Chapter 3: Qualitative characteristics Fin. Infor of Flashcards Preview

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Flashcards in Chapter 3: Qualitative characteristics Fin. Infor of Deck (8)
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1
Q

[C3/2]

- On what does IFRSs formulate?

A
  • IFRSs are formulated on the basis of the IASB’s Conceptual Framework.
  • The main underlying assumption for financial statements is going concern (действующее предприятие).
2
Q

[C3/2/2.1] What is and what is not the Conceptual Framework for financial reporting?

A

The Conceptual framework is:

  • a set of principles which underpin the foundations of fin. accounting.
  • a conceptual framework on which all IFRSs are based, prepared.

is not:
- An accounting standard by itself.

3
Q

[C3/2/2.2.1]What is going concern concept?

A
  • One important underlying assumption for fin. statements.
  • The entity is a going concern and will continue operation in the foreseeable future (12m).
  • The assets of an entity should not be values at their “break-up” value.
4
Q

[C3/2/2.2.2] What is accruals basis concept?

How the transactions are recorded and reported according to accruals basis concept?

A
  • The effects of transactions and other events are recognised when they occur. Not when the cash or other equivalent is received or paid.
  • They are recorded in the accounting records and reported in fin. statements of the periods to which they relate.
5
Q

[C3/2/2.2.2]What is matching convention?

A

In computing profit, revenue earned must be matched against expenditure incurred in earning it.

6
Q

[C3/3]What are two fundamental qualitative characteristics?

A
  • Relevance (useful, timely basis information release). It is affected by materiality of information.
  • Faithful representations (complete, neutral free from error).
7
Q

[C3/3-4.2]What are 4 enhancing qualitative characteristics?

A
  • Comparability and consistency (identify and understand differences and similarities).
  • Verifiability (information represents the economic phenomena it purports to represent faithfully).
  • Timeliness (availability of information to decision-makers in time).
  • Understandability (Classifying, characterising and presenting information clearly and concisely).
8
Q

[C3/4/4.3] The business entity concept?

A

Fin. statements always treat business as a separate entity even if the law is not recognising it as a separate legal entity.