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19 Cards in this Set
- Front
- Back
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ASSET OR LIABILITY IS CURRENT WHEN? |
-held for trading -settled/consumed during normal trading cycle -settled/ consumed within 12 months of the reporting period |
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3 ITEMS RECYCLED TO OCI |
- Efective parts of a cashflow hedge - Foreign translation gains/losses - Remeasurement of a debt instrument using profit or loss through OCI |
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3 ITEMS NOT RECYCLED TO OCI |
- Remeasurement of employee benefits defined benefit plans -Changes in Revaluation surplus - Remeasurement of investment in equity instruments using profit or loss through OCI |
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2 OPTIONS OF DISCLOSING INCOME TAX-OCI |
DIsclosing each component of OCI net of tax related effects or disclosing OCI before tax related effects with one tax amount shown |
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SOCE disclosure |
Changes in equity relating to owners must be shown separately from non owner changes in equity e.g dividends and issue of shares |
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Comparative Statement disclosure |
Comparative Statement for prior periods must be disclosed. |
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Small threat to Going Concern solution? |
Company should consider future profitability, debt finance repayment and potential alternative sources of finance. |
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Large threat to Going Concern solution? |
More should be done to evaluate whether the company can be regarded as a going concern |
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8 indicators of Uncertainty |
Major debt repayment Disclosures or provisions to material legal claims Increase in payable days Major impairment losses Increase in overdraft and short term borrowings Increase in gearing levels Negative operating cashflows Lack of Cash and cash equivalents |
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Define Accruals basis accounting |
Transactions are recorded as they occur not when cash/goods are received for them |
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2 Allowed Changes to Consistency |
1. Allowed by Ias or Ifrs standard 2. Make the statements more reliable and relevant |
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2 Materiality disclosures |
1. Material classes of information are shown separately 2. Immaterial items of a similar nature can be aggregated as long as they do not reduce understandability |
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When is Offsetting done? |
When permitted by a standard |
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Note presentation order |
1. Most relevant items 2. Similar Items grouped together 3. Order of Sofp or P/l statement |
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Compliance with IFRS statement |
A company should make an explicit and unreserved statement stating that its financial statements comply with IFRS |
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2.Accounting Policy disclosure |
1.Measurement basis used 2.Significant accounting policies |
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Source of Uncertainty disclosure |
A company should disclose information about the key sources of estimation uncertainty that may cause a material adjustment to assets and liabilities within the next year |
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Reclassification adjustment disclosure |
Disclose amounts recycled from profit or loss to OCI in SOPL or the notes |
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4 Critics of OCI |
1. No consistent basis across the accounting standards with regard to when to send items to the OCI, this makes things unclear for the users
2. Comparability of profit based performance is reduced because of the difference in OCI treatment In IFRS and US Gaap. 3. Users of Financial Statements usually ignore the OCI because it is not related to operating profit, thus ignoring the material losses. 4. Not understandable to users about which item to recycle to OCI and when, as these gains or losses are recorded in the period they did not occur, contradicting the definition of icome and expenses. |
