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Flashcards in IFRS Deck (44):
1

The International Accounting Standards Board (IASB)

IFRS

2

The International Financial Reporting Standards (IFRS) issued by the IASB

IFRS

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The IASB Framework

* The framework is NOT a standard itself
* The framework does not supersede any standard's authority

IFRS

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To provide users with information on international accounting.

IFRS

5

Entity is a Going Concern
Entity uses the accrual basis of accounting.

IFRS

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Relevance & Faithful Representation

Relevance - Makes a difference to the user
Includes:
Predictive Value - Future Trends
Confirming Value - Past Predictions

Faithful Representation
Includes:
Completeness - Nothing omitted that would impact the decision-making of a user
Neutrality - Information is presented is without bias
Free from Error - No material errors or omissions

IFRS

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Comparability - Allows users to compare different items among various periods
Verifiability - Different people would reach a similar conclusion on the information presented
Timeliness - Information is made available early enough to impact the decision making of users
Understandability - Information is easy to understand

IFRS

8

Comparative information from prior year is required under IFRS.

GAAP requires that if multiple years are presented they are consistently prepared however it doesn't require prior year comparative statements.

IFRS

9

Cost vs. Benefit

IFRS

10

Asset
Liability
Equity
Income
Expense

IFRS

11

Probable future economic benefit

Can be measured reliably

If the value or outcome cannot be measured reliably IFRS requires the use of the Cost Recovery Method.

IFRS

12

A full comparative statement using IFRS.

IFRS

13

January 1 2011 because a full year of comparative statements is required from the previous year

IFRS

14

The Fair Value election

IFRS

15

In the entity's retained earnings or equity

IFRS

16

Going Concern is an assumption under IFRS

IFRS

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IFRS doesn't allow extraordinary items.

IFRS

18

Completed contract method is not allowed under IFRS.

IFRS

19

IFRS does not allow LIFO.

IFRS

20

Statement of Comprehensive Income

Statement of Changes in Equity

IFRS

21

Income is used instead of revenue and encompasses BOTH revenue and gains.

IFRS

22

In IFRS the term profit is used instead of Net Income.

IFRS

23

They are treated the same as revenue and are not separated on the financial statements.

IFRS

24

In IFRS losses are treated the same as expenses but they ARE separated on the financial statements.

IFRS

25

Under IFRS current liabilities can only be refinanced into a non-current liability if the refinance agreement is EXECUTED prior to the balance sheet date.

GAAP requires only *intent* to refinance not actual execution.

IFRS

26

Under GAAP there are three classifications of contingent liabilities - Probable Reasonably Possible and Remote.

Under IFRS contingencies are uncertain future events and are classified as a provision if probable and measurable even if uncertain in timing or amount.

IFRS

27

Bonds may be recorded on the Statement of Financial Position using one of two methods

Fair Value through profit or loss
*Liability revalued at the end of each period
*Gain or Loss recognized in period

Amortized Cost
*Using Effective Interest Method

IFRS

28

They use the liability method - all deferred tax liabilities must be reported but only probable deferred tax assets can be reported.

They are non-current on the statement of financial position.

IFRS

29

ONLY if they are related to the same country/taxing authority


For example China Deferred Tax Assets can't offset Japan Deferred Tax Liabilities

IFRS

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The enacted rate or substantially enacted tax rate.

(GAAP is the enacted tax rate only)

IFRS

31

Income
Finance Costs
Tax Expense
Discontinued Ops
Profit/Loss
Non-controlling interest in Profit/Loss
Net profit/loss attributable from equity

IFRS

32

Recorded at cost

Valued using either:

Cost model - asset carried at cost less accumulated depreciation and impairment loss

Revaluation model - asset adjusted to fair value less accumulated depreciation

IFRS

33

Asset must be able to be reliably measured

Must be applied to whole class of assets not just one asset

No guidance on how often assets should be revalued under IFRS

IFRS

34

Initially recorded at cost

Revalued using either Fair Value model or Cost model

IFRS

35

Recorded on the Income Statement

Investment P/L : IS

PP&E P/L : OCI

IFRS

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Carried at Cost minus Accumulated Depreciation

Fair Value must still be disclosed in the notes to the financial statements

IFRS

37

Operating Leases can be recorded as Investment Property if measured at Fair Value

All other investment property must use Fair Value Model if one asset uses it

IFRS

38

Using either the Cost Model (cost less Accumulated Depreciation and Impairment Loss)

or

the Revaluation Model (Fair Value less Accumulated Depreciation)

IFRS

39

It is not recognized.

IFRS

40

If asset has a finite life it is amortized over useful life.

If asset has indefinite life it is not amortized but is tested for impairment at the reporting date.

IFRS

41

If the substantial risks of ownership have passed to the Lessee then the Lease must be accounted for as a Finance Lease

IFRS

42

Project-unit-credit method calculates the PV of the defined benefit obligation

IFRS

43

They can be classified as either Operating or Financing

Once a classification is chosen all future costs must be classified there

IFRS

44

They must be included in the notes to the financial statements.

IFRS