Accounting and IFRS for Shipping Industry

Course Info

Length: 1 Week

Type: In Classroom

Available Dates

Venue

  • July-01-2024

    Hamburg

  • July-01-2024

    Athens

  • July-01-2024

    Dubai

  • July-22-2024

    London

  • Aug-19-2024

    Istanbul

  • Aug-19-2024

    Rotterdam

  • Sep-02-2024

    Dubai

  • Sep-02-2024

    Athens

  • Sep-02-2024

    Hamburg

  • Sep-23-2024

    London

  • Oct-21-2024

    Rotterdam

  • Oct-21-2024

    Istanbul

  • Nov-04-2024

    Dubai

  • Nov-04-2024

    Hamburg

  • Nov-04-2024

    Athens

  • Nov-25-2024

    London

  • Dec-16-2024

    Istanbul

  • Dec-16-2024

    Rotterdam

Course Details

Course Outline

5 days course

Accounting Basics 

  • Terminology
  • Types of Accounting
  • Accounting Rules 
  • Global Institutions
  • IFRS / IAS

Key accounting and reporting issues

  • Continuity assessment:
  • Fair value assessment of ships:
  • Dry dock costs, construction, and retrofit delays:
  • Ship impairment assessment:
  • Impairment assessment of goodwill

Treatment of TAX in shipping

  • Types of TAX
  • VAT in shipping calculations
  • Practical case on tax report

Revenue recognition in shipping business in accordance with IFRS  15.

  • Overview of International Financial Reporting Standard 15 (IFRS 15)
  • Defining Revenue Recognition Methods: Review the basics to determine how companies recognize revenue in the shipping business according to the international standard.
  • Evaluating the effects on the financial statements: Analyzing how this recognition affects the financial statements and how it can be addressed.
  • Practical application: Practical case studies of companies applying this standard in the shipping sector.

 

Identification of contract with the appropriate customers/clients

  • Customer selection procedures: Analyze the steps that must be taken to select appropriate customers and ensure compliance with shipping requirements.
  • Contract content: Determine the necessary content to avoid confusion or vague interpretation of shipping terms.
  • Risk Analysis: Evaluate potential risks related to the contract and develop strategies to deal with them.

 

dentification of shipping obligations with the contract

  • Defining Obligations: Examine how specific shipping obligations in the contract are identified and documented.
  • Compliance Verification: Ensure that shipping obligations comply with legal and industry regulations and standards.
  • Change Management: Establish procedures to address any changes in shipping obligations during the contract period.

 

Determination of the shipping transaction price

  • Costing Techniques: Review appropriate costing techniques to determine the price of a shipping transaction.
  • Competitor evaluation: Studying competitors' prices to ensure price competitiveness.
  • Price Negotiation: Develop negotiation skills to achieve the best possible price.

 

Allocation of the transaction price to the performance obligations

  • Determine cost elements: Analyze the various factors that should be taken into consideration when allocating the transaction price.
  • Clarifying the services included: Ensure that all services included in the deal and their impact on the cost are clarified.
  • Performance follow-up: Establishing systems to monitor the company’s performance in achieving its obligations.

Recognition of shipping revenue when each performance obligation is completed.

  • Monitoring Procedures: Develop procedures to monitor the fulfillment of performance obligations and determine when revenue should be recognized.
  • Financial reporting: How to include these revenues in financial reports accurately according to specified standards.
  • Commitment to Transparency: Enhancing the transparency of financial operations and ensuring that information is shared correctly and in a timely manner.

 

Accounting for Property Plant and Equipment (IAS 16) , Government Grants (IAS 20) , Investment Property (IAS 40)

Measurement of shipping assets at recognition, after recognition and derecognition

  • Measuring Assets at Recognition: Detailing how the value of assets is measured during revenue recognition processes.
  • Measuring assets after recognition: Talk about potential changes in the value of assets after revenue is recognized.
  • Measuring assets upon derecognition: A review of the methods used to measure assets upon derecognition of revenue.

 

Revaluation of shipping assets

  • Reasons for revaluation: Examine the reasons that may require revaluation of shipping assets.
  • Impact of economic changes: How the economic context affects the revaluation of assets.
  • Difference Accounting: Explaining how to address differences between book value and fair value.

 

Depreciation of shipping assets 

  • Depreciation methods: Explain the different ways the value of assets is depreciated over time.
  • The impact of accounting policies: Study how accounting policies can affect depreciation rates.
  • Consumption monitoring: means of monitoring asset consumption and improving efficiency of use.

 

IFRS 13 - Fair Value Measurement

  • The concept of fair value: Explaining the concept of fair value and how to measure it.
  • Techniques used: Review of accounting techniques used to measure fair value.
  • Impact on Financial Reporting: Analyze how fair value measurement affects financial reporting.

