Lecture 1 Flashcards
What are the three levels at which ‘International’ in International Accounting can be defined?
- Supranational accounting
- Company level
- Comparison with IFRS
What is supranational accounting?
Standards, guidelines, and rules issued by supranational organizations such as the European Union
What does international accounting involve at the company level?
Standards and practices related to international business activities and foreign investments
What is the broadest level of international accounting?
Study of accounting standards in each country compared to IFRS
List some reasons for accounting diversity in the world.
- Legal system
- Taxation
- Providers of financing
- Inflation
- Political and economic ties
- Language barriers
What problems are caused by accounting diversity?
- Incomparability of financial statements
- Lack of high-quality accounting information
- Preparation of Consolidated financial statements
- Access to Foreign capital markets
What was the original name of IFRS?
International Accounting Standards (IAS)
When did the IASB take over the responsibility for setting International Accounting Standards?
April 1, 2001
What is the main purpose of the IFRS due process?
To develop IFRSs through an international consultation process
List the stages of the IFRS due process.
- Setting the agenda
- Planning the project
- Developing and publishing the discussion paper
- Developing and publishing the exposure draft
- Developing and publishing the standard
- Maintenance and monitoring
What is the purpose of the IFRS Foundation?
To foster educational activities for consistency in the application of IFRSs
What is the structure of US GAAP?
- General Principles (ASC 100)
- Presentation (ASC 200)
- Assets (ASC 300)
- Liabilities (ASC 400)
- Equity (ASC 500)
- Revenue (ASC 600)
- Expenses (ASC 700)
- Broad Transactions (ASC 800)
- Industry-Specific Standards (ASC 900)
What is the main difference between US GAAP and IFRS?
US GAAP is rules-based, while IFRS is principles-based
Fill in the blank: IFRS began as an attempt to ______ accounting across the European Union.
[harmonise]
True or False: US GAAP provides more judgment and interpretation compared to IFRS.
False
What does IAS stand for?
International Accounting Standards
What is ASC 606 related to in US GAAP?
Revenue Recognition
What does the acronym IASB stand for?
International Accounting Standards Board
What is the purpose of IAS 1?
Presentation of Financial Statements
What is the significance of SIC-7?
Introduction of the Euro
What does IFRS 15 cover?
Revenue from Contracts with Customers
List three examples of IAS.
- IAS 1: Presentation of Financial Statements
- IAS 2: Inventories
- IAS 7: Statement of Cash Flows
