Question
Question 1. Which of the following practices is not allowed by International Financial Reporting Standards? Use of the closing exchange rate for the translation of
Question 1. Which of the following practices is not allowed by International Financial Reporting Standards?
Use of the closing exchange rate for the translation of the statement of profit or loss of a foreign subsidiary
Accounting for incorporated joint ventures using the equity method.
Accounting for changes in accounting policy by restating comparatives and adjusting the prior year opening retained earnings
Question 2. Which of the following criteria does not have to be met in order for an operation to be classified as discontinued under IFRS 5?
The operation represents a separate line of business or geographical area
The operation is part of a single plan to dispose of a separate major line of business or geographical area
The operation is a subsidiary acquired exclusively with a view to resale
The operation is expected to be sold within six months of the year end
Recognising actuarial gains and losses in other comprehensive income
Question 3. In accordance with IAS 20 Accounting for Government Grants and Disclosure of Government Assistance, how are grants related to assets recognised?
In the statement of profit or loss for the period they are due to be received
In the statement of financial position as deferred income
In the statement of financial position as a deduction from the carrying amount of the relevant asset
In the statement of financial position as deferred income OR as a deduction from the carrying amount of the relevant asset
Question 4. An entity acquires an item of equipment that is not of a specialised nature by way of a lease. In accordance with IFRS 16 Leases a right of use asset is recognised. There is no certainty that the entity (as the lessee) will obtain ownership of the equipment by the end of the lease term. Depreciation of the equipment should be spread over:
The term of the lease
The useful life of the equipment
The shorter of the term of the lease or the useful life of the equipment
A period consistent with similar owned items of equipment
Question 5. Provence Co, a multi-national organisation, wishes to follow a policy of revaluation of certain non current assets. Which of the following assets could it revalue in accordance with IAS 16?
Ignoring any other assets within the same class, an individual asset that in management's opinion has a fair value that is materially different from its carrying amount
All assets within a single country on a country by country basis
All assets which have not been revalued within the past 5 years
All assets within a single broad class such as land and buildings
Question 6. Which of the following statements is correct?
IAS 16 Property, Plant & Equipment forbids the capitalisation of any subsequent expenditure on an asset
IAS 36 Impairment of Assets applies to all assets including inventories and receivables
IAS 20 Accounting for Government Grants and Disclosure of Government Assistance allows grants related to assets to be presented in the statement of financial position as deferred income or as a deduction from the cost of the related assets.
IFRS 16 Leases always requires a lessee to recognise a right of use asset in respect of a lease
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