While the conceptual framework that underlies ifrs is

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While the conceptual framework that underlies IFRS is very similar to that used to develop GAAP, the elements identified and their definitions under IFRS are different. The IASB elements and their definitions are as follows. Assets. A resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity. Liabilities. 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. Liabilities may be legally enforceable via a contract or law, but need not be, i.e., they can arise due to normal business practice or customs. International Standard-Setting Organizations:
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ABOUT THE NUMBERS While the conceptual framework that underlies IFRS is very similar to that used to develop GAAP, the elements identified and their definitions under IFRS are different. The IASB elements and their definitions are as follows. Equity. A residual interest in the assets of the entity after deducting all its liabilities. Income. Increases in economic benefits that result in increases in equity (other than those related to contributions from shareholders). Income includes both revenues (resulting from ordinary activities) and gains. Expenses . Decreases in economic benefits that result in decreases in equity (other than those related to distributions to shareholders). Expenses includes losses that are not the result of ordinary activities. International Standard-Setting Organizations:
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Which of the following statements about the IASB and FASB conceptual frameworks is not correct? a. The IASB conceptual framework does not identify the element comprehensive income. b. The existing IASB and FASB conceptual frameworks are organized in similar ways. c. The FASB and IASB agree that the objective of financial reporting is to provide useful information to investors and creditors. d. IFRS does not allow use of fair value as a measurement basis. IFRS SELF-TEST QUESTION
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Which of the following statements is false? a. The monetary unit assumption is used under IFRS. b. Under IFRS, companies may use fair value for property, plant, and equipment. c. The FASB and IASB are working on a joint conceptual framework project. d. Under IFRS, there are the same number of financial statement elements as in GAAP. IFRS SELF-TEST QUESTION
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The issues that the FASB and IASB must address in developing a common conceptual framework include all of the following except: a. Should the characteristic of relevance be traded-off in favor of information that is verifiable? b. Should a single measurement method be used? c. Should the common framework lead to standards that are principles-based or rules-based? d. Should the role of financial reporting focus on stewardship as well as providing information to assist users in decision- making? IFRS SELF-TEST QUESTION
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