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FAR CPA section > IASB IFRS > Flashcards

IASB IFRS Flashcards

1
Q

How long are the terms for board members of the International Accounting Standards Board (IASB)?

A

5 years, renewable one term

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2
Q

What is the third objective of the International Financial Reporting Standards (IFRS) Foundation?

A

To take into account the special needs of a range of sizes and types of entities in diverse economic settings

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3
Q

What is the first objective of the International Financial Reporting Standards (IFRS) Foundation?

A

To develop in the public interest a single set of high‐quality, understandable enforceable and globally accepted financial reporting standards. These standards require high quality, transparent, and comparable information in financial reporting to help make economic decisions.

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4
Q

What year did the International Accounting Standards Board (IASB) begin taking control of standard setting?

A

2001 (April)

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5
Q

How long are the terms for the trustees of the International Financial Reporting Standards (IFRS) Foundation?

A

3 years, renewable one term

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6
Q

Does the International Accounting Standards Board (IASB) have enforcement power over companies?

A

No, it does not have enforcement power.

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7
Q

What is the fourth objective of the International Financial Reporting Standards (IFRS) Foundation?

A

To promote and facilitate adoption of IFRs issued by the International Accounting Standards Board (IASB), through the convergence of national accounting standards IFRS

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8
Q

Who appoints members of the International Accounting Standards Board (IASB), International Financial Reporting Standards (IFRS) Advisory Council, and IFRS Interpretations Committee?

A

The IFRS Foundation

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9
Q

What is IOSCO?

A

It is the International Organization of Securities Commissions. IOSCO promotes high standards of regulation to ensure transparent and efficient capital markets.

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10
Q

What does the International Financial Reporting Standards (IFRS) Advisory Council do?

A

The council advises the IASB on priorities and the views of interested organizations on major projects as well as the benefits and costs of proposed standards.

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11
Q

What is the second objective of the International Financial Reporting Standards (IFRS) Foundation

A

To promote the use and rigorous application of those standards

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12
Q

From what entity did the International Accounting Standards Board (IASB) evolve?

A

The IASB, formed in 2001, evolved from the International Accounting Standards Committee (IASC), which was established in 1973

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13
Q

What does the International Financial Reporting Standards (IFRS) Interpretations Committee do?

A

The committee serves a similar role to the Financial Accounting Standards Board’s Emerging Issues Task Force, except that the IFRS Interpretations Committee’s pronouncements (interpretations) are reviewed by the International Accounting Standards Board before they are issued. The IFRS Interpretations Committee reviews issues arising in the context of IFRSs and issues interpretations of those issues.

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14
Q

What is simplified for small and medium‐sized entities (SMEs) in International Financial Reporting Standards (IFRS)?

A

Topics that are irrelevant are eliminated.
Recognition and measurement aspects are simplified.
Disclosures reduced to 10% of those in regular IFRS.

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15
Q

What did the Securities and Exchange Commission (SEC) eliminate for foreign companies listed in the United States?

A

A reconciliation of earnings and equity to U.S. generally accepted accounting principles (Form 20‐F) in their financial statements.

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16
Q

List the steps of developing International Accounting Standards.

A

Add the item to the agenda.
Discuss the issue.
Publish a discussion paper if the topic is difficult.
Prepare and vote on the exposure draft.
Issue the exposure draft.
Analyze comments on the exposure draft.
Debate the issue at hand.

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17
Q

List some examples of simplified recognition and measurement for small and medium‐sized entities (SMEs) in International Financial Reporting Standards (IFRS)?

A

Goodwill is amortized.
All research and development is expensed.
Categories of investments are reduced.
Less prior year data is required for first‐time adoption.

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18
Q

Are International Financial Reporting Standards (IFRS) more rules based or principle based?

A

Principle based

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19
Q

What are some omitted topics for small and medium‐sized Entities (SMEs) in International Financial Reporting Standards (IFRS)?

A

Earnings per share
Interim financial reporting
Segment reporting

20
Q

When can revisions happen for small and medium‐sized entities (SMEs) in International Financial Reporting Standards (IFRS)?

A

Revisions for SMEs standards happen every three years at most

21
Q

Under International Financial Reporting Standards (IFRS), if no standards exist on an accounting issue, what should companies use?

A

The definitions, recognition criteria, and measurement concepts for assets, liabilities, income, and expenses in the Framework

22
Q

What is the highest level of international generally accepted accounting principles (GAAP)?

