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M92 > Chapter 7 > Flashcards

Chapter 7 Flashcards

1
Q

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

A

FRS 101

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2
Q

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

A

FRS 102

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3
Q

What most insurance companies following FRS102 adopt

A

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

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4
Q

What is the IFRS foundation

A

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

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5
Q

Who are the IASB

A

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

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6
Q

What are the three countries without an IFRS mandate

A

Do USA, Japan and China

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7
Q

What is the AOC

A

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

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8
Q

What are the two underlying assumptions used in IFRS

A

Accrual basis and Going concern

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9
Q

What is the Accrual basis

A

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

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10
Q

What is the going concern basis

A

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

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11
Q

What are assets

A

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

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12
Q

What is equity

A

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

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13
Q

Andy. What are the two types of accounting used

A

IFRS

UK space GAAP

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14
Q

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

A

All companies prepare financial statements giving a true and fair review

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15
Q

What is the financial crisis advisory group

A

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

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16
Q

What is the objective of IFRS 5

A

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

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17
Q

What does IFRS for mainly deal with

A

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

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18
Q

What does IFRS for require to be shown for general insurance

A

Claims development tables

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19
Q

What do claims development tables convey

A

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

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20
Q

A- What does an IFRS financial statement consist of

A

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

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21
Q

What is FRS 102 based on 

A

The IFRS for SME’s

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22
Q

What is the FRC going to be replaced by

A

ARGA

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23
Q

What is a small entity

A

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

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24
Q

What is a micro entity

A

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

25
Q

What FRS does micro entity use

A

FRS 105 What can also choose to adopt FRSS102 or IFRS

26
Q

What does FRS 101 do

A

Addresses the disclosure requirements for IFRS

27
Q

What do FRS 103 do

A

Contain specific accounting requirements for insurance of applying FRS 102

28
Q

What is the new UK GAAP

A

FRS 102

29
Q

What is the financial reporting standard for insurance companies

A

FRS 103

30
Q

Andy. What tupe of accounting is used when quoted?

IFRS or UK GAAP

A

IFRS (they do nor have a choice)

31
Q

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

A

UK GAAP

32
Q

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

A

IASB (international accountancy standards Board)

33
Q

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

A

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

34
Q

Andy. What does NEW GAAP require?

A

FRS102

35
Q

Andy. What replaced old UK GAAP

A

FRS 102

36
Q

Andy. Who sets the UK space GAAP standards

A

Financial reporting council (FRC)

37
Q

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

A

350

38
Q

Andy. Traditionally UK firms have preferred UK space GAAP because

A

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

39
Q

Andy. What are the tWo IFRS underlying assumptions

A

The firm is a going concern

Accounting is done on an accrual basis

40
Q

Andy. Is UK space GAAP done on an accrual basis

A

Yes

41
Q

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

A

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

42
Q

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

A

To learn from the banking crisis on accounting

43
Q

Andy. What does the IFRS require the use of

A

Claims development table (CDT)

44
Q

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

A

I FRS4

45
Q

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

A

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

46
Q

Andy. What will IFRS insurers use

A

CDT and IFRS4

47
Q

Andy. What well UK GAAP insurance use

A

FRS 102 and FRS 103

48
Q

Andy. What will insurers not use

A

FRS 105 as it applies to micro entities

49
Q

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

A

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

50
Q

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

A

There may be

51
Q

Andy. What is a micro entity

A

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

52
Q

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

A

FRS 105

53
Q

Andy. What is the financial reporting council

A

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

54
Q

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

A

Accounting standards
auditing standards
actuarial standards

55
Q

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

A

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

56
Q

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

A

102 or/ and 103

57
Q

b- what are the insurnace rules for UK GAAP

A

103 only

58
Q

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

A

IFRS

M92 (12 decks)

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