Q1: Conceptual Framework for Financial Reporting 2018

Revision of the Conceptual Framework will automatically lead to changes in Standards that are inconsistent with the revised concepts.

• True

• False

How does the Conceptual Framework explain the role of stewardship?

• Providing information needed to assess management's stewardship is identified as an additional objective of financial reporting, equal in prominence to providing financial information useful to users in making decisions relating to providing resources to the entity

• Decisions relating to providing resources to the entity depend on users' assessment of the amount, timing and uncertainty of the prospects for future net cash inflows to the entity and on their assessment of management's stewardship

• Providing information needed to assess stewardship is more important than providing information needed to assess the prospects for future cash inflows to the entity

• Financial reports are not intended to provide information needed to assess stewardship

When a reporting entity is not a legal entity and does not comprise only legal entities all linked by a parent-subsidiary relationship, the boundary of the reporting entity can contain an incomplete set of economic activities if that entity provides a description of how the boundary was determined

• True

• False

For a right to meet the definition of an asset, it needs to be likely that the right will produce economic benefits for the entity

• True

• False

Which factors may indicate that recognition of an item meeting the definition of an asset or a liability may not provide useful information?

• Uncertainty about whether an asset or liability exists

• Low probability of an inflow or outflow of economic benefits

• Other factors

• All of the above

• None of the above.

An entity may decide to include income or expenses in other comprehensive income when doing so would result in the statement of profit or loss providing more relevant information, or providing a more faithful representation of the entity's performance for the period

• True

• False

Which statement is incorrect regarding the Conceptual Framework for Financial Reporting?

• Serves as a guide in developing future PFRSs

• Serves as a guide in resolving accounting issues that are not addressed directly in existing PFRSs

• Is not a PFRS and hence does not define standards for any particular measurement or disclosure issue

• Prevails in cases where there is conflict with a PFRS

The IASB revised the Conceptual Framework because the previous version is

• no longer relevant

• no longer useful

• useful but needed improvements

• useful but is required to be revised by legislation

Which of the following remained unchanged in the 2018 Conceptual Framework?

• The reporting entity

• Derecognition

• Presentation and disclosure

• Concepts of capital and capital maintenance

Which of the following is the foundation of the Conceptual Framework?

• The objective of general purpose financial reporting

• A reporting entity concept

• The qualitative characteristics of, and the constraint on, useful financial information

• The elements of financial statements