International Financial Reporting Standards
Quiz:
Conceptual Framework
for Financial Reporting
Joint World Bank and IFRS Foundation ‘train
the trainers’ workshop hosted by the ECCB,
30 April to 4 May 2012
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©©IFRS
IFRSFoundation
Foundation| |3030Cannon
CannonStreet
Street| |London
LondonEC4M
EC4M6XH
6XH| |UK.
UK.www.ifrs.org
www.ifrs.org
Quiz: purpose of the Conceptual
Framework for Financial Reporting
2
Question 1: The purpose of the Conceptual
Framework for Financial Reporting is:
a. to assist the IASB in setting IFRSs?
b. to assist preparers of financial
statements in applying IFRSs?
c. to assist auditors in forming an opinion
on whether financial statements
comply with IFRSs?
d. to assist users of financial statements
in interpreting IFRS financial
statements?
e. all of the above?
© IFRS
Foundation
30 Cannon Street
London EC4M
| UK. www.ifrs.org
© 2012
IFRS| Foundation
| 30 |Cannon
Street6XH
| London
EC4M 6XH | UK | www.ifrs.org
Quiz: purpose of the Conceptual
Framework for Financial Reporting
3
Question 1: The purpose of the Conceptual
Framework for Financial Reporting is:
a. to assist the IASB in setting IFRSs?
b. to assist preparers of financial
statements in applying IFRSs?
c. to assist auditors in forming an opinion
on whether financial statements
comply with IFRSs?
d. to assist users of financial statements
in interpreting IFRS financial
statements?
e. all of the above?
© IFRS
Foundation
30 Cannon Street
London EC4M
| UK. www.ifrs.org
© 2012
IFRS| Foundation
| 30 |Cannon
Street6XH
| London
EC4M 6XH | UK | www.ifrs.org
Quiz: objective of general purpose of
financial reporting
4
Question 2: The objective of general
purpose financial reporting is:
a. 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?
b. to inform government statistics?
c. to support the entity’s tax return?
© IFRS
Foundation
30 Cannon Street
London EC4M
| UK. www.ifrs.org
© 2012
IFRS| Foundation
| 30 |Cannon
Street6XH
| London
EC4M 6XH | UK | www.ifrs.org
Quiz: objective of general purpose of
financial reporting
Question 2: The objective of general
purpose financial reporting is:
d. to meet all the information needs of all
the users of an entity’s financial
statements?
e. to inform economic decision-making
by a broad range of users (including
managers, investors, creditors and
prudential regulators)?
© IFRS
Foundation
30 Cannon Street
London EC4M
| UK. www.ifrs.org
© 2012
IFRS| Foundation
| 30 |Cannon
Street6XH
| London
EC4M 6XH | UK | www.ifrs.org
5
Quiz: objective of general purpose of
financial reporting
6
Question 2: The objective of general
purpose financial reporting is:
a. 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?
b. to inform government statistics?
c. to support the entity’s tax return?
d. to meet all the information needs of all the
users of an entity’s financial statements?
e. to inform economic decision-making by a
broad range of users (including managers,
investors, creditors and prudential
regulators)?
© 2012 IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK | www.ifrs.org
Quiz: objective of general purpose
7
financial reporting
Question 3: Which of the following could
most closely be associated with the
objective of financial reporting:
a. have a bias toward understating assets
and income and overstating liabilities
and expenses?
b. transparency and neutrality?
c. financial stability through
conservatism/prudence?
d. management discretion in reporting
financial information?
© IFRS
Foundation
30 Cannon Street
London EC4M
| UK. www.ifrs.org
© 2012
IFRS| Foundation
| 30 |Cannon
Street6XH
| London
EC4M 6XH | UK | www.ifrs.org
Quiz: objective of general purpose
8
financial reporting
Question 3: Which of the following could
most closely be associated with the
objective of financial reporting:
a. have a bias toward understating assets
and income and overstating liabilities
and expenses?
b. transparency and neutrality?
c. financial stability through
conservatism/prudence?
d. management discretion in reporting
financial information?
© IFRS
Foundation
30 Cannon Street
London EC4M
| UK. www.ifrs.org
© 2012
IFRS| Foundation
| 30 |Cannon
Street6XH
| London
EC4M 6XH | UK | www.ifrs.org
Quiz: fundamental qualitative
characteristics
Question 4: The fundamental qualitative
characteristics are:
a. comparability and relevance?
b. relevance and reliability?
c. relevance, reliability and
comparability?
d. relevance and faithful representation?
e. comparability, relevance and faithful
representation?
