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Chapter 24: Question 1IFRS (page 1467)

Where can authoritative IFRS be found related to the various disclosure issues discussed in the chapter?

Short Answer

Expert verified

IAS 1, IAS 24, IAS 10, IFRS 8, and IAS 34 are discussed in the chapter.

Step by step solution

01

Meaning of IFRS

IFRS refers to a collection of globally agreed accounting and financial reporting rules for the preparation and presentation of financial statements. Ensures that accounting practices are consistent, resulting in comparable financial records among various reporting substances around the world.

02

Discussing authoritative IFRS be found to the various disclosure issues.  

The IFRS guidelines addressing related party disclosures are:

  1. IAS 1 (“First Time Adoption of IFRS”)
  2. IAS 24 (“Related Party Disclosures”)
  3. Disclosure and acknowledgment of post-balance sheet events in IAS 10 (“Events after the Balance Sheet Date”)
  4. Fragment reporting provisions in IFRS 8 (“Operating Segments”)
  5. And intervals detailing requirements are displayed in IAS 34 (“Interim Financial Reporting”)

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Most popular questions from this chapter

(Post-Balance-Sheet Events) For each of the following subsequent (post-balance-sheet) events, indicate whether a company should (a) adjust the financial statements, (b) disclose in notes to the financial statements, or (c) neither adjust nor disclose.

  1. Settlement of federal tax case at a cost considerably in excess of the amount expected at year-end.
  2. Introduction of a new product line.
  3. Loss of assembly plant due to fire.
  4. Sale of a significant portion of the company’s assets.
  5. Retirement of the company president.
  6. Prolonged employee strike.
  7. Loss of a significant customer.
  8. Issuance of a significant number of shares of common stock.
  9. Material loss on a year-end receivable because of a customer’s bankruptcy.
  10. Hiring of a new president.
  11. Settlement of prior year’s litigation against the company (no loss was accrued).
  12. Merger with another company of comparable size.

What is the relationship of the asset turnover to the return on assets?

(Disclosure of Estimates) Nancy Tercek, the financial vice president, and Margaret Lilly, the controller, of Romine Manufacturing Company are reviewing the financial ratios of the company for the years 2017 and 2018. The financial vice president notes that the profit margin on sales ratio has increased from 6% to 12%, a hefty gain for the 2-year period. Tercek is in the process of issuing a media release that emphasizes the efficiency of Romine Manufacturing in controlling cost. Margaret Lilly knows that the difference in ratios is due primarily to an earlier company decision to reduce the estimates of warranty and bad debt expense for 2018. The controller, not sure of her supervisor’s motives, hesitates to suggest to Tercek that the company’s improvement is unrelated to efficiency in controlling cost. To complicate matters, the media release is scheduled in a few days.

Instructions

  1. What, if any, is the ethical dilemma in this situation?

Carlton Company is involved in four separate industries. The following information is available for each of the four industries.

Operating Segment

Total Revenue

Operating Profit (Loss)

Identifiable Assets

W

\( 60,000

15,000

\)167,000

X

10,000

3,000

83,000

Y

23,000

(2,000)

21,000

Z

9,000

1,000

19,000

\(102,000

\)17,000

$290,000

Instructions

Determine which of the operating segments are reportable based on the:

a) Revenue test.

Carlton Company is involved in four separate industries. The following information is available for each of the four industries.

Operating Segment

Total Revenue

Operating Profit (Loss)

Identifiable Assets

W

\( 60,000

15,000

\)167,000

X

10,000

3,000

83,000

Y

23,000

(2,000)

21,000

Z

9,000

1,000

19,000

\(102,000

\)17,000

$290,000

Instructions

Determine which of the operating segments are reportable based on the:

b) Operating profit (loss) test.

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