CFAS CHAPTER 2

86問 • 12ヶ月前

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Is a complete, comprehensive, and single document promulgated by the INTERNATIONAL ACCOUNTING STANDARDS BOARD.

conceptual framework for financial reporting

Is a summary of the terms and concepts that underly the preparation and presentation of financial statements for EXTERNAL USERS.

conceptual framework

In other words, ____ describes the concepts for GENERAL PURPOSE FINANCIAL REPORTING.

conceptual framework

Is an attempt to provide an overall theoretical foundation for accounting.

conceptual framework

Is intended to guide standard setters, preparers, and users of financial information in the preparation and presentation of statements.

conceptual framework

Is the underlying theory for the development of accounting standards and revision of previously issue the counting standards.

conceptual framework

Will be used in future standard setting decision but no changes are made to the current IFRS.

conceptual framework

CONCEPTUAL FRAMEWORK provides the foundation for standards that:

a. contribute to transparency b. strengthen accountability c. contribute to economic efficiency

Contribute to TRANSPARENCY by enhancing international comparability and quality of financial information.

conceptual framework

STRENGTHEN ACCOUNTABILITY by reducing gap between the providers of capital and the people to whom they have interested their money.

conceptual framework

CONTRIBUTE TO ECONOMIC EFFICIENCY by helping investors to identify opportunities and risks around the world.

conceptual framework

To assess the International Accounting Standards Board to develop IFRS standards based on consistent concepts.

purpose of revised conceptual framework

To assess prepares a financial statements to develop consistent accounting policy when no standard applies to a particular transaction or other event or where an issue is not yet addressed by an IFRS.

purpose of revised conceptual framework

To assist prepares a financial statements to develop accounting policy when a standard allows a choice of an accounting policy.

purpose of revised conceptual framework

To assist all parties to understand and interpret the IFRS standards.

purpose of revised conceptual framework

If there is a standard or an interpretation that specifically applies to a transaction, the standard or interpretation OVERRIDES the ____.

conceptual framework

In the absence of a standard or an interpretation that specifically applies to a transaction, management shall consider the applicability of the ______ in developing and applying an accounting policy that results in information that is relevant and reliable.

conceptual framework

CONCEPTUAL FRAMEWORK is NOT an _______.

international financial reporting standard

Nothing in the _____ overrides any specific INTERNATIONAL FINANCIAL REPORTING STANDARD.

conceptual framework

In case where there is a conflict, the requirements of the INTERNATIONAL FINANCIAL REPORTING STANDARDS shall prevail over the _____.

conceptual framework

Under the CONCEPTUAL FRAMEWORK FOR FINANCIAL REPORTING, the users of financial information may be classified into two, namely:

primary users and other users

Include the existing and potential investors, lenders and other creditors.

primary users

Include the employees, customers, governments and their agencies, and the public.

other users

Are the parties to whom general purpose financial reports are primarily directed.

primary users

Cannot require reporting entities to provide information directly to them and therefore must rely on general purpose financial reports for how much of the financial information is needed.

primary uses

Are concerned with the risk andherent in and return provided by their investments.

existing and potential investors

They need information to help them determine whether they should buy, hold or sell.

existing and potential investors

Are also interested in information which enables them to assess the ability of the entity to pay the dividends.

shareholders

Are interested in information which enables them to determine whether their loans, interest there on and do their amounts owing to them will be paid when due.

lenders and other creditors

Are users of financial information other than existing and potential investors, lenders and other creditors.

other users

Or so cold because they are parties that may find the general purpose financial reports useful but the reports are not directed to them primarily.

other users

Are interested in information about the stability and profitability of the entity.

employees

Are interested in information which enables them to assess the ability of the entity to provide remuneration, retirement benefits and employment opportunities.

employees

Have an interest in information about the continuance of an entity especially when they have a long term involvement with or are dependent on the entity.

customers

Our interested in the allocation of resources and therefore the activities of the entity.

government and their agencies

These users require information to regulate the activities of the entity, determine taxation policies and as a basis for national income and similar statistics.

government and their agencies

Entities make substantial contribution to the local economy in many ways including the number of people the employee and their patronage of local suppliers.

public

Financial statements may assist the public by providing information about the trend and the range of its activities.

public

The objective of financial reporting forms the foundation of the ______.

conceptual framework

Is to provide financial information about the reporting entity that is useful to existing and potential investors, lenders and other creditors in making decisions about providing resources to the entity.

objective of financial reporting

Is to provide information about the entity useful to current and future investors and creditors in making decisions as capital providers.

objective of financial reporting

The _____ is the WHY, PURPOSE or GOAL of accounting.

