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Reporting Financial Performance - D

D A English 73 cards

Cards in this deck (73)

  1. 1Accounting policiesSpecific principle base conventions rules and practice adopt teed by an entity in preparing and presentating financial statement
  2. 2Change in accounting estimateAn adjustment of the carrying amount of an asset or a liability or the amount of the periodic consumption of an asset that results from the assessment of the liability present status or and excpected future benefits and o bligaiton associated with assets and liabilities .
  3. 3Where do these changes come fromChanges in accounting estimates results from new information or new developments and accordingly are not correction of errors
  4. 4MaterialOmissions or misstatement of items are material if they could individually or collective influence the economic dfeciison that user make on the basis of the finacnial statmeents
  5. 5Prior period errors.Omissions and misstatements the entity financial statements for one or more prior periods arising from a failure to use or misused of reliable information that
    Was available when finacnial statements fror those periods were authroised for issue
  6. 6ExamplesMathematicl errors, accounting poolicies,oversights
  7. 7Retrospective applicationnew accounting policy to transaction other events and conditiions as if that policy had always being applied
  8. 8Reospective restatementcorrecting the recognition mesurement and disclosure of amount of elements of financial statmeents as if a pr ior period error had never occurred
  9. 9Prospectice applicationChange in accounting policy and of recognising the effect of a change in an accountign estimate respecitvely or to make a restrospective restatemnt ot correct an error if one of the following applu
  10. 10ImpracticableApplying a requirement is impractice able when the entity cannot apply it after makign every reasonble effect to do so. It is impracticable to apply a change in an aaccounting policy retrospectively or to make a restrosspective restatement to correct an error if one of the following apply
  11. 11Effect of the retrsoecptive application or retrosepceive restatement are nto determinableEffect of the retrsoecptive application or retrosepceive restatement are nto determinable
  12. 12The retsoepective application or statemnet requires assumption aboutthose estimates hthatThe retsoepective application or statemnet requires assumption aboutthose estimates hthat
  13. 13Provides evidence of circumstnace that esxited on the dates at which amounts are to be recognised measured or disclosedProvides evidence of circumstnace that esxited on the dates at which amounts are to be recognised measured or disclosed
  14. 14Would have been availabel when the finacnial statements for that prior period were authorised for issue from other informationWould have been availabel when the finacnial statements for that prior period were authorised for issue from other information
  15. 15How to determine accounting polciiesApply the relevant IFRS
  16. 16If there is none,then you use judgement from information that is relevant and reliable.
  17. 17Changes in accounting policies Applied retrosepctively?Changes in accounting policies
    Applied retrosepctively
  18. 18Changes in accounting polices will be rare and should be made if:Change is required by an IFRS
    The change will result in a more appropriate presentation of event or transacations in the financial statement of the enetity providing more reliable and relevant informaiton
  19. 19Standard highlights two types of event which do not constitute changes in accounting policy:Adopting an accounting policy for a new type of transaction or event not dealt with previously by the entirety
    Adopting a new accounting policy for a transaction or event which has not occurred in the past or wheich was not material
  20. 20FIFORevenue 869
    Opening 135 +
    Purchase 246 +
    Closing 174 -
    Gross Profit 662
  21. 21Weighted averageRevenue 869
    Cost of sale
    Opening 122 +
    Purchase 246 +
    Closing 143 -
    Gross Profit 644
    THIS IS LOWER 18
  22. 22when a change in accoutning policy has a mterial effect on the current period or any prior pertiod presented or when it may have material effect in subsequent periodCertain disclosure is required
  23. 23Reasons for the changeAmount of the adjustment for the current period and for each period presented
    Amount of the adjustment relating to periods prior to those included in the comparative infomration
    The fact that comparative information has been restated or that it is impracticable to do so
  24. 24Changes in accounting estimate are not applied retrospectively T/FTRUE
  25. 25ExamplesA necessary irrecoverable debt allowance
    Useful lives of depreicable assets
    Provision for obsolesence of inventory
  26. 26Effect of a change in an accounting estimate should be included in the dermination of net profit or loss in one of:Period of the change, if the change affects that period only
    The period of the change and future periods if the changes affect both.
  27. 27Current Period:Bad debt estimate.
  28. 28Same expense classification as was used previously for the estimate. How doe sthis help?This rule helps to ensure consistency between the financial statements of different periods
  29. 29Prior period errors must be corrected retrospectively T/FTRUE
  30. 30How can errors be corrected?Error can be correct throguh net profit or oss for the current period
  31. 31When the error occurred before the earliest prior period presented, .restating the opening balances of assets liabilities and equity for that period