A

The International Financial Reporting Standards

23
Q

Does the International Accounting Standards Board (IASB) framework include losses for the term “expense”?

A

Yes, it includes such losses.

24
Q

What elements of the Financial Accounting Standards Board (FASB) framework are not included in the International Accounting Standards Board (IASB) framework?

A 
Investments by owners
    Distributions to owners
    Comprehensive income
    Gains
    Losses
25
Q

What elements are considered income under the Financial Accounting Standards Board (FASB) framework?

A

“Revenue” and “gains” as separate elements.

26
Q

What will be the underlying conceptual support for future principles‐based accounting standards?

A

Developing a common framework

27
Q

When do you recognize an element in the International Accounting Standards Board (IASB) framework?

A

When it is probable that there is a future economic benefit and the item has a cost or value that can be measured with reliability

28
Q

What are the underlying assumptions of the International Accounting Standards Board (IASB) framework

A

The financial statements are prepared on the accrual basis.

The entity is a going concern.

29
Q

What is meant by a reliable measurement?

A

It is a measurement in which a reasonable estimate is made.

30
Q

True or False: Income may be realized or unrealized.

A

tRUE

31
Q

True or False: The International Accounting Standards Board (IASB) framework should apply only to public companies, not private corporations.

A

False. The IASB framework should apply to both public and private companies.

32
Q

What are some of the purposes of the International Accounting Standards Board (IASB) framework?

A

Assist the board to develop new International Accounting Standards (IASs)
Promote harmonization of standards
Assist and provide information to interested parties

33
Q

What are the five elements in the International Accounting Standards Board (IASB) framework?

A 
Assets
    Liabilities
    Equity
    Income
    Expenses
34
Q

What comprises income under the International Accounting Standards Board (IASB) framework?

A

It includes both revenues and gains.

35
Q

What are the various types of generally accepted accounting principles which may be used by a U.S. entity?

A

Depending on the entity, the following types of generally accepted accounting principles may be used:

U.S. Generally Accepted Accounting Principles (GAAP);
U.S. Other Comprehensive Basis of Accounting (OCBOA);
International Financial Reporting Standards (IFRS);
IFRS for Small and Medium‐sized Entities (SMEs).
36
Q

Identify the types of entities that are not eligible to use IFRS for SMEs.

A

Entities that are required to file financial statements with a regulatory body (e.g., SEC) for the purpose of issuing securities in a public market; or
Entities that hold assets in a fiduciary capacity for a broad group of outsiders (e.g., banks, insurance companies, pension funds, etc.).

37
Q

Identify some of the possible advantages of using IFRS for SMEs, instead of U.S. GAAP, by eligible entities.

A

More relevant standards;
Less complicated and voluminous standards;
Less costly standards to implement;
Less frequent changes in standards.

38
Q

How are expenses classified under International Financial Reporting Standards (IFRS)?

A

They are classified by business function or nature of the expense.

39
Q

What is the overall objective of financial statements under International Financial Reporting Standards (IFRS)?

A

To provide information about the financial position, financial performance, and cash flows of an entity that is useful to a wide range of users in making economic decisions

40
Q

What type of balance sheet is required under International Financial Reporting Standards (IFRS)?

A

Statement of financial position items must be classified as current and noncurrent.

41
Q

What two formats are accepted under International Financial Reporting Standards (IFRS) for income statement presentation?

A

Single‐step statements

Multiple‐step income statements

42
Q

What should financial statements do according to International Financial Reporting Standards (IFRS)?

A

Fairly present the underlying financial position and financial performance of the entity by faithfully representing the underlying economic reality the firm faced during the period.

43
Q

Do International Financial Reporting Standards (IFRS) allow the term “reserve” on the balance sheet?

A

Yes, the term “reserve” is allowed.

44
Q

Do International Financial Reporting Standards (IFRS) allow revaluation of plant assets and intangibles to fair value as a other comprehensive income item?

A

Yes, the standards allow this.

45
Q

Do International Financial Reporting Standards (IFRS) have a required minimum list of items to be reported on the income statement?

A

Yes, the standards have a minimum list of items.

46
Q

Are extraordinary items allowed in International Financial Reporting Standards (IFRS)?

A

No, extraordinary items are not allowed.

47
Q

Is a separate statement of other comprehensive income one of the formats permitted under International Financial Reporting Standards (IFRS)?

A

Yes, this is one of the formats permitted under IFRS.

FAR CPA section (19 decks)

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