International Accounting Standards
Exam Questions and Answers 100%
Solved
Why use international accounting standards? - ✔✔* Provides a
framework - 'rules' - for preparing financial statements
* Ensures accountants follow the same set of rules
* Reduce number of different accounting treatments
* Meet the director's duty to ensure the FS comply with IAS
* Meet the auditor's report requirements
Benefits of international accounting standards - ✔✔* Standardise
financial statements internationally
* Reduce variations of accounting treatments
* Allow users of FS to make inter-firm comparisons
IAS 1 Presentation of Financial Statements - ✔✔"to provide
information about the financial position, financial performance and
1
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
, cash flows of an entity that is useful to a wide range of users in
making economic decisions"
* Requires compliance with accounting concepts
IAS2 Inventories - ✔✔* Requires inventories are valued at the
lower of cost and net realisable value
* COST - purchase price + any costs incurred to bring product to
where it is
* NRV - estimated selling price - costs necessary to bring product
into a selling condition
IAS 7 Cash Flow Statements - ✔✔* Requires a cash flow
statement is included in the FS
* Compliments IS & BS - IS reports on financial performance, BS
reports on financial position, CFS focuses on the changes in
financial position
* OPERATING ACTIVITIES - main revenue-producting activities,
interest & tax
2
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
Exam Questions and Answers 100%
Solved
Why use international accounting standards? - ✔✔* Provides a
framework - 'rules' - for preparing financial statements
* Ensures accountants follow the same set of rules
* Reduce number of different accounting treatments
* Meet the director's duty to ensure the FS comply with IAS
* Meet the auditor's report requirements
Benefits of international accounting standards - ✔✔* Standardise
financial statements internationally
* Reduce variations of accounting treatments
* Allow users of FS to make inter-firm comparisons
IAS 1 Presentation of Financial Statements - ✔✔"to provide
information about the financial position, financial performance and
1
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
, cash flows of an entity that is useful to a wide range of users in
making economic decisions"
* Requires compliance with accounting concepts
IAS2 Inventories - ✔✔* Requires inventories are valued at the
lower of cost and net realisable value
* COST - purchase price + any costs incurred to bring product to
where it is
* NRV - estimated selling price - costs necessary to bring product
into a selling condition
IAS 7 Cash Flow Statements - ✔✔* Requires a cash flow
statement is included in the FS
* Compliments IS & BS - IS reports on financial performance, BS
reports on financial position, CFS focuses on the changes in
financial position
* OPERATING ACTIVITIES - main revenue-producting activities,
interest & tax
2
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
