Premium Essay

Iasb Framework

In: Business and Management

Submitted By amnamirza
Words 971
Pages 4
Q1. COSTELLO ADVERTISING AGENCY. | Trial Balance | November 30,2011 | Account Titles | Debit | Credit | Cash | 11,000.00 | | Accounts receivable | 20,000.00 | | Office supplies | 8,600.00 | | Prepaid Rent | 1,600.00 | | Unexpired Insurance | 3,350.00 | | Equipment | 60,000.00 | | Accumulated Depreciation: Equip | | 28,000.00 | Accounts Payable | | 5,000.00 | Interest payable | | 400 | Unearned Advertising fee | | 7,200.00 | Notes Payable | | 8,000.00 | Salaries payable | | - | Capital Stock | | 30,000.00 | Retained Earnings | | 10,000.00 | Dividends | 4,000.00 | | Advertising Revenue | | 64,000.00 | Salaries Expense | 30,000.00 | | Insurance Expense | 650 | | Rent Expense | 800 | | Depreciation Expense | 5,500.00 | | Office supplies Expense | 7,000.00 | | Interest Expense | 100 | | Totals | Rs. 152,600.00 | Rs. 152,600.00 |

Other data.
1. Office supplies on hand at November 31 totals Rs. 6,000.
2. Accrued but unrecorded and uncollected Advertising revenue totals Rs. 3,000 at the end of November.
3. The equipment is being depreciated over an estimated useful life of 10years.
4. The company prepaid its six-month rent agreement on September 1, 2011.
5. Unearned advertising fee of Rs. 3,200 was earned at the end of the month.
6. Salaries of Rs. 2,000 are accrued at November 30, 2011.
7. Insurance for six-months was paid in advance on October 1, 2011.
8. On July 1, 2011 company borrowed Rs. 8000 by signing a twelve-month, 6% note payable. The entire amount plus interest is due on maturity.
Requirements.
a. Prepare an income statement, Statement of retained earnings and balance sheet.

Q.2. The following information has been extracted from the…...

Similar Documents

Premium Essay

Fasb & Iasb Relationship

...block-quotes, so comments in those areas should be ignored. Please see the other helpful writing resources in the Tutorials and Guides section of the Center for Writing Excellence. Thank you for using WritePoint. The IASB and FASB have collaborated for the past 10 years. This collaboration was a goal toward convergence of U.S. generally accepted accounting principles (GAAP). The convergence project began with the two organizations conducting a joint meeting in Norwalk, Connecticut, on September 18, 2002. The goal for creating the convergence project was for the “development of high-quality compatible accounting standards that can be used for both domestic and cross-border financial reporting. They also promised to use their best efforts to make their existing financial reporting standards compatible as soon as practicable and to coordinate their future work programs to maintain compatibility” (Schroeder, Clark & Cathey, p. 95). Since 2002, the two boards have described what convergence means and their tactics to achieve it in fulfilling those goals through the Memorandum of Understanding between the IASB and the FASB. The main way the FASB and IASB collaborate is through joint projects to develop common standards (FASB, 2013) Besides the collaboration from the two boards, both organizations have had involvement with the SEC. The SEC has directed the FASB to consider international convergence......

Words: 1423 - Pages: 6

Premium Essay

Nz Framework

...Conceptual Framework 1. Two of the fundamental qualitative characteristics of accounting information as outlined in conceptual framework are ‘relevance’ and ‘representational faithfulness’. Provide a brief description of the meaning of these two characteristics. Do you think faithful representation is more important than relevance for accounting information? [ 3+3=6 marks] [Word limit 300] Suggested solution: The fundamental qualitative characteristics identified in the New Zealand Framework are ‘relevance’ and ‘faithful representation’. Relevance is a fundamental qualitative characteristic of financial reporting. Under the IASB Conceptual Framework, information is regarded as relevant if it is considered capable of making a difference to a decision being made by users of the financial statements. There are two main aspects to relevance. For information to be relevant it should have both predictive value and confirmatory value (or feedback value), the latter referring to information’s utility in confirming or correcting earlier expectations. The other primary qualitative characteristic is ‘faithful representation’. According to the IASB Conceptual Framework, to be useful, financial information must not only represent relevant phenomena but must also faithfully represent the phenomena that it purports to represent. According to paragraph QC 12 of the IASB Conceptual Framework: To be a perfectly faithful representation, a depiction would have three......

