Flashcards in International Accounting Standards Board Deck (17):
What are the objects of the IFRS Foundation?
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
Which groups does the IFRS Foundation appoint?
members of the IASB, IFRS Advisory Council and the IFRS Interpreations Committee
What does IASB do?
The Board is responsible for promulgating the IFRSs, including those for SMEs (small and medium-sized entities), and for approving Interpretations of IFRSs developed by the IFRS Interpretations Committee
What does the IFRS Interpretations Committe do?
The IFRS Interpretations Committee serves a similar role to the FASB's Emerging Issues Task Force, except that the IFRS Interpretations Committee's pronouncements (Interpretations) are reviewed by the IASB before they are issued
What does the IFRS Advisory Council do?
The IFRS Advisory Council advises the IASB on priorities and the views of interested organizations on major projects, as well as the benefits and costs of proposed standards.
Which international accounting standards are part of IFRS?
IAS, IFRS, SIC and IFRS interpretationals
Explain the IFRS hierarchy
1. Requirements in IFRSs dealing with similar and related issues;
2. The definitions, recognition criteria, and measurement concepts for assets, liabilities, income, and expenses in the Framework;
3. If no such guidance exists, pronouncements of other standard-setting bodies using a similar conceptual framework, other accounting literature, and accepted industry practices provided there is no conflict with the first two levels above.
Is IFRS more principle based or rules based?
Is GAAP more principle based or rules based?
What are the steps to develop new rules in IFRS?
1. Add the item to the agenda
2. Discuss the issue and prepare a discussion paper
3. Publish the discussion paper
4. Prepare an exposure draft
6. Analzye comments to the exposure draft
7. debate and isssue the final IFRS
5. Issue the exposure draft
What are the 5 elements in the IASB Framework?
Assets, Liabilities, Equity, Income and Expenses
Define Assets (IASB)
An asset is a resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity.
Define Liabilities (IASB)
A liability is a present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying future benefits.
Equity is the residual interest in the asset after subtracting liabilities. Several sub-categories of equity are mentioned including funds contributed by shareholders, retained earnings, and reserves representing appropriations or capital maintenance adjustments.
Define Income (IASB)
Income represents increases in economic benefits deriving from increases in assets or decreases in liabilities that result in increases in equity (other than those related to contributions from shareholders). – includes Gains
Define Expenses (IASB)
Expenses represent decreases in economic benefits deriving from decreases in assets or increases in liabilities that result in decreases in equity (other than those related to distributions to shareholders). – includes losses