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18065723
College 2 - Conservatism
Description
Master IFRS 2 Quiz on College 2 - Conservatism, created by Burak Baharli on 12/05/2019.
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ifrs 2
master
Quiz by
Burak Baharli
, updated more than 1 year ago
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Created by
Burak Baharli
about 5 years ago
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Resource summary
Question 1
Question
Wat is de doelstelling van de financiële verslaggeving?
Answer
the single objective of financial reporting is providing useful information for valuation decisions
Qualitative characteristics serve to operationalise this objective
introducing concepts which standard-setters can employ as arguments in the development of new or revised standards
Question 2
Question
What is Decision Usefulness?
Answer
Ex-Ante (vooraf) role of accounting information
Evaluate the return potential of investment opportunities
Evaluate the managers to monitor the use of invested capital
Ex-Post role of accounting information
Question 3
Question
Book value = Recognition of (present value of) future dividends according to accounting
Answer
True
False
Question 4
Question
Market Value= value of future dividends according to investors
Answer
True
False
Question 5
Question
What are Qualitative Characteristics?
Answer
the boundaries of what the standard-setters deem ‘‘appropriate’’ financial reporting
procedures to facilitate completion of a particular task
Information is capable of making a difference in the decisions made by capital providers
Question 6
Question
Why is it important to operationalise the objective of financial reporting?
Answer
the recurrent use of qualitative characteristics in the framing of accounting problems by standard-setters, practitioners and academics
Mindsets consist of a collection of judgment criteria and cognitive processes and procedures to facilitate completion of a particular task
the boundaries of what the standard-setters deem ‘‘appropriate’’ financial reporting
Question 7
Question
Nolder & Kadous (2018): Professional skepticism can not be conceptualized as both a mindset and an attitude
Answer
True
False
Question 8
Question
What is Relevance?
Answer
Information is capable of making a difference in the decisions made by capital providers
Predictive and/or confirmatory value
Capable of making a difference whether the users use it or not
Only material information is useful
Materiality: omission or misstatement would influence the decisions of the users
Depiction of an economic phenomenon is complete, neutral and free from material error!
Complete if depiction includes all information necessary
Question 9
Question
Which one is description of Faithful Representation?
Answer
Depiction of an economic phenomenon is complete, neutral and free from material error!
Complete if depiction includes all information necessary
Neutral if there is absence of bias to attain a predetermined result
Disclose information about the degree of uncertainty that could lead to material errors
Information shall be understandable
Assume that user has reasonable knowledge
Not an excuse not to report on complex issues
Question 10
Question
Which one is description of Understandability?
Answer
Information shall be understandable
Assume that user has reasonable knowledge
Not an excuse not to report on complex issues
Information is available to decision makers before it loses its capacity to influence decisions
do not equalize differences!
Information is available to decision makers
Question 11
Question
Which one is description of Timeliness?
Answer
Information is available to decision makers before it loses its capacity to influence decisions
It is achieved if different independent observers could reach the same conclusions about the respective economic phenomena
Comparisons of different companies
Question 12
Question
Which one is description of Verifiability
Answer
Quality of information that helps assure users that information faithfully represents the economic phenomena (werkelijkheid).
It is achieved if different independent observers could reach the same conclusions about the respective economic phenomena
Question 13
Question
What is Comparability?
Answer
Comparisons over time
Comparisons of different companies
But: do not equalize differences
Assume that user has reasonable knowledge
Not an excuse not to report on complex issues
Question 14
Question
What is Stewardship?
Answer
Ex-Post (achteraf) role of accounting information
Ex-Ante role of accounting information
Subset of decision usefulness
Evaluate the managers to monitor the use of invested capital
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