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DIVIDENDS DISCLOSURE: KEY ELEMENTS REVISION OF IAS 12 SICs EXTRACTS FROM PUBLISHED FINANCIAL STATEMENTS MULTIPLE-CHOICE QUESTIONS Chapter 10 - PROPERTY, PLANT, AND EQUIPMENT (IAS 16) BACKGROUND AND INTRODUCTION SCOPE RECOGNITION OF AN ASSET DEPRECIATION DERECOGNITION IFRIC INTERPRETATION 1 DISCLOSURE EXTRACTS FROM PUBLISHED FINANCIAL STATEMENTS MULTIPLE-CHOICE QUESTIONS Chapter 11 - LEASES (IAS 17) BACKGROUND AND INTRODUCTION SCOPE CLASSIFICATION OF LEASES LEASES IN THE FINANCIAL STATEMENTS OF LESSEES LEASES IN THE FINANCIAL STATEMENTS OF LESSORS SALE AND LEASEBACK TRANSACTIONS AND OTHER TRANSACTIONS INVOLVING THE LEGAL FORM ... THE FUTURE OF LEASE ACCOUNTING EXTRACTS FROM PUBLISHED FINANCIAL STATEMENTS MULTIPLE-CHOICE QUESTIONS Chapter 12 - REVENUE (IAS 18) BACKGROUND AND INTRODUCTION SCOPE MEASUREMENT OF REVENUE IDENTIFICATION OF A TRANSACTION SALE OF GOODS RENDERING OF SERVICES INTEREST, ROYALTIES, AND DIVIDENDS DISCLOSURES IFRIC 12, SERVICE CONCESSION ARRANGEMENTS IFRIC 13, CUSTOMER LOYALTY PROGRAMS AMENDMENT TO IAS 18 ANNUAL IMPROVEMENTS 2009 IFRIC 15, AGREEMENTS FOR THE CONSTRUCTION OF REAL ESTATE DISCLOSURES IFRIC 18, TRANSFERS OF ASSETS FROM CUSTOMERS EXTRACTS FROM PUBLISHED FINANCIAL STATEMENTS MULTIPLE-CHOICE QUESTIONS Chapter 13 - EMPLOYEE BENEFITS (IAS 19) SCOPE DEFINED CONTRIBUTION PLANS AND DEFINED BENEFIT PLANS—CLASSIFICATION DEFINED BENEFIT PLANS DEFINED CONTRIBUTION PLANS CONTRASTING DEFINED BENEFIT AND DEFINED CONTRIBUTION ACCOUNTING FOR DEFINED CONTRIBUTION SCHEMES ACCOUNTING FOR DEFINED BENEFIT PLANS KEY INFORMATION: DEFINED BENEFIT PLANS STATEMENT OF FINANCIAL POSITION STATEMENT OF COMPREHENSIVE INCOME MEASURING THE DEFINED BENEFIT OBLIGATION PLAN ASSETS PENSION ASSETS AND LIABILITIES CURTAILMENTS AND SETTLEMENTS ACTUARIAL GAINS AND LOSSES—DEFINED BENEFIT PLANS IFRIC 14, IAS 19—THE LIMIT ON A DEFINED BENEFIT ASSET, MINIMUM FUNDING ... DISCLOSURE
EXTRACTS FROM PUBLISHED FINANCIAL STATEMENTS MULTIPLE-CHOICE QUESTIONS Chapter 14 - ACCOUNTING FOR GOVERNMENT GRANTS AND DISCLOSURE OF GOVERNMENT ... INTRODUCTION SCOPE GOVERNMENT GRANTS RECOGNITION OF GOVERNMENT GRANTS NONMONETARY GRANTS PRESENTATION OF GRANTS RELATED TO ASSETS REPAYMENT OF GOVERNMENT GRANTS GOVERNMENT ASSISTANCE DISCLOSURES MULTIPLE-CHOICE QUESTIONS Chapter 15 - THE EFFECTS OF CHANGES IN FOREIGN EXCHANGE RATES (IAS 21 ) OBJECTIVES FUNCTIONAL CURRENCY RECORDING FOREIGN CURRENCY TRANSACTIONS USING THE FUNCTIONAL CURRENCY RECOGNITION OF EXCHANGE DIFFERENCES TRANSLATION TO THE PRESENTATION CURRENCY FROM THE FUNCTIONAL CURRENCY TRANSLATION OF A FOREIGN OPERATION DISPOSAL OF A FOREIGN ENTITY DISCLOSURE EXTRACTS FROM PUBLISHED FINANCIAL STATEMENTS MULTIPLE-CHOICE QUESTIONS Chapter 16 - BORROWING COSTS (IAS 23) BACKGROUND SCOPE BORROWING COSTS QUALIFYING ASSETS RECOGNITION BORROWINGS ELIGIBLE FOR CAPITALIZATION EXCESS OF CARRYING AMOUNT OF THE QUALIFYING ASSET OVER THE RECOVERABLE AMOUNT COMMENCEMENT OF CAPITALIZATION SUSPENSION OF CAPITALIZATION CESSATION OF CAPITALIZATION DISCLOSURE EXTRACT FROM PUBLISHED FINANCIAL STATEMENTS MULTIPLE-CHOICE QUESTIONS Chapter 17 - RELATED-PARTY DISCLOSURES (IAS 24) BACKGROUND AND INTRODUCTION SCOPE EXPLANATION AND FURTHER ELABORATION OF THE DEFINITIONS SCOPE EXCLUSIONS AND EXEMPTION DISCLOSURES EXTRACTS FROM PUBLISHED FINANCIAL STATEMENTS MULTIPLE-CHOICE QUESTIONS Chapter 18 - ACCOUNTING AND REPORTING BY RETIREMENT BENEFIT PLANS (IAS 26) INTRODUCTION SCOPE DEFINED CONTRIBUTION PLANS DEFINED BENEFIT PLANS ADDITIONAL DISCLOSURES REQUIRED BY THE STANDARD MULTIPLE-CHOICE QUESTIONS Chapter 19 - CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS (IAS 27) SCOPE PRESENTATION OF FINANCIAL STATEMENTS
Page 4 and 5: Title Page Copyright Page Foreword
Page 8 and 9: CONSOLIDATED FINANCIAL STATEMENTS A
Page 10 and 11: ELABORATION AND INTERPRETATION OF T
Page 12 and 13: MULTIPLE-CHOICE QUESTIONS Chapter 3
Page 14 and 15: FOREWORD TO THE FIRST EDITION by th
Page 16 and 17: PREFACE Achieving consistency in fi
Page 18 and 19: ABOUT THE AUTHORS Abbas Ali Mirza i
Page 20 and 21: ecognition and use of IFRS. A major
Page 22 and 23: SIC 12, Consolidation—Special-Pur
Page 24 and 25: The IFRS Advisory Council shall com
Page 26 and 27: Chapter 2 IASB FRAMEWORK INTRODUCTI
Page 28 and 29: ELEMENTS OF FINANCIAL STATEMENTS Th
Page 30 and 31: Chapter 3 PRESENTATION OF FINANCIAL
Page 32 and 33: XYZ Inc. is a manufacturer of telev
Page 34 and 35: Statement of Comprehensive Income I
