INTRO

Question 1

What is the IASB’s mission statement?

Answer 1

IASB’s mission is to develop International Financial Reporting Standards (IFRS) that bring transparency, accountability and efficiency to financial markets around the world.

Question 2

What are the key principles of IASB’s mission statement?

Answer 2

• IFRS brings transparency by enhancing the international comparability and quality of financial information, enabling investors and other market participants to make informed economic decisions.
• IFRS strengthens accountability by reducing the information gap between the providers of capital and the people to whom they have entrusted their money.
• IFRS contributes to economic efficiency by helping investors to identify opportunities and risks across the world, thus improving capital allocation. For businesses, the use of a single, trusted accounting language lowers the cost of capital and reduces international reporting costs.

Question 3

Which are the key driving principles of IFRS standard?

Answer 3

• Substance over form:
  Classification of lease contracts
  Consolidation (Control principle IFRS 10)
  Revenue recognition
• Systematic recognition in the financial statements
• Frequent use of fair value:
  Financial instruments
  Investment property
  Assets acquired and liabilities assumed in a business combination
• No standard format for preparing financial statements, but extensive disclosure requirements:
  Interests in other entities
  Segment information
  Earnings per share