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Flashcards in 9D IFRS Deck (80):
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Financial Statements:

IAS1 provides that a complete set of financial statements be prepared...

Annually

1

Are there revenues in IFRS?

No

2

How many methods under IFRS are there for the Statement of Cashflows?

3

3

What is the complete set of financial statements under IFRS? 5

1 statement of financial position
2 statement of comprehensive income
3 statement of changes in equity
4 statement of cash flows
5 notes containing significant accounting policies and explanations

4

The headings of financial statements should include...3

1 the name of the entity

2 title of the statement

3 date of the statement

5

Financial statements should present...

A true and fair view of the company

6

IFRS must be used unless there is a rare circumstance where the use of IFRS would...

Produce misleading financial statements

7

Whenever an entity retrospectively applies an accounting policy, retrospectively restates its financial statements, or reclassifies items....

3 years of state,nets of financial position are required for
comparative purposes

8

Accrual basis of accounting is used to prepare the financial statements with the assumption that the entity is...

A going concern

9

Assets and liabilities may not be offset against each other unless...

Specifically permitted by IFRS

10

Income and expenses may not be offset unless...

Specifically permitted by IFRS

11

Offsets may be used for...

Valuation purposes, such as contra accounts

Ex. Allowance for uncollectible accounts or accumulated
Depreciation

12

Items on financial statements should be presented separately for...

Each material class of similar items

13

On financial statements, If an item is not material it may be...

Aggregated with other items

14

Subsequent events are considered...

2) Unlike US GAAP, which considers subsequent events through...

Through the date financial statements are authorized to be issued

2) the financial statement issuance date

15

Assets are classified as...

Current and Noncurrent

16

Assets are classified as current if it is expected to...4

1 Be realized or held for consumption in normal course of entity's operating cycle
2 held primarily for trading purposes
3 expected to be realized within 12 months of the end of the period
4 cash or cash equivalent that's not restricted

17

Noncurrent assets include:8

1 Tangible
2 intangible
3 operating
4 long term financial assets
5 investment property
6 PPE
7 assets held for sale
8 miscellaneous assets

18

Example of long term financial assets

Held to maturity investments

19

Liabilities are classified as...

Current and Noncurrent

20

A liability is current if it is expect to be...4

1 settled in normal course of business during operating cycle
2 due to settle within 12 months
3 held primarily for trading purposes
4 doesn't have an unconditional right to defer settlement beyond
12 months

21

2 payables that are classified as current regardless of settlement date

1 trade payables

2 accruals for operating costs

22

Interest bearing liabilities are classified based upon whether they are...

Due within 12 months

23

If an agreement to refinance a liability on a long term basis is executed prior to the financial statement date e liability must be classified as...

2) how is this different from GAAP?

Noncurrent

2) under GAAP, if there is the intent and ability to refinance before
The issuance of financial statements, reclassification is permitted

24

For refinancing and executed agreement prior to balance sheet date...

Is not required

25

For IFRS, if the agreement to refinance is made after the balance sheet date then the liability...

Must be classified as current on the balance sheet date

26

Similar to US GAAP, if long term debt becomes callable due to a violation of a loan convenant, the liability must...

Be classified as a current liability

27

For shareholders' equity the financial statements must disclose the number of shares of stock...

Authorized, issued and outstanding

28

Preference shares

Preferred stock

29

If there are preference shares, they must be reported...

Separately including number of shares authorized, issued and outstanding

30

Preference shares that are redeemable at the option of the holder
must be...

Classified as liabilities

31

Treasury shares repurchased are...

Stated at cost and shown as reduction to shareholders equity

32

Accumulated other comprehensive income is reported in the...

Shareholders equity section of the balance sheet

33

Noncontrolling interests are disclosed as...

A separate item in the equity section of the balance sheet

34

Category required by IAS 1 in statement of financial position:

Investment...

Property

35

Category required by IAS 1 in statement of financial position:

Biological assets, define

Living plants and animals controlled by entity

36

Category required by IAS 1 in statement of financial position:

Provisions, define

Probable and measurable estimated expense or liability

Ex. Warranty expense

37

IAS 1 requires that a minimum of the following items be included on the income statement:

Revenue, what's it referred to as?

Referred to as income under IFRS

38

IAS 1 requires that a minimum of the following items be included on the income statement:

Finance costs, what's it referred to under IFRS?

Interest expense

39

IAS 1 requires that a minimum of the following items be included on the income statement:

Share of profits and losses of...

Associates and joint ventures for using equity method

40

IAS 1 requires that a minimum of the following items be included on the income statement:

Tax...

Expense

41

IAS 1 requires that a minimum of the following items be included on the income statement:

Discontinued...

