Conceptual Framework - IFRS Flashcards
Fundamental Qualitative Characteristics of Useful Financial Information
Relevance
Predictive Value
Confirmatory Value
Materiality
Faithful Representation
Complete
Neutral
Free from Error
Enhancing Qualitative Characteristics of Useful Financial Information
Comparability
Consistency
Verifiability
Timeliness
Understandability
Cost Constraint
Information that confirms or changes previous previous evaluations
Confirmatory Value
Information that helps users to predict future outcomes
Predictive Value
Information is material if omitting, misstating or obscuring it could influence decisions that users make
Materiality
Refers to the use of the same methods for the same items
Consistency
Assess whether the benefits of reporting particular information are likely to justify the costs incurred to provide and use that information
Cost Constraint
If reporting entity comprises both the parent and its subsidiaries
Consolidated F/S
If reporting entity is parent alone
Unconsolidated F/S
If reporting entity comprises two or more entities that are not linked by a parent-subsidiary relationship
Combined F/S
Criteria to define as Asset (4.3-4.5)
Right
Control
Potential to produce economic benefits
Criteria to define a Liability (4.26-4.27)
Entity has an obligation
Obligation is to transfer an economic resource
Obligation is a present obligation that exists as a result of past events
Residual interest int he assets after deducting liabilities (4.63)
Equity
Increases in assets or decreases in liabilities, that result in increases in equity, other than those relating to contributions from holders of equity claims
Income
Decreases in assets or increases in liabilities, that result in decreases in equity other than those relating to distributions to holders of equity claims
Expenses