Intermediate Accounting
3rd Edition
ISBN: 9780136912644
Author: Elizabeth A. Gordon; Jana S. Raedy; Alexander J. Sannella
Publisher: Pearson Education (US)
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Textbook Question
Chapter 3, Problem 1BCC
Basis for Conclusions Case 1: Judgment and Estimation Uncertainty
Unlike U.S. GAAP, IFRS requires that an entity disclose (a) management’s judgments with the most significant effect on the financial statements and (b) information about the major sources of estimation uncertainty that may result in a material adjustment to the carrying values of the entity’s assets and liabilities. These disclosure requirements are included in IAS 1, “Presentation of Financial Statements.” Paragraph 122 contains the requirement related to judgments and paragraph 125 contains the requirement related to estimation uncertainty.
Read paragraphs BC77 through BC84 in the basis for conclusions in IAS 1. What reasons did the Board give for requiring the disclosures about judgment? What reasons did the Board give for requiring the disclosures about estimation uncertainty?
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Choose the correct.Which of the following statements concerning U.S. GAAP is true?a. Does not require segment information to be reported in accordance with generally accepted accounting principles.b. Does not require a reconciliation of segment assets to consolidated assets.c. Requires geographic area information to be disclosed in interim financial statements.d. Requires disclosure of a major customer’s identity.
AASB 101 indicates that when presenting a statement of financial position, an entity should:
present all assets and liabilities as two groups and disclose their specific classifications in notes as per paragraphs 57-67.
only present items on the basis of liquidity if that information is reliable and more relevant. If this is the case, assets should be discretely grouped into current and non-current classifications.
present items broadly in order of liquidity if that information is reliable and more relevant than following paragraphs 66-76.
always classify items as current and non-current.
For each class of financial assets and liabilities, the entity shall disclose the fair value of that class of financial assets and liabilities in a manner that allows comparison with the corresponding carrying amount on the balance sheet. Why do you think that these disclosures contribute to improving the quality of information for users of financial statements? Comment critically
Chapter 3 Solutions
Intermediate Accounting
Ch. 3 - Prob. 3.1QCh. 3 - Prob. 3.2QCh. 3 - Does U.S. GAAP require that companies disclose...Ch. 3 - Does IFRS require that companies disclose...Ch. 3 - Prob. 3.5QCh. 3 - Does IFRS require that companies disclose their...Ch. 3 - Prob. 3.7QCh. 3 - Prob. 3.8QCh. 3 - Prob. 3.9QCh. 3 - Prob. 3.10Q
Ch. 3 - Prob. 3.11QCh. 3 - What is the Basis for Conclusions and where can...Ch. 3 - Prob. 3.13QCh. 3 - Prob. 3.14QCh. 3 - Prob. 3.1BECh. 3 - Judgment in Accounting for Plant and Equipment....Ch. 3 - Match Each Cognitive Bias Below with its...Ch. 3 - Prob. 3.4BECh. 3 - Prob. 3.5BECh. 3 - Prob. 3.6BECh. 3 - Prob. 3.7BECh. 3 - Codification Research. Referencing Appendix A,...Ch. 3 - Prob. 3.9BECh. 3 - Prob. 3.10BECh. 3 - Exercises E3-1. Accounting Policy Disclosures. To...Ch. 3 - Cognitive Bias. A team of accounting students is...Ch. 3 - Cognitive Bias. A team of accounting students is...Ch. 3 - Authoritative Literature. Provide the reference to...Ch. 3 - Authoritative Literature. Provide the reference to...Ch. 3 - Authoritative Literature. To what entity types...Ch. 3 - Authoritative Literature. How does FASB define...Ch. 3 - Prob. 3.8ECh. 3 - Prob. 1JCCh. 3 - Prob. 2JCCh. 3 - Prob. 1SSCCh. 3 - Surfing the Standards Case 2: Inventory...Ch. 3 - Prob. 3SSCCh. 3 - Basis for Conclusions Case 1: Judgment and...Ch. 3 - Basis for Conclusions Case 2: Income Statement or...
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