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E0700237.ACC203 - E0700237 QUESTION 1 International...

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E0700237 QUESTION 1 International Financial Reporting Standards (IFRS) or International Accounting Standards (IAS) is a set of accounting standards, developed by the International Accounting Standards Board (IASB). Today, IFRS or IAS is becoming the global standard for the preparation and presentation of public company financial statements, Cash Flow Statements, Property, Plant and Equipment. IFRS is Standards, Interpretations and the framework for the Preparation and Presentation of Financial Statements. The IAS 1 Presentation of Financial Statements requires the financial statements must "present fairly" the financial position, financial performance and cash flows of an entity. Fair presentation requires the faithful representation of the effects of transactions, other events, and conditions in accordance with the definitions and recognition criteria for assets, liabilities, income and expenses set out in the framework. The application of IFRS, with additional disclosure when necessary, is presumed to result in financial statements that achieve a fair presentation. IFRS is standards, interpretations and the framework for the Cash Flow Statements. The IAS 7 Cash Flow Statements requires presenting a statement of cash flows. The statement of cash flows calls for the provision of information about the historical changes in cash and cash equivalents of an entity, which classifies cash flows during the period from operating, investing and financing activities. Cash flows are inflows and outflows of cash and cash equivalents. Information about the cash flows of an entity provides users financial statements with a basis to assess the ability of the entity to generate cash and 1
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E0700237 cash equivalents and the needs of the entity to utilize those cash flows. The economic decisions require an evaluation of the ability of an entity to generate cash and cash equivalents and the timing and certainty of their generation. The IFRS is to prescribe the accounting treatment for property, plant and equipment so that users of the financial statements can discern information about an entity’s investment in its property, plant and equipment and the changes in such investment. The principal issues in accounting for property, plant and equipment are the recognition of the assets, the determination of their carrying amounts and the depreciation charges and impairment losses to be recognized in relation to them. IAS 16, Property, Plant and Equipment,
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