“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.”
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.
Don’t miss any of the IFRS updates on this blog. Sign up for free by subscribing with your email for notifications.
Please share. Thanks for participating.