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Accounting Research (1 Sem AY 2020-2021) Javier, Jaypee T. Dec 30, 2020
Accounting Research (1 Sem AY 2020-2021) Javier, Jaypee T. Dec 30, 2020
Exercise 2.1
Access the LASB website (www.iffs.ong), click on the “Around the World” tab and click
on the “Analysis of Use ...” link. Do the G20 jurisdictions modify IFRS? If so, please
explain.
- The G20 consists of 19 countries plus the European Union: Argentina, Australia, Brazil,
Canada, China, France, Germany, India, Indonesia, Italy, Japan, the Republic of Korea,
Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, and the United
States of America.
Of the 14 G20 jurisdictions that have adopted IFRS for all or most publicly traded
companies, 11 require IFRSs for all; 2 (Mexico and Argentina) require IFRSs for all other
than financial institutions; and 1 (Canada) allows US GAAP for some and has deferred
IFRSs for some others. 13 of the 14 G20 jurisdictions that have adopted IFRSs for all or
most publicly traded companies also permit IFRSs for all or most non-publicly traded
companies.
Exercise 5.2
Access the European Union website (www-.europa.eu). How many member states
comprise the EU?
- As of December 2020, there are twenty-seven member states. The United Kingdom
withdrew from the European Union on 31 January 2020.
Exercise 6.3
As of December 2020, the three recently completed projects are: ROLLOUT OF THE
REVISED AND RESTRUCTURED CODE, ALIGNMENT OF PART 4B WITH ISAE 3000
(REVISED), and ROLE AND MINDSET EXPECTED OF PROFESSIONAL
ACCOUNTANTS (FORMERLY PROFESSIONAL SKEPTICISM)
Exercise 7.4
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Accounting Research (1st Sem AY 2020-2021) Assignment 19
Javier, Jaypee T. Dec 30, 2020
Exercise 9.5
Knowledge Busters 2.
of IFRS Northwood Industries, a U.S.-based public company, has two subsidiaries located in
Europe. These two subsidiaries are required to prepare their individual financial statements in
accordance with IFRS. Northwood, contemplating that the SEC will soon require U.S.-based
public companies to file financial statements also in accordance with IFRS, has decided to
check out the requirements. The new controller at Northwood is seeking assistance as to
whether any international standards address first time adopters of IFRS and, more specifically,
the requirements to change to IFRS.
- IFRS 1.
IFRS 1 requires an entity that is adopting IFRS Standards for the first time to prepare a
complete set of financial statements covering its first IFRS reporting period and the
preceding year. The entity uses the same accounting policies throughout all periods
presented in its first IFRS financial statements. Those accounting policies must comply
with each Standard effective at the end of its first IFRS reporting period.
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Accounting Research (1st Sem AY 2020-2021) Assignment 19
Javier, Jaypee T. Dec 30, 2020
IFRS 1 provides limited exemptions from the requirement to restate prior periods in
specified areas in which the cost of complying with them would be likely to exceed the
benefits to users of financial statements.
IFRS 1 also prohibits retrospective application of IFRS Standards in some areas,
particularly when retrospective application would require judgements by management
about past conditions after the outcome of a particular transaction is already known.
IFRS 1 requires disclosures that explain how the transition from previous GAAP to IFRS
Standards affected the entity’s reported financial position, financial performance and
cash flows.
Knowledge Busters 3.
JB Company recently acquired 100 percent of Sampson Company for $150,000 cash. Both
companies are located outside of the United States and JB needs to prepare consolidated
financial statements. JB provided the following information regarding the Sampson’s account
values at acquisition:
Required: Utilize elFRS to find authoritative guidance regarding business acquisitions and the
valuation of items acquired. Prepare the acquisition journal entry based upon your research.
Prepare a report to be presented to JB Company’s management with specific authoritative
literature references.
- IFRS 3
IFRS 3 seeks to enhance the relevance, reliability and comparability of information
provided about business combinations (e.g., acquisitions and mergers) and their effects.
It sets out the principles on the recognition and measurement of acquired assets and
liabilities, the determination of goodwill and the necessary disclosures.
- ASC 805-10
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Accounting Research (1st Sem AY 2020-2021) Assignment 19
Javier, Jaypee T. Dec 30, 2020
Acquisition Methods:
- Identifying the acquirer
- Determining the acquisition date
- Recognizing and measuring the subsidiary’s identifiable assets
and liabilities. - Recognizing goodwill and any non-controlling interest.
Knowledge Busters 4.
SANDY: Do you know if standards between the IFRS and U.S. GAAP have converged?
LORI: No, I don’t know if the standards have converged but I think the two are almost identical.
Required: Use a secondary source (e.g., firm website/publication) to investigate IFRS vs. U.S.
GAAP differences as of 2020. Prepare a report that lists and summarizes five differences
between the two sets of standards. Be sure to include the respective standard’s numbers (e.g.,
[AS 2 and ASC 805) and cite your source.
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Accounting Research (1st Sem AY 2020-2021) Assignment 19
Javier, Jaypee T. Dec 30, 2020
Knowledge Busters 5.
Parent Company has control over several entities. Parent Company reports inventory using the
first-in, first-out (FIFO) cost formula. The other entities report inventories using the FIFO cost
formula or the weighted-average (WA) cost formula. See inventory values below.
Required: Utilize elFRS to find authoritative guidance regarding the amount Parent Company
should report for inventory in its consolidated financial statements? Be sure to cite specific
authoritative literature to justify your answer.
References:
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1
https://www.iaseminars.com/blog/blog-article/articleid/99/the-global-use-of-ifrs-analysis-of-the-g20
2
https://europa.eu/european-union/about-eu/countries_en
3
https://www.ethicsboard.org/consultations-projects/iesba-completed-projects
4
https://www.iasplus.com/en/standards
5
https://www.iasplus.com/en/standards/ifric