FinStat - IAS Flashcards
IAS 10
Events after the reporting period
-> how to account for events after the reporting period but before the date when financial statements are authorized
IAS 10: Adjusting Events
- Bankruptcy of a customer
- value of assets or provisions
= events after the reporting period that provide further evidence of conditions that existed at the end of the reporting period
IAS 10: Non-adjusting evntw
- Dividend payments
- lower price of shares
IAS 10: Non-adjusting evntw
- Dividend payments
- lower price of shares
IAS 34
Interim Finacial Reporting
Content of IAS 34
Encourages public limited corporations to provide interim financial reports at least on a half-yearly basis
!! Stock exchange requirement not IAS
Pro and Con of IAS 34
Pro: information is up to date
Con: not same amount of reliability
IAS 8
Accounting Policies, Changes in Accounting Estimates & Errors
IAS 8: Chnages in Accounting Policies
Retrospective
IAS 8: Changes in Accounting Estimates
Prospective
-> result from new information or new developments
IAS 8: Errors
-> depends
Material Errors: Retrospective (because impact on investors decision)
Immaterial Errors: Prospective
IAS 8: Changes only permitted if:
- required by a standard
- info is reliable and more relevant
Materiality
Information is material if obmitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make
IAS 2
Inventory
Inventory Classification
- Goods held for sale
- Work in Process/ Progress
- Raw Materials
IAS 2: Valuation of inventory
Inventory should be valued at the lower of cost and NRV
IAS 2: Goal
Ensure that inventory is not overvalued
-> no hidden losses in the balace sheet
IAS 2: Calculation NRV
Estimated selling price
- Estimated completion cost
- Estimated selling costs
Hidden Reserve
Book valueof assets < market value
-> happens with LIFO and increasing prices
IAS 16
Property, Plant and Equipment PPE
IAS 16: Assets Definition
Assets are economic resources that are expected to benefit the entity in the future
-> Assets are reported in the balance sheet
IAS 16: PPE Definition
Tangible items held for use in production or supply of goods & services or administrative purposes
-> long-term items
-> keep in mind excpetions
IAS 16: recognition of PPE
PPE shall be recognized as an asset if:
- its probable that future economic benefits aasociated with the item will flow to the entity
- it can be measured reliably
IAS 16: CAPEX
Capital Expenditure
