cfas

• fair value is the price that would received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
• in using the cost model, after initial recognition intangible assets should be carried at cost less accumulated amortization and impairment losses.
• in using the revaluation model, intangible assets may be carried at a revalued amount (based on fair value) less any subsequent amortization and impairment losses only if fair value can be determined be reference to an active market.
• the present value of the fresh cash flows expected to be derived from an asset or cash generating unit is called value in use.
• the accounting standards used in the Philippines are adapted from the standards issued by the

  International Accounting Standards Board (IASB)
• it is the branch of accounting that focuses on the preparation of general purpose financial statements.

  Financial Accounting
• events that do not involve an external party.

  internal events
• this concept defines the area of interests of the accountant. it determines which transactions are recognized in the books of accounts and which are not.

  separate entity
• the process of identifying, measuring, analyzing, and communicating financial information needed by management to plan, evaluate, and control an organization's operation is called

  managerial accounting
• it is the official standard setting body in the Philippines. it is composed of a chairperson and 14 members.

  Financial Reporting Standards Council (FRSC)
• financial reporting standards continuously change primarily in response to

  users' needs
• the ability through consensus among measures to ensure that information represents what it purports to represent is an example of the concept of

  verifiability
• according to the conceptual framework, the pervasive constraints on the information that can be provided by financial reporting is

  cost-benefit
• information on the utilization of economic resources is most useful when assessing an entity's

  management stewardship
• this refers to the comparability of financial statements of the same entity but in different periods

  intra-comparability
• according to pas 1, the judgements and estimates embodied in the financial statements, for example, materiality judgements, assessments of uncertainty and risk, and the like, are the responsibility of the entity's

  management
• materiality does not make any difference with regard to

  intentional errors
• the transfer of resources from the government to an entity in exchange for past or future compliance with certain conditions is called Government grants.
• Direct method - this method of presenting cash flows from (used in) operating activities shows each major class of gross cash receipts and gross cash payments.
• temporary difference - these are difference that have future tax consequences.
• permanent differences - no future tax consequences
• different company, same period

  inter-comparability
• same company, different periods

  intra-comparability
• when information about two different entities has been prepared and presented in a similar manner, the information exhibits the characteristics of comparability.
• according to the conceptual framework, physical count of inventory is an example of direct verification.
• these are the end product of the financial reporting process and the means by which information gathered and processed is periodically communicated to users.

  financial statements
• this type of presentation of statement of financial position does not show distinctions between current and noncurrent items.

  unclassified presentation
• financial statement would be dated as at a certain date

  statement of financial position
• inventories are measured at

  lower of cost and fair value
• an entity that presents its first PFRS financial statements is referred to under PFRS 1 as a

  first-time adopter
• PFRS 1 requires an entity to prepare and present an

  opening PFRS statement of financial position
• the beginning of the earliest period for which an entity presents full comparative information under PFRS in its first PFRS financial statements

  the date to transition to PFRS
• under pfrs 1, the early application of pfrs that have not yet become effective as of the current reporting period

  is permitted, but not required
• retrospective application of accounting policies means

  as if pfrs have been used all along
• Many shares and most share options are not traded in an active market. Therefore, it is often difficult to arrive at a fair value of the equity instruments being issued. Which of the following option valuation techniques should not be used as a measure of fair value in the first instance?

  Intrinsic value.
• the date on which the acquirer obtains control of the acquiree

  acquisition date
• the statement of profit or loss includes?

  discontinued operations
• assets that are classified as held for sale under pfrs 5 are


  not depreciated
• according to pfrs 5, gains and losses on remeasurement of assets held for sale are

  recognized in profit or loss
• according to pfrs 5, the assets and liabilities of a disposal group are presented

  separately on the face of the statement of financial position