F7-Conceptual framework

Question 1

Purpose of conceptual framework (3)

Answer 1

-Assist IASB to develop IFRS that are base on cosistent concepts
-Assist to prepare of accounts to develop accounting policies in cases there is no IFRS
-Assist all parties to understand and interpret IFRSs

Question 2

Advantage and disadvantage of conceptual framework.

Answer 2

1.Advantage (4):
-Accounting standards developed on the same theoretical principles -> avoid a haphazard (lung tung) approach to setting standard and should lead to standardised acc practices.
-Development acc standard is less subject to political pressure
-Acc standard use a consistent approach (without conceptual framwork, may can concentrated on P/L while other focus on valuation of net assets)
-A principle-based apprach avoids the need for large volumes of “rules” to address every scenario.Instead, same underlying principles can be applied to any scenario
2.DISADVANTAGES (3):
-Not certain that a single conceptual framwork can be suit all users.
-Diversity of user requirement may need variety of acc standards.
-Not clear that conceptual framwork makes task of preparing and then implementing standards any easier than without a framwork

Question 3

Fundamental qualitative characteristic of financial information:

Answer 3

1.Fundamental qualitative characteristic of financial information: -Relevance (Capable of making a diff in decisions for users. It has predictive and/or confirmatory value).
Consideration should be given to materiality.
-Faithfull representation:Reflect susbstance over the legal form, and is:
+Complete
+Neutral
+Free from error
Prudence: is exercising caution, particularly with areas where judgement or estimation is required.
Support the concept is neutrality

Question 4

Enhancing qualitative charateristics (4)

Answer 4

Enhancing qualitative charateristics (4):
-Comparability
-Verifiability
-Timeliness
-Understandability

CVTU (chị Tuyết trước thích xe (C) VTU

Question 5

Recognitiion and derecognition

Answer 5

1.Recognition creteria:
-Meets the difinition of an element.
-Provides information that is relevant and a faithful representation.
-At a cost that does not outweigh the benefit.

2. Derecognition:
   -When control of all/part of an asset is lost.
   -When there is no longer a present obligation in respect of all/part of a libility

Question 6

The need for a regulatory framework

Question 7

The need for a regulatory framework

Answer 7

The need for a regulatory framework (2)
-To act as a central source of reference of genarally accepted accounting practise (GAAP) in a given market.
-To designate a system of enforcement of that GAAP to ensure cosistency between companies in practice.

Question 8

Who is Vinh

Answer 8

My love