FACULTY OF BUSINESS
DEPARTMENT OF ACCOUNTING
A report done in partial fulfillment of the course required Financial Accounting (ACCT 111)
Question: Explain the IAS and the IFRS.
Abigail P. Ebel
ID: 2015050155 Lecturer: B. Ndiweni
First written in 1973, International Accounting Standards (IAS) are issued by International Accounting Standard Board (IASB) since 2001, and its predecessor, International Accounting Standard Committee (IASC). IAS are a set of standards stating how particular types of transactions and other events should be reflected in the financial statements.
IAS 1: Presentation of Financial Statements.
IAS 1 explains the presentation and preparation of the financial …show more content…
It states that inventories must be measured at the lower cost and net realizable value. The accounting treatment of inventories is done according to the system of historical cost. IAS 2 also explains the treatments which are allowed for the calculation of inventory costs.
IAS 3: Cash Flow Statements
A cash flow statement is a component which is required of an IAS financial statement. The IAS 7 describes this requirement by the cash flow information benefit which it gives. The IAS 7 specifies the rough structure of a cash flow statement and gives a definition of cash and cash equivalents. The cash flows have to be differianted into those attained from investing, operating and financing activities.
IAS 8: Net Profit or Loss for the Period, Fundamental Errors and Changes in Accounting Policies
IAS 8 guarantees that all companies should present their income statement in consistent form. It outlines ordinary activities of businesses and requires disclosing of extraordinary items separately. Disclosure of single items of income and expense is dependent on how pertinent the information is for describing the enterprises’ performance. It also regulates how to handle the fundamental balancing errors from preceding accounting periods and in which situations changes in the accounting policy are …show more content…
This standard also explains what a financial statement should disclose.
IAS 17: Leases
This standard differentiates operating leases from finance. In this respective assignment, the way in which the leased asset is balanced has considerable consequences. IAS 17 also establishes how to deal with any excess of leaseback transactions and sales proceeds.
IAS 18: Revenue
The organization’s success is accurately determined from the date at which revenue is recognized. According to this standard, revenue must be recognized when there is a probability that future economic benefits will flow to the organization and these benefits can be reliably measured.
IAS 19: Employee Benefits
Workers receive benefits such as payments, specific leaves, salaries and wages, termination and equity compensation benefits. This standard standardizes the measurement and recognition of all long term and short term workers benefits.
IAS 20: Accounting for Government Grants and Disclosure of Government