Words: 2093 - Pages: 9

Premium Essay

C12-3 Iasb Deliberations

...C12-3 IASB Deliberations Robert Peters ACC/440 December 2, 2013 Rick Corwin C12-3 IASB Deliberations This paper will identify three projects currently on the active agenda that are being addressed by the IASB. Items that will be addressed for each of the projects are what is the timetable identified for milestones on each of the projects and what is the status of the conceptual Framework project? IFRS 9: Financial Instruments (replacement of IAS 39) The IASB divided this project to reconsider the accounting for financial into three phases classification and measurement, impairment methodology, and hedge accounting. IFRS 9 included requirements for financial assets and was published in November 2009. During October 2010 requirements for liabilities were added. One of the most notable changes were made to the fair value option for liabiliober 2010 requirements for liabilities were added.One of the most notable changes were made to theties to respond to the issue of own credit risk. It was decided by the IASB that the mandatory date of January 2015 did not allow enough time for entities to apply the new standard due to the impairment phase of the IFRS 9 has not been completed. A new date will be decided when the entire IFRS 9 project is close to completion. The changes made to IFRS 9 in November 2013 remove the effective date from IFRS 9, but entities may choose to apply IFRS 9 immediately. Phase II: Amortized cost and impairment of financial assets. The IASB is......

Words: 867 - Pages: 4

Premium Essay

Summary on Iasb

...Nature of IASB: The International Accounting Standards Board (IASB) is a London­based organization which seeks to set and enforce standards for accounting procedures. Over 100 countries currently require or permit companies to comply with IASB standards. It is responsible for maintaining the International Financial Reporting Standards (IRFS). The organization was preceded by the International Accounting Standards Committee (IASC). The IASB's Role: Under the IFRS Foundation Constitution, the IASB has complete responsibility for all technical matters of the IFRS Foundation including: ● full discretion in developing and pursuing its technical agenda, subject to certain consultation requirements with the Trustees and the public ● the preparation and issuing of IFRSs (other than Interpretations) and exposure drafts, following the due process stipulated in the Constitution ● the approval and issuing of Interpretations developed by the IFRS Interpretations Committee. IASB’s Objectives: ● to develop, in the public interest, a single set of high quality, understandable, enforceable and globally accepted international financial reporting standards (IFRSs) based upon clearly articulated principles. These standards should require high quality, transparent and comparable information in financial statements and other financial reporting to help investors, other participants in the world's capital markets and other users of financial information make economic decisions; ● ● to promote t...

Words: 481 - Pages: 2

Premium Essay

Iasb and Fasb

...Running head: THE IASB AND FASB The IASB and FASB Amber Lynch ACC/541 Week 1 Paper March 10, 2014 The IASB and FASB Although the concept of the convergence of accounting standards is a new concept to some the idea has existed since the 1950’s. This idea came about as a solution for economic integration and the uptick in international business operations. When the project was first constructed it focused mainly on harmonizing the differences in principles that existed across many different capital markets throughout the world. The idea of harmonization remained in place until the 1990’s when the concept of convergence became the new priority. The concept of convergence centers on the concept of creating one set of accounting standards that would be used across all of the major financial markets in the world (FASB, n.d.). In order for this set of accounting standards to be uniform it requires the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) to work together towards the creation and implementation of the standards. The FASB has been the organization in charge of establishing the standards for financial accounting in the private sector within the United States since 1973 (FASB, n.d.). These standards are formally recognized by both the Securities and Exchange Commission and the American Institute of Certified Public Accountants (FASB, n.d.). They are more commonly known as Generally Accepted Accounting......

