F1 - Balance Sheet and Disclosures Overview

Question 1

In what paragraph should the “Summary of Significant Accounting Policies” appear?

Answer 1

Usually the 1st or 2nd paragraph as they are an “integral part” of the financial statements

Question 2

What should be included in the “Summary of Significant Accounting Policies” footnote?

Answer 2

1) Basis of consolidation
2) Depreciation methods
3) Amortization of intangibles
4) Inventory pricing
5) Accounting for profit recognition on long-term construction
6) Revenue recognition from franchising/leasing

Question 3

What is the purpose of information presented in notes to the financial statements?

Answer 3

To provide disclosures required by GAAP

Question 4

What amounts should be reported as related party disclosures?

Answer 4

Any amounts outside the ordinary course of business

Question 5

What related party transactions do not need to be disclosed under GAAP?

Answer 5

Compensation arrangements, expense allowances, any other items in the “ordinary course of business” and any immaterial amounts

Question 6

What related party transactions need to be disclosed under IFRS?

Answer 6

Compensation arrangements