Case 4: There had been a group discussion on various aspects related to accounting standards amongst a few fresh graduates. Each graduate had come up with an opinion about the topics that are been discussed below. You are required to review each of the discussion and validate their opinion with required explanation. Also, you need to provide the correct opinion in case you disagree with all the opinions. Each of the given discussion should be commented upon within 75 - 150 words. The question contains 5 discussions. (5x 2 marks = 10 marks) Discussion 1: There are several fundamental and qualitative characteristics provided by the conceptual framework that are required in any financial information. When financial information does exhibit the characteristic of consistency? Graduate 1 opinioned that when expenses are reported as charges against revenue in the period in which they are paid the financial information exhibits consistency Graduate 2 mentioned that when a company applies the same accounting treatment to similar events from period to period it exhibits consistency in its financial information Graduate 3 stated that when extraordinary gains and losses are not included on the income statement the financial information exhibits consistency Graduate 4 mentioned that when accounting procedures are adopted which give a consistent rate of net income then only the financial information exhibits consistency Discussion 2: Conceptual framework was initially produced in 1989, partially revised in 2010, and finally revised in March 2018. Which term was included for the first time in the final version of Conceptual Framework? Graduate 1 stated that the criteria for recognition and derecognution was introduced in the final version Graduate 2 mentioned that there was no new term that was introduced in the final version Graduate 3 mentioned that qualitative characteristics where introduced in the final version Graduate 4 had no opinion on such statement Discussion 3: An entity whose financial statements comply with IFRSs shall make an explicit and unreserved statement of such compliance in the notes. In such compliance the entity has to follow the treatment for various elements provided by respective accounting standards. Graduate I agreed with the statement and mentioned that the accounting standards are a set of rules which the entity must follow but the management can make decision related certain elements Case 4: There had been a group discussion on various aspects related to accounting standards amongst a few fresh graduates. Each graduate had come up with an opinion about the topics that are been discussed below. You are required to review each of the discussion and validate their opinion with required explanation. Also, you need to provide the correct opinion in case you disagree with all the opinions. Each of the given discussion should be commented upon within 75 - 150 words. The question contains 5 discussions. (5x 2 marks = 10 marks) Discussion 1: There are several fundamental and qualitative characteristics provided by the conceptual framework that are required in any financial information. When financial information does exhibit the characteristic of consistency? Graduate 1 opinioned that when expenses are reported as charges against revenue in the period in which they are paid the financial information exhibits consistency Graduate 2 mentioned that when a company applies the same accounting treatment to similar events from period to period it exhibits consistency in its financial information Graduate 3 stated that when extraordinary gains and losses are not included on the income statement the financial information exhibits consistency Graduate 4 mentioned that when accounting procedures are adopted which give a consistent rate of net income then only the financial information exhibits consistency Discussion 2: Conceptual framework was initially produced in 1989, partially revised in 2010, and finally revised in March 2018. Which term was included for the first time in the final version of Conceptual Framework? Graduate 1 stated that the criteria for recognition and derecognution was introduced in the final version Graduate 2 mentioned that there was no new term that was introduced in the final version Graduate 3 mentioned that qualitative characteristics where introduced in the final version Graduate 4 had no opinion on such statement Discussion 3: An entity whose financial statements comply with IFRSs shall make an explicit and unreserved statement of such compliance in the notes. In such compliance the entity has to follow the treatment for various elements provided by respective accounting standards. Graduate I agreed with the statement and mentioned that the accounting standards are a set of rules which the entity must follow but the management can make decision related certain elements