Words: 1122 - Pages: 5

Premium Essay

Important of Iasb

...In a broad sense a conceptual framework can be seen as an attempt to define the nature and purpose of accounting. A conceptual framework must consider the theoretical and conceptual issues surrounding financial reporting and form a coherent and consistent foundation that will underpin the development of accounting standards. Conceptual frameworks can apply to many disciplines, but when specifically related to financial reporting, a conceptual framework can be seen as a statement of generally accepted accounting principles (GAAP) that form a frame of reference for the evaluation of existing practices and the development of new ones. As the purpose of financial reporting is to provide useful information as a basis for economic decision making, a conceptual framework will form a theoretical basis for determining how transactions should be measured by historical value or current value and reported is how they are presented or communicated to users. Some accountants have questioned whether a conceptual framework is necessary in order to produce reliable financial statements. Past history of standard setting bodies throughout the world tells us. In the absence of a conceptual framework, accounting standards were often produced that had serious defects that is: * They were not consistent with each other particularly in the role of prudence versus accruals or matching. * They were also internally inconsistent and often the effect of the transaction on the......

Words: 1087 - Pages: 5

Premium Essay

Iasb

...IASB and FASB Relationships IASB and FASB Relationships University of Phoenix ACC/541 University of Phoenix ACC/541 The International Accounting Standards Board (IASB) and the Financial Accounting Standard Board (FASB) have made huge changes in order to understand the relationship between the two. The IASB was created to provide observance in how the financial statements were published and their global acceptance and to work towards improvements of accounting standards. In this paper, brief analysis of the IASB and FASB history and how the MSA program prepares students for the career path in becoming a qualified accountant. The mission to improve and establish accounting and financial reporting for public and private sectors is entitled to the FASB. Both the IASB and FASB have the same tasks of improving common understanding of financial reporting, and regulating rules and laws with their own requirements on accounting. The FASB is a nonprofit organization that centers on GAAP and the IASB deals with the international financial standards board. The Master of Accountancy (MSA) program is designed to enhance the knowledge of people who already possess an undergraduate degree and they wish to continue their education. These programs are used to allow interactions with other individuals in learning solutions to problems in accounting. The MSA programs are allotted to provide students with historical perspectives of different aspects within accounting. Since...

Words: 286 - Pages: 2

Premium Essay

Revenue Recognition Within the Iasb and Fasb

...Revenue Recognition within the IASB and FASB Revenue Recognition within the IASB and FASB Revenue is a critical number to any user of financial statements in determining an organization’s financial position and performance. Although this is the case, there are many differences between revenue recognition for U.S. GAAP (Generally Accepted Accounting Standards under the FASB) and IFRS (International Financial Reporting Standards under IASB). Along with these differences comes need for improvement in both reporting methods. IFRS has fewer requirements for revenue recognition in comparison to U.S. GAAP, and is made up of two central revenue recognition standards: IAS 18 (revenue) and IAS 11 (construction contracts). These standards are said to be fairly difficult to apply and understand, and give little guidance on important topics for users. On the other hand, U.S. GAAP is made up of a very wide range of revenue recognition concepts and has countless requirements for specific transactions and specific industries. This makes is very difficult for users to apply these reporting standards and makes it even harder for users of these financial statements to determine the entity’s performance, as accounting for different transactions and industries can result in different numbers for economically similar situations. IFRS may not be perfect, but overall I believe it provides a simpler and more user-friendly set of accounting standards for revenue-recognition than U.S.......

