Chapter 7 Flashcards
 What may subsidiaries of quoted companies and the Parent company adopt for its own accounts
FRS 101
What May UK companies other than quoted companies adopt for their accounts
FRS 102
What most insurance companies following FRS102 adopt
FRS 3 (Which sets out the financial reporting requirements in guidance for insurance contracts)
What is the IFRS foundation
I’m not for profit international organisation responsible for developing a single set of high quality global accounting standards known as IFRS standards
Who are the IASB
They are supported by the IFRS interpretations committee and their role is to offer guidance where divergence in practice occurs
What are the three countries without an IFRS mandate
Do USA, Japan and China
What is the AOC
The EU has set up the accounting regulartory committee whose role is is to endorse IFRS for use by EU quoted companies
What are the two underlying assumptions used in IFRS
Accrual basis and Going concern
What is the Accrual basis
The effect of transactions and other events are recognised when they occur. Not as cash is received or paid
What is the going concern basis
If management has significant concerns about the entity’s ability to continue as it Going concern the uncertainties must be disclosed
What are assets
Resources controlled by the entity from which future economic benefits are expected to fly to the entity
What is equity
Residual interest in the assets of the entity after deducting all its liabilities
Andy. What are the two types of accounting used
IFRS
UK space GAAP
Hey what does the companies act 2006 incorporate in a financial statements as a requirement
All companies prepare financial statements giving a true and fair review
What is the financial crisis advisory group
Was set up to consider financial reporting issues arising from the global financial crisis
What is the objective of IFRS 5
Do you help investors and others better understand insurance risk exposure, profitability and financial position
What does IFRS for mainly deal with
Mainly deals with a definition of an insurance contract and guidance on presentation and disclosure
What does IFRS for require to be shown for general insurance
Claims development tables
What do claims development tables convey
Valuable information about how accurate management prior estimate of outstanding claims were an extent to which insurance liabilities are subject to variation
A- What does an IFRS financial statement consist of
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
What is FRS 102 based on 
The IFRS for SME’s
What is the FRC going to be replaced by
ARGA
What is a small entity
Has one or two of the following:
Turnover less than 10.2 million
Total assets less than 5.1 million
50 employees or less
What is a micro entity
It satisfies any two of the following
Turnover less than 632,000
Total assets less of 316k
10 employees or less
What FRS does micro entity use
FRS 105 What can also choose to adopt FRSS102 or IFRS
What does FRS 101 do
Addresses the disclosure requirements for IFRS
What do FRS 103 do
Contain specific accounting requirements for insurance of applying FRS 102
What is the new UK GAAP
FRS 102
What is the financial reporting standard for insurance companies
FRS 103
Andy. What tupe of accounting is used when quoted?
IFRS or UK GAAP
IFRS (they do nor have a choice)
Andy. If you are not quoted what accounting can you use
UK GAAP
Andy. Who set tye IFRS standards and given guidance by the IFRS committee?
IASB (international accountancy standards Board)
Andy. IFRS is used by quoted companies but can also be used by?
Firms who gave international subsidiaries or wish heir accounts to be read in an international recognised format
Andy. What does NEW GAAP require?
FRS102
Andy. What replaced old UK GAAP
FRS 102
Andy. Who sets the UK space GAAP standards
Financial reporting council (FRC)
Andy. New GAAP has significantly reduced its rules. How many pages have they gone to from 3000
350
Andy. Traditionally UK firms have preferred UK space GAAP because
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
Andy. What are the tWo IFRS underlying assumptions
The firm is a going concern
Accounting is done on an accrual basis
Andy. Is UK space GAAP done on an accrual basis
Yes
Andy. What do both standards require accounts to be and need
True and fair. Both need balance sheet income statement and cash flow statement 
Andy. What does the financial crisis advisory group do. (FCAG)
To learn from the banking crisis on accounting
Andy. What does the IFRS require the use of
Claims development table (CDT)
Andy. What I FRS may be used if accounting in IFRS
I FRS4
Andy. For new UK space GAAP what FRS do insurers have to follow
FRS 103 which are specific for insurance contracts as well as FRS 102 which are more general rules
Andy. What will IFRS insurers use
CDT and IFRS4
Andy. What well UK GAAP insurance use
FRS 102 and FRS 103
Andy. What will insurers not use
FRS 105 as it applies to micro entities
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
They can use the financial reporting standards for smaller entities (FRSSE)
Andy. If using the FRSSE is there additional disclosures on true and fair
There may be
Andy. What is a micro entity
Firms that have a turnover of less than 632,000, assets of less than 316,000 and employees less than 10
Andy. What FRS is presumed In Law to be true and fair so no additional disclosure is necessary
FRS 105
Andy. What is the financial reporting council
U.K.’s independent regulator and oversee Three A’s
Andy. What are the three A’s of the financial reporting council
Accounting standards
auditing standards
actuarial standards
Andy. Who are the financial reporting review panel and who do they support
They support the financial reporting council and a task with looking at accounting standards of the very large UK corporations
B- Which FRS does an insurer have to complete when following UK GAAP
102 or/ and 103
b- what are the insurnace rules for UK GAAP
103 only
A - if you are a quoted company can you do UK GAAP or IFRS
IFRS
