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    The Nature and Operations of The IASB

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    Tran Anh
    Here are the answers to the exercise on assets and liabilities: $50,000 spent by a manufacturer on training staff how to operate machinery - Asset $10,000 spent by a business to patent its technology - Asset $30,000 expected expenditure on redecorating business premises in the upcoming year - Liability $15,000 that a retailer expects to have to repay to customers that return purchased items within the 30 day statutory return period - Liability $100,000 losses expected by a car manufacturer in the upcoming financial year as a result of economic recession - Neither $40,000 spent on equity shares in another company - Asset

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    The Nature and Operations of The IASB

    Uploaded by

    Tran Anh
    313 views12 pages
    Here are the answers to the exercise on assets and liabilities: $50,000 spent by a manufacturer on training staff how to operate machinery - Asset $10,000 spent by a business to patent its technology - Asset $30,000 expected expenditure on redecorating business premises in the upcoming year - Liability $15,000 that a retailer expects to have to repay to customers that return purchased items within the 30 day statutory return period - Liability $100,000 losses expected by a car manufacturer in the upcoming financial year as a result of economic recession - Neither $40,000 spent on equity shares in another company - Asset

    Original Title

    CertIFR_Module-1

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    Here are the answers to the exercise on assets and liabilities: $50,000 spent by a manufacturer on training staff how to operate machinery - Asset $10,000 spent by a business to patent its technology - Asset $30,000 expected expenditure on redecorating business premises in the upcoming year - Liability $15,000 that a retailer expects to have to repay to customers that return purchased items within the 30 day statutory return period - Liability $100,000 losses expected by a car manufacturer in the upcoming financial year as a result of economic recession - Neither $40,000 spent on equity shares in another company - Asset

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    313 views12 pages

    The Nature and Operations of The IASB

    Uploaded by

    Tran Anh
    Here are the answers to the exercise on assets and liabilities: $50,000 spent by a manufacturer on training staff how to operate machinery - Asset $10,000 spent by a business to patent its technology - Asset $30,000 expected expenditure on redecorating business premises in the upcoming year - Liability $15,000 that a retailer expects to have to repay to customers that return purchased items within the 30 day statutory return period - Liability $100,000 losses expected by a car manufacturer in the upcoming financial year as a result of economic recession - Neither $40,000 spent on equity shares in another company - Asset

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 12

    Module 1:

    The nature and operations of


    the IASB
    What you will learn?

     Origins of International Accounting Standard


    Boards (IASB)

     Structure of IFRS Foundation

     International Accounting Standard (IAS


    standards) and International Financial
    Reporting Standards (IFRS Standards) that are
    currently in issue

     The purpose of financial statements – The


    Conceptual Framework for Financial
    Reporting
    Formation of the Board

     The International Accounting Standards Committee (IASC)


    was founded
    1973
     Accounting Standards were set by an IASC Board (13 country
    members & up to 3 additional organisational members

     IASC concluded that there must be a convergence between


    1997 national accounting standards and practices and global
    accounting standards

    1 July  International Accounting Standards Board – a new standards


    2000 setting body was formed

     The Board (IASB) took over from the IASC the responsibility
    1 April for setting International Accounting Standards
    2001  More than 140 accountancies body in IASC membership
    (1973 – 2001)
    Structure of the IFRS Foundation

    The Monitoring Board

    Appoints & advises

    IFRS Foundation Trustees


    Appoints Appoints Appoints
    & Advises & &
    oversees oversees oversees

    The IFRS The IFRS


    The IASB
    Advisory Interpretations
    (the Board)
    Council Committee

    Develop &
    issues Interprets

    IFRS Standards
    Structure of the IFRS Foundation
    Process for developing an individual standard

     Establish an Advisory Committee to give advice


    on issues arising in the project
    Step 1  Consultation with the Advisory Committee and
    the IFRS Advisory Council occure throughout the
    project

     IASB may develop and publish Discussion Papers


    Step 2 for public comment

     IASB develops and publishs an Exposure Draft


    Step 3 for public comment

    Step 4  IASB issues a final IFRS


    Structure of the IFRS Foundation
    Some differences between IFRS and GAAP

    IFRS GAAP

    International Generally
    Financial Accepted
    Acronym
    Reporting Accounting
    Standard Principles