Words: 2239 - Pages: 9

Premium Essay

Comparison of Fasb &Iasb

...Mr. James Leisenring, who is a FASB Senior Advisor, makes a presentation about the conceptual framework on Thursday. He expressed some views in this presentation are on his own and do not necessarily represent official position of the financial accounting standard board. Official position of the FASB Board is arrived at only after extensive due process and deliberations. In class, we learned that the conceptual framework is making up with objective, qualitative characteristics, constraints; elements, recognition measurement and disclosure concepts, and financial statement elements which are provide guidance to standard setting. In our text book, the conceptual framework has been described as an “accounting constitution” because it provides the underlying foundation for US accounting standard. And more formally, it is a coherent system of interrelated objectives and fundamental that is intended to lead to consistent standard and that prescribes the nature, function, and limits of financial accounting and reporting. Mr. Leisenring comes up with some different views and concerns of some aspect of the concept framework in his presentation. For example, he talks about the definition of assets liabilities and revenue and expenses, on his view, Mr. leisenring concerns the definition of those concept are kind of vogue and uncertainty. There is no discussion of what items that are not resources or obligations should be recognized or what would be the basis for recognition. He talks......

Words: 564 - Pages: 3

Premium Essay

Conceptual Framework

...A conceptual framework for financial reporting A conceptual framework, in the field we are concerned with, is a statement of generally accepted theoretical principles which form the frame of reference for financial reporting. The financial reporting process is concerned with providing information that is useful in the business and economic decision-making process. Therefore a conceptual framework will form the theoretical basis for determining which events should be accounted for, how they should be measured and how they should be communicated to the user. Although it is theoretical in nature, a conceptual framework for financial reporting has highly practical final aims. The danger of not having a conceptual framework is demonstrated in the way some countries' standards have developed over recent years; standards tend to be produced in a haphazard and fire-fighting approach. Where an agreed framework exists, the standard-setting body act as an architect or designer, rather than a fire-fighter, building accounting rules on the foundation of sound, agreed basic principles. The lack of a conceptual framework also means that fundamental principles are tackled more than once in different standards, thereby producing contradictions and inconsistencies in basic concepts, such as those of prudence and matching. This leads to ambiguity and it affects the true and fair concept of financial reporting. Another problem with the lack of a conceptual framework has become apparent in......

Words: 1910 - Pages: 8

Premium Essay

The Relationship Between Iasb and Fasb

...The Relationship between IASB and FASB Doris Edwards ACC/541 – Accounting Theory and Research Instructor - Leslie Crews, JD, MBT March 28, 2011 Financial Accounting Standards Board History The Financial Accounting Standards Board (FASB) is a private sector organization that was established in 1973. The FASB is governed by the Financial Accounting Foundation (FAF). The FAF appoints the members of the Financial Accounting Standards Advisory Council (FASAC), the council is the entity that informs the FASB of pressing issues or topics to be reviewed (2003, Webster’s). The goal of the FASB is to set standards for financial accounting practices and the production of financial reports. The FASB works to ensure that financial reporting is; transparent, reliable, relevant, comparable, and consistent. It is the responsibility of the FASB to regularly review standards, to check for deficiencies within the current standards, and to also look for methods to improve reporting based on current day needs. As set by Section 108 of the Sarbanes-Oxley Act any standard set by the FASB is recognized to be “generally accepted” for the purpose of the federal securities laws (Schroeder, 2011). The FASB initially issued standards through two different types of pronouncements, these are more commonly known as Statements of Financial Accounting......

Words: 1173 - Pages: 5

Premium Essay

Convergence of Fasb and Iasb

...Project is undertaken by the IASB and the FASB jointly aiming at removing the differences between the two sets of accounting Standards, the GAAP and the IFRS. In other words, the main purpose of the project is to make the accounting standards of both the IASB and the FASB comparable so that there will be a global used accounting standard. (Deegan 2010, p49) This project will make international financial reports more comparable and more helpful for information users. The development of Conceptual Framework is a basic requirement for the changes of accounting standards. With the international convergence of financial framework, a more developed common framework is required to provide a basis for the IASB and the FASB to develop high quality common standards, to eliminate differences between the two sets of standards and to seek to replace weaker standards with stronger standards; Therefore the development of conceptual framework project is a basic need for the conducting of convergence project. In addition, the convergence project will lead professionals to realize the change of information demand and financial system. Because of these changes, the conceptual framework, being developed two decades ago, need to be evolved. (Deegan 2010, p49) Otherwise the current conceptual framework will not be helpful to issue a common set of principle-based standards. (IASB 2005) 2. TT * Limitation to meet current financial environment. The conceptual frameworks of both boards......

