Term
| What are the 2 definitions of the term Framework? |
|
Definition
1) The regulatory or institutional framework which embraces IFRS standard-setting process & general legal context in with IFRS standards are used
2) A set of generally accepted theoretical principles to be kept in mind while designing new accounting standards or when applying them in practice. |
|
|
Term
| What are the elements that impact companies' accounting and financial reporting processes? |
|
Definition
- National laws
- EU or other regulations
- Securities exchange rules
- Tax Regulations
- Accounting principles |
|
|
Term
| The key goal of Regulatory Framework? |
|
Definition
| To ensure that users of financial statements receive information which is good enough to enable them to make economic decisions |
|
|
Term
| Benefits of harmonization |
|
Definition
1) Reading and interpretation are a lot easier when financial information from different countries is prepared on a consistent basis.
2) Preparation of financial information uses up less resources.
3) For investors - easier to compare different entities and can make fully informed investment decisions.
4) Easier to control tax statements - limits tax avoidance.
|
|
|
Term
| Barriers to harmonization |
|
Definition
1) Individual countries have their own social, political and economic contexts
2) Harmonized solutions are not easily transferable to all countries.
3) Costly process
|
|
|
Term
| 4 institutions involved in the IFRS Standard Setting process |
|
Definition
1) The International Accounting Standards Board (IASB)
2) The International Financial Reporting Standards Foundation (IFRS Foundation)
3) The IFRS Interpretations Committee (IFRS IC)
4) The IFRS Advisory Council (IFRS AC)
|
|
|
Term
| What is the goal of IASB? |
|
Definition
| To develop a single set of high-quality understandable and enforceable accounting standards. |
|
|
Term
| Why does IASB have to cooperate closely with national authorities? |
|
Definition
| Because it lacks the legal authority to enforce compliance with the standards that it develops. |
|
|
Term
| The objective of IFRS Foundation? |
|
Definition
- Development of a set of global accounting standards of high quality
- Promoting the widespread application of the standards |
|
|
Term
|
Definition
| Issue guidance o accounting topics where divergent interpretations of the standards exist or where new issues are not specifically dealt with in the standards. |
|
|
Term
| Before any interpretation issued by IFRS IC becomes binding, who should approve them first? |
|
Definition
| IASB (International Accounting Standards Board) |
|
|
Term
|
Definition
| Provide a forum for IASB to consult a spectrum of stakeholders who might be affected by the work of the board. |
|
|
Term
| Typical procedure for developing a new standard |
|
Definition
1) IASB identifies a topic and appoints a committee
2) A discussion paper issued by IASB to encourage comments from wider audience
3) IASB publishes exposure draft for public comment. This is the first draft version of the proposed standard.
4) Following receipt of comments, IASB publishes final text of new IFRS. |
|
|