© IFRS
Foundation
30 Cannon Street
London EC4M
| UK. www.ifrs.org
© 2012
IFRS| Foundation
| 30 |Cannon
Street6XH
| London
EC4M 6XH | UK | www.ifrs.org
9
Quiz: fundamental qualitative
characteristics
Question 4: The fundamental qualitative
characteristics are:
a. comparability and relevance?
b. relevance and reliability?
c. relevance, reliability and
comparability?
d. relevance and faithful representation?
e. comparability, relevance and faithful
representation?
© IFRS
Foundation
30 Cannon Street
London EC4M
| UK. www.ifrs.org
© 2012
IFRS| Foundation
| 30 |Cannon
Street6XH
| London
EC4M 6XH | UK | www.ifrs.org
10
Quiz: qualitative characteristics
11
Question 5: verifiability means
knowledgeable and independent observers:
a. would reach complete agreement that a
depiction is a faithful representation?
b. cannot reach consensus that a
depiction is a faithful representation?
c. could reach consensus, but not
necessarily complete agreement, that a
depiction is a faithful representation?
© IFRS
Foundation
30 Cannon Street
London EC4M
| UK. www.ifrs.org
© 2012
IFRS| Foundation
| 30 |Cannon
Street6XH
| London
EC4M 6XH | UK | www.ifrs.org
Quiz: qualitative characteristics
12
Question 5: verifiability means
knowledgeable and independent observers:
a. would reach complete agreement that a
depiction is a faithful representation?
b. cannot reach consensus that a
depiction is a faithful representation?
c. could reach consensus, but not
necessarily complete agreement, that a
depiction is a faithful representation?
© IFRS
Foundation
30 Cannon Street
London EC4M
| UK. www.ifrs.org
© 2012
IFRS| Foundation
| 30 |Cannon
Street6XH
| London
EC4M 6XH | UK | www.ifrs.org
Quiz: qualitative characteristics
13
Question 6: which statement/s are true?
a. Relevance is a fundamental qualitative
characteristic.
b. Financial information without both
relevance and faithful representation is
not useful.
c. Financial information without both
relevance and faithful representation
cannot be made useful by being more
comparable, verifiable, timely or
understandable.
© 2012 IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK | www.ifrs.org
Quiz: qualitative characteristics
14
Question 6: which of the statements below
are true?
d. Financial information that is relevant
and faithfully represented may still be
useful even if it does not have any of
the enhancing qualitative
characteristics
e. All of the above statements.
f. None of the above statements.
© IFRS
Foundation
30 Cannon Street
London EC4M
| UK. www.ifrs.org
© 2012
IFRS| Foundation
| 30 |Cannon
Street6XH
| London
EC4M 6XH | UK | www.ifrs.org
Quiz: qualitative characteristics
15
Question 6: which of the statements below
are true?
d. Financial information that is relevant
and faithfully represented may still be
useful even if it does not have any of
the enhancing qualitative
characteristics
e. All of the above statements.
f. None of the above statements.
© IFRS
Foundation
30 Cannon Street
London EC4M
| UK. www.ifrs.org
© 2012
IFRS| Foundation
| 30 |Cannon
Street6XH
| London
EC4M 6XH | UK | www.ifrs.org
16
Quiz: recognition
Question 7: Expenses are recognised in
comprehensive income (profit or OCI):
a. using the matching basis—on the basis
of a direct association between the
costs incurred and the earning of
specific items of income?
b. using the accrual basis—items are
recognised as assets, liabilities, equity,
income or expenses when they satisfy
the definitions and recognition criteria
for those items?
c. at the discretion of management?
© IFRS
Foundation
30 Cannon Street
London EC4M
| UK. www.ifrs.org
© 2012
IFRS| Foundation
| 30 |Cannon
Street6XH
| London
EC4M 6XH | UK | www.ifrs.org
17
Quiz: recognition
Question 7: Expenses are recognised in
comprehensive income (profit or OCI):
a. using the matching basis—on the basis
of a direct association between the
costs incurred and the earning of
specific items of income?
b. using the accrual basis—items are
recognised as assets, liabilities, equity,
income or expenses when they satisfy
the definitions and recognition criteria
for those items?
c. at the discretion of management?
© IFRS
Foundation
30 Cannon Street
London EC4M
| UK. www.ifrs.org
© 2012
IFRS| Foundation
| 30 |Cannon
Street6XH
| London
EC4M 6XH | UK | www.ifrs.org
18
Quiz: uncertain future cash flows
Question 8: Recognition criteria determine
when to recognise an item.
