“Curiosity is the very basis
of education and if you tell me that curiosity killed the cat, I say only that
the cat died nobly.”
Arnold
Edinborough
Hello!
It’s another edition of IFRS
is easy.
Permit me to shed another light
on a seemingly debatable aspect of IAS 1 –the new terms given to different old
terms used in Accounting.
A few weeks ago, a female friend of mine got married. As a custom, she’s
expected to change her last name (surname) to that of her husband. She was
Raro-Edo Mairo before marriage, now she’s Adeleke Mairo. Imagine I wasn’t aware
that she’s married, and as a friend I called her by her maiden name. Would I
have been wrong?
This applies to the change of
titles given to different terms by the IAS e.g. stock became inventory, debtors became receivables etc. The fact that there’s a change of title doesn’t signify
a change in nature. Mairo is still female just like receivables are still those that are indebted to the business. Hence,
IAS 1 clarifies that an entity may use titles for statements rather than those
used in the standard and that it does not prohibit the use of alternative
descriptions as long as the meaning is clear.
But then, let me quiz you
further? Why would you prefer to call me my previous name when you are aware of
my new name?
Yeah, so let’s test your
understanding so far. Click below to view or download questions on IAS 1 and
the solutions. Try and make attempts to solve them before scrolling to the
solutions section.
Kindly drop your comments, opinions and questions in the
comment box.
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