OBJECTIVE OF FINANCIAL REPORTING

The OBJECTIVE OF FINANCIAL REPORTING is the ______ of accounting.

WHY, PURPOSE or GOAL

Is the provision of financial information about an entity to external users that is useful to them in making economic decisions and for assessing the effectiveness of the entity's management.

financial reporting

The principal way of providing financial information to external users is through the ______.

annual financial statements

_____ encompasses not only financial statements but also other information such as financial highlights, summary of important financial figures, analysis of financial statements and significant ratios.

FINANCIAL REPORTING

FINANCIAL REPORTS also include ______ such as description of major products and the listing of corporate officers and directors.

non-financial information

_____ a financial information of the parties that provide resources or capital to the entity.

primary users

The overall objective of _______ is to provide information useful for decision making.

financial reporting

Places more emphasis on the importance of providing information needed to assess the MANAGEMENT STEWARDSHIP of the entity's economic resources.

conceptual framework

To provide information useful in making decisions about providing resources to the entity.

objectives of financial reporting

To provide information useful in assessing the cash flow prospects of the entity.

objectives of financial reporting

To provide information about entities resources, claims, and changes in resources and claims.

objectives of financial reporting

Need general purpose financial reports in order to enable them in making decisions whether to buy, sell or hold equity investments.

existing and potential investors

Knee general purpose financial reports in order to enable them in making decisions whether to provide or settle loans and other forms of credit.

existing and potential lenders and other creditors

Decisions by existing in potential investors about buying, selling or holding equity investments depend on the ____ that they expect from an investment.

returns

Decisions by existing and potential lenders and other creditors about providing or settling loans and other forms of credit depend on the _____.

principal and interest payments

Should provide information useful in assessing the amount, timing and uncertainty of an entity's cash flows on the ability of the entity to generate future net cash flows.

financial reporting

Is information about the entities economic resources and the claims against the reporting entity.

financial position

The economic resources are the

assets

The claims are the

liabilities and equity

Comprises the assets, liabilities and equity of an entity at a particular moment in time.

financial position

Information about the nature and amounts of an entity's economic resources and claims can help users identify the entities financial strength and weakness.

financial position

Is the availability of cash in the near future to cover currently maturing obligations.

liquidity

Is the availability of cash over a long term to meet financial commitments when they fall due.

solvency

P changes in economic resources and claims result from _____ and from events or transactions such as issuing debt or equity instruments.

financial performance

____ of an entity comprises revenue, expenses and net income or loss for a period of time.

financial performance

Is the level of income earned by the entity through the efficient and effective use of its resources.

financial performance

Financial performance is also known as

results of operations

Financial performance is portrayed in

income statement and statement of comprehensive income

Helps users to understand the return that the entity has produced on the economic resources.

financial performance

Information about the return the entity has produced provides an indication of how well management has discharged its responsibilities to make efficient and effective use of the entitys economic resources.

financial performance

Is usually helpful and predicting future returns on the entity's economic resources

past financial performance

Information about ____ during a period is useful in assessing the entitys ability to generate future cash inflows from operations.

financial performance

The financial performance of the entity must be measured using the

accrual basis of accounting

Depicts the effects of transactions and other events and circumstances on an entity's economic resources and claims in the periods in which those effects occur even if the resulting cash receipts and payments occur in a different period.

accrual accounting

The effects of transactions and other events are recognized when they occur and not as cash is received or paid

accrual accounting

Means that income is recognized when earned regardless of when received and expense is recognized when incurred regardless of when paid

accrual accounting

Information about financial performance measured in accordance with ____ provides a better basis for assessing past and future performance than information solely about cash receipts and payments during a period.

accrual accounting

______ do not and cannot provide all of the information that existing and potential investors, lenders and other creditors need.

general purpose financial reports

Are not designed to show the value of an entity but the reports provide information to help the primary users estimate the value of the entity.

general purpose financial reports

Are intended to provide common information to users and cannot accommodate every request for information.

general purpose financial reports

To large extent, _____ are based on estimate and judgement rather than exact depiction.

general purpose financial reports

Is there responsibility of management in efficiently and effectively using the economic resources of the entity.

management stewardship

Information from this is useful for predicting how management will use the entitys economic resources in future periods.

management stewardship

The information on _____ can be useful for assessing the entitys prospects for future net cash flows.

management stewardship

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