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Yaeger FAR > 9D IFRS > Flashcards

9D IFRS Flashcards

0
Q

Are there revenues in IFRS?

A

No

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1
Q

Financial Statements:

IAS1 provides that a complete set of financial statements be prepared…

A

Annually

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2
Q

How many methods under IFRS are there for the Statement of Cashflows?

A

3

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3
Q

What is the complete set of financial statements under IFRS? 5

A 
1 statement of financial position
2 statement of comprehensive income
3 statement of changes in equity
4 statement of cash flows
5 notes containing significant accounting policies and explanations
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4
Q

The headings of financial statements should include…3

A

1 the name of the entity

2 title of the statement

3 date of the statement

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5
Q

Financial statements should present…

A

A true and fair view of the company

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6
Q

IFRS must be used unless there is a rare circumstance where the use of IFRS would…

A

Produce misleading financial statements

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7
Q

Whenever an entity retrospectively applies an accounting policy, retrospectively restates its financial statements, or reclassifies items….

A

3 years of state,nets of financial position are required for
comparative purposes

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8
Q

Accrual basis of accounting is used to prepare the financial statements with the assumption that the entity is…

A

A going concern

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9
Q

Assets and liabilities may not be offset against each other unless…

A

Specifically permitted by IFRS

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10
Q

Income and expenses may not be offset unless…

A

Specifically permitted by IFRS

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11
Q

Offsets may be used for…

A

Valuation purposes, such as contra accounts

Ex. Allowance for uncollectible accounts or accumulated
Depreciation

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12
Q

Items on financial statements should be presented separately for…

A

Each material class of similar items

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13
Q

On financial statements, If an item is not material it may be…

A

Aggregated with other items

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14
Q

Subsequent events are considered…

2) Unlike US GAAP, which considers subsequent events through…

A

Through the date financial statements are authorized to be issued

2) the financial statement issuance date

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15
Q

Assets are classified as…

A

Current and Noncurrent

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16
Q

Assets are classified as current if it is expected to…4

A

1 Be realized or held for consumption in normal course of entity’s operating cycle
2 held primarily for trading purposes
3 expected to be realized within 12 months of the end of the period
4 cash or cash equivalent that’s not restricted

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17
Q

Noncurrent assets include:8

A 
1 Tangible
2 intangible
3 operating 
4 long term financial assets
5 investment property
6 PPE
7 assets held for sale
8 miscellaneous assets
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18
Q

Example of long term financial assets

A

Held to maturity investments

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19
Q

Liabilities are classified as…

A

Current and Noncurrent

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20
Q

A liability is current if it is expect to be…4

A

1 settled in normal course of business during operating cycle
2 due to settle within 12 months
3 held primarily for trading purposes
4 doesn’t have an unconditional right to defer settlement beyond
12 months

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21
Q

2 payables that are classified as current regardless of settlement date

A

1 trade payables

2 accruals for operating costs

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22
Q

Interest bearing liabilities are classified based upon whether they are…

A

Due within 12 months

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23
Q

If an agreement to refinance a liability on a long term basis is executed prior to the financial statement date e liability must be classified as…

2) how is this different from GAAP?

A

Noncurrent

2) under GAAP, if there is the intent and ability to refinance before
The issuance of financial statements, reclassification is permitted

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24
Q

For refinancing and executed agreement prior to balance sheet date…

A

Is not required

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25
Q

For IFRS, if the agreement to refinance is made after the balance sheet date then the liability…

A

Must be classified as current on the balance sheet date

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26
Q

Similar to US GAAP, if long term debt becomes callable due to a violation of a loan convenant, the liability must…

A

Be classified as a current liability

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27
Q

For shareholders’ equity the financial statements must disclose the number of shares of stock…

A

Authorized, issued and outstanding

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28
Q

Preference shares

A

Preferred stock

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29
Q

If there are preference shares, they must be reported…

A

Separately including number of shares authorized, issued and outstanding

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30
Q

Preference shares that are redeemable at the option of the holder
must be…

A

Classified as liabilities

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31
Q

Treasury shares repurchased are…

A

Stated at cost and shown as reduction to shareholders equity

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32
Q

Accumulated other comprehensive income is reported in the…

A

Shareholders equity section of the balance sheet

33
Q

Noncontrolling interests are disclosed as…

A

A separate item in the equity section of the balance sheet

34
Q

Category required by IAS 1 in statement of financial position:

Investment…

A

Property

35
Q

Category required by IAS 1 in statement of financial position:

Biological assets, define

A

Living plants and animals controlled by entity

36
Q

Category required by IAS 1 in statement of financial position:

Provisions, define

A

Probable and measurable estimated expense or liability

Ex. Warranty expense

37
Q

IAS 1 requires that a minimum of the following items be included on the income statement:

Revenue, what’s it referred to as?

A

Referred to as income under IFRS

38
Q

IAS 1 requires that a minimum of the following items be included on the income statement:

Finance costs, what’s it referred to under IFRS?

