Assets and Financial Liabilities VIEW
Initial and Subsequent Measurement of Financial Assets and Liabilities VIEW
Disclosures of Financial Instruments (Ind AS 107) VIEW
Disclosure of different Categories of financial assets and financial liabilities in the Balance sheet and Profit and Loss Account VIEW

 

Unit 5 Consolidated Financial Statements (Ind AS 27) [Book]  
Consolidated Financial Statements, Definitions Ind AS 27 VIEW
Presentation of Consolidated financial Statements Ind AS 27 VIEW
Scope of Consolidated financial statements Ind AS 27 VIEW
Consolidation procedures, Loss of control Ind AS 27 VIEW
Accounting for investments in subsidiaries Ind AS 27 VIEW
Jointly controlled entities and associates in Separate financial statements Ind AS 27 VIEW
Management Notes

Private placements of Shares

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Private placement, the issue is placed directly with a few selected small number of investors. This is also known as non-public offering. Typical investors include large banks, mutual funds, insurance companies and pension funds. The private placement does not have to be registered with the Securities and Exchange Commission.

Private placements are much cheaper than IPOs. However, this method cannot be used for large issues because a small group of investors will have limited risk appetite. Also, these issues are not traded in the secondary market, as opposed to IPO securities, which once listed are traded in the secondary market. This makes it difficult for investors to liquidate these securities.

The term private placement refers to the sale of securities to a small number of private investors to raise capital. These private investors include mutual fund investors, banks, insurance companies and etc. Private placements are different from public issue since in the latter one the shares are sold in the open market to anyone willing to buy them whereas in private placements of shares the shares are sold to specific investors.

Private placement is a method of raising capital in which securities are sold directly to a selected group of investors rather than through a public offering. This targeted approach allows companies to raise funds from a specific set of investors, often institutions or high-net-worth individuals, without the need for public registration. Private placements are regulated by securities laws, and the process involves meticulous planning, compliance, and negotiations between issuers and investors.

Private placement is a valuable tool for companies seeking to raise capital efficiently while maintaining a degree of confidentiality. It provides flexibility in structuring deals, selecting investors, and tailoring terms to meet specific needs. While private placements may not be suitable for all companies, they offer a strategic avenue for raising capital, attracting strategic partners, and fueling growth in a controlled and efficient manner. Companies considering private placements should carefully assess their capital needs, regulatory obligations, and strategic goals before engaging in this form of capital raising.

Features of Private Placement:

  1. Limited Investor Pool:

Private placements involve a restricted number of investors. This targeted approach allows issuers to negotiate terms with a select group, often chosen based on their strategic alignment with the company’s goals.

  1. Exemption from Public Registration:

Unlike public offerings, private placements are exempt from the rigorous public registration process. This exemption is provided under various securities regulations, such as Regulation D in the United States or the SEBI (Securities and Exchange Board of India) guidelines in India.

  1. Negotiable Terms:

Issuers and investors have more flexibility in negotiating the terms of the private placement. This includes aspects such as pricing, the structure of securities, and any covenants or conditions attached to the investment.

  1. Diverse Securities:

Private placements can involve a variety of securities, including equity, debt, convertible securities, or preferred shares. The choice of security depends on the company’s capital needs and the preferences of investors.

  1. Customized Agreements:

The terms and conditions of private placement agreements are often customized to suit the specific needs of both parties. This flexibility allows for tailoring the investment structure to align with the company’s strategy.

  1. Confidentiality:

Private placements offer a level of confidentiality that is not present in public offerings. Companies can raise capital without disclosing sensitive information to competitors or the broader market.

Regulatory Framework for Private Placement:

While private placements offer flexibility, they are subject to regulatory oversight to protect the interests of investors. The regulatory framework varies by jurisdiction, but common elements:

  1. Accredited Investors:

Many jurisdictions restrict private placements to accredited investors, who are deemed to have the financial sophistication to understand and assess the risks associated with these investments.

  1. Exemptions from Registration:

Private placements are exempt from the full registration requirements that public offerings must undergo. However, issuers must comply with specific regulations governing private placements.

  1. Disclosure Requirements:

While private placements provide confidentiality, issuers are still required to provide certain disclosures to investors. These disclosures may include financial statements, risk factors, and other relevant information.

  1. Limited Marketing and Solicitation:

The solicitation of investors in a private placement is limited compared to public offerings. Issuers must be cautious in their approach to avoid violating regulations related to marketing and advertising.

  1. Resale Restrictions:

Investors in private placements may face restrictions on selling their securities in the secondary market. These restrictions help maintain the private nature of the placement.

Advantages of Private Placement:

  1. Efficiency and Speed:

Private placements are generally faster and more cost-effective than public offerings. The absence of extensive regulatory reviews and public registration processes accelerates the capital-raising timeline.

