IFR SYNC NOTES 01/30/21

IASB Structure

IFRS Due Process:

1. Agenda Consultation
2. Research Programme
3. Standard Setting Programme
4. Maintenance Programme

Status and Purpose of Conceptual Framework:

STATUS:

 General accepted theoretical framework for a field of study

 Basis for the development of new accounting standards and evaluation of existing ones
  Sets out agreed concepts that underlie financial framework

CF is not a standards. Standards are higher than Conceptual Framework. When there is a conflict, the
standard prevails.

Purposes:

1. IASB
 Development and review of IFRS
 Harmonization of standards that are similar (hindi pwedeng magkakaiba ang
measurement)
2. FRSC
 Follows IFRS
 Developing national standards
3. FS Preparers
 Application of IFRS (Use CF as guide)
 Topics not dealt by IFRS
4. Auditors
 Expressing audit opinion
5. Users
 Interpreting financial information
6. General Public
 Work of IASB
 Standards formulation process

Objectives of General Purpose of FR

Provide useful information by the reporting entity to existing and potential investors, lenders and
creditors to make decisions
Fundamental Characteristics

1. Relevance
 Making a difference in user’s decision
 Must have predictive value
 Must have confirmatory value (feedback) – dapat nacconfirm or pwede ma-irevaluate
 Must be material (entity specific) – based sa entity ang materiality

Measurement Uncertainty and Relevance

 2. Faithful Representation
 Present what is purports to present
 It has completeness in terms of words and numbers and the other required disclosures
 It must be neural and not biased
 It must be free from error (ideally) or free from material errors
 Neutrality is supported by the exercise of prudences
 PRUDENCE: exercise of caution when making judgments ***

Enhancing Characteristics – makes useful info to a more useful info

3. Comparability
 Like things look alike; different things look different; intercompany and intracompany
4. Verifiability
 Knowledgeable, independent observers could reach consensus that a depiction is a
faithful representation *you can verify the accounts based on information that they
gather, it can be direct or indirect
5. Timeliness
 Having information available to decision-makers in time to be capable of influencing
their decisions
6. Understandability
 Classifying, characterising and presenting information clearly and concisely makes it
understandable
 Complex phenomenon might not be understandable but omission wiwll make the
information complete
  Reasonable knowledge of business and economic activity by users assumed; approach
information with diligence

Chapter 3: Financial Statement

BIR- ayaw ng conso, parent only

SEC- gusto ng conso

Chapter 5:
CHAPTER 6:
CHAPTER 7:
CHAPTER 8