93 Conptal Framo PROBLEMS PROBLEM 1: TRUE OR FALSE All changes in an entity's economic resources and claims to those resources result from the entity's financial performance. The qualitative...

Extracted text: 93 Conptal Framo PROBLEMS PROBLEM 1: TRUE OR FALSE All changes in an entity's economic resources and claims to those resources result from the entity's financial performance. The qualitative characteristics of useful information apply nly to the financial information provided in the financial statements. . According to IFRS Practice Statement 2 Making Materiality Judgnents, cost is an important consideration when making materiality judgments. T, When making materiality judgments, assessment alone is not always sufficient to conclude that an item of information is not material. Es. Materiality judgments apply only to items that are recognized but not to those that are unrecognized. 6. The more significant the qualitative factors are, the lower the quantitative thresholds will be. Thus, an item with a zero amount can be material in light of qualitative thresholds. Fz. When making materiality judgments, an entity should judge an item's materiality only on its own and not in combination with other information in the complete set of financial quantitative a statements. ES The Conceptual Framework and the Standards specify a uniform quantitative threshold for materiality. 9 To meet the objectives of general purpose financial reporting, a Standard sometimes contains requirements that depart from the Conceptual Framework. F 10. The Conceptual Framework is concerned with the provision of financial information to both external users and internal users. PROBLEM 2: TRUE OR FALSE 1. The Conceptual Framework may be revised from time to time. Revisions in the Conceptual Framework automatically result to changes in the Standards.


Extracted text: Con 94 from the asset or liability. 3. Legal enforceability of a right, for example ownership necessary for control over an economic resource to exist 4. According to the revised Conceptual Framework, an asser exist even if the probability that it will provide inflows future economic benefits is low, and even if the asset is subie to a high measurement uncertainty. 5. According to the revised Conceptual Framework, what the enti controls is the right, and not the ultimate inflows of future economic benefits that the economic resource may produce. 6. The Conceptual Framework defines income and expenses in terms of changes in assets and liabilities. 7. Not all items that meet the definition of a financial statement element are recognized; they are recognized only if recognizing them will also result in relevant and faithfully represented information. 8. Measuring an asset at historical cost will always result in the same carrying amount of the asset from period to period. 9. According to the Conceptual Framework, amortized cost measurement relates to historical cost, rather than current value. 10. Although the use of a single measurement basis improves the understandability of the financial statements, this may not always lead to useful information. Thus, the Standards require different measurement bases for different assets, liabilities, income and expenses. PROBLEM 3: MULTIPLE CHOICE 1. According to the Conceptual Framework, these are the qualitative characteristics that make information useful to users. a. Fundamental c. Relevance d. Comparability b. Enhancing laike of an accountable evente in the SFP and .