Flashcards in IFRS for SMEs Deck (11):
Does IFRS have a concept comparable to "Other Comprehensive Basis of Accounting (OCBOA)?
No, nor do they address the issue of personal financial statement.
What is the IFRS for SMEs?
A pronouncement that is a modification and simplification of the full IFRS and is designed to be used primarily by private companies
What are the objectives of the IFRS for SMEs?
1.) To provide useful information about the financial position, performance and cash flows of an entity that is useful for economic decision making by a broad range of users who are not in position to demand reports tailored to meet their needs.
2.) to show the results of management and the accountability of management for the resources entrusted to it.
What options does an entity have that does not have to follow either U.S. GAAP or full IFRS?
They can use OCBOA or IFRS for SMEs
Who may use IFRS for SMEs?
Entities that do not have public accountability
What kinds of entities have "Public accountability" under IFRS and would be precluded from IFRS for SMEs?
1.) Entities that are required to file financial statements with a securities commision or other regulatory body
2.) Entities that hold assets in a fiduciary capacity including:
c.)Brokers and dealers in securities
3.) Not-for-profit or governmental entites
What are the various types of generally accepted accounting principles which may be used by a U.S. entity?
Depending on the entity, the following types of generally accepted accounting principles may be used:
U.S. Generally Accepted Accounting Principles (GAAP);
U.S. Other Comprehensive Basis of Accounting (OCBOA);
International Financial Reporting Standards (IFRS);
IFRS for Small and Medium-sized Entities (SMEs).
Identify some of the possible advantages of using IFRS for SMEs, instead of U.S. GAAP, by eligible entities.
1..)More relevant standards;
2.)Less complicated and voluminous standards;
3.)Less costly standards to implement;
4.)Less frequent changes in standards.
What basis of accounting is used in the IFRS for SMEs pronouncement?
What are some of the major characteristics of IFRS for SMEs and the simplification it brings?
1.)Disclosures are simplified in a number of areas including pension, leases and financial instruments
2.)LIFO is prohibited
3.)Goodwill and Indefinite life intangibles are amortized over a period no longer than 10 years
4.)Depreciation is based on a components approach
5.)A simplified approach to temporary differences is used for income tax accounting
6.)Reversal of impairment charges is allowed, if certain criteria are met
7.)Accounting for financial assets and liabilities makes greater used of cost
8.)No disclosures for EPS or Segment disclosures