Question 34. IPSAS 41, Financial Instruments, establishes new requirements for classifying, recognising and measuring financial instruments to replace those in IPSAS 29, Financial Instruments: Recognition and Measurement. Which one of following statements is not correct?

The effective date of IPSAS 41 is 1 January, 2022, with earlier adoption encouraged.

IPSAS 41 provides users of financial statements with more useful information than IPSAS 29, by applying a single classification and measurement model for financial assets that considers the characteristics of the asset's cash flows and the objective for which the asset is held.

IPSAS 41 provides users of financial statements with more useful information than IPSAS 29, by applying a single forward-looking expected credit loss model that is applicable to all financial instruments subject to impairment testing.

IPSAS 41 is not final yet, and as such it is unknown when it replaces IPSAS 29.

Question 35. Following IPSAS 35 'Consolidated financial statements' an entity, regardless of the nature of its involvement with another entity, shall determine whether it is a controlling entity by assessing whether:

There is evidence of ownership being limited to 5 years and management is actively seeking a buyer of the entity.

There are legally binding agreements between the controlling and controlled entity.

It controls the other entity.

There is evidence that the material assets in the controlled entity are to be sold within a 12 month period.

Question 36. Which of the following statements are true in regards to going concern following IPSAS 1 "Presentation of financial statements"?

The going concern assessment shall be made by those responsible for the preparation of financial statements

Financial statements shall, under ordinary circumstances, be prepared on a going concern basis

If there are uncertainties in regards to going concern this shall be disclosed

All of the above are correct

Question 37. RPG 2 'Financial Statement Discussion and Analysis' outlines that a financial discussion and analysis does not need to include:

An overview of the entitys operations and the environment in which it operates.

A description of the entitys principal risks and uncertainties that affect its financial position, financial performance and cash flows, an explanation of changes in those risks and uncertainties since the last reporting date and its strategies for bearing or mitigating those risks and uncertainties.

An analysis of the entitys financial statements including significant changes and trends in an entitys financial position, financial performance and cash flows.

Information about the entitys asset management system.

Question 38. Public Sector Entity X purchased an available-for-sale financial instrument for USD 80,000 on 31 March 2014. The direct acquisition costs incurred were USD 14,000. On 31 December 2014 the fair value of the instrument was USD 110,000 and the transaction costs that would be incurred on sale were estimated at USD 12,000. Following IPSAS 29 Financial instruments: recognition and measurement, what gain would be recognized in the financial statements for the year ended 31 December 2014? The Directors plan to finalise the financial statements on 10 February 20X0. What liabilities should be recognised in the 31 December 20X0 financial statements?

No gain would be recognized

USD 4,000

USD 16,000

USD 20,000

Question 39. IPSAS 18 'Segment reporting' suggests that reportable segments should be identified by reference to:

A distinguishable activity or group of activities of an entity

Whether a particular segment structure reflects the basis on which the governing body and senior manager require financial information to enable them to assess the past performance of the entity in achieving its objectives

Whether a segment is meaningful for accountability and decision-making purposes

All of the above

Question 40. Which of the below items would appear under the financing activities under the cash flow statement following IPSAS 2 'Statement of cash flows'?

Inventory write-off

Paying off a 3-year loan

Gain on property revaluation

Loss on a construction contract

Question 41. Following IPSAS 29 Financial instruments: recognition and measurement, which term of the below, best describes a compound financial instrument component of a hybrid instrument that also includes a non-derivative host contract?

A financial asset held for trading

A held-to-maturity investment

An embedded derivative

An available-for-sale financial asset