Chapter 7 - Accounting Standards Flashcards
What are the four principal objectives of the IFRS foundation.
Develop a single set of high quality reporting standards
Promote the use of the standards
Take account of a range of types of entity
Promote and facilitate adoption of IFRS standards through convergence with national accounting standards
What is the accruals basis?
The effect of transactions and other events recognised when they occur, not as cash is received or paid.
What is going concern?
The financial statements are prepared on the basis that an entity will continue in operation for the foreseeable future.
The IFRS framework describes the quantitive charetierstcs of financial statements as being…
- understandability
- relevance
- reliability and
- comparability
The IFRS framework sets out the statement of financial position (balance sheet) as comprising …
Assets, Liabilities and equities
Assets are…
Resources controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity
Liabilities are…
A present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits
Equity is…
Residual interest in the assets of the entity after deducting all its liabilities.
In regards to IFRS 4 requirements, insurers need to make extensive disclosures about what
Risk management policy,
interest and credit risk information and terms and conditions of insurance contracts with the impact on future cash flows
In regards to IFRS 4 requirements, insurance liabilities must be kept in the insurers balance sheet until when
They are discharged, cancelled or expire
In regards to IFRS 4, insurance liabilities must be included in the balance sheet without offsetting them against…?
Related reinsurance assets
In regards to IFRS 4 requirements, there should be a test for the adequacy of…
Recognised insurance liabilities
In regards to IFRS 4 requirements, there should be an impairment test for…
Reinsurance assets
IFRS financial statements consist of what
- a balance sheet
- income statement
- a cash flow statement
- notes, including a summary of the significant accounting policies
The FRC is the UKs independent regulator responsible for…
Promoting confidence in corporate reporting and governance. The FRC’s mission is to promote high quality corporate governance and reporting to foster investment.
What is the FRRP?
Financial reporting review panel
Depending on the circumstances, the FRRP may accept another form of remedial action. For example, correction of comparative figures in the next set of if annual financial statements. Failing voluntary correction, the FRRP can apply to the court for an order to secure the necessary revision of financial statements, although…
To date it has never had to do this.
What are SORPs?
SORPs are recommendations on accounting practices for specialised industries, such as insurance, and they supplement accounting standards. SORPs are not issued by FRC but by industry bodies.
What is the FRSSE?
Financial reporting standard for smaller entities.
A new standard will be issued for micro entities expected to be those with a turnover of less than £632,000 known as …. And based on FRS 102 but with a number of significant simplifications
FRSME
What is the financial reporting standard for micro entities in the UK
FRS105
What are Claims Development tables
Convey information on accuracy of insurers reserving
What is the FCAG
Financial Crisis Advisory Group looks at accounting issues from financal crisis
