International Financial Reporting Standards (IFRS) Flashcards
(33 cards)
When do you recognize an element in the International Accounting Standards Board (IASB) framework?
When it is probable that there is a future economic benefit and the item has a cost or value that can be measured with reliability.
What are some omitted topics for small and medium-sized entities (SMEs) in IFRS?
- Earnings per share
- Interim financial reporting
- Segment reporting
List the steps of developing International Accounting Standards.
- Add the item to the agenda.
- Discuss the issue.
- Publish a discussion paper if the topic is difficult.
- Prepare and vote on the exposure draft.
- Issue the exposure draft.
- Analyze comments on the exposure draft.
- Debate the issue at hand.
Identify the types of entities that are not eligible to use IFRS for SMEs.
- Entities that are required to file financial statements with a regulatory body (e.g., SEC) for the purpose of issuing securities in a public market; or
- Entities that hold assets in a fiduciary capacity for a broad group of outsiders (e.g., banks, insurance companies, pension funds, etc.).
What did the SEC eliminate for foreign companies listed in the United States?
A reconciliation of earnings and equity to U.S. GAAP (Form 20-F) in their financial statements.
Under IFRS, if no standards exist on an accounting issue, what should companies use?
The definitions, recognition criteria, and measurement concepts for assets, liabilities, income, and expenses in the Framework.
What are the five elements in the IASB framework?
- Assets
- Liabilities
- Equity
- Income
- Expenses
When can revisions happen for small and medium-sized entities (SMEs) in IFRS?
Revisions for SMEs standards happen every three years at most.
What is the highest level of international GAAP?
The International Financial Reporting Standards
Do IFRS allow revaluation of plant assets and intangibles to fair value as a other comprehensive income item?
Yes, the standards allow this.
Do IFRS have a required minimum list of items to be reported on the income statement?
Yes, the standards have a minimum list of items.
What is meant by a “reliable measurement”?
It is a measurement in which a reasonable estimate is made.
TRUE or FALSE: Income may be realized or unrealized.
True.
What elements are considered income under the FASB framework?
“Revenue” and “gains” as separate elements.
How are expenses classified under IFRS?
They are classified by business function or nature of the expense.
Is a separate statement of other comprehensive income one of the formats permitted under IFRS?
Yes, this is one of the formats permitted under IFRS.
TRUE or FALSE: The IASB framework should apply only to public companies, not private corporations.
False. The IASB framework should apply to both public and private companies.
What are the various types of GAAP which may be used by a U.S. entity?
Depending on the entity, the following types of GAAP may be used:
- U.S. GAAP;
- U.S. Other Comprehensive Basis of Accounting (OCBOA);
- International Financial Reporting Standards (IFRS);
- IFRS for Small and Medium-sized Entities (SMEs).
What is simplified for small and medium-sized entities (SMEs) in IFRS?
- Topics that are irrelevant are eliminated.
- Recognition and measurement aspects are simplified.
- Disclosures reduced to 10% of those in regular IFRS.
Are IFRS more rules based or principles based?
Principle based.
What are the underlying assumptions of the IASB framework?
- The financial statements are prepared on the accrual basis.
- The entity is a going concern.
Does the IASB framework include losses for the term “expense”?
Yes, it includes such losses.
What two formats are accepted under IFRS for income statement presentation?
- Single-step statements
2. Multiple-step income statements
What comprises income under the IASB framework?
It includes both revenues and gains.
