midium accounting

Topics: International Financial Reporting Standards, Financial statements, International Accounting Standards Board Pages: 18 (5778 words) Published: October 16, 2014
CHAPTER 1
Financial Reporting and Accounting Standards
ASSIGNMENT CLASSIFICATION TABLE
Topics

Questions

Cases

1.

Global markets.

1

2.

Environment of accounting.

2, 3, 4

4, 5, 7

3.

Objective of financial reporting.

5, 6, 7, 8, 9, 10

2

4.

Standard-setting organizations.

11, 12, 13, 14,
15, 16, 17, 18

1, 3, 6

5.

Financial reporting challenges.

19, 20, 21, 22,
23, 24, 25

8, 9, 10

6.

Ethical issues.

25

11, 12

Copyright © 2014 John Wiley & Sons, Inc.

Kieso, IFRS, 2/e, Solutions Manual

(For Instructor Use Only)

1-1

ASSIGNMENT CHARACTERISTICS TABLE
Item
CA1-1
CA1-2
CA1-3
CA1-4
CA1-5
CA1-6
CA1-7
CA1-8
CA1-9
CA1-10
CA1-11
CA1-12

1-2

Description

Level of
Difficulty

Time
(minutes)

IFRS and standard-setting.
IFRS and standard-setting.
Financial reporting and accounting standards.
Financial accounting.
Need for IASB.
IASB role in standard-setting.
Accounting numbers and the environment.
Politicalization of IFRS.
Models for setting IFRS.
Economic consequences.
Rule-making Issues.
Financial reporting pressures.

Simple
Simple
Simple
Simple
Simple
Simple
Simple
Complex
Simple
Moderate
Complex
Moderate

5–10
5–10
15–20
15–20
15–20
15–20
10–15
15–20
10–15
10–15
20–25
25–35

Copyright © 2014 John Wiley & Sons, Inc.

Kieso, IFRS, 2/e, Solutions Manual

(For Instructor Use Only)

ANSWERS TO QUESTIONS
1. World markets are becoming increasingly intertwined. The tremendous variety and volume of both exported and imported goods indicates the extensive involvement in international trade. As a result, the move towards adoption of international financial reporting standards has and will continue in the future.

2. Financial accounting measures, classifies, and summarizes in report form those activities and that information which relate to the enterprise as a whole for use by parties both internal and external to a business enterprise. Managerial accounting also measures, classifies, and summarizes in report form enterprise activities, but the communication is for the use of internal, managerial parties, and relates more to subsystems of the entity. Managerial accounting is management decision oriented and directed more toward product line, division, and profit center reporting. 3. Financial statements generally refer to the four basic financial statements: statement of financial position, statement of comprehensive income, statement of cash flows, and statement of changes in equity. Financial reporting is a broader concept; it includes the basic financial statements and any other means of communicating financial and economic data to interested external parties. 4. If a company’s financial performance is measured accurately, fairly, and on a timely basis, the right managers and companies are able to attract investment capital. To provide unreliable and irrelevant information leads to poor capital allocation which adversely affects the securities market. 5. A single set of high quality accounting standards ensures adequate comparability. Investors are able to make better investment decisions if they receive financial information from a U.S. company that is comparable to an international competitor.

6. The objective of general purpose financial reporting is to provide financial information about the reporting entity that is useful to present and potential equity investors, lenders, and other creditors in making decisions in about providing resources to the entity. 7. General-purpose financial statements provide financial reporting information to a wide variety of users. To be cost effective in providing this information, general-purpose financial statements provide at the least cost the most useful information possible. 8. Shareholders, creditors, suppliers, employees, and regulators all use general-purpose financial statements. The primary user group is capital providers...
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