HÖGSKOLAN I BORÅS INTERNATIONELL REDOVISNING 7,5 ...

HÖGSKOLAN I BORÅS
INTERNATIONELL REDOVISNING
7,5 Högskolepoäng
Provmoment: Tentamen
Ladokkod: 22IR1D
Tentamen ges för: Civilekonomprogrammet, Magisterutbildning i Företagsekonomi och fristående kurs.
Namn: …………………………………………………………………………..
Personnummer: ………………………………………………………………..
Tentamensdatum: 2012-12-11
Tid: 13.00 – 17:00
Hjälpmedel: Miniräknare samt engelsk-svenskt lexikon.
Totalt antal frågor på tentamen: 4 frågor.
Totalt antal poäng på tentamen: 35 poäng.
För att få respektive betyg krävs: För godkänt på tentamen krävs minst 17,5 poäng.
Nästkommande tentamenstillfälle: Augusti 2013
Rättningstiden är tre veckor.
Viktigt! Glöm inte att skriva namn och personnummer på alla blad du lämnar in.
Ansvarig lärare: Glenn Fihn (0704-942420)
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HÖGSKOLAN I BORÅS – (GF)
Namn ……………………………………… Personnummer …………………………………
Uppgift nr __ 1 __ (20 poäng)
UPPGIFT: besvara nedanstående flervalsfrågor (bara ett kryss per fråga).
1. International accounting can be defined in terms of which the following levels?
A) Supranational organizations
B) Company
C) Country
D) All of the above
2. What is the term used to describe the possibility that a foreign currency will decrease in US $ value over the
life of an asset such as Accounts Receivable?
A) foreign exchange translation
B) foreign exchange risk
C) hedging
D) foreign currency options
3. As used in international accounting, a “hedge” is:
A) a business transaction made to reduce the exposure of foreign exchange risk.
B) the legal barrier between the various divisions of a multinational company.
C) the loss in US $ resulting from a decline in the value of the US $ relative to foreign currencies.
D) one form of foreign direct investment.
4. A translation adjustment may be necessary when:
A) notes to financial statements are converted from one language to another.
B) foreign currency financial statements are converted to another currency.
C) consolidated financial statements are prepared.
D) hedging foreign currency.
5. Why would a company want its stock cross-listed on the stock exchanges of several countries?
A) To make financial reporting less burdensome for its accounting firm
B) In order to use International Financial Reporting Standards
C) To gain access to more financial resources than are available in its home country
D) All of the above
6. Which of the following is not a problem caused by accounting diversity?
A) Lack of qualified international auditors
B) Preparation of consolidated financial statements
C) Access to foreign capital markets
D) Comparability of financial statements
7. In code law countries such as Germany, France, and Japan, tax law and accounting standards tend to be:
A) unrelated.
B) very different.
C) similar.
D) more confusing than those in the U.S.
8. How are the concepts of professionalism, uniformity, conservatism, and secrecy classified in Gray's
framework for accounting system development?
A) Accounting values
B) Accounting systems
C) Institutional consequences
D) Cultural dimensions
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HÖGSKOLAN I BORÅS – (GF)
Namn ……………………………………… Personnummer …………………………………
Uppgift nr __ 1 __ (fortsättning)
9. The 1993 study by Doupnik and Salter found that a cluster of Latin American countries indicated that the
similarity of their accounting systems was related to:
A) a common currency.
B) the effect of persistent inflation.
C) the colonial influence of Spain.
D) the colonial influence of the United States of America.
10. In the Nobes classification of accounting systems, micro-based accounting systems are derived from:
A) government models.
B) business models.
C) tax laws.
D) code law.
11. Which of the following statements is true about accounting convergence?
A) Convergence is a synonym for harmonization.
B) Convergence is the opposite of standardization.
C) Convergence, unlike harmonization, takes place over a period of time.
D) Convergence means developing high-quality standards in partnership with national standard-setters.
12. The “Seventh Directive” issued by the European Commission is a statement to the European Union (EU)
members concerning:
A) adoption of the Euro as the currency used throughout the EU.
B) consolidated financial statements.
C) rules for valuation, financial statement disclosures, and financial statement format.
D) authority of the European Commission to pass laws.
13. Of the 16 members of the International Accounting Standards Board (IASB), how many work for the board on
a full-time basis?
A) 8
B) 13
C) 10
D) 0
14. What basis does the International Accounting Standards Board use in formulating its IFRS?
A) Detailed rules to govern accounting practice
B) A framework of accounting principles
C) Typical tax laws of western nations
D) Exceptions or unusual circumstances that require special attention
15. What was the 2002 finding by the six largest public accounting firms regarding International Financial
Reporting Standards?
A) Of the countries surveyed, almost all planned to make their GAAP converge with IFRS.
