International Accounting Standards Board

Question 1

What are the objects of the IFRS Foundation?

Answer 1

To develop, in the public interest, a single set of high-quality, understandable, enforceable, and globally accepted financial reporting standards based upon clearly articulated principles

Question 2

Which groups does the IFRS Foundation appoint?

Answer 2

members of the IASB, IFRS Advisory Council and the IFRS Interpreations Committee

Question 3

What does IASB do?

Answer 3

The Board is responsible for promulgating the IFRSs, including those for SMEs (small and medium-sized entities), and for approving Interpretations of IFRSs developed by the IFRS Interpretations Committee

Question 4

What does the IFRS Interpretations Committe do?

Answer 4

The IFRS Interpretations Committee serves a similar role to the FASB’s Emerging Issues Task Force, except that the IFRS Interpretations Committee’s pronouncements (Interpretations) are reviewed by the IASB before they are issued

Question 5

What does the IFRS Advisory Council do?

Answer 5

The IFRS Advisory 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.

Question 6

Which international accounting standards are part of IFRS?

Answer 6

IAS, IFRS, SIC and IFRS interpretationals

Question 7

Explain the IFRS hierarchy

Answer 7

1. Requirements in IFRSs dealing with similar and related issues;
2. The definitions, recognition criteria, and measurement concepts for assets, liabilities, income, and expenses in the Framework;
3. If no such guidance exists, pronouncements of other standard-setting bodies using a similar conceptual framework, other accounting literature, and accepted industry practices provided there is no conflict with the first two levels above.

Question 8

Is IFRS more principle based or rules based?

Answer 8

Principle based

Question 9

Is GAAP more principle based or rules based?

Answer 9

Rules Based

Question 10

What are the steps to develop new rules in IFRS?

Answer 10

1. Add the item to the agenda
2. Discuss the issue and prepare a discussion paper
3. Publish the discussion paper
4. Prepare an exposure draft
5. Analzye comments to the exposure draft
6. debate and isssue the final IFRS
7. Issue the exposure draft

Question 11

What are the 5 elements in the IASB Framework?

Answer 11

Assets, Liabilities, Equity, Income and Expenses

Question 12

Define Assets (IASB)

Answer 12

An asset is 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.

Question 13

Define Liabilities (IASB)

Answer 13

A liability is 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 future benefits.

Question 14

Define Equity(IASB)

Answer 14

Equity is the residual interest in the asset after subtracting liabilities. Several sub-categories of equity are mentioned including funds contributed by shareholders, retained earnings, and reserves representing appropriations or capital maintenance adjustments.

Question 15

Define Income (IASB)

Answer 15

Income represents increases in economic benefits deriving from increases in assets or decreases in liabilities that result in increases in equity (other than those related to contributions from shareholders). – includes Gains

Question 16

Define Expenses (IASB)

Answer 16

Expenses represent decreases in economic benefits deriving from decreases in assets or increases in liabilities that result in decreases in equity (other than those related to distributions to shareholders). – includes losses

Question 17

What are the 2 assumptions in the IASB Framework?

Answer 17

Accrual Basis and Going Concern