Ias Study Guide
IAS 1 – Presentation of Financial Statements
Its objective is to provide information about the financial position, performance and changes in financial position of an entity that is useful to a wide range of users in making economic decisions.
Considerations underpinning Financial Statements preparation: * Comparability – Standardisation of information, internationally to aid users of the accounts. * Consistency – Same accounting methods and policies each month/accounting period. * Understandability - expression, with clarity, of accounting information in such a way that it will be understandable to users. * Relevance – Information presented should be timely as investors cannot made solid decisions on old information. * Reliability – Free from bias so users have assurance that all information is accurate and has not been manipulated.
Accounting Concepts: Two fundamental accounting concepts
Going Concern – is the assumption that an entity will remain in business for the foreseeable future.
Accruals - Income should be properly "matched" with the expenses of a given accounting period.
Other Accounting Concepts:
Consistency – Same accounting methods and policies each month/accounting period.
Fair presentation - Faithfully represent the data presented and be useful to the reader or user in terms of relevance and reliability.
Off Setting - Entities can't offset assets and liabilities against each other.
Elements of the Financial Statements are:
Assets – Resources controlled by past events where future economic benefits are expected.
Liabilities – Obligations owed as a result of past events that result in an outflow of cash.
Equity – the excess of assets over liabilities.
Income – Revenue from the course of ordinary activities, such as sale of goods
Expense – includes expenses, cost of sales and losses.
IAS 2 - Inventories
Inventories should be valued at the lower of cost and net realisable value (NRV); NRV is the estimated selling
Its objective is to provide information about the financial position, performance and changes in financial position of an entity that is useful to a wide range of users in making economic decisions.
Considerations underpinning Financial Statements preparation: * Comparability – Standardisation of information, internationally to aid users of the accounts. * Consistency – Same accounting methods and policies each month/accounting period. * Understandability - expression, with clarity, of accounting information in such a way that it will be understandable to users. * Relevance – Information presented should be timely as investors cannot made solid decisions on old information. * Reliability – Free from bias so users have assurance that all information is accurate and has not been manipulated.
Accounting Concepts: Two fundamental accounting concepts
Going Concern – is the assumption that an entity will remain in business for the foreseeable future.
Accruals - Income should be properly "matched" with the expenses of a given accounting period.
Other Accounting Concepts:
Consistency – Same accounting methods and policies each month/accounting period.
Fair presentation - Faithfully represent the data presented and be useful to the reader or user in terms of relevance and reliability.
Off Setting - Entities can't offset assets and liabilities against each other.
Elements of the Financial Statements are:
Assets – Resources controlled by past events where future economic benefits are expected.
Liabilities – Obligations owed as a result of past events that result in an outflow of cash.
Equity – the excess of assets over liabilities.
Income – Revenue from the course of ordinary activities, such as sale of goods
Expense – includes expenses, cost of sales and losses.
IAS 2 - Inventories
Inventories should be valued at the lower of cost and net realisable value (NRV); NRV is the estimated selling