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zAccounting > IFRS > Flashcards

IFRS Flashcards

1
Q

Need for one set of international accounting standards

A

Multinational corporations

Mergers and acquisitions

Information technology - removing international barriers

Financial markets

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2
Q

Concern of making foreign companies follow SOX

A

Higher costs of SOX compliance are making the U.S securities markets less competitive

whether the benefits exceed the costs

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3
Q

Principles based

A

IFRS

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4
Q

rules based

A

GAAP

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5
Q

Do foreign companies need to reconclie their accounting with GAAP

A

No

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6
Q

Asset - IASB

A

A resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity

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7
Q

Liabilities - IASB

A

A present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits

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8
Q

Equity - IASB

A

A residual interest in the assets of the entity after deducting all its liabilities

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9
Q

Income - IASB

A

Increases in economic benefits that result in increases in equity.

Includes revenues and gains

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10
Q

Expenses - IASB

A

Decreases in economic benefits that result in decreases in equity.

Losses that are not the result of ordinary activities

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11
Q

Title on IFRS balance sheet

A

Uses “statement of financial position” instead

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12
Q

Order on “statement of financial position”

A

Noncurrent assets

Current assets

Equity

Noncurrent liabilities

Current liabilities

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13
Q

Order of current assets - IFRS

A

reverse order of liquidity

ex. cash is last

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14
Q

Term for stock - IFRS

A

shares

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15
Q

Term for common stock - IFRS

A

share capital - ordinary

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16
Q

How often are financial statements prepared - IFRS?

A

annually

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17
Q

IFRS applies what kind of value

A

fair value

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18
Q

Transaction analysis is the________ under IFRS and GAAP

A

same

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19
Q

_______ is the basis for accounting systems worldwide

A

double-entry system

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20
Q

Trial balance is _________ as the text book

A

the same

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21
Q

Expanded accounting equation under IFRS

A

Assets = liabilities + share capital - dividends + revenues - expenses

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22
Q

General policy for using proper currency symbols both IFRS and GAAP

A

Currency signs are shown in trial balances and financial statements

23
Q

Cash basis and IFRS

A

Cash basis is NOT in accordance with IFRS

24
Q

Common assumption under IFRS and GAAP

A

periodicity assumption

25
Q

GAAP revenue recogntion

A

100 rules

26
Q

IFRS revenue recognition

A

one rule

27
Q

Revenue Recognitoin GAAP and IFRS

A

General revenue recogntion principles are the same

28
Q

GAAP revenue recognition defintion

A

realized, realizable and earned

29
Q

IFRS revenue recogntion definition

A

Probability that the economic benefits associated with the transaction will flow to the company selling

Must be capable of being measured reliably

30
Q

Revaluation of land and buidlings - IFRS

A

is permitted

31
Q

Depreciation based on revaluation of assets

A

Allowed in IFRS

not permitted under GAAP

32
Q

IFRS income

A

includes revenues and gains (outside normal course of business)

33
Q

Closing process IFRS and GAAP

A

applicable to all companies

the same

34
Q

Revenue Recognition Project

A

Will place more emphasis on when changes occur in assets and liabilities

35
Q

Income statement IFRS and GAAP

A

Income statement is required under IFRS and GAAP

36
Q

Inventory System under GAAP and IFRS

A

Companies can choose to use either a perpetual or a periodic system under either

37
Q

Inventories under IFRS

A

Held-for-sale in the ordinary course of business, in the process of production for such sale, or in the form of materials or supplies to be consumed in the production process or in providing services

38
Q

Classification of income statement under GAAP

A

Classified by function

ex. administration, distribution

39
Q

Classification of income statement under IFRS

A

either nature or function

nature: salaries, depreciation expense, utilities expense

*if company does functional method, must disclose by nature in the notes to financial statements

40
Q

Presentation of Income Statement: GAAP and IFRS

A

GAAP - either single step or multiple-step

IFRS - does not mention either

41
Q

Revaluation adjustments - IFRS

A

Initial gains and losses resulting from revaluation are reported as adjustments to equity often as other comprehensive income

42
Q

IFRS and equity

A

Because of revaluation, IFRS has more transactions that affect equity but not net income

43
Q

IAS 1

“Presentation of Financial Statements”

A

Provides general guidelines for the reporting of income statement information

44
Q

Comprehensive income under IFRS

A

includes unrealized gains and losses that are not included in the calculation of net income

45
Q

Years of income statement

A

IFRS - 2 years

GAAP - 3 years

46
Q

New approach of income statement

A

Better prepresent how businesses are run

47
Q

Major differences of inventory reporting

A

IFRS prohibits use of LIFO cost

determines lower-of-cost-or-market inventory valuation differently

48
Q

Who owns the goods - goods in transit or consigned goods- are what?

A

The same under IFRS and GAAP

49
Q

Inventory valuation - IFRS

A

net realizable value = the best estimate of the net amounts that inventories are expected to realize

50
Q

Write-downs IFRS and GAAP

A

can be reversed under IFRS

cannot be reversed under GAAP

51
Q

Valuation of inventory - IFRS

A

Does not permit the option of valuing inventories at fari value

requries inventory to be written down, but cannot be wrriten up above its original cost

52
Q

Specific Identification

A

Must be used under IFRS if the inventory items are not interchangeable

53
Q

IFRS requires the following (ending inventory)

A

Ending inventory is wrriten down to net realizable value and may be written up in future periods to its net realizabl value but not above its original cost

zAccounting (31 decks)

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