Improving disclosure practices

In order to be awarded CPD units you must answer the following five random questions correctly. If you fail the test, please re-read the article before attempting the questions again.

  1. The IASB issued IFRS 12 Disclosure of Interests in Other Entities as part of a suite of new standards that addressed inter entity investments. What was the key disclosure enhancement for investors that was introduced by IFRS 12?

  2. The IASB hosted a public discussion forum on financial reporting in 2013 with the objective of clarifying the problem with disclosure and its causes. Which of the following issues was not an opinion expressed by the forum?

  3. The IASB hosted a public discussion forum on financial reporting in 2013 with the objective of clarifying the problem with disclosure and its causes. Why did the forum feel that there is an accounting risk attached to disclosure?

  4. The issue with disclosure overload is prevalent also in the USA. In 2014 the FASB issued the Conceptual Framework for Financial Reporting Chapter 8: Notes to Financial Statements. What does the FASB feel is the primary purpose of notes to financial statements?

  5. In July 2016, the IASB set out in a staff paper that proposed an approach to researching their project on Primary Financial Statements. The feedback received on their request for views indicated that the research should initially focus on the reporting of financial performance. Which of the following was not a view share by the respondents to the IASB project?

  6. Some respondents to the IASB research project stated that investors would like to understand the return that management has generated from its operations and resources, and the interaction between the business model and performance of an entity. Why was it felt that this project on Primary Financial Statements should be prioritised?

  7. It was suggested that the IASB explore how the statements of financial performance could be improved to provide more useful information to users. In addition, there was a growing concern about the increasing use of alternative performance measures and non-IFRS information in the communication of performance. What did the research highlight about adjusted or non-GAAP earnings?

  8. The objective of the IASB research project is to identify and develop a set of principles for disclosure that could form the basis of a standards-level project. The IASB focus is the review and revision of the general requirements in IAS 1 Presentation of Financial Statements. The IASB is looking to potentially amend IAS 8 Accounting Policies, Changes in Accounting Estimates and Error. What is the purpose of the proposed amendment to IAS 8?

  9. As a result of the feedback and research undertaken, the IASB has suggested certain areas for inclusion in its project. Which of the following is not one of those areas?

  10. There are a number of other standard setters and regulators that have undertaken projects on disclosure overload. In 2013 the European Financial Reporting Advisory Group (EFRAG) issued Towards a disclosure framework for the notes. Which of the following was a key outcome of the document?