Question 1. According to IAS 37 Provisions, Contingent Liabilities and Contingent Assets, which of the following should be provided for in the financial statements?

Legal cases brought against a company

Future operating losses

Costs of an expected future restructuring of a company

Onerous contracts

Question 2. Ralph Co aquires 80% of Angus Co on 1 January 20X7 for $780,000. At this date the net assets of Angus Co had a book value of $720,000 and a fair value of $750,000. The difference was due to land that was still held at 31 December 20X7. The NCI was measured as a proportion of net assets. Extracts from the statements of financial position of the two companies at 31 December 20X7 were as follows: Ralph $'000 Angus $'000 Property, plant and equipment 1,290 640 Investment 780 - Current assets 370 450 What is consolidated total assets?

2,960,000

2,930,000

2,780,000

2,742,000

Question 3. Borrower Co has a policy of capitalising interest costs on self-constructed assets in accordance with IAS 23 Borrowing Costs.

During the year it has the following sources of borrowings

	Average outstanding liability($'000)	Interest Cost ($'000)
Medium term bank debt	10,000	900
50 year term debt	25,000	2,000
Bank overdraft	5,000	600

All the borrowings have been used to finance the production of qualifying assets but none relate to a specific qualifying asset. What is the appropriate capitalisation rate to apply to the qualifying assets?

Nil %

8.29%

8.75%

10.0%

Question 4. A Co owns a controlling investment of 70% of B Co. During the year, A Co sold goods to B Co for $60,000 at cost plus 20%. At the year end, B Co still had half of the goods in their inventory. A Co's total inventory at the year end was $120,000, and B Co's total inventory was $80,000. How much inventory should be recognised in A Co's consolidated statement of financial position?

$195,000

$200,000

$176,000

$158,500

Question 5. Below are a number of statements relating to IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. Which one of these statements is true?

The main objective of IFRS 5 is to specify the disclosure requirements of non-current assets held for sale

IFRS 5 only applies to those reporting entities whose securities are listed on an international stock exchange

The IFRS 5 definition of a discontinued operation cannot be met unless the operations were previously disclosed as a separate business segment under IFRS 8

IFRS 5 classifies a discontinued operation as a component of an entity that has been disposed of or is classified as held for sale