(112026708) kieso_inter_ch01_ifrs

8/13/2019 (112026708) Kieso_Inter_Ch01_IFRS

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Learning Obj ec ti e!1. Identify the major financial statements and other means of financial reporting.

2. Explain how accounting assists in the efficient use of scarce

resources.

3. Explain the need for high-quality standards.

4. Identify the o jecti!e of financial reporting.

". Identify the major policy-setting odies and their role in the standard-setting process.

#. Explain the meaning of I$%&.

'. (escri e the challenges facing financial reporting.

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Financial Re"#rting and Acc#$nting Standard!

Gl#bal %ar&et!

Objecti e #' Financial

Re"#rting

Standard-SettingOrgani(ati#n!

FinancialRe"#rting

C)allenge!

Financial !tate*ent!and 'inancialre"#rting

Acc#$nting andca"ital all#cati#n

Hig)-+$alit,!tandard!

General-"$r"#!e'inancial!tate*ent!

Ca"ital "r# ider!

Entit, "er!"ecti e

Deci!i#n-$!e'$lne!!

IOSCO

IAS

Hierarc), #' IFRS

P#liticalen ir#n*ent

E."ectati#n! ga"

Signi'icant 'inancialre"#rting i!!$e!

Et)ic!

Internati#nalc#n ergence

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Gl#bal %ar&et!

)orld mar*ets are ecoming increasingly intertwined.T#" /0 +lo al ,ompanies In erms f &ales


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Gl#bal %ar&et!

Financial State*ent! and Financial Re"#rtingC)aracteri!tic! #' acc#$nting are/

01 the identi'icati#n *ea!$re*ent and c#**$nicati#nof financial information a out

02 economic entities to

03 interested parties.

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LO 1 Identify the major financial statements and other means of financial reporting.


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Gl#bal %ar&et!

Ec#n#*ic Entit, Financial State*ent! Additi#nal In'#r*ati#n

FinancialIn'#r*ati#n

Acc#$nting1

Identi', and

%ea!$re and

C#**$nicate

State*ent # ' Financial P# ! it i#n

Inc#*e S tate*e n t #rState*ent # ' C # * " re ) e n ! i e

Inc # *e

State*ent #' Ca! )Fl#2 !

State*ent # ' C)ange! in E+$i t,

N#te D i!c l# ! $ re!

Pre!ident3! letter

P r # ! " ect $ !e!

Re"#rt! 'iled 2i t)g# er n *e n ta l a g e n c ie!

Ne2! relea!e! F# reca!t!

En ir #n *e n ta l

i*"act !tate*e n t!

Etc 4

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LO 1 Identify the major financial statements and other means of financial reporting.


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Acc#$nting and Ca"ital All#cati#n%esources are li*ited . Efficient use of resources often determines whether a usiness thri!es.

Ill$!trati#n 1-5,apital llocation 4rocess

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LO 2 Explain how accounting assists in the efficient use of scare resources.


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Hig) 6$alit, Standard!+lo ali5ation demands a single set of high-quality international accounting standards. &omeelements/

1. &ingle set of high-quality accounting standards esta lished y a single standard-setting ody .

2. ,onsistency in application and in terpre ta tion .

3. ,ommon disclosure s.

4. ,ommon high-quality auditing standards and pra ct ice s.

". ,ommon approach to regulatory re!iew and en f orcemen t.

#. Education and training of mar*et par ticipan ts.0,ontinued1

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LO 3 Explain the need for high- uality standards.


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LO 3 Explain standards.


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Objecti e #' Financial Acc #$nting

Objecti e7 ro!ide financial information a out the reportingentity that is $!e'$l to

present and potential equity in!estors2 lenders and

other creditors

in ma*ing decisions in their capacity as capital pro!iders.

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LO ! Identify the o"jecti#es of financial reporting.


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General-P$r"#!e Financial State*ent!

ro!ide financial reporting information to a wide !ariety

of users.

ro!ide the most useful information possi le at the least cost.