B) Very few of the countries studied planned to move their national accounting standards toward
convergence with IFRS.
C) There were almost as many convergence strategies as there were countries in the study.
D) The countries that planned to make their GAAP converge with IFRS were predominantly western
European nations.
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HÖGSKOLAN I BORÅS – (GF)
Namn ……………………………………… Personnummer …………………………………
Uppgift nr __ 1 __ (fortsättning)
16. Which of the following inventory valuation methods commonly used in the U.S. is NOT allowed under IAS 2
(Inventories)?
A) LIFO
B) FIFO
C) weighted average
D) retail inventory method
17. What is the basis for choosing depreciation methods for fixed assets under IAS 16 (Property, Plant, &
Equipment)?
A) Tax minimization
B) Profit maximization
C) Useful life of the fixed asset
D) Pattern of economic benefits to be derived from the asset
18. IASB standards address related party transactions. According to these standards, which of the following is
considered a “related party?”
A) parent companies
B) subsidiary companies
C) key members of management
D) All of the above could be related parties.
19. What is one major difference between IFRS and U.S. GAAP relative to discontinued operations?
A) U.S. GAAP requires that the after-tax gain or loss from operations and the after-tax gain or loss on asset
disposal be shown as a combined item.
B) U.S. GAAP requires the above components to be shown separately.
C) IFRS requires that the after-tax gain or loss from operations and the after-tax gain or loss on asset
disposal be shown separately.
D) IFRS requires no separate disclosure for discontinued operations.
20. Under IAS 16 (Property, Plant, and Equipment), subsequent revaluation decreases are:
A) never recognized.
B) credited to a revaluation surplus account.
C) recognized as an expense on the Income Statement.
D) first recognized as a reduction in any related revaluation surplus.
21. The term “provision” as it is used in IAS 37, is most closely related to what term in U.S. GAAP?
A) Contingent liability, where the outflow of resources is “remote.”
B) Contingent liability, where the outflow of resources is “probable.”
C) Current liability, where the outflow is difficult to measure.
D) Reserve for bad debt, where the amount recoverable is “uncertain.”
22. Which of the following represents a difference in the classification of current liabilities between IFRS and
U.S. GAAP?
A) refinanced short-term debt
B) amounts payable on demand due to violation of debt covenants
C) bank overdrafts
D) all of the above
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HÖGSKOLAN I BORÅS – (GF)
Namn ……………………………………… Personnummer …………………………………
Uppgift nr __ 1 __ (fortsättning)
23. Under both IFRS and U.S. GAAP, in an equity-settled share-based payment transaction, how are such
payments to non-employees measured?
A) at the cost of the goods or services received
B) Both standards are silent as to the treatment of non-employees.
C) always the fair value of the equity instrument
D) at the fair value of goods or services received, if a reliable determination is available—otherwise, the fair
value of the equity instrument
24. Under IFRS 2, with respect to choice-of-settlement share-based payments, if it is the entity that has the right
to choose between equity settlement and cash settlement, when must the entity choose the cash settlement?
A) if the supplier provides services
B) if the supplier provides goods
C) if the entity has a present obligation to settle in cash
D) The entity always has the option to choose either method.
25. Under IAS 18, when it is probable that the economic benefits of interest, royalties, and dividends will flow to
the enterprise and can be measured reliably, how should revenue be recognized?
A) Interest income shall be recognized based on an effective yield basis.
B) Royalties are recognized on an accrual basis with reference to the terms of the agreement.
C) Dividends are recognized when the shareholders’ right to receive payment is established.
D) All of the above govern revenue recognition under these circumstances.
26. The number of U.S. dollars ($) today to buy one U.K. pound (£) six months from now is called:
A) the spot rate
B) the exact rate
C) the forward rate
D) the prime rate
27. What has occurred when one company purchases the right to buy a foreign currency some time in the future at
an exchange rate quoted today?
A) The company has acquired a call option.
B) The company has entered a forward contract.
C) The currency has appreciated relative to the dollar.
D) The company has acquired a put option.
28. What is a “strike price?”
A) the exchange rate that is used to buy a foreign currency today
B) the price that will be paid for goods in a forward contract
C) the exchange rate that will be used if a foreign currency option is executed
D) the difference between the wholesale rate and the retail rate for foreign currency exchange
29. What is foreign exchange risk exposure?
A) the possibility of a loss because of changes in the value of a foreign currency
B) losses caused by paying for purchased goods in a foreign currency
C) losses caused by receiving payment in a foreign currency for goods sold
D) All of the above
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HÖGSKOLAN I BORÅS – (GF)
Namn ……………………………………… Personnummer …………………………………
Uppgift nr __ 1 __ (fortsättning)
30. Why must the two-transaction approach be used for recording foreign currency transactions under U.S.
GAAP?
A) The two-transaction approach is required under IFRS.
