IAS and IFRS Concepts Flashcards

These flashcards cover key concepts from IAS and IFRS accounting standards, providing essential questions and answers for exam preparation.

What is the recoverable amount of an asset under IAS 36?

The higher of value in use and fair value less costs of disposal.

Which costs should NOT be included in the initial cost of PPE under IAS 16?

Administrative overheads.

What indicates an impairment loss under IAS 36?

When carrying amount is greater than recoverable amount.

How is basic earnings per share (EPS) calculated under IAS 33?

Profit attributable to ordinary shareholders divided by weighted average number of ordinary shares.

What is classified as an operating activity under IAS 7?

Cash receipts from sales of goods and services.

When should revenue be recognized under IFRS 15?

When performance obligations are satisfied.

How should research costs be treated under IAS 38?

Recognized as an expense when incurred.

Under IAS 37, when should a provision for restructuring costs be recognized?

When a formal restructuring plan has been announced and implementation has started.

When can an impairment loss on an asset be reversed under IAS 36?

When there is a change in estimates resulting in an increase of recoverable amount.

How should inventories be measured according to IAS 2?

At the lower of cost and net realizable value.

Which inventory cost measurement method is NOT acceptable under IAS 2?

LIFO (Last In First Out).

Which of the following is NOT an example of an intangible asset under IAS 38?

Internally generated goodwill.

How are changes in investment property fair value recognized under IAS 40?

In profit or loss.

What should borrowing costs directly attributable to a qualifying asset be?

Capitalized as part of the asset's cost.

Which condition is NOT necessary for recognition of a provision under IAS 37?

There is a legal obligation.

What is the first step in the revenue recognition process under IFRS 15?

Identifying the contract.

How is an increase in asset value recognized under the revaluation model in IAS 16?

In revaluation surplus in equity.

What is the correct accounting treatment for a downward revaluation of a PPE asset?

Deduct €50,000 from revaluation surplus and recognize the remaining €20,000 in profit or loss.

What is investment property primarily held for under IAS 40?

Capital appreciation or rental income.

What method can be used to present investing cash flows in the statement of cash flows?

Either the direct or indirect method.