PIRON

 

Telecommunication Sector

IFRS for Telecommunication Sector

Duration: 2 Days

This valuable course answers questions such as:

1. How are recognition and measurement rules applied to intangible and long-lived assets, impairment, and inventories?
2. Under what circumstances is a sale of capacity classified as a lease?
3. What are the significant upcoming accounting issues that will affect telecommunication firms?
4. How IAS 18 and US GAAP are applied to complex revenue recognition situations?

Course Summary

This two-day course examines international financial reporting issues in detail and their effect on telecommunication entities (telecoms).

Course Benefits

  • Learn practical answers to typical telecommunication questions on intangible assets, property, plant and equipment, leasing, impairment, inventories and revenue recognition
  • Be able to analyze a sale of capacity in the context of IFRIC 4 Determining Whether an Arrangement Contains a Lease
  • Be up-to-date with the latest accounting pronouncements
  • Gain an awareness of pending issues and their affect on telecommunication firms
  • Understand how to apply IFRS and US GAAP to complex revenue recognition situations

Teaching Method

  • Identification of the critical issues affecting financial reporting in the telecommunication industry
  • Succinct examples and cases that illustrate classification and accounting
  • Presentation and discussion of model financial statement disclosures
  • All participants receive copies of the presentation slides and other course materials

Course Summary

1.Intangible Assets (IAS 38)
  • Internally generated software - when should capitalization start and what costs should be included
  • Telecommunication licenses - start of amortization, amortization method and period
2.Property, Plant and Equipment (IAS 16)
  • Construction cost of network - financing cost, site selection costs, network planning, dismantling and restoration costs
  • Component approach, start of depreciation, depreciation method and period
3.Leases (IAS 17)
  • Indefeasible rights of use and capacity arrangements (IFRIC 4)
4.Impairment of Assets (IAS 36)
  • Impairment indicators in the telecom industry
  • Defining cash generating units
  • Calculating recoverable amounts
  5.Inventories (IAS 2)
  • Valuation of handsets
  • Inventory versus marketing costs

6.Revenue Recognition (IAS 18) and US GAAP
  • Bundled (or multi-element) arrangements
  • Handset sales / Sales of modems
  • Prepaid revenue
  • Loyalty schemes / Free minutes
  • Principal-agent arrangements (agreements with content providers and other third parties)
  • Interconnect arrangements
  • Activation costs / Customer acquisition costs / Subscription fees / etc.
7.Recent and Pending Issues
  • Recently issued standards, interpretations and their impact on telecommunication firms
  • Proposed IFRS changes that will affect the sector
  • IFRS-US GAAP convergence update
  • IASB projects and plans of interest to telecommunication entities

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