Page 36 and 37: Available-for-sale financial assets
Page 38 and 39: Notes The notes should disclose the
Page 40 and 41: equired by the counterparty to sett
Page 42 and 43: The costs of purchase constitute al
Page 44 and 45: Based on the FIFO cost flow assumpt
Page 46 and 47: • Accounting policies adopted for
Page 48 and 49: f. Choices a and c. g. Choices a, b
Page 50 and 51: 1. They should be “short term”
Page 52 and 53: 2. Proceeds from disposal of debt i
Page 54 and 55: 1. Cash collections from customers
Page 56 and 57:
3. Placements and withdrawals of de
Page 58 and 59:
Additional Information Retained ear
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c. Indirect Method Cash paid to sup
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Notes to the Consolidated Cash Flow
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Chapter 6 ACCOUNTING POLICIES, CHAN
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een applied. The impact of the new
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• For current and each prior peri
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An entity should disclose amounts a
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Notes to the Financial Statements (
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d. The entity would find the determ
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Given these facts, what is the “a
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existed at the end of the reporting
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Chapter 8 CONSTRUCTION CONTRACTS (I
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2. Costs that are attributable to c
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4. Revenue, costs, and profits to b
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Facts 34 Construction contracts Mil
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ecognized as revenue. Therefore, $7
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The Standard Applies to the Account
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ACCOUNTING FOR DEFERRED TAX To acco
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TEMPORARY DIFFERENCES NOT RECOGNIZE
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Required Show the impact on the fin
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Solution Zero. There is no temporar
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Solution Facts CASE STUDY 13 East i
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Since 20X4, Frontier has incurred s
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calculated that the liability and e
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Chapter 10 PROPERTY, PLANT, AND EQU
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Required 2. Initial delivery and ha
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disposal. Any gain on disposal is t
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financing liability and the financi
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Chapter 11 LEASES (IAS 17) BACKGROU
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the fair value of the asset. During
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ate in the lease is 9.3% (approxima
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Discuss how this transaction should
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The basic lease accounting model ha
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6. The lease of land and buildings
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Chapter 12 REVENUE (IAS 18) BACKGRO
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• Do not involve the same counter
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• The costs incurred and the cost
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Up to March 31, 20X9, the value of
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e that the real estate developer as
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Turnover is recognized when the ris
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Chapter 13 EMPLOYEE BENEFITS (IAS 1
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The accounting for a defined contri
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The amount of the expense or income
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• Fair value of plan assets: $50
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8. Past service cost: $115 million.
