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Questions and Answers
What is the new name of the Financial Reporting Standards Council?
What is the new name of the Financial Reporting Standards Council?
Which board sets the IFRS Sustainability Disclosure standards?
Which board sets the IFRS Sustainability Disclosure standards?
What is required for the renewal of a CPA license in the Philippines?
What is required for the renewal of a CPA license in the Philippines?
Which statement is true regarding Continuing Professional Education for CPAs?
Which statement is true regarding Continuing Professional Education for CPAs?
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What is the primary law regulating the practice of accountancy in the Philippines?
What is the primary law regulating the practice of accountancy in the Philippines?
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What body is authorized to promulgate rules affecting the accountancy profession in the Philippines?
What body is authorized to promulgate rules affecting the accountancy profession in the Philippines?
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What happens to a CPA upon reaching the age of 65 in terms of CPD requirements?
What happens to a CPA upon reaching the age of 65 in terms of CPD requirements?
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Which of the following is NOT true about the Continuing Professional Development (CPD) requirements?
Which of the following is NOT true about the Continuing Professional Development (CPD) requirements?
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Which statement regarding public accounting practice is false?
Which statement regarding public accounting practice is false?
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Which organization is not part of the national professional organization of CPAs?
Which organization is not part of the national professional organization of CPAs?
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What is the status of the Conceptual Framework in accounting?
What is the status of the Conceptual Framework in accounting?
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Which of the following is not a fundamental qualitative characteristic of financial statements?
Which of the following is not a fundamental qualitative characteristic of financial statements?
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Which requirement is necessary for partnerships in public accounting?
Which requirement is necessary for partnerships in public accounting?
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Which entity issues certificates of accreditation to CPAs in public practice?
Which entity issues certificates of accreditation to CPAs in public practice?
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What is a requirement for a CPA to be accredited in public practice?
What is a requirement for a CPA to be accredited in public practice?
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Which statement about the qualitative characteristics of financial statements is true?
Which statement about the qualitative characteristics of financial statements is true?
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What is the correct chronological order in the standard setting process?
What is the correct chronological order in the standard setting process?
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Which of the following statements about IFRIC Interpretations is correct?
Which of the following statements about IFRIC Interpretations is correct?
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What is the main purpose of the due process system in developing financial accounting standards?
What is the main purpose of the due process system in developing financial accounting standards?
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Which inventory cost flow assumption would consistently result in the highest income during sustained inflation?
Which inventory cost flow assumption would consistently result in the highest income during sustained inflation?
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Which statement regarding LCNRV is incorrect?
Which statement regarding LCNRV is incorrect?
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How should an investor report a receivable from an investee when using the equity method for a 30% ownership?
How should an investor report a receivable from an investee when using the equity method for a 30% ownership?
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Which option correctly describes the relationship between LIFO and income during periods of inflation?
Which option correctly describes the relationship between LIFO and income during periods of inflation?
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Which of the following is not a purpose of the discussion paper in the standard setting process?
Which of the following is not a purpose of the discussion paper in the standard setting process?
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Which statement is true for a bond maturing on a single date when using the effective interest method of amortizing bond discount?
Which statement is true for a bond maturing on a single date when using the effective interest method of amortizing bond discount?
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In theory, what would the proceeds from the sale of a bond equal?
In theory, what would the proceeds from the sale of a bond equal?
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When can an operating segment be considered reportable?
When can an operating segment be considered reportable?
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Which combination of conditions allows a nonpublicly accountable entity to claim compliance with IFRS for SMEs?
Which combination of conditions allows a nonpublicly accountable entity to claim compliance with IFRS for SMEs?
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Which statement regarding IFRS for SMEs is not correct?
Which statement regarding IFRS for SMEs is not correct?
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What distinguishes the effective interest method from other methods of amortizing bond discount?
What distinguishes the effective interest method from other methods of amortizing bond discount?
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When is segment liabilities considered significant for reportability?
When is segment liabilities considered significant for reportability?
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Which of the following is a requirement for goodwill under IFRS for SMEs?
Which of the following is a requirement for goodwill under IFRS for SMEs?
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Which statement is incorrect concerning small entities?
Which statement is incorrect concerning small entities?
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Which statement regarding small entities is incorrect?
Which statement regarding small entities is incorrect?
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Which framework is generally applicable for SMEs?
Which framework is generally applicable for SMEs?
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What standard is applied by micro entities?
What standard is applied by micro entities?
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What is the correct term for financial statements when an entity first adopts IFRS?
