M1 - Notes to Financial Statements

Question 1

True or False? Disclosures of significant estimates when it is probable that the estimate will change in the near term, even if the effect of the change will be immaterial are required.

Answer 1

False.

Significant estimates should be disclosed when it is reasonably possible (not probable) that the estimate will change in the near term and that the effect of the change will be material. Immaterial items are not disclosed.

Question 2

The summary of significant accounting policies is typically the first note provided after the financial statements and will include components such as: measurement basis, accounting principles and methods, criteria, and policies such as basis of consolidation, depreciation methods, Revenue recognition, etc. True or false?

Answer 2

True