CPA Excel - IASB

Question 1

What are the objectives of the IFRS Foundation?

Answer 1

1. To develop, in the public interest, a single set of high-quality, understandable, enforceable, and globally accepted financial reporting standards
2. To promote the use and rigorous application of those standards.
3. To take account of, as appropriate, the needs of a range of sizes and types of entities in diverse economic settings
4. To promote and facilitate adoption of IFRS being the standards and interpretations issued by the IASB, through the convergence of national accounting standards and IFRSs.

Question 2

What is the IASB?

Answer 2

International Accounting Standards Board - London based organization formed to develop a single set of financial accounting standards worldwide

Question 3

What is the IFRS Hierarchy?

Answer 3

Goes from most to least authoritative:

1) Requirements in IFRSs dealing with similar and related issue
2) The definitions, recognition criteria, and measurement concepts for assets, liabilities, income, and expenses in the Framework
3) If no such guidance exists, pronouncements of other standard-setting bodies using a similar conceptual framework, other accounting literature, and accepted industry practices provided there is no conflict with the first two levels above.

Question 4

Describe IFRS for SMEs.

Answer 4

International standards for Small to Medium Entities - one single standards for companies that are not publically traded.

Simplifies financial reporting, eliminates topics not relevant to SMEs, reduces disclosures.

Question 5

Describe the due process for establishing IFRS.

Answer 5

Similar to FASB - The IASB -

1) Adds item to Working Agenda
2) Discusses the issue
3) Prepares discussion paper
4) Publishes discussion paper
5) Issues the exposure draft
6) Analyzes comments to exposure drafe
7) Issues the IFRS

Question 6

What is the purpose of IASBs conceptual framework?

Answer 6

Assist IASB in developing in IAS and reviewing existing IASs

Assist national standard-setting bodies in developing standards.

Assist IASB in promoting harmonization of standards.

Question 7

Identify the IASB Framework’s objectives, qualitative characteristics, and constraints.

Answer 7

SAME AS FASB -

Question 8

Identify the IASB Framework’s elements.

Answer 8

5 different elements (FASB has 10)

1) Assets
2) Liabilities
3) Equity
4) Income
5) Expenses