CIMA BA3 · Chapter 1 · Question 10 of 10
Under the revised IASB Conceptual Framework, an item that meets the definition of an element is recognised in the financial statements when:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Recognising it provides users with relevant information and a faithful representation of the item
Explanation
The revised Conceptual Framework recognises an element when doing so gives users relevant information and a faithful representation. The 'probable flow of benefits and reliable measurement' test was the recognition criterion in the earlier framework and has been replaced. The IASB sets no monetary materiality threshold, and auditors do not approve individual items.
More The accounting framework and the Conceptual Framework MCQs
- Q2According to the IASB Conceptual Framework for Financial Reporting, what is the objective of general purpose financial reporting?
- Q3Which group does the Conceptual Framework identify as the primary users of general purpose financial reports?
- Q4Under the IASB Conceptual Framework, an asset is defined as:
- Q5Under the IASB Conceptual Framework, which of the following is the definition of a liability?
- Q6Which of the following is NOT one of the elements of financial statements identified in the IASB Conceptual Framework?