B) U.S. GAAP requires conservatism in financial reporting.
C) All other methods are excessively complicated to use and therefore obscure the essence of the transaction.
D) Management made two decisions: one to sell and another to extend credit in a foreign currency.
31. Homeko, Inc. is located in the U.S., but it has subsidiaries in Germany. When the euro appreciates relative to
the U.S. dollar, what is the direction of the translation adjustment to consolidate Homeko's financial
statements?
A) When there is net asset exposure, the translation adjustment will be positive.
B) When there is net liability exposure, the translation adjustment will be positive.
C) The direction of the adjustment is indeterminate.
D) There will be no adjustment necessary unless the difference is realized.
32. Essco Ltd, a foreign subsidiary of Peako Corp., has written down its inventory to current market value under a
“lower of cost or market” rule. When consolidating Essco's balance sheet into Peako's balance sheet, what
exchange rate should be used for the inventory under the temporal method?
A) historical rate
B) current rate
C) average rate
D) cannot be determined with the information given
33. When would the balance sheet exposure arising from the current rate method become realized?
A) It is realized once the financial statements of the subsidiary and the parent are consolidated.
B) It is realized any time the historical exchange rate is different from the spot rate at the balance sheet date.
C) It is realized when the subsidiary is sold at book value and the proceeds are converted to parent company
currency.
D) It can never be realized because it is only the result of the choice of accounting methods and does not
reflect real exposure.
34. Under the current rate method of translating foreign currency financial statements, what exchange rate should
be used for cost of goods sold?
A) spot rate at the end of the year
B) average rate during the year
C) spot rate mid-year
D) There is no single rate because beginning and ending inventory must be converted at different exchange
rates than purchases.
35. Which of the following is a non-derivative hedging instrument?
A) forward contract on foreign currency
B) foreign currency call option
C) foreign currency loan
D) foreign currency put option
36. Which of the following is a reason for analyzing the financial statements of foreign corporations?
A) making credit decisions about foreign customers
B) evaluating international business combinations
C) diversifying an investment portfolio
D) All of the above are reasons for analyzing foreign financial statements.
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HÖGSKOLAN I BORÅS – (GF)
Namn ……………………………………… Personnummer …………………………………
Uppgift nr __ 1 __ (fortsättning)
37. How should currency translation be done in order to appropriately compare a financial statement presented in
Japanese yen to a financial statement presented in Chinese yuan?
A) The temporal method should be used.
B) The historical exchange rates should be used convert financial statement amounts.
C) All amounts should be converted at the current exchange rate.
D) Current year statements should be converted at the current exchange rate and prior year statements should
be converted at prior year exchange rate.
38. What is the best short-term solution to alleviate problems of financial statement analysis arising from
international differences in accounting terminology?
A) Require all countries to conform to IASB standards.
B) Create standard financial statement terminology for all companies around the world.
C) Analysts should carefully read the notes to financial statements and learn about the business environments
of countries they analyze.
D) Convert all financial statements into English.
39. What is OIBD?
A) This is the Organization of International Boards of Directors, which is attempting to harmonize
accounting standards.
B) It stands for “operating income before depreciation,” which some analysts use to remove the effect of
international accounting standard diversity.
C) It is the Organization of International Bond Dealers, whose financial analysts developed EBITDA.
D) None of the above.
40. Which of the following is most likely to affect an analyst's ability to make meaningful comparisons of
financial statement ratios for companies in different countries?
A) differences in currency
B) language differences
C) varying business traditions
D) mathematical degrees of magnitude
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HÖGSKOLAN I BORÅS – (HP)
Namn ……………………………………… Personnummer …………………………………
Uppgift nr __ 2 __ (5 poäng)
(Revaluation by replacement cost – IAS 16)
A company purchased an item of plant for 200 000 SEK on 1 January 2001. The plant was depreciated on a
strait-line basis over estimated life at 10 years. On 1 January 2003 the entity decided to revaluate its plan.
No fair value was available for the item of plant that had been purchased for 200 000 kr. The replacement
cost of the plant at 1 January 2003 was 300 000 kr.
(a) What is the carrying value of the plant immediately before the revaluation (1 p);
(b) What is the carrying value of the plant after the revaluation (1 p);
(c) Suppose that the asset, which was revalued in the end of second period, is sold in 2007 for 60 000.
Record the transactions and discuss about the elimination of the revaluation reserve. (3 p)
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HÖGSKOLAN I BORÅS – (HP)
Namn ……………………………………… Personnummer …………………………………
Uppgift nr __ 3 __ (5 poäng)
The (Swedish) company Y prepares its financial statements in accordance with IFRS. The company seeks a listing on
a US stock exchange. The company needs a guide for reconciliation in restating the financial statements from IFRSbased
interpretation to the US GAAP. For the application of reconciliation we need to look up the general ledger for
the accounting period and debiting and crediting various accounts. The balance sheet and income statement for the
latest financial period are presented below.
