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overview
Key Learning Objectives
- Understanding of the 5-step model of recognising revenue under IFRS 15
- Overview of the IFRS 9, the new financial instruments standard and how it impacts shipping?
- Accounting for Leasing and Sale-Leaseback Transactions
- Understand the new leasing standard and what is changing
- Other amendments Relevant to the Shipping Industry – who will be affected? Effects of the changes? Determining values? Exemptions and more
- Recognizing and implementing Revenue and Costs under the new standard
- Hedge accounting in shipping industry
- Assessment of costs that can be capitalised
- Shipping Asset Depreciation and Residual Value
- Impairment of Non-Financial Assets
- Group Accounts Consolidation and Joint Arrangements
About the Course
A shipping alert! Are you ready for the new accounting standards for revenue recognition, financial instruments and leases?
It may be time to take action sooner than you thought. The new and changed accounting standards are bringing big changes with a bang!
On top of this, recent years of diminishing growth in freight rates and vessel values due to slowdown in the global economy and international trades have been accompanied by challenges and issues faced in financial reporting for shipping and offshore companies.
Specific questions have been raised relating to vessel impairment, leasing and sale-leaseback, ship financing loans and borrowing costs, residual values and useful economic life for the purpose of revenue and cost recognition, depreciation calculations, charter terminations, financing issues and going concern.
Accounting and IFRS for Shipping Industry course will highlight key accounting standards most relevant to shipping and offshore companies in the current economic climate and guide participants on how to implement them effectively in their scope of work. The course will examine key proposed IFRS/IAS revisions under evaluation and identify how these could affect shipping companies if approved and implemented.
Accounting and reporting procedures for joint arrangements such as ship pooling and the use of financial instruments and derivatives will be covered as well. In addition, the course will also address practical issues and challenges which ship owners and operators face in bookkeeping and first time IFRS adoption in times of difficult market conditions.
Who Will Benefit
This course is intended for all professionals serving in accounting or financial functions across the shipping and offshore sectors and is involved preparing and interpreting consolidated financial statements. Job functions include:
- Accountants
- Budget Analysts
- Accounting Manager
- Auditors
- Finance Analysts, Managers & Directors
- Chief Financial Officers
- Financial/Cost Controllers
- Investment Analysts
- Consultants and Advisors
Testimonials
“The expert trainers are truly knowledgeable. The programme is informative and essential in updating our accounting policies, discussing with auditors about finance lease & operating lease contracts”
Senior Financial Accountant, Brunei Gas Carriers
“Instructors offer a lot of practical examples in the shipping industry, making the learning of IFRS compliance especially on leases and revenue recognition easy to learn”
Revenue Accounting Manager, Ardmore Shipping
“Presentations covered important materials for my work and my company’s new accounting standard implementation”
Account Payable, Oman Shipping Company
Agenda
REVENUE RECOGNITION
- IFRS 15 – overview of the new revenue standard
- Understanding of the 5 step model of recognising revenue
- Identify the contract(s) with the customer
» Contract combinations
» Contract modifications - Identify the performance obligations in the contract
- Determine the transaction price
» Guidance on variable consideration
» Existence of significant financing component
» Consideration payable to customer - Allocate the transaction price to the performance obligations
- Recognise revenue when (or as) each performance obligation is satisfied
- Impact on shipping
- Charter income
- Voyage income
- Liquidated damages
- Demurrage income
- Principal or agent issues
- Identifying service components in a revenue contract
- Slot exchange arrangements
- Onerous contracts
LEASING
- Identifying lease contracts
- Assessment of operating versus finance lease
- Accounting for finance leases
- Accounting for operating leases
- Impact of renewal/extension options
- Impact of contingent charter payments
- Impact of residual value guarantees
- Accounting for changes in estimates/circumstances/agreement after lease inception
- Accounting for sale and leaseback transactions
- New leasing standard – what’s changing from 2019
- New definition of Lease
- Lessee’s Accounting
- Lessor’s accounting
- Sale and Lease back transactions
CONSOLIDATION AND JOINT ARRANGEMENT
- Understanding and applying IFRS 10 Consolidated
- Concept of de facto control, voting and other rights
- Joint arrangements under IFRS 11 Joint Arrangements
- Joint operations – parties involved with joint control have rights to the assets and obligations for the liabilities
- Joint ventures – parties involved with joint control have rights to the overall assets of the arrangement
- Shipping pools
- full control over the pool – pool consolidation
- Joint operator of the pool – the company’s share of revenue, costs, assets and liabilities is recognised
- Ship Chartering special purpose vehicles
- Accounting for joint arrangements
FINANCIAL INSTRUMENTS
- FRS 109 – overview of the new financial instruments standard
- Classification and measurement: financial asset and financial liabilities
» Amortised cost
» Fair value through profit or loss
» Fair value through OCI - Accounting for derivatives
- Expected credit loss model
- Classification and measurement: financial asset and financial liabilities
- Commodity purchase and supply contracts
- Shipbuilding option agreements
- Embedded derivatives
- Hedge accounting in shipping
- Fair value hedge
- Cash flow hedge
- Accounting for debt modifications
- Overview of FRS 32 – Financial instruments: Presentation
- Debt vs equity considerations
- Compound Financial Instruments
PROPERTY, PLANT & EQUIPMENT
- Assessment of costs that can be capitalised
- Pre-delivery instalments
- Borrowing costs
- Timing of capitalisation
- Eligible borrowing costs
- General borrowing costs
- Vessel government grant accounting
- Repairs and maintenance
- Dry-docking
- Cost allocation and componentization when a vessel is purchased
- Depreciation
- Useful life
- Residual value
- Depreciation method
IMPAIRMENT
- Determination of CGUs
- Assessment of impairment indicators
- Global economic downturn and market slump
- Slowing demand for shipping services
- Depressed charter rates
- Low new build prices or ship resale prices
- Ships and vessels lay up
- Abnormally high scrapping fees
- Significant physical damage to the vessel
- Operating losses
- Determination of FVLCTS
- Determination of VIU
- Differences between fair value and value in use
» Reversal of past impairments
» Part-completed new builds
» Disclosure under IAS 36
- Differences between fair value and value in use
TAXATION
- Tonnage tax classification
On-site & in-house training
Deliver this course how you want, where you want, when you want – and save up to 40%! 8+ employees seeking training on the same topic?
Talk to us about an on-site/in-house & customised solution.