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Pensions Employee costs Employee co
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9. An entity operates a defined ben
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For quite some time, it has been un
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Solution Citimart Inc. would need t
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The Standard does not favor either
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Chapter 15 THE EFFECTS OF CHANGES I
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Facts An entity purchases equipment
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The exchange difference is calculat
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disposal was recognized. The same a
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Difference 7 Total 89.5 (say 90m) T
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ate on December 31, 20X9 is $1 =
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On December 1, 2009, Compassionate
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1. In order to capitalize the borro
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Chapter 17 RELATED-PARTY DISCLOSURE
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Solution Yes, under IAS 24 (revised
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warrant disclosure because it may n
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Facts Zeeba Inc. is part of a major
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The Used Equipment Co (Pty) Limited
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Key management personnel are define
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Chapter 18 ACCOUNTING AND REPORTING
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Total accounts payable 41,000 Accru
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Employee contributions 50,000 Total
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Chapter 19 CONSOLIDATED AND SEPARAT
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2. Noncontrolling interests in the
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When an entity loses control of a s
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Initially, the fair value of the as
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c. The ultimate parent entity produ
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EQUITY METHOD Under the equity meth
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What is the relationship between Co
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What amount should be shown in A’
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(f) (g) (h) December 31 60 73 Assoc
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. The carrying value of the associa
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PRACTICAL INSIGHT Turkiye Petrol Ra
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Cash 5,150 Share capital (300/100
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Chapter 22 INTERESTS IN JOINT VENTU
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Facts Three entities decide to form
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current period (IFRIC 1.5). Thus in
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Methods of valuation techniques use
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of impairment exists, the carrying
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Chapter 23 FINANCIAL INSTRUMENTS: P
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Contracts for contingent considerat
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has the unconditional right to refu
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principal and interest cash flows)
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On January 15, 20X5, Entity A issue
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instruments. A financial instrument
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The major components of market risk
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Credit risk is the risk that a cust
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1. Are there any circumstances when
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• A purchased put option to sell
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• Sales that are so close to matu
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eceived nothing on entering into th
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price plus interest. In this case,
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CASE STUDY 4 This case illustrates
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financial liabilities measured at f
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Example If Entity A receives a cash
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If the reporting period does not co
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cash flow pattern, credit quality,
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of the cash flows. 2. Entity A purc
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PRACTICAL INSIGHT IAS 39 does not p
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This case illustrates how to accoun
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This case illustrates how to accoun
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This case illustrates when to separ
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change in fair value of the derivat
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A cash flow hedge is a hedge of the
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This case illustrates the accountin
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PRACTICAL INSIGHT It is often possi
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Derivatives are measured on the bal
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15. Which of the following is not o
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• As amounts attributable to the
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The theoretical ex-rights fair valu
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Diluted earnings per share Adjusted
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Earnings: diluted earnings per shar
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• Basic and diluted earnings per
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The numbers of shares included in t
Page 296 and 297:
Chapter 26 INTERIM FINANCIAL REPORT
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should be applied and previously re
Page 300 and 301:
Consolidated balance sheet at June
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1. Under IAS 34, interim financial
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was $5 million. It was planned at t
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development costs. An impairment lo
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The fair value less cost to sell of
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can be reasonably allocated. 3. Thi
