FAR210 Topic 2 Half Time MAC1103A

Reporting entity can be defined as “an entity that is required, or chooses, to prepare financial statements”. Find the INCORRECT statement from the following, relating to the financial statement of the reporting entity:

• Consolidated financial statements referred to the reporting entity which comprise of both the parent and its subsidiaries.

• Combined financial statement referred to reporting entity that are linked by a parent-subsidiary.

• Unconsolidated financial statement referred to reporting entity which is the parent alone.

• Combined financial statement is for reporting entity are not all linked by a parent-subsidiary relationship.

Identify the PRIMARY USER of the general purpose financial reporting in accordance to the 2018 Conceptual Framework from the following:

• Employees, investors and trade union representatives

• Existing and potential investors, lenders and other creditors

• Lenders and other creditors and customers

• Existing and potential investors, government agencies and the general public

The 2018 Conceptual Framework identifies two fundamental qualitative characteristics that is:

• comparability and verifiability

• relevance and timeliness

• faithful representation and relevance

• understandability and relevance

Which of the following is NOT TRUE about the comparability characteristics of financial information?

• Information about a reporting entity is more useful if it can be compared with similar information about other entities and with similar information about the same entity for another period or another date.

• Comparability should be viewed only within an entity.

• Comparability can be achieved if the financial effects of like transactions and other events are measured and displayed in a consistent way.

• Compliance with MFRSs, including the disclosure of the accounting policies used by the entity, helps to achieve comparability.

One of the purposes of Conceptual Framework is to assist the MASB to develop MFRS Standards that are based on consistent concepts.

Is this statement True or False?

• True

• False