Conceptual Framework - IFRS

Question 1

Fundamental Qualitative Characteristics of Useful Financial Information

Answer 1

Relevance
Predictive Value
Confirmatory Value
Materiality
Faithful Representation
Complete
Neutral
Free from Error

Question 2

Enhancing Qualitative Characteristics of Useful Financial Information

Answer 2

Comparability
Consistency
Verifiability
Timeliness
Understandability
Cost Constraint

Question 3

Information that confirms or changes previous previous evaluations

Answer 3

Confirmatory Value

Question 4

Information that helps users to predict future outcomes

Answer 4

Predictive Value

Question 5

Information is material if omitting, misstating or obscuring it could influence decisions that users make

Answer 5

Materiality

Question 6

Refers to the use of the same methods for the same items

Answer 6

Consistency

Question 7

Assess whether the benefits of reporting particular information are likely to justify the costs incurred to provide and use that information

Answer 7

Cost Constraint

Question 8

If reporting entity comprises both the parent and its subsidiaries

Answer 8

Consolidated F/S

Question 9

If reporting entity is parent alone

Answer 9

Unconsolidated F/S

Question 10

If reporting entity comprises two or more entities that are not linked by a parent-subsidiary relationship

Answer 10

Combined F/S

Question 11

Criteria to define as Asset (4.3-4.5)

Answer 11

Right
Control
Potential to produce economic benefits

Question 12

Criteria to define a Liability (4.26-4.27)

Answer 12

Entity has an obligation
Obligation is to transfer an economic resource
Obligation is a present obligation that exists as a result of past events

Question 13

Residual interest int he assets after deducting liabilities (4.63)

Answer 13

Equity

Question 14

Increases in assets or decreases in liabilities, that result in increases in equity, other than those relating to contributions from holders of equity claims

Answer 14

Income

Question 15

Decreases in assets or increases in liabilities, that result in decreases in equity other than those relating to distributions to holders of equity claims

Answer 15

Expenses

Question 16

The process of capturing for inclusion in the F/S an item that meets the definition of one of the elements - asset, liability, equity, income or expenses (5.1)

Answer 16

Recognition

Question 17

The removal of all or part of a recognized asset/liability from an entity’s statement of financial position (5.26)

Answer 17

Derecognition

Question 18

The amount at which an asset, a liability or equity is recognized in the statement of financial position is referred to as its (5.1)

Answer 18

Carrying Amount

Question 19

Derecognition of Asset

Answer 19

when the entity loses control of all or part of the recognized asset

Question 20

Derecognition of LIability

Answer 20

when the entity no longer has a present obligation for all or part of the recognized liability

Question 21

Measurement base (6.4)

Answer 21

Historical Cost
Current Value
Fair Value
Value in use for assets/fulfillment value for liabilities
Current Cost

Question 22

Historical Cost for an asset (6.5)

Answer 22

consideration paid PLUS transaction costs

Question 23

Historical cost is updated over time for

Answer 23

1. Depreciation/amortization
2. Payments received that extinguish part or all of the assets
3. Impairment
4. Accrual of interest to reflect any financing component of the asset

Question 24

Historical cost for a liability

Answer 24

consideration received to incur or take on the liability LESS transaction cost.

Question 25

Price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date (6.12)

Answer 25

Fair Value

Question 26

Indirect methods must reflect ALL of the following factors (6.14)

Answer 26

1. Estimates of future cash flows
2. Possible variations in the estimated amount or timing of future cash flows, caused by inherent uncertainty, including credit risk
3. Time value of money
4. Risk premium or discount for uncertainty

5.3 Other factors (e.g. liquidity)

Question 27

Present value of cash flows, or other economic benefits, that an entity expects to derive from the use of an asset and its ultimate disposal (6.17)

Answer 27

Value in use

Question 28

Present value of the cash, or other economic resources, that an entity expects to be obliged to transfer as it fulfills a liability (6.17)

Answer 28

Fulfilment value

Question 29

Cost of an equivalent asset at the measurement date, comprising the consideration that would be paid PLUS transaction costs (6.21)

Answer 29

Current cost of an asset

Question 30

Consideration that would be received for an equivalent liability at the measurement date LESS transaction costs (6.21)

Answer 30

Current cost of a liability

Question 31

An entry unlike fair value and value in use / fulfilment value which are exit values (6.21)

Answer 31

Current value