CHAPTER 2

• IASB

  International Accounting Standards Board
• International Accounting Standards Board

  • is an Independent private sector body. 
• International Accounting Standards Board

  • To achieve convergence in the accounting principles that are used by businesses and other organizations for financial reporting around the world.
• Monitoring Board 

  • Approve and oversee trustees
• IFRS Foundation

  •  22 trustees. Appoint, oversee, raise funds.
• International Financial Reporting Standards

  • Formerly IASC Foundation, is an independent, not-for profit private sector organization working in the public interest.
• International Accounting Standards Board 

  • Is the independent standard-setting body of the IFRS Foundation. Its members are responsible for the development and publication IFRSs.
•  IFRS Advisory Council

  • has 40 members and provides a forum for organizations and individuals with an interest in international financial reporting to participate in the standard setting process.
• • IFRS Interpretations Committee (formerly called the IFRIC)
• IFRS Interpretations Committee

  • is the interpretative body of the IASB. 
• IFRS Interpretations Committee 

  • The mandate of the Interpretations Committee is to review on a timely basis widespread accounting issues that have arisen within the context of current IFRSs and to provide authoritative guidance (IFRICs) on those issues.
• Accounting Standards

  • are authoritative statements of how particular types of transaction and other events should be reflected in financial statements. Accordingly, compliance with __ will normally be necessary for the fair presentation of financial statements.
• ASC - Accounting Standards Council
• IAS - International Accounting Standards
• Investors 

  • need information to help them determine whether they should buy, hold or sell.
•  Employees 

  • are interested in information about the stability and profitability of their employers.
•  Lenders 

  • are interested in information that enables them to determine whether their loans and the related interest will be paid when due.
• Suppliers and other trade creditors

  • are interested in information that enables them to determine whether amounts owing to them will be paid when due.
•  Customers 

  • have an interest in information about the continuance of an enterprise, especially when they have a long-term involvement with, or are dependent on, the enterprise.
• • Government and their agencies

  are interested in the allocation of resources and, therefore, the activities of the enterprises. They also require information in order to regulate the activities of the enterprises, determine taxation policies and as the basis for national income and similar statistics.
• • Public Enterprises

   affect members of the public in a variety of ways.
• Stewardship

  ▪ Financial statements also show the results of the ___ that is the accountability of management for the resources entrusted to it by the owners
• Accrual Basis

  • The effects of transactions and other events are recognized when they occur and not as cash is received or paid. This means that the accountant records revenues as they are earned and expenses as they are incurred
•  Cash Basis 

  • The accountant does not record a transaction until cash is received or paid.
• Going Concern

  • The financial statements are normally prepared on the assumption that an enterprise is a going concern and will continue in operation for the foreseeable future. Hence, it is assumed that the enterprise has neither the intention nor the need to liquidate or curtail materially the scale of its operations.
• Threshold quality

  • (or a cut off point) is one that needs to be considered before  considering the other qualities of information.
• Materiality depends

  • on the size of the item or error judged in the particular circumstances of its omission or misstatement.
• Materiality

  • Information that is not material cannot be useful
•  Relevance 

  Information has the quality of ____ when it influences the economic decisions of users by helping them evaluate past, present or future events, confirming, or correcting, their past evaluations.
•  Financial information

  • has a predictive role when it is used to make predictions of, for instance future cash flows or income.
• Comparability

  • Consistency
  • Disclosure e.g. accounting policies and corresponding figures 
• Understandability

  • Aggregation and Classification 
  • User’s Abilities
• Financial concept

  • of capital, such as invested money or invested purchasing power, capital is synonymous with the net assets or equity of the enterprise.
•  Physical Concept

  • of capital, such as operating capability, capital is regarded as the productive capacity of the enterprise based on, for example, units of output per day.
• MONITORING BOARD - Participating in the process for appointing trustees and approving the appointment of trustees according to the guidelines set out in the IFRSF constitution
• MONITORING BOARD - Reviewing and providing advice to the trustees on their fulfilment of the responsibilities set out in the IFRSF constitution. The trustees will make an annual written report to the Monitoring Board.
• IASC - INTERNATIONAL ACCOUNTING STANDARDS COMMITTEE
• IFRS Foundation

  • Formerly IASC Foundation, is an independent, not-for profit private sector organization working in the public interest.
• Accounting Standards?

  • are authoritative statements of how particular types of transaction and other events should be reflected in financial statements. Accordingly, compliance with this will normally be necessary for the fair presentation of financial statements.
• Objective of Financial Statements

  • is to provide information about the financial position, performance, and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions.