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GRIPPING IFRS PDF

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Gripping IFRS Complete - Ebook download as PDF File .pdf), Text File .txt) or read book online. IFRS. Gripping IFRS. The Pillars of Accounting. 2. Chapter 1. Contents continued 5. IAS 1: Presentation of financial statements: an overview. Overview. Solutions to Gripping IFRS: Graded Financial reporting framework Questions Solution a) The objectives of the IASB are: to develop, in the public interest.


Gripping Ifrs Pdf

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Complete Gripping IFRS. Complete Gripping IFRS. Language English Pages . Views 3, views. Size MiB. Downloads © Accounting PDF. Posts about GRIPPING IFRS GRADED QUESTIONS-COMPLETE BOOK written by muhammadmohsinraza In Past years it is much difficult to prepare IFRS because there was no proper practice Download GRIPPING IFRS GRADED QUESTIONS & SOLUTIONS Here is only solution of questions, where can i get questions in PDF as well????.

As investors are providers of risk capital to the entity, the provision of financial statements that meet their needs will also meet most of the needs of other users that financial statements can satisfy. Explanation Introduction: An account with a credit balance is normally a liability, income or equity. The definitions of each of these elements will now be discussed. Definition of a liability and discussion thereof a present obligation of the entity, as a result of past events, the settlement of which is expected to result in an outflow of economic benefits.

There is an essential difference between an equity participant and a financier. An equity participant shareholder invests money in a company for an indefinite period of time. He is considered to be a part owner, who never expects to be refunded the capital contributed. Instead, the shareholder hopes for dividend distributions and growth in the value of his share certificates through the success of the company. The financier e. This discussion was not required. Although there is a past event — the issue of shares — this event, in itself, does not create an associated present obligation.

The transaction in question involves equity participants and accordingly, there exists no obligation to repay the amount of C By default, there will be no related settlements resulting in the outflow of future economic benefits. Both the share capital and the share premium are obviously not liabilities.

Definition of income and discussion thereof an increase in future economic benefits during the accounting period, in the form of inflows or enhancements of assets or decreases in liabilities, resulting in an increase in equity other than through contributions from equity participants.

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There has been an inflow of assets during the period: an amount of C in cash upon the issue of shares. But, the definition specifically excludes contributions from equity participants: therefore both the share capital and share premium cannot be considered to be income since it represents a contribution from equity participants. Definition of equity and discussion thereof the residual interests in assets, after deducting all liabilities.

Since the transaction creates an asset of C cash in bank and does not create a liability at all as explained in the discussion above , the residual interest resulting from the transaction is a net asset of C with the result that both the share capital and the share premium should therefore be treated as equity. Liability definition: There must be a present obligation of the entity as a result of a past event the settlement of which is expected to result in an outflow of future economic benefits.

Recognition criteria for income: Income may only be recognised in the financial statements if: there is a probable increase in future economic benefits through either an increase in assets or decrease in liabilities; and this increase can be measured reliably.

Conclusion: The bookkeeper must treat the receipt as a current liability in the financial statements of Hazyview Mall Ltd as at 31 December 20X3.

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Both of these elements will now be discussed in terms of the arguments presented by the accountant. Definition of a liability a present obligation of the entity, arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits.

Recognition criteria for a liability it must be probable that the future economic benefits will flow from the entity, the item must have a cost that can be reliably measured. Definition of an expense Decreases in economic benefits, during the accounting period, in the form of outflows or depletions of assets or incurrence of liabilities, that result in decreases in equity, other than those relating to distribution to equity participants.

Recognition criteria for an expense An expense may only be recognised in the financial statements if: there is a probable decrease in future economic benefits through either an decrease in assets or an increase in liabilities; and this decrease can be measured reliably.

Discussion of the definition of a liability Although a possible outflow of economic benefits would result in the event of a theft or other calamity, this outflow is not expected since: no past event has occurred: neither an insurance contract has been signed requiring the payment of insurance premiums nor has a calamity occurred requiring a repair or replacement ; and thus there is no present obligation for an obligation to be a present obligation, there has to be a past event.

Furthermore, there is no obligation as the company is not obliged, legally or otherwise , to repair or replace any items damaged.

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An obligation derives from either a legal obligation or a constructive obligation e. Neither a legal nor a constructive obligation exists here since there is simply an internal management decision that can obviously be rescinded. Discussion of the recognition criteria for a liability It can be argued that the cost of C is reliably measured, as it represents the best estimate of the insurance expense based on past experience. Although the liability has been estimated based on past insurance contributions, the actual claims have historically been significantly less than the insurance premiums.

IAS 1 p13 states that fair presentation requires faithful representation of transactions and elements as defined in the framework. As a result, IAS 1, p13, therefore requires a user to incorporate the principles set out in the framework although it is not an IFRS as well as the definitions of the elements, so as to achieve fair presentation.

Understandability; Comparability. Reliability; and Relevance; Understandability Since entities are allowed to use a variety of measurement models to report their financial information, understandability is impaired. For example, IAS 16 Property, plant and equipment allows the cost model or the revaluation model to be used for different classes of assets: Comparability Comparability amongst similar entities is impaired by permitting choice between measurement models and further detracts from their understandability.

For example, two similar entities may choose different models i. Reliability With regard to IAS 16 Property, plant and equipment , for example, the cost model may be argued to be more reliable than the revaluation model. On the other hand, it is unlikely to provide relevant values for the statement of financial position as the depreciated cost is unlikely to have any relevance to its true value.

Relevance The fair value and revaluation models are more likely to produce relevant values, but may be criticized as being unreliable in the absence of active markets. The fair value and revaluation models aid comparability as similar assets with differing historical costs could be reported as the same value in the statement of financial position. It may, however, be noted that fair value accounting can also detract from comparability in extremely volatile markets.

It can be seen that it is difficult to successfully meet all four qualitative characteristics. The providers of risk capital and their advisers are concerned with the risk inherent in, and return provided by, their investments. They need information to help them determine whether they should buy, hold or sell. Shareholders are also interested in information which enables them to assess the ability of the entity to pay dividends. Employees and their representative groups are interested in information about the stability and profitability of their employers.

They are also interested in information which enables them to assess the ability of the entity to provide remuneration, retirement benefits and employment opportunities.

Lenders are interested in information that enables them to determine whether their loans, and the interest attaching to them, will be paid when due. Suppliers and other trade creditors. Suppliers and other creditors are interested in information that enables them to determine whether amounts owing to them will be paid when due.

Trade creditors are likely to be interested in an entity over a shorter period than lenders unless they are dependent upon the continuation of the entity as a major customer. Customers have an interest in information about the continuance of an entity, especially when they have a long-term involvement with, or are dependent on, the entity.

Governments and their agencies. Governments and their agencies are interested in the allocation of resources and, therefore, the activities of entities. They also require information in order to regulate the activities of entities, determine taxation policies and as the basis for national income and similar statistics.

Entities affect members of the public in a variety of ways. For example, entities may make a substantial contribution to the local economy in many ways including the number of people they employ and their patronage of local suppliers.

Financial statements may assist the public by providing information about the trends and recent developments in the prosperity of the entity and the range of its activities. As investors are providers of risk capital to the entity, the provision of financial statements that meet their needs will also meet most of the needs of other users that financial statements can satisfy.

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Explanation Introduction: An account with a credit balance is normally a liability, income or equity. The definitions of each of these elements will now be discussed. Definition of a liability and discussion thereof a present obligation of the entity, as a result of past events, the settlement of which is expected to result in an outflow of economic benefits.

There is an essential difference between an equity participant and a financier.

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An equity participant shareholder invests money in a company for an indefinite period of time. He is considered to be a part owner, who never expects to be refunded the capital contributed. Instead, the shareholder hopes for dividend distributions and growth in the value of his share certificates through the success of the company.

The financier e. This discussion was not required. Although there is a past event — the issue of shares — this event, in itself, does not create an associated present obligation.

The transaction in question involves equity participants and accordingly, there exists no obligation to repay the amount of C By default, there will be no related settlements resulting in the outflow of future economic benefits. Both the share capital and the share premium are obviously not liabilities.

Definition of income and discussion thereof an increase in future economic benefits during the accounting period, in the form of inflows or enhancements of assets or decreases in liabilities, resulting in an increase in equity other than through contributions from equity participants. There has been an inflow of assets during the period: But, the definition specifically excludes contributions from equity participants:In so doing.

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Notes supporting items in the other four components should be listed in the same order that each line item and each financial statement is presented on occasion.

B for C the marked price. Materiality depends on the size and nature of the omission or misstatement judged in the surrounding circumstances. Prepare the statement of comprehensive income for the year ended 31 December 20X1 assuming: If the user or bank is suitably impressed by your financial statements, the business may benefit by more investment, higher share prices, lower interest rates on bank loans and more business partners, ventures and opportunities.

There are therefore still no temporary differences or deferred tax. The four main qualities that a set of financial statements should have are listed as follows: This happens where either the definition or recognition criteria or both are not met, but yet the information is still expected to be relevant to users in making their economic decisions.

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