    A set of
    Universal business
    accounting
    language is
    guidelines and
    Meaning followed while
    procedures to
    reporting financial
    prepare financial
    statements
    statements

    Developed
    IASB FASB
    by

    Based on Principles Rules


    Structure of the IFRS Foundation
    Advantages of applying IFRS

    A business can present its FS on the same basis as its


    foreign competitors, making FS comparable

    Cross-border listing will be facilitated, making it easier


    to raise capital abroad

    Companies with foreign subsidiaries will have a


    common, enabling company-wide accounting language

    Foreign companies which are targets for takeovers or


    mergers can be more easily appraised
    Standards in issue
    IFRS

    IFRS 1 First-time adoption of IFRS IFRS 10 Consolidated Financial Statements

    IFRS 2 Share-based Payment IFRS 11 Joint Arrangements

    IFRS 3 Business Combinations IFRS 12 Disclosure of Interests

    Insurance Contracts
    IFRS 4 (replaced by IFRS 17 since 1 Jan IFRS 13 Fair Value Measurement
    2021)
    Non-current assets held for Sale
    IFRS 5 IFRS 14 Regulatory Deferral Accounts
    and Discontinued Operations

    Exploration for and Evaluation of Revenue from Contracts with


    IFRS 6 IFRS 15
    Mineral Resources Customers

    IFRS 7 Financial Instruments: Disclosures IFRS 16 Leases

    IFRS 8 Operating Segments IFRS 17 Insurance Contracts

    IFRS 9 Financial Instruments


    Standards in issue
    IAS

    Accounting for
    Government Grants Financial
    Presentation of
    IAS 1 IAS 20 and Discolsure of IAS 32 Instruments
    Financial Statements
    Governance Presentation
    Assistance
    The Effects of
    IAS 2 Inventories IAS 21 changrs in foreign IAS 33 Earnings Per Share
    exchange rate
    Statement of Cash Interim Financial
    IAS 7 IAS 23 Borrowing costs IAS 34
    Flows Reporting
    Accounting policies,
    Related Party Impairment of
    IAS 8 changes in accounting IAS 24 IAS 36
    Disclosure Assets
    estimates & errors
    Accounting and Provisions,
    Events after the Reporting by Contingent Liabilities
    IAS 10 IAS 26 IAS 37
    Reporting Period Retirement Benefit and Contingent
    Plans Assets
    Seperate Financial
    IAS 12 Income Taxes IAS 27 Statement (revised IAS 38 Intangible Assets
    2011)
    Investments in
    Property, Plant and Associates and Joint
    IAS 16 IAS 28 IAS 40 Investment property
    Equipment Venture (revised
    2011)
    Financial Reporting
    IAS 19 Employee Benefits IAS 29 in Hyperinflationary IAS 41 Agriculture
    Economies
    Conceptual Framework for Financial Reporting

    Main purpose of Financial Statements


    To give information to users (particularly investors and
    creditors) so that they can make financial decisions

    Underlying assumption
    Going concern

    Qualitative characteristics of financial information

    Fundamental characteristics Enhancing characteristics

    Relevance Comparability
     Materality Verifiability
    Faithful representation Timeliness
     Complete Understandability
     Neutral
     Free from bias
     Substance over form
    Conceptual Framework for Financial Reporting
    Five main elements of financial statements

    as a result of past events


    Asset
    has a potential to produce economic benefits

    a present obligation of the entity


    Liability
    as a result of past events

    residual interest in the assets after


    Equity
    deducting all its liabilities

    increase in assets or decrease in liabilities


    Income
    that result in increases in equities

    decrease in assets or increase in liabilities


    Expenses
    that result in decreases in equities
    Exercise
    Assets and liabilities

    Asset Liability Neither


    $50,000 spent by a manufacturer on
    training staff how to operate machinery
    $10,000 spent by a business to patent its
    technology
    $30,000 expected expenditure on
    redecorating business premises in the
    upcoming year

    $15,000 that a retailer expects to have to


    repay to customers that return purchased
    items within the 30 day statutory return
    period

    $100,000 losses expected by a car


    manufacturer in the upcoming financial
    year as a result of economic recession
    $40,000 spent on equity shares in another
    company

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