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CHAPTER 2 CONCEPTUAL FRAMEWORK UNDERLYING FINANCIAL ACCOUNTING

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Question;41. The International;Accounting Standards Board has given companies the option of using fair value;to report financial liabilities.;42. Under International Financial Reporting Standards (IFRS) product costs are charged off in the;immediate period and period costs may be carried into future periods.;43. Under International Financial Reporting Standards (IFRS) notes to the financial statements must;qualify as an element.;44. Under International Financial Reporting Standards (IFRS) supplementary information may be;information that is high in relevance but low in reliability.;45. The cost constraint included in the International Accounting;Standards Board?s conceptual framework states that financial information should;be free from cost to users of the information.;46. The International Accounting Standards Board?s (IASB) rule for;materiality is any item under 5% of net income is considered immaterial.;47. The International Accounting Standards Board?s (IASB) conceptual;framework includes the concept of prudence or conservatism which means when in;doubt, choose the solution that will be least;likely to overstate assets or income and/or understate liabilities or expenses.;48. Under International Financial Reporting Standards (IFRS) companies must consider both quantitative;and qualitative factors in determining whether an item is material.;49. Under International Financial Reporting Standards (IFRS) companies need not report immaterial items within the body of the financial;statements, but must disclose them in the notes or supplementary information;that accompany the financial statements.;50. The conceptual framework;underlying U.S. GAAP is similar to that underlying IFRS.

 

Paper#55026 | Written in 18-Jul-2015

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