Developmental Conceptual Framework & Standard-Setting Bodies

• the qualitative information capable of making difference in a decision even if some users choose not to take advances of it or are already aware of it from other sources.

  relevance
• public entities which is a holders of secondary licenses issues by regulatory agencies and shall use the full PFRS, as adopted by the Securities and Exchange Commission.


  financial reporting framework applicable for large entities
• those responsible for the preparation and presentation of financial statements 


  management
• non trade receivables are claims arising from sources other than sale of merchandise in the ordinary course of the business are classified as:

  current asset if collectible within the normal operating cycle.
• presentation of assets and liabilities in increasing or decreasing liquidity provides information that is

  separate current to non current
• current and non current presentation of assets and liabilities provides useful information when the entity 


  supplies goods or services within a clearly identifiable operating cycle
• the measurement bases that provide monetary information about assets, liabilities, and related income and expenses, using information derived from the price of the transaction or other event that gave rise to them

  historical cost
• which is not a component of other comprehensive income?

  foreign currency translation adjustment
• the income statement provides information that help predict the timing of future cash flow, amount of future cash flow and?

  uncertainty of future cash flow
• the financial repot that shows the reposting entity's economic resources and claims

  statement of financial position
• the qualitative information capable for depiction of a faithful representation

  neutrality
• refers to the ability of the business to raise cash and t meet unexpected cash requirements

  solvency
• the concept of accounting that the financial statements are normally prepared on the assumption that the reporting entity will continue in operation for the foreseeable future

  going concern assumption
• an entity achieves a fair presentation by compliance with applicable PFRS in all financial statements and shall present fairly the financial position, financial performance, and cash flows of an entity in all circumstances ______

  virtually
• depreciating the remaining carrying value of an item of property, plant, and equipment over its revised life is an example of


  prospective application of change in accounting estimate
• the increases in the prices of assets that are not disposed of and held over the period by the entity are profits and they may be recognized as a gain


  true
• an entity whose financial statements comply with IFRSs shall make an ___ and ___ statement of such compliance in the notes. an entity shall not describe financial statements as complying with IFRS unless they comply with all the requirements.

  explicit and unreserved
• the financial report that shows the changes due to events and transactions other than financial performance such as the issue of equity instruments and distributions of cash or other assets to shareholders


  statement of changes in equity
• this approaches to income measurement underlies financial accounting and reporting

  transaction approach
• the effect of any retrospective application or retrospective restatement as a result of change in accounting policy or correction of prior period errors, this information shall be presented on the face of


  statement of income
• the increases in assets, or decreases in liabilities, that result in increases in equity, other than those relating to contributions from holders of equity claims

  income
• the complete set of financial statements presented the comprehensive income and it components should 


  be displayed in a statement that has the same prominence as other financial statements
• the use of reasonable estimates is an essential part of the preparation of financial information. in some cases, the level of uncertainty involved in estimating a measure of an asset or liability may be so high that it may be questionable whether the estimate would provide a sufficiently faithful presentation of that asset or liability and of any resulting income, expenses, or changes in equity. these estimates may have include

  allowance for uncollectible accounts, depreciation expenses, and investment at fair value
• this basic feature supports the presentation of each material item separately and immaterial amounts of similar nature are grouped and reported as a single item in the financial statements

  materiality and aggregation
• the measurement bases that provide monetary information about assets, liabilities, and related income and expenses, using information updated to reflect conditions at the measurement date


  current value
• financial concept of capital, such as invested money or invested purchasing power, capital is synonymous with the

  equity of the entity
• what section of the statement of financial position should cash that is restricted for the settlement of liability that is due 18 months after the reporting period be presented?


  noncurrent asset
• the information should be disclosed in the summary of significant accounting policies

  refining debt subsequent to the reporting period
• the option for the presentation of other comprehensive income that s preferred is

  a continuation from the net income in the income statement or a separate statement that begins with the net income
• the elements of financial statements that relate to an entity's financial performance

  income and expense
• cash flow from these activities represent the extent to which expenditures have been made for resources intended to generate future income and cash flows

  operating, financing, and investing activities
• General-purpose financial statements


  Those statements intended to meet the needs of the users to provide the most useful information to a wide variety of users
• Objective of general-purpose financial reporting


  To provide financial information about the reporting entity that is useful to existing and potential investors, lenders and other creditors in making decisions relating to providing resources to the entity
• Objective of general-purpose financial reporting


  • Forms the foundation of the Conceptual Framework
  • Other aspects of the Conceptual Framework flow logically from the objective
• Decision-usefulness


  Information contained in the financial statements should help investors assess the amounts, timing, and uncertainty of prospective cash inflows from dividends or interest, and the proceeds from the sale, redemption, or maturity of securities or loans
• Elements necessary for a single, widely accepted set of high-quality accounting standards


  • A single set of high-quality accounting standards established by a single standard-setting body
  • Consistency in application and interpretation
  • Common disclosures
  • Common high-quality auditing standards and practices
  • A common approach to regulatory review and enforcement
  • Education and training of market participants
  • Common delivery systems (e.g., extensible Business Reporting Language—XBRL)
  • A common approach to corporate governance and legal frameworks around the world
• Branches of accounting


  • Financial Accounting
  • Management Accounting
  • Cost Accounting
  • Auditing
  • Government Accounting
  • Tax Accounting
  • Accounting Education
• International Accounting Standards Board (IASB)


  The main international standard setting organization, based in London, United Kingdom, that issues International Financial Reporting Standards (IFRS)
• International Organization of Securities Commissions (IOSCO)


  Does not set accounting standards, but is dedicated to ensuring that the global markets can operate in an efficient and effective basis
• International standard-setting structure


  • IFRS foundation (22 trustees)
  • International Accounting Standards Board (IASB) (16 members)
  • IFRS Advisory Council (30 or more members)
  • IFRS Interpretations Committee (22 members)
  • Monitoring Board