Question

STANDARDS

IPSAS vs IAS

IPSAS	Description	IAS/IFRS	Description
1	Presentation of Financial Statements
2	Cash Flow Statements
12	Inventories
17	Property, Plant & Equipment
33	First Time Adoption of Accrual Basis IPSASs

Identify/find the corresponding IAS/IFRSs’ for the IPSASs’ listed in the table above, then
write on at least 3 similarities and 3 differences between the respective standards

JOURNAL ENTRIES

Cash vs Accrual Accounting Entries

Company X is located in the commercial sector of Trinidad and Tobago and has been operating from 1992. The company purchased office supplies from Florida Distributors Co. Ltd on May 12, 2016 that valued US$50,000.00. Company X pays US$20,000.00 by cash on May 31, 2016, US$25,000.00 by cheque on June 2, 2016, and then settled its bill by transferring the balance from its bank account directly into the bank account of the supplier on June 3, 2016.

 Record the transactions in the books of Company X using the cash basis?
 Record the transactions in the books of Company X using the accrual basis?

Note that all transactions are to be recorded in the home currency of Company X

Answer 1

journal entries ( assuming 1usd = 6.75 ttd)

12 may 2016 office supplies A/C Dr 337500 td

To florida distributors Co. ltd A/C 337500 ttd

31 may 2016 florida distributors Co. ltd A/C Dr 135000 ttd

To cash 135000 ttd

2 june 2016 florida distributors Co.A/C ltd Dr 168750 ttd

To bank a/c 168750 ttd

3 june 2016 florida distributors Co A/C. ltd Dr 33750 ttd

to bank a/c 33750 ttd

IPSAS vs IAS

IPSAS	Description	IAS/IFRS	Description
1	Presentation of Financial Statements	IAS 1/ IPSAS 1	• IPSAS 1 requires the presentation of a statement showing all changes in net assets/equity. • IPSAS 1 does not explicitly preclude the presentation of items of revenue and expense as extraordinary items, either on the face of the statement of financial performance or in the notes. • IPSAS 1 uses different terminology.
2	Cash Flow Statements	IAS 7/ IPSAS 2	• IPSAS 2 contains a different set of definitions. • IPSAS 2 encourages disclosure of a reconciliation of surplus or deficit to operating cash flows in the notes to the financial statements. • IPSAS 2 uses different terminology.
12	Inventories	IAS 2/ IPSAS 12	• IPSAS 12 requires that where inventories are acquired through a nonexchange transaction, their cost is their fair value as at the date of acquisition. • IPSAS 12 requires that where inventories are provided at no charge or for a nominal charge, they are to be valued at the lower of cost and current replacement cost. • IPSAS 12 uses different terminology.
17	Property, Plant & Equipment	IAS 16/ IPSAS 17	• Under IPSAS 17 revaluation increases and decreases are offset on a class of assets basis. • IPSAS 17 states that where an item is acquired at no cost, or for a nominal cost, its cost is its fair value as at the date it is acquired. • IPSAS 17 uses different terminol• IPSAS 33 uses different terminology. • IPSAS 33 has different structure and requirements compared to IFRS 1.ogy.
33	First Time Adoption of Accrual Basis IPSASs	IFRS 1/ IPSAS 33 description • IPSAS 33 uses different terminology. • IPSAS 33 has different structure and requirements compared to IFRS 1.