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问题

Faithful representation is a fundament


Faithful representation is a fundamental characteristic of useful information within the IASB’s Conceptual framework for financial reporting.Which of the following accounting treatments correctly applies the principle of faithful representation?

  • AReporting a transaction based on its legal status rather than its economic substance
  • BExcluding a subsidiary from consolidation because its activities are not compatible with those of the rest of the group
  • CRecording the whole of the net proceeds from the issue of a loan note which is potentially convertible to equity shares as debt (liability)
  • DAllocating part of the sales proceeds of a motor vehicle to interest received even though it was sold with 0% (interest free) finance
参考答案
参考解析:

The substance is that there is no ‘free’ finance; its cost, as such, is built into the selling price.

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