Chapters 1-5

Which are the three bodies included in the IFRS Foundation?

Advisory council, IASB, IFRS Interpretations committee

What is the structure of an IFRS Standard (which of the following are included)?

Objectives, definitions, body of the standard, transitional provision

What is the aim for the IFRS Foundation?

To develop high-quality accounting standards

What is “Basis for Conclusion”?

It sets out considerations which were taken into account when the standard was devised

Which are the three main sources of regulation?

Legislation, accounting standars, stock exchange regulations

How many countries today are compliant with IFRS?

140

Explain relevance

The financial information has predictive and confirmative value

There are three ways to measure current value. Which of the following is not included?  

The amount paid to acquire an asset

Which of the following is NOT included in the objective for the IASB Conceptual framework?

The first accounting standard issued, IFRS1, relates to the conceptual framework

What other users, than the primary users, rely in financial information and the IFRS? Which group is NOT included?

Management

What is a perfectly “faithful representation”?

Complete, neutral, free from error

Which are the important users of financial information according to the framework? Which of the following are NOT included?

General public

How is equity defined?

The residual interest in the assets of the entity after deducting all liabilities

How is liability defined?

A present obligation to transfer economic resources

How is an asset defined in the conceptual framework?

A present economic resource controlled by the entity

Which are the four enhancing qualitative characteristics? Which of the following is not one of them.

Neutrality

Which main items are presented in the statement of comprehensive income? Which of the following are NOT included

Extraordinary items

If an interim report only presents the statements of comprehensive income and earnings per share it does not comply with IAS34. What is missing?

Balance sheet, cash flow statement, changes in equity

What is the difference between the “profit and loss statement” P&L and “other comprehensive income” (OCI)?

Certain standards require the company to present items in other comprehensive income and not in P&L

What does a complete set of financial statements comprise?

Financial position, other comprehensive income, changes in equity, notes

How is “material” information defined in IAS 1? Which of the following is NOT correct

If presenting the information could influence decisions users make on the basis of those financial statements

What is the objective for the financial statements presented in IAS1?

To provide information that is useful to a wide range of users in making economic decisions

What accounting standard does include a “management commentary”?

None it is an IFRS practise statement

Give an example of criteria that satisfies the classification as a current asset. Which one is NOT correct.

It is expected to be revalued at fair value

What is the definition of a non-current asset?

If it is not current, it is non-current

Describe the format for the balance sheet that IAS1 prescribes

It does not specify any particular format

If a company voluntarily change an accounting policy, what information must the company present?

The reason why the new policy will provide more reliable and reliant information

Changes in accounting estimates can only be accounted for prospectively. What does that mean?

It will affect the current and future periods

Which are the situations where a company can choose to change an accounting policy?

A new standard is issued or an IFRIC Interpretation

There are three accounting standards that permits no choice for accounting policy treatments in the standard. Which of the following is NOT included.

Inventories; provisions, contingent liabilities and contingent assets, intangible assets

How will the accounting be affected if the company needs to apply a change in accounting policy retrospectively?

The present and the previous year will be changed

How should the initial recognition be measured? IAS16

To the purchase price, less discounts and rebates

If the revalued PPE a year later is sold, how will a revaluation gain (relating to the previous year) be recognised?

Directly in retained earnings in equity

Define level 2 inputs.

Quoted prices for a similar asset in an active market

How does IAS 16 define PPE? Which one is not correct.

Held for sale

IFRS13 defines three levels of inputs in its fair value hierarchy. Describe a valuation using “Level 3 inputs”

Using unobservable inputs, meaning inputs for which market data is not available, for example estimates of future cash flows.

If a PPE is revalued and the value increases, how will the gain be recognized? Which of the following is correct?

An increase is presented in Other comprehensive income

If it is probable that future economic benefits from an asset will flow to the company, what other requirement must be fulfilled to be able to recognize PPE?

The cost can be measured reliably

Define depreciations

A systematic allocation aiming at allocating expenses

If the depreciation method is changed, how will this be dealt with according to IAS?

It is a change in accounting estimate and will be changed prospectively

How is a gain or loss on a fair value revaluation of investment property presented in the financial reports?

On a separate line in the P/L

If a company takes up a loan in a bank to use for construction of its own building – how will the interest cost on the loan be accounted for?

It should be capitalised and included in the cost of the building

What is a carrying amount?

The amount that is shown in the financial statements

Describe the cost model for PPE

The initial recognized cost, less depreciations and impairments, plus dismantling costs at the end

Repair, maintenance, replacement of major parts and major inspections – which could be treated as a capital expenditure?

Major replacements