Table of Contents

 

Chapter 1 - Introduction to IFRS - Section 1................................................................................... 8

1.1   The IASB Structure................................................................................................................................ 8

1.1.1   IFRS Foundation...................................................................................................................................... 9

1.1.2   International Accounting Standards Board (IASB)........................................................................ 10

1.1.3   International Financial Reporting Committee (IFRIC).................................................................. 10

1.1.4   Standards Advisory Council (SAC).................................................................................................... 10

Chapter 1 – Section 1 Review Questions.......................................................................................... 11

Chapter 1 - Introduction to IFRS - Section 2................................................................................ 12

1.2   IASB Due Process..................................................................................................................................... 12

1.2.1   Setting the agenda................................................................................................................................. 12

1.2.2   Project Planning.................................................................................................................................... 13

1.2.3   Development and publication of a discussion paper...................................................................... 13

1.2.4   Development and publication of an exposure draft........................................................................ 14

1.2.5   Development and publication of an IFRS......................................................................................... 15

1.2.6   Procedures after an IFRS is issued..................................................................................................... 16

1.3   International Financial Reporting Standards (IFRS)................................................ 16

Chapter 1 – Section 2 Review Questions.......................................................................................... 18

Chapter 2 - IFRS Financial Statements - Section 3................................................................... 20

2.1   Framework for the Preparation and Presentation of Financial Statements              20

2.1.1   Purpose and status................................................................................................................................. 20

2.1.2   Scope........................................................................................................................................................ 21

2.1.3   The objective of financial statements................................................................................................. 22

2.1.4   Underlying assumptions....................................................................................................................... 22

2.1.5   Qualitative characteristics of financial statements........................................................................ 22

2.1.6   The elements of financial statements.................................................................................................. 23

2.1.7   Recognition of the elements of financial statements....................................................................... 24

2.1.8   Measurement of the elements of financial statements..................................................................... 25

2.1.9   Concepts of capital and capital maintenance................................................................................. 26

Chapter 2 – Section 3 Review Questions.......................................................................................... 28

Chapter 2 - IFRS Financial Statements - Section 4................................................................... 30

2.2   Presentation of Financial Statements................................................................................ 30

2.2.1   Statement of Financial Position......................................................................................................... 30

2.2.2   Statement of Comprehensive Income.................................................................................................. 33

2.2.3   Statement of Changes in Equity.......................................................................................................... 35

2.2.4   Statement of Cash Flows...................................................................................................................... 37

2.2.5   Notes to the Financial Statements...................................................................................................... 39

Chapter 2 – Section 4 Review Questions.......................................................................................... 41

Chapter 3 - U.S. GAAP & IFRS: What is the Difference? - Section 5.................................. 45

3.1   Revenue recognition......................................................................................................................... 46

3.2   Expense recognition........................................................................................................................... 47

3.2.1   Share-based payments........................................................................................................................... 47

3.2.2   Employee benefits.................................................................................................................................. 49

3.3   Assets............................................................................................................................................................. 50

3.3.1   Long-lived Assets.................................................................................................................................... 50

3.3.2   Inventory.................................................................................................................................................. 51

3.3.3   Intangible Assets.................................................................................................................................... 51

3.3.4   Impairment of Assets.............................................................................................................................. 52

3.3.5   Leases (current model).......................................................................................................................... 53

Chapter 3 – Section 5 Review Questions.......................................................................................... 56

Chapter 3 - U.S. GAAP & IFRS: What is the Difference? - Section 6.................................. 59

3.4   Liabilities.................................................................................................................................................. 59

3.4.1   Provisions and contingencies.............................................................................................................. 59

3.4.2   Income taxes............................................................................................................................................ 59

3.5   Other U.S. GAAP & IFRS Differences............................................................................................ 60

3.5.1   Financial instruments........................................................................................................................... 60

3.5.2   Business combinations.......................................................................................................................... 63

3.5.3   Subsequent events.................................................................................................................................. 63

3.5.4   Related parties........................................................................................................................................ 64

3.5.5   Earnings-per-share................................................................................................................................ 64

Chapter 3 – Section 6 Review Questions.......................................................................................... 66

Chapter 4 - Convergence - Section 7................................................................................................... 69

4.1   The History of Convergence........................................................................................................ 69

4.1.1   The convergence timeline..................................................................................................................... 70

4.1.2   The Norwalk Agreement........................................................................................................................ 73

4.1.3   Memorandum of Understanding......................................................................................................... 73

Chapter 4 – Section 7 Review Questions.......................................................................................... 75

Chapter 4 - Convergence - Section 8................................................................................................... 76

4.2   The Joint Projects................................................................................................................................. 76

4.2.1   Conceptual Framework Project.......................................................................................................... 77

4.2.2    Business Combinations........................................................................................................................ 79

4.2.3   Leasing..................................................................................................................................................... 79

4.2.4   Revenue Recognition............................................................................................................................. 81

Chapter 4 – Section 8 Review Questions.......................................................................................... 83

Chapter 5 - Adoption - Section 9............................................................................................................. 84

5.1   First-time Adoption (IFRS 1)............................................................................................................. 84

5.1.1   Objective & scope.................................................................................................................................. 84

5.1.2   Key Dates................................................................................................................................................. 85

5.1.3   Recognition & measurement................................................................................................................ 85

5.1.4   Disclosures.............................................................................................................................................. 88

Chapter 5 – Section 9 Review Questions.......................................................................................... 90

Chapter 5 - Adoption - Section 10........................................................................................................... 92

5.2   The Impact of Adoption..................................................................................................................... 92

5.2.1   Technical accounting challenges....................................................................................................... 92

5.2.2   Tax consequences................................................................................................................................... 93

5.2.3   Internal processes and statutory reporting impact......................................................................... 94

5.2.4   Technology infrastructure impact...................................................................................................... 95

5.2.5   Organizational changes....................................................................................................................... 96

Chapter 5 – Section 10 Review Questions....................................................................................... 98

Review Answers.................................................................................................................................................. 99

Glossary................................................................................................................................................................ 129

Index.......................................................................................................................................................................... 133

Final Examination......................................................................................................................................... 137

CPASelfstudy.com Course Evaluation.......................................................................................... 153