International Accounting Standards Flashcards
Objective of IFRS Foundation
To take account, as appropriate, the needs of a range of sizes and types of entities in diverse economic settings.
Parent of IASB they appoint members of IASB, IFRS Advisory Council and IFRS Interpretations Committee.
IFRS are more Principles Based
Less detailed than US GAAP
Fewer Rules
Requires more professional judgment
less literature to address exceptions
IFRS defines Small and Medium Sized Entities as
One Single standard for companies that are not publicly traded.
IASB due process procedures include
Add the item to working agenda discuss the issue prepare the discussion paper publish the discussion paper issue the exposure draft analyze comments to the exposure draft issue the IFRS
IFRS Hierarchy
Requirments in IFRS dealings with similar or related issues
Definitions
Recognition criteria
measurement concepts for assets, liabilities, income and expenses in framework
most recent pronouncements of other standard setting bodies that use similar conceptual framework to develop accounting standards
How does IASB Framework define an asset
Resource controlled by the entity as a result of past events from which future economic benefit are expected to flow to the entity
How does IASB Framework define Recognition
Process of reporting an item in the financial statements of an entity is Recognition
When should an item that meets the definition of an element be recognized
the item has a cost or value that can be measured reliably.
What are two fundamental qualitative characteristics of financial information
Relevance and Faithful Representation
Two assumptions underlying the preparation and presentation of the financial statements under IASB framework
Accrual Basis and Going Concern
Does IASB have enforcement authority
NO, enforcement is carried out by regulators. It is to assist in promoting the harmonization of regulations, accounting standards and procedures relating to the presentation of financial statements by providing a basis for reducing the number of alternative treatments permitted by IFRS.
Inventory methods used by IFRS
FIFO and Weighted Average Cost Assumptions.
Is IFRS an Other Comprehensive basis for accounting
No, it is rather one form of GAAP. and may be used as an alternative to OCBOA
Goodwill under IFRS
Goodwill is assumed to have limited life and amortized not to exceed 10 years
Can the cost method or the equity method be used under IFRS to account for an investment in another entity
Yes