Measurement is determining the monetary
amounts at which to measure an item.
Uncertainties about the extent of future cash
flows:
a. only affect the decision about whether to
recognise?
b. only affect the estimation of the amount
at which to measure the item?
c. could affect both recognition and
measurement?
© IFRS
Foundation
30 Cannon Street
London EC4M
| UK. www.ifrs.org
© 2012
IFRS| Foundation
| 30 |Cannon
Street6XH
| London
EC4M 6XH | UK | www.ifrs.org
Quiz: uncertain future cash flows
19
Question 8: Recognition criteria determine
when to recognise an item.
Measurement is determining the monetary
amounts at which to measure an item.
Uncertainties about the extent of future cash
flows:
a. only affect the decision about whether to
recognise?
b. only affect the estimation of the amount
at which to measure the item?
c. could affect both recognition and
measurement?
© IFRS
Foundation
30 Cannon Street
London EC4M
| UK. www.ifrs.org
© 2012
IFRS| Foundation
| 30 |Cannon
Street6XH
| London
EC4M 6XH | UK | www.ifrs.org
Quiz: measurement
20
Question 9: How many measurement bases
does IFRSs specify for the measurement of
assets?
a. one—historical cost
b. one—fair value
c. two—historical cost and fair value
d. many—including historical cost, fair
value, value in use, estimated selling
price less costs to complete and sell,
etc
© IFRS
Foundation
30 Cannon Street
London EC4M
| UK. www.ifrs.org
© 2012
IFRS| Foundation
| 30 |Cannon
Street6XH
| London
EC4M 6XH | UK | www.ifrs.org
Quiz: measurement
21
Question 9: How many measurement bases
does the IFRSs specify for the measurement
of assets?
a.
b.
c.
d.
one—historical cost
one—fair value
two—historical cost and fair value
many—including historical cost, fair
value, value in use, estimated selling
price less costs to complete and sell,
etc
© IFRS
Foundation
30 Cannon Street
London EC4M
| UK. www.ifrs.org
© 2012
IFRS| Foundation
| 30 |Cannon
Street6XH
| London
EC4M 6XH | UK | www.ifrs.org
Quiz: status of Conceptual Framework
Question 10: the Conceptual Framework:
a. is an IFRS?
b. overrides all other IFRS requirements?
c. does not define standards for any
particular measurement or disclosure
issue?
d. is in the hierarchy that management must
in the absence of a specific IFRS
requirement apply in developing an
accounting policy that results in
information that is relevant?
© IFRS
Foundation
30 Cannon Street
London EC4M
| UK. www.ifrs.org
© 2012
IFRS| Foundation
| 30 |Cannon
Street6XH
| London
EC4M 6XH | UK | www.ifrs.org
22
Quiz: status of Conceptual Framework
Question 10: the Conceptual Framework:
a. is an IFRS?
b. overrides all other IFRS requirements?
c. does not define standards for any
particular measurement or disclosure
issue?
d. is in the hierarchy that management must
in the absence of a specific IFRS
requirement apply in developing an
accounting policy that results in
information that is relevant?
© IFRS
Foundation
30 Cannon Street
London EC4M
| UK. www.ifrs.org
© 2012
IFRS| Foundation
| 30 |Cannon
Street6XH
| London
EC4M 6XH | UK | www.ifrs.org
23
Questions or comments?
Expressions of individual views by
members of the IASB and its staff
are encouraged.
The views expressed in this
presentation are those of the
presenter.
Official positions of the IASB on
accounting matters are determined
only after extensive due process
and deliberation.
© IFRS
Foundation
30 Cannon Street
London EC4M
| UK. www.ifrs.org
© 2012
IFRS| Foundation
| 30 |Cannon
Street6XH
| London
EC4M 6XH | UK | www.ifrs.org
24
25
The requirements are set out in International Financial
Reporting Standards (IFRSs), as issued by the IASB at 1
January 2012 with an effective date after 1 January 2012
but not the IFRSs they will replace.
The IFRS Foundation, the authors, the presenters and the
publishers do not accept responsibility for loss caused to
any person who acts or refrains from acting in reliance on
the material in this PowerPoint presentation, whether such
loss is caused by negligence or otherwise.
© 2011
IFRS Foundation
| 30 Cannon
| London
6XH | EC4M
UK. www.ifrs.org
©
IFRS Foundation
| 30Street
Cannon
StreetEC4M
| London
6XH | UK | www.ifrs.org