Chapter 7

Question 1

 What may subsidiaries of quoted companies and the Parent company adopt for its own accounts

Answer 1

FRS 101

Question 2

What May UK companies other than quoted companies adopt for their accounts

Answer 2

FRS 102

Question 3

What most insurance companies following FRS102 adopt

Answer 3

FRS 3 (Which sets out the financial reporting requirements in guidance for insurance contracts)

Question 4

What is the IFRS foundation

Answer 4

I’m not for profit international organisation responsible for developing a single set of high quality global accounting standards known as IFRS standards

Question 5

Who are the IASB

Answer 5

They are supported by the IFRS interpretations committee and their role is to offer guidance where divergence in practice occurs

Question 6

What are the three countries without an IFRS mandate

Answer 6

Do USA, Japan and China

Question 7

What is the AOC

Answer 7

The EU has set up the accounting regulartory committee whose role is is to endorse IFRS for use by EU quoted companies

Question 8

What are the two underlying assumptions used in IFRS

Answer 8

Accrual basis and Going concern

Question 9

What is the Accrual basis

Answer 9

The effect of transactions and other events are recognised when they occur. Not as cash is received or paid

Question 10

What is the going concern basis

Answer 10

If management has significant concerns about the entity’s ability to continue as it Going concern the uncertainties must be disclosed

Question 11

What are assets

Answer 11

Resources controlled by the entity from which future economic benefits are expected to fly to the entity

Question 12

What is equity

Answer 12

Residual interest in the assets of the entity after deducting all its liabilities

Question 13

Andy. What are the two types of accounting used

Answer 13

IFRS

UK space GAAP

Question 14

Hey what does the companies act 2006 incorporate in a financial statements as a requirement

Answer 14

All companies prepare financial statements giving a true and fair review

Question 15

What is the financial crisis advisory group

Answer 15

Was set up to consider financial reporting issues arising from the global financial crisis

Question 16

What is the objective of IFRS 5

Answer 16

Do you help investors and others better understand insurance risk exposure, profitability and financial position

Question 17

What does IFRS for mainly deal with

Answer 17

Mainly deals with a definition of an insurance contract and guidance on presentation and disclosure

Question 18

What does IFRS for require to be shown for general insurance

Answer 18

Claims development tables

Question 19

What do claims development tables convey

Answer 19

Valuable information about how accurate management prior estimate of outstanding claims were an extent to which insurance liabilities are subject to variation

Question 20

A- What does an IFRS financial statement consist of

Answer 20

A balance sheet; an income statement; a cash flow statement and notes including a summary of the significant accounting policies

In addition either a SOCE or SORIE

Question 21

What is FRS 102 based on 

Answer 21

The IFRS for SME’s

Question 22

What is the FRC going to be replaced by

Answer 22

ARGA

Question 23

What is a small entity

Answer 23

Has one or two of the following:
Turnover less than 10.2 million
Total assets less than 5.1 million
50 employees or less

Question 24

What is a micro entity

Answer 24

It satisfies any two of the following
Turnover less than 632,000
Total assets less of 316k
10 employees or less

Question 25

What FRS does micro entity use

Answer 25

FRS 105 What can also choose to adopt FRSS102 or IFRS

Question 26

What does FRS 101 do

Answer 26

Addresses the disclosure requirements for IFRS

Question 27

What do FRS 103 do

Answer 27

Contain specific accounting requirements for insurance of applying FRS 102

Question 28

What is the new UK GAAP

Answer 28

FRS 102

Question 29

What is the financial reporting standard for insurance companies

Answer 29

FRS 103

Question 30

Andy. What tupe of accounting is used when quoted? | IFRS or UK GAAP

Answer 30

IFRS (they do nor have a choice)

Question 31

Andy. If you are not quoted what accounting can you use

Answer 31

UK GAAP

Question 32

Andy. Who set tye IFRS standards and given guidance by the IFRS committee?

Answer 32

IASB (international accountancy standards Board)

Question 33

Andy. IFRS is used by quoted companies but can also be used by?

Answer 33

Firms who gave international subsidiaries or wish heir accounts to be read in an international recognised format

Question 34

Andy. What does NEW GAAP require?

Answer 34

FRS102

Question 35

Andy. What replaced old UK GAAP

Answer 35

FRS 102

Question 36

Andy. Who sets the UK space GAAP standards

Answer 36

Financial reporting council (FRC)

Question 37

Andy. New GAAP has significantly reduced its rules. How many pages have they gone to from 3000

Answer 37

350

Question 38

Andy. Traditionally UK firms have preferred UK space GAAP because

Answer 38

1 management time involved in the transfer 2 accounting skills available for the transfer 3 training requirements that would be needed 4 changes required to systems 5 Changes to the way costs are accounted for some of which may be tax and gearing disadvantages

Question 39

Andy. What are the tWo IFRS underlying assumptions

Answer 39

The firm is a going concern | Accounting is done on an accrual basis

Question 40

Andy. Is UK space GAAP done on an accrual basis

Answer 40

Yes

Question 41

Andy. What do both standards require accounts to be and need

Answer 41

True and fair. Both need balance sheet income statement and cash flow statement 

Question 42

Andy. What does the financial crisis advisory group do. (FCAG)

Answer 42

To learn from the banking crisis on accounting

Question 43

Andy. What does the IFRS require the use of

Answer 43

Claims development table (CDT)

Question 44

Andy. What I FRS may be used if accounting in IFRS

Answer 44

I FRS4

Question 45

Andy. For new UK space GAAP what FRS do insurers have to follow

Answer 45

FRS 103 which are specific for insurance contracts as well as FRS 102 which are more general rules

Question 46

Andy. What will IFRS insurers use

Answer 46

CDT and IFRS4

Question 47

Andy. What well UK GAAP insurance use

Answer 47

FRS 102 and FRS 103

Question 48

Andy. What will insurers not use

Answer 48

FRS 105 as it applies to micro entities

Question 49

Andy. What can companies using UKGAAP With a turnover of less than 10.2 million, assets of less than 5.1 million and employees less than 50 use

Answer 49

They can use the financial reporting standards for smaller entities (FRSSE)

Question 50

Andy. If using the FRSSE is there additional disclosures on true and fair

Answer 50

There may be

Question 51

Andy. What is a micro entity

Answer 51

Firms that have a turnover of less than 632,000, assets of less than 316,000 and employees less than 10

Question 52

Andy. What FRS is presumed In Law to be true and fair so no additional disclosure is necessary

Answer 52

FRS 105

Question 53

Andy. What is the financial reporting council

Answer 53

U.K.’s independent regulator and oversee Three A’s

Question 54

Andy. What are the three A’s of the financial reporting council

Answer 54

Accounting standards auditing standards actuarial standards

Question 55

Andy. Who are the financial reporting review panel and who do they support

Answer 55

They support the financial reporting council and a task with looking at accounting standards of the very large UK corporations

Question 56

B- Which FRS does an insurer have to complete when following UK GAAP

Answer 56

102 or/ and 103

Question 57

b- what are the insurnace rules for UK GAAP

Answer 57

103 only

Question 58

A - if you are a quoted company can you do UK GAAP or IFRS

Answer 58

IFRS