IASB--pg 59-71

Question 1

Objectives of International Accounting Standards Committee Foundation (IASCF)

Answer 1

1. To develop, in the public interest, a single set of high-quality, understandable, enforceable, and globally accepted financial reporting standards based upon clearly articulated principles. These standards should require high quality, transparent and comparable information in financial statements and other financial reporting to help investors, other participants in the world’s capital markets and other users of financial information make economic decisions.
2. To promote the use and rigorous application of those standards.
3. To take account of, as appropriate, the needs of a range of sizes and types of entities in diverse economic settings
4. To promote and facilitate adoption of International Financial Reporting Standards (IFRSs) being the standards and interpretations issued by the IASB, through the convergence of national accounting standards and IFRSs.

Question 2

List the steps of developing International Accounting Standards.

Answer 2

1. Add item to agenda;
2. Discuss issue;
3. Publish discussion paper if topic is difficult;
4. Prepare and vote on exposure draft;
5. Issue the Exposure Draft;
6. Analyze the comments on the exposure draft;
7. Debate the issue at hand

Question 3

What are some omitted topics for Small and Medium-sized Entities (SMEs) in International Financial Reporting Standards (IFRS)?

Answer 3

1. Earnings Per Share
2. Interim Financial Reporting
3. Segment Reporting.

Question 4

Under IFRS, if no standards exist on an accounting issue, what should companies use?

Answer 4

The definitions, recognition criteria, and measurement concepts for assets, liabilities, income, and expenses in the Framework.

Question 5

What are some simplified recognition & measurement topics for Small and Medium-sized Entities (SMEs) in International Financial Reporting Standards (IFRS)?

Answer 5

1. Goodwill is amortized
2. All borrowing & R&D costs are expensed
3. Categories of investments in financial assets are reduced in number
4. Less prior data is required for first time adoption

Question 6

What are some simpler reporting options topics for Small and Medium-sized Entities (SMEs) in International Financial Reporting Standards (IFRS)?

Answer 6

1. No option to revalue plant assets and intangibles
2. Corridor amortization for defined benefit pension plans is eliminated
3. Proportionate consolidation

Question 7

What is simplified for Small and Medium-sized Entities (SMEs) in International Financial Reporting Standards (IFRS)?

Answer 7

1. Topics that are irrelevant are eliminated
2. Recognition and measurement aspects simplified
3. Disclosures reduced to 10% of those in regular IFRS.

Question 8

Which of the following best describes the term “public accountability” according to IFRSs and IFRS for SME?

I. Entity files, or is in the process of filing, its financial statements with a securities commission or other regulatory organization for the purpose of issuing any class of instruments in a public market.

II. Entity holds assets in a fiduciary capacity for a broad group of outsiders, such as a bank, insurance entity, securities broker/dealer, pension fund, mutual fund, or investment banking entity.

Answer 8

The term “public accountability” is defined by both of the two statements. In order to qualify to report under IFRS for SMEs, the entity cannot file or be in the process of filing with a securities commission, or other regulatory commission, and cannot hold assets in a fiduciary capacity

Question 9

What elements of the Financial Accounting Standards Board (FASB) framework are not included in the International Accounting Standards Board (IASB) framework?

Answer 9

Investments by owners, distributions to owners, comprehensive income, gains, losses.

Question 10

What are some of the purposes of the International Accounting Standards Board (IASB) framework?

Answer 10

1. Assist the Board to develop new International Accounting Standards (IASs)
2. Promote harmonization of standards
3. Assist, provide information to interested parties in the work.
4. Assist national standard-setting bodies in developing standard
5. Assist preparers in applying IASs and dealing with topics not yet covered by IAS
6. Assist auditors in forming opinion if financial statements conform with IASs
7. Assist users in interpreting financial statements prepared in conformity with IASs

Question 11

When do you recognize an element in the International Accounting Standards Board (IASB) framework?

Answer 11

1. When it is probable that there is a future economic benefit AND
2. the item has a cost or value that can be measured with reliability.

Question 12

What are the two fundamental (primary) qualitative characteristics of useful financial information included in IASB’s Framework?

Answer 12

1. Relevance

2. Faithful Representation

Question 13

According to the IASB Framework, the process of reporting an item in the financial statements of an entity is…

Answer 13

Recognition

Question 14

Joint Framework Project Phases

Answer 14

1. Objective & Qualitative characteristics–2010 complete
2. Elements and recognition
3. Measurements
4. Reporting Entity
5. Presentation and disclosure
6. Framework for GAAP Hierarchy
7. Applicability to the not-for profit sector
8. Remaining Issues