 

IFRS 9 - Financial Instruments (Hedge Accounting)

  • IFRS 9
  • Hedge accounting principles: Explanation of accounting principles related to financial instruments and hedge accounting.
  • Hedging techniques: The study of techniques used to reduce financial risks.
  • The impact of hedging on financial performance: Analyze how hedge accounting can affect the estimation of financial performance.

 

Treatment of borrowing costs 

  • Borrowing cost analysis: studying the components of borrowing costs and methods for calculating them.
  • Interest effect: How the interest rate affects borrowing costs and planning.
  • Borrowing cost management: Develop strategies to examine and improve the management of borrowing costs.
  • Vessel government grant accounting
  • Accounting Requirements: Review how government grants to support shipping activities are processed.
  • Estimating value: How to estimate the financial value of grants and their impact on financial reports.
  • Compliance with standards: Verifying that accounting is carried out in accordance with international standards.

 

Treatment of dry docking

  • Maintenance Costs: Determine costs and manage ship dry dock operations.
  • Impact of temporary closure: How does drydock closure affect the financial statements.
  • Improving Efficiency: Develop strategies to improve the efficiency of dry dock operations and achieve maximum financial benefit.

 

Expected credit loss model

  • Understanding Credit Loss: Explaining how to estimate and account for expected loss on debt.
  • Influencing factors: Analysis of the factors that affect the credit loss estimate.
  • Impact on Financial Reporting: How credit loss estimation affects shipping companies' financial reporting.

 

Hedge accounting in shipping (fair value hedge and cash flow hedge)

  • The concept of hedging: Explain the concept of hedging and its importance in the context of shipping.
  • Fair value hedging: How companies hedge to protect themselves from fluctuations in the value of assets and liabilities.
  • Cash Flow Hedging: Review how cash flows are hedged to address financial risks.

 

Accounting for debt modification

  • Debt modification interpretation: How to identify and account for any debt modifications.
  • Impact of Interest Spreads: Examining how adjustments in interest rates affect financial reporting.
  • Compliance with standards: Ensuring that accounting conforms to recognized international standards.

 

Accounting for complex financial instruments.

  • Definition of complex financial instruments: Understand what complex financial instruments mean and how they are accounted for.
  • Evaluation techniques: Study of the methods used to evaluate the value of these instruments.
  • Impact on Financial Reporting: Analyze how the valuation of complex financial instruments impacts shipping companies' financial reporting

Determination of control 

  • Definition of Control: Explain the concept of control in the context of the shipping business.
  • Defining control: How to define and achieve control over assets and activities.
  • Reporting on control: How to report control-related information in financial reports.

 

Consolidation procedures

  • Legal and Financial Procedures: How to legally and financially integrate a shipping business.
  • Stages of merging: Detailing the steps and stages of merging and how to implement it.
  • Effect of consolidation on reporting: How does consolidation affect the income statement, balance sheet, and cash flow statement.

 

Preparation of consolidated Income Statement

  • Key Components: Explain the key components that should be included in a consolidated income statement.
  • Breaking down revenues and costs: How to effectively distribute revenues and shipping costs on the income statement.
  • Related Financial Reporting: Analysis of how the income statement affects other financial reports.

 

Preparation of consolidated SOFP

  • Consolidated SOFP Concept: Explain the concept and importance of preparing a consolidated balance sheet.
  • Consolidating Assets and Liabilities: How to consolidate assets and liabilities in the balance sheet.
  • Impact of Standardization on Reporting: How a standardized SOFP setting affects company reporting.

 

Preparation of consolidated Statement of Cash Flows

  • Cash Flow Analysis: Explain how to analyze and present a cash flow statement in a shipping context.
  • Consolidate cash flows: How to consolidate cash flows from various shipping activities.
  • Impact on financial reporting: How does the consolidated statement of cash flows affect financial reporting

 

Treatment of Non-controlling interests in shipping business

  • Non-controlling interests:
  • How to deal with interests that shipping does not control:
  • How does the presence of non-controlling interests affect shipping operations and related activities

 

Treatment of Goodwill in shipping business

  • Understanding the concept of goodwill: Explain the concept and importance of goodwill treatment in the context of the shipping business.
  • Estimating the value of goodwill: How to estimate the value of goodwill and its impact on financial reports.
  • Affected Financial Reporting: Analyze how the goodwill transaction affects financial reporting.

 

Treatment of intra-group items and unrealized profits

  • Understanding inter-group items: Explain how inter-group items are treated in freight calculations.
  • Recording unrealized profits: How to record profits that have not yet been realized in financial reports.
  • Final Financial Reports: Analyze how line items and unrealized gains affect final reports.

 

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