Borrowing costs:
IAS 23: According to the standard the borrowing costs for putting the asset should be capitalized and increased the
initial value of the assets. The Swedish company expensed the borrowing costs.
US-GAAP: It should be capitalized (not expensed)
Problem: In the previous year an asset was bought. The useful life is 5 years. The current interest expense (before the
asset was used in production) is 25 and the previous year was 75 millions.
Your task is to adjust the accounts and correct the balance respectively income sheets which are attached to this
question (5 p).
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HÖGSKOLAN I BORÅS – (HP)
Namn ……………………………………… Personnummer …………………………………
Uppgift nr __ 3 __ (fortsättning)
Balance Sheet (Under IFRS),
December 31, 2004
Current assets:
Cash and bank
Accounts receivable
Inventories
Total current assets
Current liabilities:
Bank overdraft
Accounts payable
Accruals and provisions
Total current liabilities
Net current assets
Property, plant and equipment
Accumulated depreciation
Intangible assets
Accumulated amortization
Long-terms loan
Share-holder equity
Equity capital
Retained earnings
Revaluation reserve
Income sheet
Ended December 31, 2004
Sale
Less:Cost of sale
Gross profit
Distribution costs
Adm. costs
Operating expenses:
Depreciation
Amortization
Staff costs
Other operating expenses
Total distribution
Income from operation
Interest expense
Interest income
Net income
500
7 500
3 500
11 500
1 000
5 000
4 000
10 000
15 500
9 000
3 000
1 000
3 000
4 000
2 000
1 000
Debit Credit US-GAAP
IFRS Debit Credit US-GAAP
27,000
14,000
13,000
5 000
1 500
1 000
1 000
1 500
1 500
11 500
1 500
700
200
1 000
10 (11)
27 000
14 000
13 000
5 000
1 500

HÖGSKOLAN I BORÅS – (GF)
Namn ……………………………………… Personnummer …………………………………
Uppgift nr __ 4 __ (5 poäng)
Aktiebolaget AB MB bildar dotterbolaget AB DB i Tyskland den 1/1 år 1 och satsar 400 Euro (4 000 SEK) i
det nybildade bolaget. Omedelbart vid bildandet köper AB DB in varor till lagret för 200 Euro. I övrigt
gäller följande för AB DB:
(a) Försäljning och samtliga kostnader uppstod jämnt fördelat under räkenskapsåret.
(b) Varuinköpen uppstod jämnt fördelade under räkenskapsåret.
(c) Inventarierna anskaffades vid en tidpunkt då valutakursen var 10,25 SEK/Euro.
(d) Utdelningen fastställdes i mitten av december år 1 när valutakursen var 10,75 SEK/Euro.
(e) Lagret vid årets slut inköptes i mitten av december år 1 när valutakursen var 10,75 SEK/Euro.
(f) Det långfristiga lånet togs när valutakursen var 10,25 SEK/Euro.
UPPGIFT: Räkna om balansräkningar och resultaträkning från Euro till SEK med hjälp av ”The
Current Rate Method”.
Valutakurser (SEK/EURO)
Januari 1 År 1 10,00 SEK/Euro
December 31 År 1 11,00 SEK/Euro
Genomsnittlig valutakurs År 1 10,50 SEK/Euro
Genomsnittlig valutakurs December År 1 10,75 SEK/Euro
Valutakurs vid fastställandet av utdelningen År 1 10,75 SEK/Euro
Valutakurs vid anskaffandet av inventarier År 1 10,25 SEK/Euro
Valutakurs vid långfristig upplåning År 1 10,25 SEK/Euro
Balansräkning
BR (euro) valuta- BR (SEK) BR (euro) valuta- BR (SEK))
1/1 ÅR 1 kurs 1/1 ÅR 1 31/12 ÅR 1 kurs 31/12 ÅR 1
Bank 200 640
Kundfordringar 300
Lager 200 260
Inventarier 800
Ackumulerade värdeminskningar -80
Summa tillgångar 400 1 920
Leverantörsskulder 240
Långfristiga skulder 1 200
Aktiekapital 400 400
Balanserad vinst 80
Ackumulerade kursdifferenser
Summa skulder och eget kapital 400 1 920
Resultaträkning Balanserad vinst
RR (euro) valuta- RR (SEK) Euro valuta- SEK
ÅR 1 kurs ÅR 1 kurs
Försäljning 3 000 Balanserad vinst (1/1 år 1) 0
Kostnader: Årsresultat 120
Kostnad sålda varor -2 400 Utdelningar -40
Löner -300 Balanserad vinst (31/12 år 1) 80
Avskrivningar -80
Räntekostnader -60
Resultat före skatter 160
Skatter -40
Årsresultat 120
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