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    IFRS Summary

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    Limenih
    The document discusses International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles (GAAP). It provides definitions and explanations of key terms related to IFRS and GAAP, including their principles, objectives, differences between them, and components. The document also discusses accounting standards in other countries/regions and fundamental accounting principles.

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    IFRS Summary

    Uploaded by

    Limenih
    21 views6 pages
    The document discusses International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles (GAAP). It provides definitions and explanations of key terms related to IFRS and GAAP, including their principles, objectives, differences between them, and components. The document also discusses accounting standards in other countries/regions and fundamental accounting principles.

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    IFRS summary

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    The document discusses International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles (GAAP). It provides definitions and explanations of key terms related to IFRS and GAAP, including their principles, objectives, differences between them, and components. The document also discusses accounting standards in other countries/regions and fundamental accounting principles.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    21 views6 pages

    IFRS Summary

    Uploaded by

    Limenih
    The document discusses International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles (GAAP). It provides definitions and explanations of key terms related to IFRS and GAAP, including their principles, objectives, differences between them, and components. The document also discusses accounting standards in other countries/regions and fundamental accounting principles.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 6

    What is IFRS summary?

    The IFRS Summaries provide an introduction to each standard in issue and a


    quick reference source of key requirements. The Snapshots present a useful glance
    of key provisions, with cross references to the summaries or standards as necessary.
    This guidance is not a substitute for knowledge of the complete standards.

    What are the 4 principles of IFRS?


    IFRS requires that financial statements be prepared using four basic principles: clarity,
    relevance, reliability, and comparability.

    What is the meaning of IFRS?

    International Financial Reporting Standards


    International Financial Reporting Standards (IFRS) are a set of accounting rules for the financial
    statements of public companies that are intended to make them consistent, transparent, and easily
    comparable around the world.

    What is the purpose of introducing IFRS?


    IFRS specifies how businesses need to maintain and report their accounts.
    Created to establish a common accounting language, the goal of the international
    financial reporting standards is to make financial statements coherent and consistent
    across different industries and countries.

    What are the 4 principles of GAAP?


    The four basic constraints associated with GAAP include objectivity, materiality,
    consistency and prudence.

    How can I learn IFRS?


    Being me in your shoes, I would start my IFRS learning as a step-by-step
    process:
    1. Learn the basic structure of IFRS.
    2. Read the Framework.
    3. Get some knowledge about individual standards.
    4. Develop your knowledge and be up to date.
    What is difference between GAAP and IFRS?

    The primary difference between the two systems is that GAAP is rules-based and
    IFRS is principles-based. ... Consequently, the theoretical framework and principles of
    the IFRS leave more room for interpretation and may often require lengthy disclosures
    on financial statements.

    How many types of IFRS are there?


    The following is the list of IFRS, and IAS issued by the International Accounting
    Standard Board (IASB) in 2019. In 2019, there are 16 IFRS and 29 IAS. IAS will replace
    IFRS once it is finalized and issued by IASB.

    What are the components of IFRS?


    IFRS financial statements consist of:
    • a statement of financial position (balance sheet)
    • a statement of comprehensive income. ...
    • a statement of changes in equity.
    • a statement of cash flows.
    • notes, including a summary of the significant accounting policies.

    What are the main objectives of IFRS?


    Its principal objectives are:
    • to develop, in the public interest, a single set of high quality, understandable,
    enforceable and globally accepted international financial reporting standards
    (IFRS Standards) based upon clearly articulated principles. ...
    • to promote the use and rigorous application of those standards.

    What is the scope of IFRS?


    Scope of IFRSs

    IFRSs apply to the general-purpose financial statements and other financial


    reporting by profit-oriented entities – those engaged in commercial, industrial,
    financial, and similar activities, regardless of their legal form.
    What is ind?
    Indian Accounting Standard (abbreviated as Ind-AS) is the Accounting standard
    adopted by companies in India and issued under the supervision of Accounting
    Standards Board (ASB) which was constituted as a body in the year 1977. ... MCA must
    spell out the accounting standards applicable for companies in India.

    What is on balance sheet?

    A balance sheet is a financial statement that reports a company's assets, liabilities,


    and shareholder equity. The balance sheet is one of the three core financial
    statements that are used to evaluate a business. It provides a snapshot of a company's
    finances (what it owns and owes) as of the date of publication.

    Is IFRS rules based?


    One of the major differences lies in the conceptual approach: U.S. GAAP is rule-based,
    whereas IFRS is principle-based. ... However, IFRS include positions and guidance
    that can easily be considered as sets of rules instead of sets of principles.