Operations

42

IAS 1 requires that a minimum of the following items be included on the income statement:

Profits or...

Loss

43

IAS 1 requires that a minimum of the following items be included on the income statement:

Noncontrolling interest in...

Profit or loss

44

IAS 1 requires that a minimum of the following items be included on the income statement:

Net profit (loss) attributable to...

Equity holders in the parent

45

Minimum number of items required by IAS 1 in the income statement?

8

46

If an entity acquires less than 100% of the subsidiary, the income statement should indicate...

The profit or loss attributable to the noncontrolling interest and
The owners of the parent

47

Major difference between GAAP and IFRS on the income statement, is that IFRS does not permit...

2) how should they be reported under IFRS.?

Classification of extraordinary items

2) as income or expense

48

Operating expenses may be classified either by...

Nature or by function

49

Classification by nature is based on the...

Character of the expense

Ex. Salaries and wages, raw material, interest expense,
tax expense, depreciation

50

Classification by function is based on...

The purpose of the expenditure

Ex. Such as manufacturing, distribution or administration

51

If an entity classifies expenses by function, cost of sales...

Must be stated separately from other expenses

52

US GAAP expenses are classified...

By function

Ex, COGS, operating expenses

53

For IFRS, finance costs (interest expense) must be...

Identified separately regardless of which classification scheme is
Used

54

Operating expenses are normally classified as...2

1 distribution costs (selling expenses)

2 general and administrative exp.

55

If an item is material in amount and of such size, nature or incidence, that disclosure is important to understand the performance of the entity, then the item...

Should be disclosed separately

Examples of these disclosures: write downs of inventories, PPE,
Restructuring costs, costs of litigation settlements, reversals of provisions

56

Treatment of discontinued operations is similar...

To US GAAP

57

Discontinued operations:

If an asset is classified as held for sale or is part of a disposal group, it is valued at...

The lower of carrying value or fair value less costs to sell

58

Discontinued operations:

The write down net of tax is included in...

Discontinued operations in the income statement

59

For discontinued operations several calculations are required:

First, revenues, expenses...

Pretax profit or loss and related income tax expenses are
Calculated

60

For discontinued operations several calculations are required:

Second, the gain or loss on disposal or...

Remeasurement is calculated with the related income tax expense

61

For discontinued operations several calculations are required:

Third and final, the total of the proceeding 2 calculations is...

Determined net of tax and must be disclosed in the income
Statement

62

For discontinued operations several calculations are required:

The footnote disclosures must include the...4

1 pretax profit or loss
2 gain or loss on disposal
3 tax effects
4 net cashflows from operating, investing and financing activities

63

The statement of comprehensive income must be presented in...

One statement or in 2 statements

64

5 common items included in comprehensive income

1 changes in revaluation surplus for PPE
2 actuarial gains/losses on defined benefit plans
3 gains/losses from foreign currency translations
4 gains/losses from measuring AFS financial assets
5 effective portion from gains/losses on hedging instruments used
As cash flow hedges

65

Each component of comprehensive income should be...

Stated separately in statement of comprehensive income

66

The accounting rules for statement of cash flows are similar...

To US GAAP

67

For IFRS, cash flows include...

Inflows and outflows of both cash and cash equivalents

68

Cash equivalents include...4

1 cash on hand
2 bank balances for immediate use
3 other demand deposits
4 short term investments with maturities of 3 months or less

69

What are the 2 acceptable methods for preparing the statement of cash flows?

1 direct method

2 indirect method

70

Statement of cashflows:

For the indirect method, operating activities may be presented using...

A modified approach

71

Statement of cashflows:

Modified indirect method

Shows revenues and expenses in operating activities

Then reports changes in working capital accounts

72

As in US GAAP, statement of cashflows is divided into 3 parts of activities

1 operating

2 investing

3 financing

73

At the bottom of the statement of cash flows, a reconciliation must be made with the...

Amounts in the statement of cash flows and cash/cash equivalents reported in statement of financial position

74

Statement of cashflows:

The most significant difference between IFRS and US GAAP is...

Where certain items are presented on the statement of cashflows

75

Statement of cashflows:

Although the entity has discretion on where interest and dividends are reported, it must...

Be reported on a consistent basis

76

Statement of cashflows:

Cash from the purchase and sale of trading securities are classified as...

Operating activities

77

Statement of cashflows:

Cash advances and loans (bank overdrafts) are usually classified as...

Operating activities

78

Statement of cashflows:

Taxes paid on income must be disclosed...

2) however, cash flows from certain taxes may be classified...

Separately in operating activities

2) elsewhere if they are related to investing or financing activities

79

Statement of cashflows:

The effects of noncash transactions are...

Not reported on the statement of cashflows, they are instead
Disclosed in the notes of the financial statements