Question

A company using IFRS to prepare its financial statements will use a hierarchy to determine what recognition, valuation, and disclosure requirements should be used.

1. IFRS, IAS, IFRS Interpretations
2. Pronouncements of other standard-setting bodies
3. The Conceptual Framework for Financial Reporting

Which of the following depicts the correct order of the hierarchy?

a. 2,3,1
b. 3,2,1
c. 1.2.3
d. 1,3,2

Answer 1

The hierarchy for determining recognition, valuation, and disclosure requirements for IFRS is:

d. 1,3,2

Step-by-step explanation:

1. IFRS, IAS, IFRS Interpretations are the main standards issued by the IASB, the international accounting standard-setting body. It is like the FASB that sets the US GAAP.

2. Pronouncements of other standard-setting bodies can be applied where IFRS are not definitive.

3. The Conceptual Framework for Financial Reporting help the IASB to develop and revise IFRS that are based on consistent concepts.