IFRS

Question 1

IASB: Int’l Accounting Standards Board

Answer 1

1. Issues IFRS

2. Most AUTHORITATIVE & 1st place management looks for guidance accounting policies

Question 2

IASB Framework

Answer 2

• Develops standards
• Is NOT a standard itself
• Does NOT supersede any standard’s authority

Question 3

Objective of IFRS Framework

Answer 3

Provide users with information

Question 4

Assumptions?

Answer 4

1. Entity is a Going Concern

2. Entity uses Accrual basis of accounting

Question 5

Qualitative Characteristics?

Answer 5

1. Relevance
   a. Makes a difference to user
   b. Predictive Value - Predicts Future
   c. Confirmatory Value - Evaluates Past
2. Faithful Representation
   a. Complete
   b. Neutral
   c. Free from Error

Question 6

Enhancing Characteristics?

Answer 6

1. Comparability
   a. Allows users to compare different items among various periods
2. Verifiability
   a. Different people who reach same conclusion
3. Understandability
   a. Easy to use and understand
4. Timeliness
   a. Information is available in time to make a decision

Question 7

Pervasive Constraint of IFRS

Answer 7

Cost vs Benefits