IFRS Flashcards
How does the IFRS structure differ from GAAP?
Principal/Judgment based vs Rules Based
Which organization’s standards are the most authoritative in the hierarchy of international accounting?
The International Accounting Standards Board (IASB)
Where is the first place management should look for guidance on international recognition and accounting policies? The
The International Financial Reporting Standards (IFRS) issued by the IASB
Which assumptions are followed within the IRFS framework?
Entity is a Going Concern and uses the accrual basis of accounting.
How is going concern different under IFRS than from GAAP?
Going Concern is an assumption under IFRS
What are the Qualitative Characteristics of accounting information within IFRS?
Relevance & Faithful Representation
Same as GAAP
What are the Enhancing Characteristics of IFRS?
CUT-V
Same as GAAP
How does comparability differ under GAAP versus IFRS?
Comparative information from prior year is required under IFRS.
GAAP requires that if multiple years are presented they are consistently prepared however it doesn’t require prior year comparative statements.
How is the term income used in IFRS?
Income - used instead of revenue and encompasses BOTH revenue and gains.
(Not an element under GAAP; used to describe calculation e.g. Net Income)
How is the term profit used in IFRS?
Profit is used instead of Net Income.
How does IFRS treat gains?
They are treated the same as revenue and are not separated on the financial statements.
How does IFRS treat losses?
In IFRS losses are treated the same as expenses but they ARE separated on the financial statements.
What is the Pervasive Constraint within IFRS?
Cost vs. Benefit
What are the elements of financial position under IFRS?
Asset-RESOURCE controlled by entity as a result of past events and from which future economic benefits are expected to flow from entity.
Liability-present OBLIGATION entity arising from past events, settlement of which is expected to result in outflow from entity of resources embodying economic benefits
Equity-RESIDUAL INTEREST in the assets of entity after deducting all its liabilities
What are the criteria for recognition on IFRS financial statements?
Probability of occurrence
Reliable Measurement
If the value or outcome cannot be measured reliably IFRS requires the use of the Cost Recovery Method.
When transitioning to IFRS what type of financial statement must be produced for the first reporting period?
A full comparative statement using IFRS.
If IFRS was implemented in June 2012 for use in the December 31 2012 financial statements what is the Date of Transition?
January 1 2011 because a full year of comparative statements is required from the previous year