PART A
Question 1: IASB’s Conceptual Framework

(a) The International Accounting Standards Board (IASB) devises and publishes International

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Explain the main concepts of capital maintenance, making references to the IASB’s Conceptual Framework.
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Financial Reporting Standards (IFRS Standards) while it revised versions of International
Accounting Standards (IAS Standards) originally published by the International Accounting
Standards Committee (IASC). The IASB has also published the Conceptual Framework for Financial Reporting reflecting some of the attributes that make financial information useful to the various users of financial statements.
You are required to:

explain the main purposes of the IASB’s Conceptual Framework document? (6 marks)

discuss the assumption which (according to the IASB’s Conceptual Framework)
underlies the preparation of financial statements. (5 marks)
explain the main concepts of capital maintenance, making references to the IASB’s
Conceptual Framework. (6 marks)

identify and explain the meanings of five qualitative characteristics and attributes of financial statements including how they respectively make financial information useful as entrenched in the IASB’s Conceptual Framework. (10 marks)

(e) critically discuss how concept of materiality is fundamental to financial reporting.
(5 marks)

Question 2: IFRS1 – First-time Adoption of International Financial Reporting Standard Prisca Plc adopts international standards for the first time in its financial statements for the year to 31 December 2019. These financial statements provide comparative figures for the previous five years. According to the IFRS 1 – First-time Adoption of International Financial Reporting Standard, you are required to:
explain the terms “first IFRS reporting period” and “date of transition” as defined by
IFRS1. (3 marks)

what are the requirements of IFRS1 which must be satisfied by Prisca Plc when
preparing these financial statements? (5 marks)

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