Quiz

• International Accounting Standards Board (IASB)


  Issues International Financial Reporting Standards (IFRSs)
• IASB

  Formed to replace the IASC
• The accounting standards issued by the IASC were adopted by the IASB
• Proper order in the development of an IFRS

  1. Discussion paper

  2. Exposure draft

  3. Accounting standard
• International Financial Reporting Standards Interpretation Committee (IFRS IC)

  Develops authoritative interpretations of existing IAS and IFRS and provides guidance on financial reporting issues not specifically addressed by IAS and IFRS
• Professional Regulation Commission


  Established the Philippine accounting standard-setting body
• Financial Reporting Standards Committee (FSRC)

  • Replaces the Accounting Standards Council
  • Main function is to establish generally accepted accounting principles in the Philippines
  • Established to assist the Board of Accountancy in carrying out its power and function in promulgating accounting standards in the Philippines
• Philippine Interpretations Committee (PIC)


  • Established by the Financial Reporting Standards Committee
  • Develops authoritative interpretations of existing PAS and PFRS and provide guidance on financial reporting issues not specifically addressed in PAS and PFRS
  • PIC Interpretation becomes part of PFRS once they are approved by the FRSC
  • IFRIC and SIC are the international counterparts of PIC
• Philippine Financial Reporting Standards

  • Philippine Accounting Standards
  • Philippine Financial Reporting Standards
  • Philippine Interpretations Committee Interpretations
• R.A. No. 9298 Philippine Accountancy Act of 2004


  The law regulating the practice of accountancy in the Philippines
• Board of Accountancy


  The body authorized by law to promulgate rules and regulations affecting the practice of accountancy in the Philippines
• Philippine Institute of Certified Public Accountants

  The accredited professional organization of CPAs in the Philippines
• Fields of accountancy practice

  • Auditing services
  • Commerce and Industry
  • Academe
  • Government
• State Government


  They license the Certified Public Accountants
• Primary users of financial information

  • Investors
  • Lenders and creditors
• Fundamental Qualitative Characteristics


  • Faithful Representation
  • Neutrality
• Enhancing Qualitative Characteristics of Useful Information

  • Comparability
  • Verifiability
  • Understandability
  • Timeliness
• Cost is one constraint on useful financial reporting that the Conceptual Framework mentioned
• Financial statements should at least be prepared annually
• Going Concern


  Financial statements are prepared under the assumption that the reporting entity will continue in operation for the foreseeable future
• Reporting Entity


  An entity that is required, or chooses, to prepare financial statements
• Unconsolidated Financial Statements


  The reporting entity comprises of the parent company only
• Elements of financial position

  Describes amounts of resources and claims against resources at a point in time
• Asset


  Refers to the present economic resources controlled by the entity as a result of past events
• Liability


  For it to exist, the settlement is expected to result in an outflow of economic benefit
• Equity


  Refers to the residual interest in the assets of the entity after deducting all of its liabilities
• Primary distinction between revenue and gain


  The nature of the activity that gives rise to the transaction
• Recognition of an Item in the financial statements

  If it meets the definition of asset, liability, equity, income, and expense
• Derecognition


  Occurs when an item no longer meets the definition of an asset or a liability, the entity loses control of the asset, or the entity no longer has a present obligation for the liability
• Measurement bases


  • Historical Cost
  • Current Value
• Fair Value


  The price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date
• Historical Cost


  The most adopted measurement basis in preparing financial statements
• Income and Expenses


  Are classified as profit or loss and other comprehensive income
• Aggregation


  The adding together of assets, liabilities, equity, income, and expenses that have similar characteristics and are included in the same classification
• Current Cost


  The measurement basis that the physical capital maintenance concept requires for adoption