FCCA Financial Reporting and Standards Flashcards

Which financial reporting framework is primarily used by publicly listed companies in the United States?

Answer: US GAAP as issued by FASB

Publicly listed US companies are required to use US GAAP (Generally Accepted Accounting Principles) as established by the Financial Accounting Standards Board (FASB).

Under IFRS 15, revenue is recognized when a company satisfies which condition?

Answer: When a performance obligation is satisfied by transferring control of goods or services

IFRS 15 requires revenue recognition upon satisfaction of a performance obligation, defined as the transfer of control of goods or services to the customer.

Which IFRS standard governs the accounting treatment of leases for lessees, requiring most leases to be recognized on the balance sheet?

Answer: IFRS 16

IFRS 16 (Leases) requires lessees to recognize a right-of-use asset and a corresponding lease liability for most leases on the balance sheet.

Under US GAAP, the accounting standard equivalent to IFRS 15 for revenue recognition is found in which codification topic?

Answer: ASC 606

ASC 606 (Revenue from Contracts with Customers) is the US GAAP equivalent to IFRS 15, both based on the same converged five-step model.

Which financial statement shows a company's financial position at a specific point in time?

Answer: Balance sheet (statement of financial position)

The balance sheet (or statement of financial position) presents a snapshot of assets, liabilities, and equity at a given date.

Under IFRS, goodwill arising from a business combination is subsequently accounted for using which method?

Answer: Tested for impairment annually and not amortized

Under IFRS 3, goodwill is not amortized but is subject to an annual impairment test, or more frequently if indicators of impairment exist.