Question 26. A self-financed government entity enters into a two-year contract to build a medical clininc at a price of $10,000,000. Work commenced on 1 June 20X0. At 31 December 20X0, the contract had progressed as follows: Work certified to date $6,000,000 Costs incurred to date $3,000,000 Estimated costs to completion $3,500,000 Rectification work estimate $500,000 What is the gross revenue to be recognised in the financial statements for the year ended 31 December 20X0 in accordance with IPSAS 11 'Construction Contracts'? Revenue is recognized on the 'percentage of completion' basis calculated using work certified by surveyors.

$3,000,000

$2,100,000

$1,800,000

$Nil

Question 27. Government unit U leases a train over an 8-year term commencing on 1 June 20X0. The discounted present value of the lease payments is $25,000. In which of the following circumstances does IPSAS 13 'Leases' indicates that the train may not appear on the statement of financial position of Government unit U?

Government unit U can purchase the train for $1 at the end of the lease term.

The estimated useful life of the train is 10 years. The train must be returned at the end of year 8.

Title to the train passes at the end of year 8 to Government unit U

The cash price of the train on an arms length basis on 1 June 20X0 is $27,000.

Question 28. In accordance with IPSAS 35 'Consolidated financial statements', voting rights are considered as:

Not necessarily being the dominant factor in deciding who controls the entity being assessed for control.

The dominant factor in deciding who controls the entity being assessed for control.

IPSAS 35 adresses binding agreements as opposed to voting rights as being the dominant factor in deciding who controls the entity being assessed for control.

IPSAS 35 does not adress voting rights.

Question 29. IPSAS 33 on First time adoption of IPSAS will be applicable to a first-time IPSAS adopter that currently applies:

Cash-based accounting (e.g. the Cash Basis IPSAS)

Modified version of either cash or accrual-based accounting (e.g. an entity that applies some IPSASs, but not the full set)

Another accrual-based GAAP standard

All of the above are within scope of IPSAS 33

Question 30. A government has decided to apply IPSAS 22 and present disclosures about the General Government Sector (GGS). Which of the below options are correct?

The financial information about the GGS shall include net information on Public Financial Corporations

The consolidated financial statements shall exclude the financial results of Public Financial Corporations

The financial information about the GGS shall be prepared in accordance with the statistical bases of financial reporting

The consolidated financial statements shall be prepared in accordance with the statistical bases of financial reporting

Question 31. Following IPSAS 33 disclosures should be made to assist users in tracking progress upon adoption and identifying possible deviations from IPSAS accounting policies during transition. An entity adopting accrual-based IPSASs for the first time is therefore required to present specified information in the notes to its transitional IPSAS financial statements or its first IPSAS financial statements. Which of the below is not a disclosure requirement?

A reconciliation of its net assets/equity reported in accordance with its previous basis of accounting to its opening balance of net assets/equity at the date of adoption of IPSASs.

Disclosure on why reconciliation of publicly available budget and the financial statements is not carried out

A reconciliation of its surplus or deficit in accordance with its previous basis of accounting to its opening balance of surplus or deficit at the date of adoption of IPSASs.

None of the above are disclosure requirements of IPSAS 33

Question 32. IPSAS 10 'Financial Reporting in Hyperinflationary Economies' applies to the financial statements of any company that reports in the currency of a hyperinflationary economy. The standard does not establish an absolute rate at which hyperinflation is deemed to occur. However, the standard gives an indication of the economic characteristics which indicate hyperinflation. Which of the following characteristics might indicate a hyperinflationary economy according to IPSAS 10?

Cumulative inflation rate over three years is approaching or exceeds 100%

An annual average inflation rate for the last three years of 20% or more

Interest rates of over 25% at the financial year end

A devaluation of the currency by 20% or more

Question 33. Public sector entity A, wishes to follow a policy of revaluation of certain non current assets in accordance with IPSAS 17 'Property, Plant and Equipment'. Which of the groups of assets could it revalue to ensure consistency with IPSAS 17?

Any individual assets that in management's opinion are materially different from carrying value.

All assets within a single broad class such as land and buildings

Any individual asset which has not been revalued within the past 5 years

All of the above criteria would allow for revaluation following IPSAS 17