Ca"ital Pr# ider! 8In e!t#r!9In!estors are the primary user group.

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Entit, Per!"ecti e

,ompanies !iewed as separate and distinct from their owners.

Deci!i#n-U!e'$lne!!In!estors are interested in assessing the company;s

1. a ility to generate net cash inflows and

2. management;s a ility to protect and enhance the

capital pro!iders; in!estments.

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Re ie2 6$ e! ti#nhe o jecti!e of financial reporting places most emphasis on/

a. reporting to capital pro!iders. . reporting on stewardship.

c. pro!iding specific guidance related to specific needs.

d. pro!iding information to indi!iduals who are experts in the field.

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Re ie2 6$ e! ti#n

+enprim

eral-purpose financialstatements

ar e prepared

a. internal users.

. external users.

c. auditors.

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d. go!ernment regulators.

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Standard-Setting O r g a ni (a ti#n !

T2# %aj#r Organi(ati#n!7

Internati#nal Acc#$nting Standard! #ard 8IAS 9

? Issues Internati#nal Financial Re"#rting Standard!

8IFRS9.

? &tandards used on most foreign exchanges.

? &tandards used y foreign companies listing on


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T2# %aj#r Organi(ati#n!7

Financial Acc#$nting Standard! #ard 8FAS 9

? Issues State*ent! #' Financial Acc#$nting

Standard! 8SFAS9 .

? %equired for all


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Internati#nal Organi(ati#n #' Sec$ritie!C#**i!!i#n! 8IOSCO9

? (oes not set accounting standards.

?? (edicated to ensuring that glo al mar*ets can operate in anefficient

LO $ Identify the major policy-setting "odies and their role in the standard-setting process.

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and effecti!e asis.) tt " 7 ::22 2 4i# !c #4# r g:


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http://www.iosco.org/http://www.iosco.org/http://www.iosco.org/http://www.iosco.org/http://www.iosco.org/http://www.iosco.org/http://www.iosco.org/http://www.iosco.org/http://www.iosco.org/http://www.iosco.org/http://www.iosco.org/


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Internati#nal Acc#$nting Standard! #ard 8IAS 9,omposed of four organi5ations9

? International ccounting &tandards

,ommittee $oundation 0IASCF 1? International ccounting &tandards7oard 0IAS 1

? &tandards d!isory ,ouncil

? International $inancial %eporting

Interpretations ,ommittee 0IFRIC 1

)tt"7::2 2 24ia!b4#rg


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http://www.iasb.org/http://www.iasb.org/


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Ill$!trati#n 1-;Internati#nal Standard-Setting Str$ct$re


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Re ie2 6$ e! ti#nI$%& stands for/

a. International $ederation of %eporting &er!ices. . Independent $inancial %eporting &tandards.

c. International $inancial %eporting &tandards. d. Integrated $inancial %eporting &er!ices.


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Re ie2 6$ e! ti#nhe major *ey players on the international side are the/

a. I &7 and $3&7. . &E, and $3&7.

c. I &, and the &E,. d. I &7 and I &, .


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Re ie2 6$ e! ti#n) hich ody from the


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D$e Pr# ce!!

he IAS d$e "r#ce!! has the following elements/

1. Independent standard-setting oard>

2. horough and systematic process for de!eloping standards>

3. Engagement with in!estors regulators usiness leaders2 and the glo al accountancy profession ate!ery stage of the process> and

4. ,olla orati!e efforts with the worldwide standard-setting community.


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D$e Pr# ce!!

Ill$!trati#n 1-;


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D$e Pr# ce!!Internati#nalStandard-SettingStr$ct$re


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T,"e! #' Pr#n#$n ce*e n t!

Issued y the I3&7/

International $inancial %eporting &tandards. $ramewor* for financial reporting.

International financial reporting interpretations.


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Re ie2 6$ e! ti#nI$%& is comprised of/

a. International $inancial %eporting &tandards and $3&7financial reporting standards.