Words: 1488 - Pages: 6

Premium Essay

Iasb

...cooperation developments. Efforts have increased during the past decade to move nations toward using international standards. The International Accounting Standards Board (IASB) is an organization that regulates the accounting standards which are accepted globally by almost all the countries in the world. This paper will first discuss the history of IASB. Next it will explain the structure of IASB. After that, the paper will talk about how International Financial Reporting Standards (IFRS) are created. Finally, it will describe the effort to converge IFRS with Generally Accepted Accounting Principles (GAAP). History of IASB International Accounting Standards Board was first known as International Accounting Standard Committee (IASC) which existed from 1973 to 2001. It was responsible for developing the International Accounting Standards (IASs) and promoting the use and application of these standards. After nearly 25 years of achievement, the IASC concluded that it must find a way to converge between national accounting standards and practices, and create high-quality global accounting standards. To do that, IASC saw a need to change its structure in order to better work together toward global harmonization. The IASC operated until April 2001 when the International Accounting Standards Board (IASB) assumed its accounting standard-setting responsibilities from it. (Hoyle B., Doupnik S. and Schaefer F) The headquarters of International Accounting Standards......

Words: 1743 - Pages: 7

Premium Essay

Iasb

...or possibly even better than IFRS. According to PwC report of 2005 and 2006 a survey with the fund managers indicates that IFRS numbers have affected investment decisions. The UK businesses believe that the logic of IFRS is that it should provide what is called ‘decision useful information’. This concept has been imported into IFRS from the USA even though IFRS do not apply there. Under the influence of American members of the IASB there has been a shift towards the US Generally Accepted Accounting Principles (GAAP) in IFRS and away from the UK / European model. Due to above given reasons, UK businesses hesitant in implementing new accounting standards. c) The new standards implemented by IASB are more complex and is required technical disclosure on different items like stock option of employees or off-balance sheet finance. These issues make some of the companies to hesitate in implement global standards. In simple words under IFRS, company profits may be affected both positively and negatively. According to Tom Jones vice- chairman of the IASB, the aim of adopting IFRS globally is to provide reports in a way that can be set in a global marketplace. This is helpful in accessing world capital markets. In the free trade and globalization of markets, IFRS allows a company to benchmark itself against its peers throughout the world and allows investors and others to compare the company’s performance with competitors globally. d) According to different studies......

Words: 2938 - Pages: 12

Premium Essay

The U.S. Convergence Toward Iasb

...The U.S. Convergence toward IASB This paper will touch on some key points, relationships, differences, and issues concerning the FASB and IASB that exist in the convergence from FASB to IASB in the U.S. They both were created to improve regulations of accounting standards, and uphold the integrity of the financial statements related to the accounting process. In the world we live in accounting standards are essential for the world economy to run smoothly. We have seen over the past decade what can happen when the standards aren’t’ used properly, or used at all. The Eron scandal, the collapse of markets in some countries like Greece, and the 2008 recession in the U.S. just to name a few examples of why they are so important. There are boards worldwide to oversee that accounting standards are being properly implemented, this paper will be concerning the two most used, the FASB, and the IASB. These boards use different accounting concepts and standards for financial reporting that guides many agencies and company’s in their day to day operations. Some examples found in the public who must rely on these standards are issuers, auditors, and any users of financial information. The International Accounting Standards Committee was from in the 70’s as the first international standards board created. Later when accounting practices were under much criticism; especially in the U.S., IASC became a self-governing international standard setter known as the International......

Words: 1049 - Pages: 5