Question 1 (2 marks)

Consider the following cases and assume in which situations a provision be made?

(i) The Company C has made profit in the current year and intends to recognize provision for the future loss at the current reporting period due to expected loss of the one of Company Cs regional departments.

(ii) The Company D decided to terminate workers due to formal closure of the business on December 15, 2020 and publicly announced it on January 5, 2021. The executive staff intends to make a provision for the direct costs of the closure. The reporting date is December 31, 2020 and financial statements are expected to be authorized for issue in March 2021.

A. In both situation a provision can be made

B. (i) only

C. (ii) only

D. Neither (i) nor (ii)

Question 2 (2 marks)

Which of the following statements is/are WRONG?

(i) New IFRS issue process always comprises the discussion paper and exposure draft

(ii) IFRS does not cover interpretations dealing with emerging issues

(iii) Only IASB develops new IFRS standards

A. (i) and (ii) only

B. (ii) and (iii) only

C. (i) and (iii) only

D. All is WRONG

Question 3 (2 marks)

Which TWO of the following reflects IAS 8 as a change in accounting policy?

A. A change in valuation of inventory from a FIFO to a weighted average basis

B. A change of depreciation method

C. Adoption of the cost model to measure the investment in associate which had never before held

D. Application of revaluation model for long-term assets previously held at cost

Question 4 (2 marks)

The cost of a property owned by the company is $500,000. It was classified as held for sale at June 30, 2020, the carrying amount was $510,000. The fair value less costs to sell was $520,000 at this date with a remaining useful life of 10 years. At the reporting period at December 31, 2020 the active market for property has collapsed and the fair value less costs to sell was re-evaluated at $500,000

What is the carrying amount of the property in the statement of financial position at the reporting date December 31, 2020?

A. $500,000

B. $510,000

C. $520,000

D. $494,000

Question 5 (2 marks)

Which TWO of the following statements below about intangible assets are WRONG?

A. An intangible asset may not be tested for revaluation if a similar asset has been sold recently

B. There is requirement always amortize intangible asset

C. The residual value of intangible asset is always nil

D. Development expenditure is only recognized if the IAS 38 recognition criteria are met.