Table of Contents
What is financial statement according to IFRS?
a statement of financial position as at the end of the period; a statement of profit and loss and other comprehensive income for the period. Other comprehensive income is those items of income and expense that are not recognised in profit or loss in accordance with IFRS Standards.
What are the major issues covered under IFRS 4?
Summary of IFRS 4
- Definition of insurance contract.
- Changes in accounting policies.
- Remeasuring insurance liabilities.
- Prudence.
- Future investment margins.
- Asset classifications.
- Other issues.
What is the objective of IFRS 4?
The objective of IFRS 4 is to specify the financial reporting for insurance contracts by any entity that issues such contracts (described in IFRS 4 as an insurer).
What is the difference between IFRS 4 and IFRS 17?
The key difference between IFRS 17 and IFRS 4 is the consistency of application of accounting treatments to areas such as revenue recognition and liability valuation. Profit recognition at the start of the contract. Revenue includes premium and may include an investment component.
Which contract falls within scope of IFRS 4?
insurance contracts
IFRS 4 applies to all insurance contracts (including reinsurance contracts) that an entity issues and to reinsurance contracts that it holds, except for specified contracts covered by other Standards.
What is IFRS in simple terms?
International Financial Reporting Standards (IFRS) are a set of accounting standards that govern how particular types of transactions and events should be reported in financial statements. They were developed and are maintained by the International Accounting Standards Board (IASB).
How many standards are there in IFRS?
The following is the list of IFRS and IAS issued by the International Accounting Standard Board (IASB) in 2019. In 2019, there are 16 IFRS and 29 IAS.
What is the meaning of financial statements?
Financial statements are written records that convey the business activities and the financial performance of a company. Financial statements are often audited by government agencies, accountants, firms, etc. to ensure accuracy and for tax, financing, or investing purposes.
What are 3 types of financial statements?
The income statement, balance sheet, and statement of cash flows are required financial statements. These three statements are informative tools that traders can use to analyze a company’s financial strength and provide a quick picture of a company’s financial health and underlying value.
What are the four types of financial statements?
There are four main financial statements. They are: (1) balance sheets; (2) income statements; (3) cash flow statements; and (4) statements of shareholders’ equity. Balance sheets show what a company owns and what it owes at a fixed point in time.
What do you mean by financial statements?
Why did IFRS 4 replace IFRS 17?
IFRS 4 explains how to disclose insurance contracts, but to put it simple, there are too many issues with IFRS 4 to make a good comparisement among insurance companies and to compare an insurance company to a non-insurance company, therefore IFRS 17 is needed.
Does IFRS 17 replace IFRS 4?
IFRS 17 replaces IFRS 4 Insurance Contracts. When introduced in 2004, IFRS 4—an interim Standard—was meant to limit changes to existing insurance accounting practices. Hence, IFRS 4 has allowed insurers to use different accounting policies to measure similar insurance contracts they write in different countries.
Does IFRS 4 permit an insurer to continue its existing accounting policies?
IFRS 4 exempts an insurer temporarily (ie until it adopts IFRS 17) from some requirements of other Standards, including the requirement to consider the Conceptual Framework in selecting accounting policies for insurance contracts.
What is the purpose of the financial statements?
Financial statements provide a snapshot of a corporation’s financial health, giving insight into its performance, operations, and cash flow. Financial statements are essential since they provide information about a company’s revenue, expenses, profitability, and debt.
Which financial statements are prepared under IFRS?
Financial statements under IFRS
| Normal name | Under IAS-1 |
|---|---|
| Balance Sheet | Statement of Financial Position (SOFP) |
| Profit & Loss Account | Statement of Comprehensive income (SOCI) Statement of Changes in equity (SOCIE) |
| Cash flow statement | Statement of Cash flows (SOCF) |
| Notes |
What is financial statement and its type?
Financial statements provide a picture of the performance, financial position, and cash flows of a business. These documents are used by the investment community, lenders, creditors, and management to evaluate an entity. There are four main types of financial statements, which are noted below.
How does IFRS 16 affect your financial statements?
Discounted Cashflow Method (“DCF”) As a result of IFRS 16 the NPV of free cashflows to the firm (“FCFF”) are expected to be higher resulting in a higher Enterprise Value
Why LIFO is not permissible under IFRS?
The IFRS does not permit the LIFO method because it can badly distort income when the inventory levels drop. When inventory falls to a low level, the older and presumably less costly inventory layers are sold. The income will artificially soar because older cost layers are much lower in cost due to inflation.
How to account for intercompany loans under IFRS?
Recognize any assets that had not previously been recognized,but which you expect to either sell in liquidation or use to pay off liabilities.
What are qualifying Spes and do they exist under IFRS?
Qualifying SPEs: FASB codification defines qualifying SPEs as trusts or additional legal expenses that are in line with conditions of FAS 140 (Marianne, 2010). Do they exist under IFRS, No. Qualifying SPEs have mortgage securitization and do not fall under the authority of the IFRS since IASB does not recognize those qualifying SPEs.
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