Performance reporting Flashcards
What 3 items are on OCI that will not be reclassified to P&L in future?
-changes to revaluation surplus
-remeasurement components
-remeasurements of investments in equity instruments
What 3 items are on OCI that may be reclassified to P&L in future?
-foreign exchange gains or losses on the translation of a foreign operation
-gains and losses on cash flow hedges
-remeasurements of investments in debit instruments
In assessing going concern, according to IAS1 Presentation of Financial Statements requires that;
-management should look into the future at least 12 months from reporting date
-uncertainties regarding going concern should be disclosed
-if going concern assumption is not followed, that fact, the basis of accounting used and reasons for not applying should be disclosed
What are the rules for presentation/accounting policies, offsetting, aggregation and comparative information?
-keep the same from period to period to allow comparability
-only offset when required or permitted by IFRS Standard
-only immaterial items can be aggregated
-comparative information for previous period should be disclosed
According to IAS1, what 4 points should entities adhere to regarding disclosure notes?
-disclose compliance with IFRS Standards
-disclose key uncertainties
-present disclosure notes in a systematic order
-disclose material accounting polices used
What are 4 scenarios where accounting policies are material?
-changed accounting policy during period
-chose it’s accounting policy from one or more options or the policy was developed in absence of an IFRS Standard
-accounting policy relates to an area where significant judgements are required
-accounting treatment of the transaction is complex
IAS 34 Interim Reporting does state it is not mandatory to produce FSs for a period covering less than a year so why is this completed by so many companies?
company law in some jurisdictions require for listed entities
What are accounting estimates?
INVOLVE AN ELEMENT OF UNCERTAINTY
-depreciation (e.g. economic life, residual value)
-amortisation
-provision measurement
How is an accounting estimate recognised?
Prospectively - current and future periods
How are prior period errors recognised? (misstatements and omissions as a result of mistakes or fraud)
Retrospectively - past (i.e. when it happened)
- comparative information is restated as if new policy had always been applied
-opening retained earnings balances in SOCE is adjusted
What are accounting policies?
principles and rules applied as to how specific transaction are reflected in FS e.g. straight line or reducing balance depreciationH
How are accounting policies recognised?
Retrospectively
- comparative information is restated as if new policy had always been applied
-opening retained earnings balances in SOCE is adjusted
What are reasons for change accounting policies?
-if required by IFRS Standard
-results in more reliable/relevant presentation in FS
What is a discontinued operation according to IFRS5 Non-current Assets Held for Sale and Discontinued Operations?
component of an entity that has been sold or which is classified as held for sale and;
-a separate line of business
-part of a plan to dispose a separate line of business or
-a subsidiary acquired solely for the purpose of resale
What is the criteria for an asset or disposal group to be held for sale?
-value will be recovered through a sales transactions
-sale if highly probable
