What is the IFRS Foundation?
Accounting foundation that appoints members of the IAS Board, IFRA Advisory Council and IFRS Interpretations Committee, they also set and approve budgets.
What is the IAS Board?
They set the International Accounting Standards
What is the IAS Boards objectives?
- Develop single set of high quality, global accounting standards
- Promote application of those standards
- Converge IFRS and national accounting standards
What is the IFRS Interpretations Committee?
Assist the board in establishing and improving standards and reporting
What does the IFRS Interpretations Committee provide guidance on?
- Newly identified issues not covered by accounting standards
- Unsatisfactory interpretations that have developed or may develop
What is the IFRS Advisory Council?
Provides forum for people in input standard-setting principles
What is the IFRS Advisory Councils objectives?
- Advise the board on agenda
- Inform the board of views of people
- Give advice to board or trustees
What must UK Companies prepare their financial statements according to?
Companies Act 2006
Who prepares accounting standards in the UK?
Financial Reporting Council
What’s the underlying assumption of financial statements?
Are prepared on a going concern basis
What are the two fundamental qualitative characteristics?
- Relevance
- Faithful representation
What are the four enhancing qualitative characteristics?
- Comparability
- Verifiability
- Timelines (Suitable timescale)
- Understandability
What are the five elements of financial statements?
- Asset
- Liability
- Equity
- Income
- Expenses
When does the recognition of item in a financial statement occur?
- Item meets the definition of an element
- Provides relevant information regarding an element
- Provides faithful representation of an element
What does IAS 1 do?
Provides formats for P+L, SFP, Changes in equity and six accounting concepts
What 6 accounting concepts are set out in IAS 1?
- Going concern
- Accruals
- Consistency
- Materiality and aggregation
- Offsetting
- Comparative information
What is a going concern?
Business will be operational for the foreseeable future
What is an accrual?
Transactions are recognised as they occur and not as cash or its equivalent is received or paid
What is consistency?
Items are presented the same way in one period to the next unless a change in operation of standard
What is materiality?
Each material class of similar items shall be presented separately
What is offsetting?
Asset and liabilities and income and expenses cannot be offset unless a standard requires it
What is Comparative Information?
Should be shown for all amounts reported in the financial statement
What are the different types of business organisation?
- For profit organisation
- Not-for-profit organisation
- Sole traders
- Partnerships
- Limited companies
- Limited liability partnerships
- Charities
- Public sector organisations
What is an asset?
A present economic resource controlled by an entity as a result of a past event
