IFRS - Intermediate Exam with correct |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
answers
Can U.S. companies listed on U.S. stock exchanges use IFRS? - correct answer✔✔No. U.S.
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companies do not have the option to report under IFRS |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
How does a principles-based standard differ from a rules-based standard? - correct
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answer✔✔A principles-based standard is consistent with a theoretical framework. In contrast, |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
a rules-based standard does not necessarily rely on a consistent theoretical framework. Rather,
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
it contains more specific and prescriptive rules.
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What is the composition of the IASB's membership? - correct answer✔✔The IASB is comprise
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of 14 members who are appointed by the IFRS Foundation's board of trustees.
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At least 11 members serve full time, and not more than 3 can be part-time members.
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To ensure broad and diverse international representation, the IASB is comprised of: 4 members
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from the Asia/Oceania region, 4 members from Europe, and 4 members from the Americas,
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and 1 member from Africa, and 1 member appointed from any area, subject to maintaining
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overall geographical balance. |||\\\ |||\\\
Characteristics of principles-based accounting systems - correct answer✔✔- Provides a clear |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
discussion of the accounting objective related to the standard |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
- Involves no bright-line tests
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- Involves a significant amount of interpretation in application
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- Involves few, if any, exceptions
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- Provides insufficient guidance to implement the standard
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, Characteristics of rules-based accounting systems - correct answer✔✔- Contains detailed |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
application guidance |||\\\ |||\\\
- Contains numerous exceptions to the types of firms and industries that are covered
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
- Contains numerous bright-line tests
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- Would not rely on extensive use of professional judgment
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- Results in inconsistencies between standards
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An accountant will use a particular accounting standard only if...
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the length of a contract covers substantially all of the useful life of a plant asset. - correct
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
answer✔✔Principles-based standard |||\\\
An accountant will use a particular accounting standard only if...
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the number of new common shares a firm issues is equal to 20% of the previously outstanding
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
shares. - correct answer✔✔Rules-based standard
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An accountant will use a particular accounting standard only if...
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a corporation owns over 50% of the voting shares of an affiliate company. - correct
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
answer✔✔Rules-based standard |||\\\
An accountant will use a particular accounting standard only if...
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a corporation has the ability to control the operating and financial activities of an affiliate
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
company. - correct answer✔✔Principles-based standard |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
An accountant will use a particular accounting standard only if...
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
it is more likely than not that a company's tax position will be sustained upon examination by
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
the Internal Revenue Service. - correct answer✔✔Principles-based standard
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answers
Can U.S. companies listed on U.S. stock exchanges use IFRS? - correct answer✔✔No. U.S.
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
companies do not have the option to report under IFRS |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
How does a principles-based standard differ from a rules-based standard? - correct
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
answer✔✔A principles-based standard is consistent with a theoretical framework. In contrast, |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
a rules-based standard does not necessarily rely on a consistent theoretical framework. Rather,
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
it contains more specific and prescriptive rules.
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
What is the composition of the IASB's membership? - correct answer✔✔The IASB is comprise
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
of 14 members who are appointed by the IFRS Foundation's board of trustees.
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
At least 11 members serve full time, and not more than 3 can be part-time members.
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
To ensure broad and diverse international representation, the IASB is comprised of: 4 members
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
from the Asia/Oceania region, 4 members from Europe, and 4 members from the Americas,
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
and 1 member from Africa, and 1 member appointed from any area, subject to maintaining
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
overall geographical balance. |||\\\ |||\\\
Characteristics of principles-based accounting systems - correct answer✔✔- Provides a clear |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
discussion of the accounting objective related to the standard |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
- Involves no bright-line tests
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\
- Involves a significant amount of interpretation in application
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
- Involves few, if any, exceptions
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
- Provides insufficient guidance to implement the standard
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
, Characteristics of rules-based accounting systems - correct answer✔✔- Contains detailed |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
application guidance |||\\\ |||\\\
- Contains numerous exceptions to the types of firms and industries that are covered
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
- Contains numerous bright-line tests
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\
- Would not rely on extensive use of professional judgment
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
- Results in inconsistencies between standards
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\
An accountant will use a particular accounting standard only if...
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
the length of a contract covers substantially all of the useful life of a plant asset. - correct
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
answer✔✔Principles-based standard |||\\\
An accountant will use a particular accounting standard only if...
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
the number of new common shares a firm issues is equal to 20% of the previously outstanding
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
shares. - correct answer✔✔Rules-based standard
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\
An accountant will use a particular accounting standard only if...
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
a corporation owns over 50% of the voting shares of an affiliate company. - correct
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
answer✔✔Rules-based standard |||\\\
An accountant will use a particular accounting standard only if...
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
a corporation has the ability to control the operating and financial activities of an affiliate
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
company. - correct answer✔✔Principles-based standard |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
An accountant will use a particular accounting standard only if...
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
it is more likely than not that a company's tax position will be sustained upon examination by
|||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\ |||\\\
the Internal Revenue Service. - correct answer✔✔Principles-based standard
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