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PRACTICAL INSIGHT Austrian Airlines
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Impairments charge in the year Ther
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. Loss on goodwill. c. Loss on a bu
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Recognition of Provisions Those lia
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An onerous contract is an agreement
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In order to recognize a provision (
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A Singapore-based shipping company
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c. Because Amazon Inc. can avoid th
Page 328 and 329:
In order to meet the definition of
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Examples of activities that may fai
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• These costs can be measured rel
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Entities are to apply the provision
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Future changes in expected cash flo
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Chapter 30 INVESTMENT PROPERTY (IAS
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If, on acquisition, it is not possi
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pool in which the fair value model
Page 344 and 345:
Chapter 31 AGRICULTURE (IAS 41) BAC
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Required Value of biological asset
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2-year-old animal at November 1, 20
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Notes to Group Financial Statements
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d. There is no requirement in the S
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Financial statements presented by a
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Solution In order to prepare the op
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• Identification of assets acquir
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2. No journal entry is required as
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IFRS 1 discusses exemptions under t
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Solution In valuing the shares of V
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• Unilever was an early adopter (
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Chapter 33 SHARE-BASED PAYMENTS (IF
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date of the cancelation is deducted
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party, to satisfy its obligations t
Page 374 and 375:
Playful has ordered an amount of in
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May 31, 20X8 August 1, 20X8 5,000
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Should the plans be valued at fair
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4. An entity issues fully paid shar
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Chapter 34 BUSINESS COMBINATIONS (I
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Future losses or other costs that a
Page 386 and 387:
93 Interest (13) Profit before tax
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This choice of method of accounting
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The error in 20X9, regarding the om
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This makes a total NCI of $554m. c)
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$m J retained earnings 360 Share of
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Intercompany transactions and the r
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11. The “excess of the acquirer
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Chapter 35 INSURANCE CONTRACTS (IFR
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Required Discuss how the reinsuranc
Page 404 and 405:
Guaranteed residual values Guarante
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Chapter 36 NONCURRENT ASSETS HELD F
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SUNDRY POINTS Exchanges of noncurre
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Before classification of the item a
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Noncurrent assets Current assets No
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c. At carrying value. d. In accorda
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IAS 8 specifies a hierarchy of crit
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fuel used, rig costs, delay rentals
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Chapter 38 FINANCIAL INSTRUMENTS: D
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other than credit risk (i.e., chang
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2. Whether fair values are determin
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d. Transfers into or out of Level 3
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equires that any derivative that do
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The amount recognized in the income
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a. To provide presentation and disc
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amongst the top management personne
Page 436 and 437:
Recreational clubs $ 50 million vs
Page 438 and 439:
Chapter 40 FINANCIAL INSTRUMENTS (I
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Discussion The entity’s objective
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The following are indicators of whe
Page 444 and 445:
However as IFRS 9 eliminates the av
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Facts CASE STUDY 6 Hant has an equi
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Chapter 41 IFRS FOR SMEs INTRODUCTI
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the IFRS for SMEs, if an entity can
Page 452 and 453:
2. The subsidiary’s business acti
Page 454 and 455:
All grants are measured at the fair
Page 456 and 457:
The present value of the fine will
Page 458 and 459:
3. If SMEs choose to follow the Sta
Page 460 and 461:
1. b 2. a 3. a 4. c 5. a 1. a 2. c*
Page 462 and 463:
1. b 2. a 3. b 1. d 2. b 3. c 4. c
Page 464 and 465:
2. b 3. b 4. a 5. a 6. b 7. b 8. b
Page 466 and 467:
18. d* 19. b 20. b 21. a 22. b 23.
Page 468 and 469:
INDEX Abandonment Accounting compou
Page 470 and 471:
Control business combinations conso
Page 472 and 473:
interests. See IAS 32, Financial In
Page 474 and 475:
events after the reporting period G
Page 476 and 477:
gross basis versus net basis indire
Page 478 and 479:
IAS 18, Revenue amendment to backgr
Page 480 and 481:
net assets available for benefits n
Page 482 and 483:
fair value per share financial stat
Page 484 and 485:
initial measurement interest income
Page 486 and 487:
scope of share-based payment transa
Page 488 and 489:
credit risk effective date fair val
Page 490 and 491:
property, plant, and equipment Impa
Page 492 and 493:
Market risk Materiality Measurement
Page 494 and 495:
Recoverable amount, impairment loss
Page 496 and 497:
usiness combinations financial inst
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