Conceptual Framework & IFRS

Question 1

What are the two Primary Qualitative Characteristics?

Answer 1

Relevance and Faithful Representation

Question 2

What are the two Ingredients for Relevance?

Answer 2

Predictive Value and Confirmatory Value

Question 3

What are the three Ingredients for Faithful Representation?

Answer 3

Free from Error, Neutrality (w/o) Bias and Completeness

Question 4

What are the four Enhancing Qualitative Characteristics?

Answer 4

Comparability, Understandability, Timeliness, Verifiability

Question 5

What are the 3 Basic Elements of Financial Statements?

Answer 5

Assets, Liabilities and Equity

Question 6

What makes up Equity?

Answer 6

Contributions/investments by owners, Distributions to owners and Comprehensive Income

Question 7

What are the four Ingredients of Comprehensive Income?

Answer 7

Derivative Cash Flow Hedges,
Excess adjustment of Pension PBO and FV of Plan Assets @ YE,
Net unrealized gains or losses on AVS,
Translation adjustments for foreign currency

Question 8

What are the three Fair Value Measurement Approaches?

Answer 8

Market Approach, Income Approach, Cost Approach

Question 9

What is Realization?

Answer 9

The act of converting non-cash resources into cash or a claim to cash.