. International $inancial %eporting &tandards International ccounting &tandards and internationalaccounting interpretations.

c. International ccounting &tandards and international accounting interpretations.

d. $ &7 financial reporting standards and International

ccounting &tandards.

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LO % Explain the meaning of I&'(.


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Financial Re"#rting C ) a lle ng e!

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LO ) *escri"e the challenges facing financial reporting.


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T)e E."ectati#n! Ga") hat the pu lic thin*s accountants should do !s. what

accountants thin* they can do.

Signi'icant Financial Re"#rting I!!$e!? ?on-financial measurements

? $orward-loo*ing information

? &ort assets

? imeliness

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Et)ic! in t)e En ir#n*ent #' Financial Acc#$nting

,ompanies that concentrate on @maximi5ing the ottom line A @facing the challenges of competition Aand @stressing short-term resultsA place accountants in an

en!ironment of conflict and pressure.

I$%& does not always pro!ide an answer.

(oing the right thing is not always easy or o !ious.

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Re ie2 6$ e! ti#nhe expectations gap is/

a. what financial information management pro!ides and what users want.

. what the pu lic thin*s accountants should do and what accountants thin* they can do.

c. what the go!ernmental agencies want from standard- setting and what the standard-setters pro!ide.

d. what the users of financial statements want from the go!ernment and what is pro!ided.

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)tt"7::2224!ec4g# :

)tt"7::2224'a!b4#rg:

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http://www.sec.gov/http://www.fasb.org/http://www.sec.gov/http://www.fasb.org/


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Sec$ritie! and E.c)ange C # ** i!! i#n

Esta lished y federal go!ernment

ccounting and reporting for pu lic companies

&ecurities ctLO + Identify the major policy-setting "odies and their

role in the standard-setting process.Slide1- 48


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+reater 3utonomy IncreasedIndependence 7roader %epresentation

LO % Identify the major policy-setting "odies and their role in the standard-setting process.

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D$e Pr#ce!!

$ &7 relies on two asic premises/

01 %esponsi!e to entire economic community

LO + Identify the major policy-setting "odies and their role in the standard-setting process.

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02 perate in full !iew of the pu lic

Ste" 1 opic placed on agendaSte" / %esearch conducted and (iscussion Cemorandum issued.

Ste" 5 u lic hearing

Ste" ; 7oard e!aluates research pu lic response and issues

Exposure (raftSte" ? 7oard e!aluates responses and issues final &tatement of

$inancial ccounting &tandard


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T,"e! #' Pr#n#$nce*ent!

&tandards Interpretations and &taff 4ositions. $inancial ccounting ,oncepts

Emerging Issues as* $orce &tatements


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U4S4 Generall, Acce"ted Acc#$nting Princi"le!rinciples that ha!e !$b!tantial a$t)#ritati e !$""#rt .

Cajor sources of +334/

$ &7 &tandards Interpretations and &taff 4osi tions

7 pinions

3I,43 ccounting %esearch 7ulletinsLO + Identify the major policy-setting "odies and their

role in the standard-setting process.Slide1- 59


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) hen the 7oard appro!es a new standard staff position etc. the results are included in theC#di'icati#nthrough an Acc#$nting Standard! U"date .


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Ill$!trati#n 1A-/

T) eC#di'icati#nFra*e 2# r&


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I t ti# l A #$ ti C #


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Internati#nal Acc#$nting C #n er g e n ce

I*"r# e*ent! in Acc#$nting Standard!I &7 and $ &7 ha!e set up an extensi!e wor* plan to achie!e

one set of international standards. Ill$!trati#n 1A-5IFRS Ad#"ti#n Ti*eline


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I t ti# l A #$ ti C #


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I t ti# l A #$ ti g C # g


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SEC >#r& Plan

&ufficient de!elopment and application of I$%&.

Independent standard-setting for the enefit of in!estors.

In!estor understanding and educa tion .


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C#" r ig) t


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C#" ,r ig) t

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