  1. Selective Investor Engagement:

Issuers can choose investors strategically, targeting those with industry expertise, strategic alignment, or specific financial capabilities.

  1. Flexibility in Terms:

The negotiated nature of private placements allows issuers to tailor terms and conditions to meet the specific needs and goals of both the company and investors.

  1. Confidentiality:

Private placements offer a level of confidentiality, allowing companies to raise capital without divulging sensitive information to the public.

  1. Strategic Alignment:

By selectively choosing investors, companies can attract strategic partners who bring not just capital but also industry knowledge, networks, and expertise.

  1. Lower Costs:

The costs associated with private placements are generally lower than those of public offerings due to reduced regulatory requirements and marketing expenses.

Challenges and Considerations:

  1. Limited Capital:

Private placements may not be suitable for companies seeking significant amounts of capital, as the investor pool is restricted.

  1. illiquidity for Investors:

Investors in private placements may face challenges in selling their securities, as these transactions are often subject to restrictions.

  1. Regulatory Compliance:

Companies must navigate complex regulatory requirements to ensure compliance with securities laws. Failure to comply can result in legal consequences.

  1. Market Perception:

Companies choosing private placements may miss out on the visibility and market perception that comes with a public offering.

  1. Negotiation Complexity:

Negotiating terms with a select group of investors can be complex, requiring skilled negotiation and legal expertise to strike a mutually beneficial deal.

Provisions as per Companies Act

(1) A company may, subject to the provisions of this section, make a private placement of securities.

(2)  A private placement shall be made only to a select group of persons who have been identified by the Board (herein referred to as “identified persons”), whose number shall not exceed fifty or such higher number as may be prescribed [excluding the qualified institutional buyers and employees of the company being offered securities under a scheme of employees stock option in terms of provisions of clause (b) of sub-section (1) of section 62], in a financial year subject to such conditions as may be prescribed.

(3) A company making private placement shall issue private placement offer and application in such form and manner as may be prescribed to identified persons, whose names and addresses are recorded by the company in such manner as may be prescribed.

Statutory Provisions for Private Placement of Securities:

Private Placement of Securities is covered under Section 42 of the Companies Act, 2013 and Companies (Prospectus and Allotment of Securities) Rules, 2014. Private Placement is defined as any offer or invitation to subscribe or issue of securities to a select group of persons by a company (other than by way of public offer) through Private Placement Offer-cum-Application.

To whom can a Private Placement offer be made:

Private Placement Offer can be made to a prospective investor or any person who intends to invest a specific amount of funds in the Company against issue of securities. Offer to subscribe for the securities of a Company under Private Placement cannot be made to more than 200 persons in a Financial Year. If a company, listed or unlisted, makes an offer to allot or invites subscription, or allots, or enters into an agreement to allot, securities to more than the prescribed number of persons, same shall be deemed to be an offer to the public.

Advertisement:

No advertisements, media marketing or distribution channels or agents to be used by the company to inform the public at large about such an issue.

Procedure:

Following procedure should be followed by the Company intending to issue securities under Private Placement:

  • Calling for the meeting of the Board of Directors of the Company to offer securities on Private Placement Basis.
  • Passing of Board Resolution for issue of shares under Private Placement to specified persons and calling for Extra-Ordinary General Meeting of the Company to take members approval.
  • Filing form MGT-14- Board Resolution for issue of shares under Private Placement.
  • Issuing notices to the shareholders for Extra-Ordinary General Meeting of the Company as per timelines or with shorter consents.
  • Passing Special Resolution in the Shareholders meeting for issue and allotment of shares under Private Placement.
  • Sending Offer cum Application Letters in form PAS-4 to identified persons within 30 days of recording the names of the identified persons. Such Offer cum Application Letters can be sent in electronic mode (emails) or by post.
  • Receiving allotment amount in a separate bank account within the offer period as mentioned in the Offer cum Application Letter.
  • The Company shall allot shares to the applicants who has subscribed for the same through application letter and deposited the subscription amount within the offer period.
  • After Closure of Offer Period call a Board Meeting and pass Resolution for Allotment of Securities to the entitled subscribers.
  • Filing of return of allotment in Form PAS-3 within 15 days from the date of the allotment i.e. After passing Board Resolution for allotment
  • Make sure the securities are allotted within 60 days of the receipt of Application amount by the Company.
  • Stamp Duty on allotment shall be paid @ 0.10% through channels as available in respective states. e.g. In Mumbai it can be paid to ESBTR or GRASS MAHAKOSH site
  • The Company will be allowed to utilize the money raised through Private Placement only after Return of Allotment in Form PAS-3 is filed with the Registrar of Companies.
  • Record of Private Placement should be maintained by the Company in prescribed Form PAS-5.
  • The Company should update its Registrar of Members in a proper manner upon completion of allotment.
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