What is the correct term for financial statements when an entity first adopts IFRS?
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An entity that presents its first annual financial statements under IFRS is referred to as what?
An entity that presents its first annual financial statements under IFRS is referred to as what?
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When is the date of transition to IFRS defined?
When is the date of transition to IFRS defined?
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Under IFRS 1, what is required in the first reporting period after adopting IFRS?
Under IFRS 1, what is required in the first reporting period after adopting IFRS?
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Study Notes
Financial Reporting Standards Council
- Renamed to Financial and Sustainability Reporting Standards Council (FSRSC)
International Sustainability Standards Board (ISSB)
- Created by IFRS Foundation to set IFRS Sustainability Disclosure standards
Continuing Professional Development
- Required for both renewal of CPA license and accreditation to practice the accountancy profession
- Required for every three years
- Requires 120 CPA credit units for accreditation to practice the accountancy profession
- Requires 15 CPA credit units for the renewal of CPA license
- CPAs reaching the age of 65 years are exempted from CPD requirements for renewal of the CPA license but not for accreditation to practice the accountancy profession
Accountancy Profession
- Regulated by R.A 9298 (The Philippine Accountancy Act of 2004)
- Board of Accountancy is the body authorized to promulgate rules and regulations
- Three main areas of practice: public accounting, private accounting and government accounting.
Public Accounting
- Single practitioners and partners of partnerships need to be registered CPAs in the Philippines
- Securities and Exchange Commission can register any corporation organized for the practice of public accounting
- Professional Regulation Commission upon favorable recommendation of the Board of Accountancy shall issue certificate of accreditation to CPAs in public practice
- Minimum requirement is three years of meaningful experience in public practice
National professional organizations of CPAs:
- Association CPAs in Public Practice (ACCPAP)
- Association of CPAs in Commerce and industry (ACPACI)
- National Association of CPAs in Education (NACPAE)
Conceptual Framework
- Highest level of authority
- Followed in the absence of a standard or an interpretation that specifically applies to a transaction
- Management considers its applicability in developing and applying accounting policy
Qualitative Characteristics of Financial Statements
- Either fundamental or enhancing
- Fundamental qualitative characteristics are relevance, faithful representation and materiality
Standard Setting Process Steps
- Research
- Discussion paper
- Exposure draft
- Standard
IFRIC Interpretations
- Considered authoritative and must be followed
- Cover newly identified financial reporting issues not specifically addressed
- Cover issues where unsatisfactory or conflicting interpretations have developed
Due Process System
- Enables interested parties to express their views on issues under consideration
Inventory Cost Flow Assumption
- FIFO consistently results in the highest income in a period of sustained inflation
LCNRV
- Net realizable value is the estimated selling price less estimated cost to complete and estimated cost of disposal
Equity Method
- Total receivable from an investee is reported separately
Bond Amortization
- Interest expense as a percentage of the bond carrying amount varies from period to period when effective interest method is used
Bond Proceeds
- Equal to the present value of the principal amount due at the end of the life of the bond plus the present value of the interest payments made during the life of the bond
Reportable Operating Segment
- Considered reportable when segment revenue is 10% or more, or assets are 10% or more, or liabilities are 10% or more, or segment profit or loss is 10% or more of the greater between combined profit of all profitable segments and combined loss of unprofitable segments
IFRS for SMEs
- Complies with all the requirements of IFRS for SMEs
Small Entities
- Inventories are measured at the lower of cost or market value
- Investment in associate shall be accounted for using cost model, fair value model or equity method
- Property, plant and equipment shall be accounted for using either the cost model or fair value method
- Their benefit obligation is calculated under company policy if higher than R.A. 7641
Small Entities
- Investment property shall be measured using either cost model or fair value model
- All borrowing costs shall be recognized as expense when incurred
- Biological asset shall be measured using either cost model or current market price model
- Leases are accounted for using either operating lease model or finance lease model
Accounting Standards for Entities
- SMEs: IFRS for SMEs
- Micro Entities: PFRS for Small Entities or Income Tax Basis
- Small Entities: PFRS for Small Entities
First Time Adopters
- Under IFRS 1, the first IFRS annual financial statements are called the opening IFRS statement of financial position
- An entity that presents first annual financial statements that conform with IFRS is known as a first-time adopter
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Description
This quiz covers essential information related to financial reporting standards, specifically the role of the Financial and Sustainability Reporting Standards Council and the International Sustainability Standards Board. It also explores the requirements for continuing professional development for CPAs and the regulations governing the accountancy profession in the Philippines.