  32. 32Why?so that the financial statement are presented as if the error had never occurred
  33. 33IFRS 5 required assets held for sale to be presented separtely in the sofp . Why?it sets out the ciritera for recognised a discounted operations
  34. 34Disposal groupA group of assets to be disposed of by sale or otherwise together as a grup in a single transacation and liabiliteis directly assoicated with those assets that will be transferred in this transacation
  35. 35CGUsmallest identifiable group of assets for whih indepdent cash flows can be identified and measured
  36. 36CLASSIFICATION FOR HELD FOR SALE 1The asset must be available for immediate sale
  37. 372There most be an active programme to locate a buyer
  38. 383The asset must be marketd for sale at a price that is reasonable in relation to its current fair value
  39. 394Sale should be expected to take place within one eyar from the date of classification
  40. 405it is unlikely that signficatn changes to the plant will be made or that plan will be drwithdraw
  41. 41Fair vlaueThe price that would be received to sell an asset or paid to transfer a liability in an orderly transacation between market paritcpant
  42. 42Cost of dispsosalThe incremental cost directly attributable to the dispsoal of an asset, excludign finance costs and income tax expense
  43. 43Recoverable amountThe higher of an asset fair value less cost for disposal and its vvalue in use
  44. 44Value in useThe PV of estimated future cash flows expected to arise from the continuing use of an asset and from itsdispsoal at the eendof its useful lfie
  45. 45Assets and liabilties held for sale should not be offset T/FAssets and liabilties held for sale should not be offset
    TRUE
  46. 46The major class of assets and liabiltiies held for sale should be sepraetly disclosed T/FThe major class of assets and liabiltiies held for sale should be sepraetly disclosed
    TRUE
  47. 47What else should be disclosedA desccription of the non current asset
    Fact and circumstances of the disposal
    Gain or loss recognised when athe item classified as held for sale
  48. 48Discontinued operationA company of an entity that has either been disposedof is classified held for sale
  49. 49Component of an entityOperations and cash flows that can be clearly distinguished operationally and for financial reporting purpose
  50. 50Present and disclose information that enables user of the financial st atements to evlauated the financail effects of discontinued oeprationsPresent and disclose information that enables user of the financial st atements to evlauated the financail effects of discontinued oeprations
  51. 51An entity should disclose a single amount in the statement of profit or loss comprising the total ofPost tax profit or loss
    Measurement to FV 0 cost of disposal
  52. 52Foreign currencyA currency other than the functional currency of the enttiy
  53. 53Functional currencyThe current of the primary economic environment in which the entity oeprates
  54. 54Presentation currecnyThe currency in which the finanil statemenets are present
  55. 55Exchange rateThe ratio of exchange for two currenceis
  56. 56Exhcanfe ifferenceThe difference resulting from translating a given nubmer of units of one currecny into another currency at different exchange rates
  57. 57Closing ratesThe spot exchange rate at the year end
  58. 58Spot excange rateThe exchange raes for immediately delivery
  59. 59Monterary itemUnit s of currency held and assets and liabiltiies to be received or paid in afixed or determinable number of units of currency
  60. 60IAS 21 STATES that compnaies should Define functionla currency and measure it results and financial position in that ucrrencyCurrecny that infleucens sale price
    Currency of the country whose competitive forces and regulations mainly determine the sales price of its goods and
    Influecnes labour material and other costs
  61. 61Companies must also consideredFund from financing activities
    Receptes from operating activities
  62. 62Conversionis the process of exchanging amounts of one foreign currency for another
  63. 63Translationis required at the end of an accounting epriod when a company wstill holds assets or liabiltieis in its statemenet of financial position which were obtained or incurred in a foreign currecny assets or liabilitis originated in a foreign currency deal
  64. 64Foreign currency transacaiton intial recognisedIAS 21 states that a foreign currency transacation should be recoreded on intial recognition in the funciton currecny
    at the At the date of the transacation
  65. 65An average rate for a period may be used if exchange rates do not fluctiate signifcantly TRUE/FALSETRUE
  66. 66Monetary items currency exchangeMonetary items involve the right ot receive or the obligation the deliver a fixed or determinable amount of currency.
  67. 67Exchanges differences occur whenthere is a change in the exchange rate
  68. 68Change of accounting policy IAS 8Changed from weighted average to FIFO
    Depreciation charges as cost of sales rather than admin expensive
    Classifying commission earned as revenue in the sopl, classified as other operating income
  69. 69Held for Sale ClassificationLower of
    Carrying amount
    FV of Disposal
  70. 70When a transaction occurs what is the exchange rateDate of the exchange rate
  71. 71non-montary items carried at historical costsRate at date of transacation
  72. 72When a transaction occurs what is the exchange rateDate of the exchange rate
  73. 73—

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Flashcards on Reporting Financial Performance - D, created by D A on 19/04/2019.
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