A

Interest expense

39
Q

IAS 1 requires that a minimum of the following items be included on the income statement:

Share of profits and losses of…

A

Associates and joint ventures for using equity method

40
Q

IAS 1 requires that a minimum of the following items be included on the income statement:

Tax…

A

Expense

41
Q

IAS 1 requires that a minimum of the following items be included on the income statement:

Discontinued…

A

Operations

42
Q

IAS 1 requires that a minimum of the following items be included on the income statement:

Profits or…

A

Loss

43
Q

IAS 1 requires that a minimum of the following items be included on the income statement:

Noncontrolling interest in…

A

Profit or loss

44
Q

IAS 1 requires that a minimum of the following items be included on the income statement:

Net profit (loss) attributable to…

A

Equity holders in the parent

45
Q

Minimum number of items required by IAS 1 in the income statement?

A

8

46
Q

If an entity acquires less than 100% of the subsidiary, the income statement should indicate…

A

The profit or loss attributable to the noncontrolling interest and
The owners of the parent

47
Q

Major difference between GAAP and IFRS on the income statement, is that IFRS does not permit…

2) how should they be reported under IFRS.?

A

Classification of extraordinary items

2) as income or expense

48
Q

Operating expenses may be classified either by…

A

Nature or by function

49
Q

Classification by nature is based on the…

A

Character of the expense

Ex. Salaries and wages, raw material, interest expense,
tax expense, depreciation

50
Q

Classification by function is based on…

A

The purpose of the expenditure

Ex. Such as manufacturing, distribution or administration

51
Q

If an entity classifies expenses by function, cost of sales…

A

Must be stated separately from other expenses

52
Q

US GAAP expenses are classified…

A

By function

Ex, COGS, operating expenses

53
Q

For IFRS, finance costs (interest expense) must be…

A

Identified separately regardless of which classification scheme is
Used

54
Q

Operating expenses are normally classified as…2

A

1 distribution costs (selling expenses)

2 general and administrative exp.

55
Q

If an item is material in amount and of such size, nature or incidence, that disclosure is important to understand the performance of the entity, then the item…

A

Should be disclosed separately

Examples of these disclosures: write downs of inventories, PPE,
Restructuring costs, costs of litigation settlements, reversals of provisions

56
Q

Treatment of discontinued operations is similar…

A

To US GAAP

57
Q

Discontinued operations:

If an asset is classified as held for sale or is part of a disposal group, it is valued at…

A

The lower of carrying value or fair value less costs to sell

58
Q

Discontinued operations:

The write down net of tax is included in…

A

Discontinued operations in the income statement

59
Q

For discontinued operations several calculations are required:

First, revenues, expenses…

A

Pretax profit or loss and related income tax expenses are

Calculated

60
Q

For discontinued operations several calculations are required:

Second, the gain or loss on disposal or…

A

Remeasurement is calculated with the related income tax expense

61
Q

For discontinued operations several calculations are required:

Third and final, the total of the proceeding 2 calculations is…

A

Determined net of tax and must be disclosed in the income

Statement

62
Q

For discontinued operations several calculations are required:

The footnote disclosures must include the…4

A

1 pretax profit or loss
2 gain or loss on disposal
3 tax effects
4 net cashflows from operating, investing and financing activities

63
Q

The statement of comprehensive income must be presented in…

A

One statement or in 2 statements

64
Q

5 common items included in comprehensive income

A

1 changes in revaluation surplus for PPE
2 actuarial gains/losses on defined benefit plans
3 gains/losses from foreign currency translations
4 gains/losses from measuring AFS financial assets
5 effective portion from gains/losses on hedging instruments used
As cash flow hedges

65
Q

Each component of comprehensive income should be…

A

Stated separately in statement of comprehensive income

66
Q

The accounting rules for statement of cash flows are similar…

A

To US GAAP

67
Q

For IFRS, cash flows include…

A

Inflows and outflows of both cash and cash equivalents

68
Q

Cash equivalents include…4

A

1 cash on hand
2 bank balances for immediate use
3 other demand deposits
4 short term investments with maturities of 3 months or less

69
Q

What are the 2 acceptable methods for preparing the statement of cash flows?

A

1 direct method

2 indirect method

70
Q

Statement of cashflows:

For the indirect method, operating activities may be presented using…

A

A modified approach

71
Q

Statement of cashflows:

Modified indirect method

A

Shows revenues and expenses in operating activities

Then reports changes in working capital accounts

72
Q

As in US GAAP, statement of cashflows is divided into 3 parts of activities

A

1 operating

2 investing

3 financing

73
Q

At the bottom of the statement of cash flows, a reconciliation must be made with the…

A

Amounts in the statement of cash flows and cash/cash equivalents reported in statement of financial position

74
Q

Statement of cashflows:

The most significant difference between IFRS and US GAAP is…

A

Where certain items are presented on the statement of cashflows

75
Q

Statement of cashflows:

Although the entity has discretion on where interest and dividends are reported, it must…

A

Be reported on a consistent basis

76
Q

Statement of cashflows:

Cash from the purchase and sale of trading securities are classified as…

A

Operating activities

77
Q

Statement of cashflows:

Cash advances and loans (bank overdrafts) are usually classified as…

A

Operating activities

78
Q

Statement of cashflows:

Taxes paid on income must be disclosed…

2) however, cash flows from certain taxes may be classified…

A

Separately in operating activities

2) elsewhere if they are related to investing or financing activities

79
Q

Statement of cashflows:

The effects of noncash transactions are…

A

Not reported on the statement of cashflows, they are instead
Disclosed in the notes of the financial statements

Yaeger FAR (59 decks)

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