Inancial Reporting International Accounting Standards
You are a newly appointed Accountant of Alpha Plc. You are asked by the Chief Finance Officer Andrew Chapman, to prepare a report suitable for presentation to the board of directors explaining the role of IASB (International Accounting Standards Board).
A (1): The mission of IASB is a?to develop, in the public interest, a single set of high quality, understandable and international financial reporting standards for general purpose financial statementa?. Critically analyse the challenges faced by the IASB in fulfilling its mission. (25 marks)
A (2): The qualitative characteristics of relevance, reliability and comparability identified in the IASBas Framework for the preparation and presentation of financial statements (Framework) are some of the attributes that make financial information useful to the various users of financial statements.
Explain what is meant by relevance, reliability and comparability and how they make financial information useful. (25 marks)
The principal aim when developing accounting standards for small to medium-sized enterprises (SMEs) is to provide a framework that generates relevant, reliable, and useful information which should provide a high quality and understandable set of accounting standards suitable for SMEs. There is no universally agreed definition of
an SME and it is difficult for a single definition to capture all the dimensions of a small or medium-sized business. The main argument for separate SME accounting standards is the undue cost burden of reporting, which is proportionately heavier for smaller firms.
B (1) Comment on the different approaches which could have been taken by the International Accounting Standards Board (IASB) in developing the a?IFRS for Small and Medium-sized Entitiesa (IFRS for SMEs),explaining the approach finally taken by the IASB. (25 marks)
B (2) Discuss the main differences and modifications to IFRS which the IASB made to reduce the burden of reporting for SMEas, giving specific examples where possible and include in your discussion how the Board has dealt with the problem of defining an SME. (25 marks)
Total (100 marks)
The assignment has two parts which are divided into 2 questions each.
Each question should be 750 words approximately.