IFRS Question #1 Essay

844 Words Sep 17th, 2014 4 Pages
IFRS Questions
Review the Preface. Include the applicable paragraph citation with your response. .
USA IFRS; What is the jurisdiction status of adoption? – When a foreign company is trading on a US stock market they can and are allowed to use current IFRS standards and not US GAAP standards
1) When was the International Accounting Standards Board (IASB) established?
2001
Review the standards and interpretations. For each of your responses, identify the applicable paragraph.
2) Review IFRS 3. How does a company determine the amount of goodwill to recognize?
IFRS 3, Par 32
Proceeds – net identifiable assets = goodwill
*Major principles are in bold within the standards*
3) Review IFRS 5. How does the standard define
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An entity shall classify all other assets as non-current.
IAS 1, Par 69 liabilities
An entity shall classify a liability as current when:
(a) it expects to settle the liability in its normal operating cycle;
(b) it holds the liability primarily for the purpose of trading;
(c) the liability is due to be settled within twelve months after the reporting period; or
(d) it does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period (see paragraph 73). Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.
An entity shall classify all other liabilities as non-current

6) Review IAS 2. How should companies measure their inventory?
IAS 2, Par 9 Inventories shall be measured at the lower of cost and net realisable value. 7) Review IAS 23. How should a company account for borrowing costs?
IAS 23, Par 9
Such borrowing costs are capitalised as part of the cost of the asset when it is probable that they will result in future economic benefits to the entity and the costs can be measured reliably

8) Review IAS 37. When should a company

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