Chapter 2 - The Framework Flashcards Preview

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Flashcards in Chapter 2 - The Framework Deck (12)
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1
Q

What is the IFRS interpretation committee?

A

Reports to the IASB with interpretations of IFRS.

Provides guidance on financial reporting issues not specifically addressed by IFRS

2
Q

What is the IASB?

A

International accounting standard board - the body responsible for developing and issuing IAS & IFRS

3
Q

What is the IFRS Advisory council?

A

The take recommendations from individuals, corporations and national standard setters and then provides advice to the IASB on priority areas of accounting

4
Q

What makes up the The Regulatory Framework?

A

IAS & IFRS

Companies Act 2006

The Framework

5
Q

What are the stages of setting standards?

A

Topic is identified

Topic is discussed and the IASB May set a working group

Discussion paper is issued for public comment

Exposure draft is issued for public comment

IASB consults with SAC (Standards Advisory Council) and working groups before an IFRS is voted on and issued

6
Q

What is the Companies Act 2006?

A

UK legislation that governs limited companies.

7
Q

What are directors responsible for under the Companies Act 2006?

A

Keeping proper accounts records

Financial statements audited and presented to shareholders

Filing of accounts at companies house

8
Q

What are the four possible bases of measurement?

A

Historical cost

Current cost

Realisable value

Present value

9
Q

What is historical cost?

A

This is the most usual method as it is the original price paid

10
Q

What is the current cost?

A

Measured at replacement cost, what it would cost if you bought it today

11
Q

What is the realisable value?

A

Measured at the amount you would receive if you sold the asset today

12
Q

What is the present value?

A

Measured at the discounted value of all future cash flows. Eg if the if a liability of due to be settled in 10 years it should be discounted to today’s value to eliminate inflation