    What are the 5 basic principles of accounting?

    5 principles of accounting are.


    • Revenue Recognition Principle,
    • Historical Cost Principle,
    • Matching Principle,
    • Full Disclosure Principle, and.
    • Objectivity Principle.

    What are the benefits of IFRS?


    1. Advantages of IFRS compared to GAAP reporting standards
    • 1.1 Focus on investors. ...
    • 1.2 Loss recognition timeliness. ...
    • 1.3 Comparability. ...
    • 1.4 Standardization of accounting and financial reporting. ...
    • 1.5 Improved consistency and transparency of financial reporting. ...
    • 1.6 Better access to foreign capital markets and investments.

    What is the difference between IAS and IFRS?


    International Accounting Standard (IAS) and International Financial Reporting Standard
    (IFRS) are the same. The difference between them is that IAS represents old
    accounting standard, such as IAS 17 Leases. While, IFRS represents new
    accounting standard, such as IFRS 16 Leases.

    What are the various accounting principles?


    Some of the most fundamental accounting principles include the following:
    • Accrual principle.
    • Conservatism principle.
    • Consistency principle.
    • Cost principle.
    • Economic entity principle.
    • Full disclosure principle.
    • Going concern principle.
    • Matching principle.

    What Is GAAP?
    GAAP is a set of rules used for helping publicly traded companies create their
    financial statements. These rules form the groundwork on which more
    comprehensive, complex, and legalistic accounting rules are based.

    GAAP covers a wide array of topics such as financial statement presentation,


    liabilities, assets, equities, revenue and expenses, business combinations,
    foreign currency, derivatives and hedging and non-monetary transactions.

    Financial accounting information is based on historical data. To facilitate


    comparisons, the financial information must follow the generally accepted
    accounting principles.

    While the overall GAAP is specified by the Financial Accounting Standards


    Board, the Governmental Accounting Standards Board (GASB) specifies
    GAAP for state and local government. Compliance with GAAP as well as SEC
    is required by publicly traded companies.

    What Are the Principles of Accounting?


    The best way to understand the GAAP requirements is to look at the ten
    principles of accounting.
    1. Economic Entity Principle

    The business is considered a separate entity, so the activities of a business


    must be kept separate from the financial activities of its business owners.

    2. Monetary Unit Principle

    The monetary unit assumption means that only transactions in U.S. dollar
    amounts can be included in accounting records. It’s important to note that
    accountants ignore the effects of inflation on the recorded dollar amounts.

    3. Time Period Principle

    The business activities may be reported in short, distinct time intervals which
    may be weeks, months, quarters, a calendar year, or fiscal year. The time
    interval must be identified in the headings of the financial statements such as
    the income statement, statement of cash flow and stockholders’ equity
    statement.

    4. Cost Principle

    The cost principle mentions the historical cost of an item. This refers to cash
    or cash equivalent that was paid to purchase an item in the past. This asset
    amount is adjusted for inflation. The historical cost is reported on the financial
    statements.

    5. Full Disclosure Principle

    All information that is relative to the business and is important to a lender or


    investor must be disclosed in the content of the financial statements or in the
    notes to the statements. This is the reason that numerous footnotes are
    attached to financial statements

    6. Going Concern Principle

    This accounting principle refers to the intent of a business to carry on its


    operations and commitments into the foreseeable future and not to liquidate
    the business.
    7. Matching Principle

    The matching principle requires that businesses use the accrual basis of
    accounting and match business income to business expenses in a given time
    period.

    For example, the commissions for sales should be recorded in the same
    accounting period that sales income was made (and not when they were
    paid).

    8. Revenue Recognition Principle

    Under the accrual basis of accounting, the revenues must be reported on the
    income statement in the period in which it is earned. This means that as soon
    as a product is sold, or the service has been performed, the revenues are
    recognized. This is regardless of whether the money is received or not.

    9. Materiality Principle

    The materiality principle refers to the misstatement in accounting records


    when the amount is insignificant or immaterial. Because of the materiality
    principle, financial statements usually show amounts rounded to the nearest
    dollar.

    10. Conservatism Principle

    If accountants are unsure about how to report an item, conservatism principle


    calls for potential expenses and liabilities to be recognized immediately. It
    directs the accountant to anticipate the losses and choose the alternative that
    will result in less net income and/or less asset amount.

    For example, potential lawsuits may be regarded as losses and are reported
    but potential gains from other sources are not.

    What are the 3 types of accounting?


    A business must use three separate types of accounting to track its income and
    expenses most efficiently. These include cost, managerial, and financial accounting,
    each of which we explore below.

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