part 1.international accounting (IASB)

Question 1

IASCF (was renamed IFRS

Answer 1

is the parent of IASB

Question 2

objectives of the IFRS

Answer 2

• to develop a single set of financial reporting standards used worldwide
• to take account of, as appropriate, the needs of a range of sizes, and types of entities in diverse economic settings

Question 3

IASB

Answer 3

is like FASB

IASB has no enforcing power

Question 4

IOSCO

Answer 4

is the international standard setter for securities markets

Question 5

IFRS

Answer 5

• oversees
• review effectiveness
• finance IASB
• appoints members to IASB
• parent of the IASB
• not for profit private sector organization

Question 6

IASB

Answer 6

establishes IFRS

Question 7

IFRS interpretation committee

Answer 7

similar to FASB emerging issues task force

Question 8

IFRS advisory council

Answer 8

advises the IASB

Question 9

IFRS

Answer 9

are more principles based (objectives oriented)

Question 10

small and medium sized entities

Answer 10

one single standard for companies that are not public traded

Question 11

IFRS standard setting process

Answer 11

research
discussion paper
proposal
exposure draft
published IFRS
post-implementation 
review

Question 12

convergence agreement between FASB and IASB

Answer 12

• norwalk agreement in 2002 formalized the commitment to covergence between FASB and IASB
• there are still differences
• SEC eliminated the requirement to reconcile from international GAAP to US GAAP in 2007 making it easier for foreign co to list on US exchanges

Question 13

first time adoption of IFRS

Answer 13

• the first reporting date: is the year end date for the period for which IFRS is first applied
• transition date: is the ongoing date of the earliest period for which full comparative financial statement under IFRS are presented.

Question 14

IFRS

Answer 14

upon adoption of IFRS the entity must present reconciliations of US GAAP to IFRS to explain the impact of the adoption on equity and comprehensive income

Question 15

mandatory exceptions to the retrospective application of IFRS

Answer 15

. derecognition of financial assets and liabilities
. hedge accounting
. assets held for sale and discounted operations
. certain aspects of accounting for non-controlling interest
use of certain estimates

Question 16

IASB framework

Answer 16

is similar to FASB

Question 17

IFRS conceptual framework

Answer 17

is a point of reference

Question 18

IFRS objective

Answer 18

to provide f/s that present a true and fair view of the entities performance

Question 19

IFRS primary characteristics

Answer 19

1. faithful representation:
   . completeness
   . neutrality
   . free from error
2. relevance
   . predictive value
   . confirmatory value
   . materiality

Question 20

IASB

Answer 20

has 2 assumptions:
. accrual method is used
. the entity is a going concern

Question 21

IFRS elements

Answer 21

assets
liabilities
equity
income
expenses

Question 22

IFRS elements are included in f/s

Answer 22

1. if it is probable that a future economic benefit associated with the item will flow to or from the entity
2. the item has a cost or value that can be measured with reliability

Question 23

IASB income

Answer 23

includes revenue and gains.

Question 24

IASB expenses

Answer 24

includes expenses and losses

Question 25

IASB

Answer 25

defines income and expenses in terms of assets and liabilities

Question 26

IFRS

Answer 26

has not concept comparable to other comprehensive basis of accounting and personal f/s

Question 27

IFRS

Answer 27

has standard for small and medium sized entities

Question 28

who needs or uses IFRS for small medium entities

Answer 28

1. any entity that does not have public accountability: . securities not publicly traded . not a financial institution 2. and is required or chooses to produce general purpose f/s . general purpose f/s presents fairly financial position, results of operations and cash flows

Question 29

who are the users of small medium entities f/s

Answer 29

. lenders, vendors, credit rating agencies . customers, family investors . short term cash flows, liquidity, solvency

Question 30

IFRS for small medium entities

Answer 30

are not OCBOA

Question 31

IFRS for small medium entities

Answer 31

are GAAP for qualifying companies

Question 32

entities that cannot use IFRS for small medium entities

Answer 32

. entities that issue instruments in a public market . entities that hold assets in a fiduciary capacity: banks, insurance companies, mutual funds, not for profits and governmental entities

Question 33

U.S. companies

Answer 33

can use IFRS even if they don't engage in international transactions

Question 34

IFRS for small medium entities

Answer 34

does not permit LIFO cost in valuing inventory

Question 35

U.S. companies

Answer 35

can use IFRS as an alternative to using OCBOA

Question 36

IFRS for small medium entities major characteristics

Answer 36

. disclosures are simplified in a number of areas including pensions, leases, and financial instruments . LIFO is prohibited . goodwill and indefinite life intangible assets amortize over a period not exceeding 10 years . depreciation is based on a components approach . a simplified temporary difference approach to income tax accounting . reversal of impairement charges, if certain criteria are met is allowed . accounting for financial assets and liabilities makes greater use of cost . no disclosures for earnings per share and segment disclosures

Question 37

various types of GAAP which can be used by a U.S, company

Answer 37

. u.s. GAAP . U.S. OCOBOA . IFRS . IFRS for small medium size entities

Question 38

IFRS general purpose f/s

Answer 38

. comparative periods are required . changes in owner's equity must be presented in a separate statement

Question 39

IFRS income statements

Answer 39

. no requirements on reporting special items | . dividends per share require disclosure

Question 40

IFRS statement of comprehensive income

Answer 40

. permits re evaluation of PPE through OCI (reclasification of PPE revaluation must also flow through OCI not NI) . per share measures are not prohibited

Question 41

IFRS statement of cash flows

Answer 41

. interest paid - operating or financing . interest received - operating or financing . taxes paid - operating - in financing or investing if specifically identified with an item . dividends received - operating or investing . dividends paid - operating or financing cash and cash equivalents - may include bank overdrafts

Question 42

IFRS f/s includes

Answer 42

``` . statement of financial position ( balance sheet) . statement of comprehensive income . statement of changes in equity . statement of cash flows . notes ```

Question 43

IFRS requires firms to analyze expenses either by:

Answer 43

1. function: focus on the activity to which the expense relates: exp: cost of sales, distribution costs 2. nature: focuses on the type of expenses. exp: changes in inventory of finished goods and work in progress, employee benefit expense, depreciation and amortization expense