IFRS Certificate Mock Exam 1

IAS 36 Impairment of Assets requires that an asset is not carried at more than its recoverable amount. Which of the following best describes recoverable amount?

The accountant of Lobb Co is preparing a statement of cash flows and has identified the following amounts:

Depreciation of $45,000

An increase in inventory levels of $80,000

A decrease in trade receivables of $65,000

A decrease in trade payables of $22,000

What is the net effect of these amounts when reconciling from profit before tax to cash generated from operations?

Which statement is correct regarding the 2018 Conceptual Framework?

Please select the right answer.

Which of the following correctly describes the classification of cash flows in accordance with IAS 7 Statement of cash flows?

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?

If a previous impairment of goodwill is determined to have reversed, the investor should

According to IAS 7 Statement of cash flows where can interest paid be classified in the cash flow statement?

Which of the following practices is not allowed by International Financial Reporting Standards?

Below are a number of statements relating to IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. Which one of these statements is true?

Which of the following statements is correct?

In accordance with IAS 20 Accounting for Government Grants and Disclosure of Government Assistance, how are grants related to assets recognised?

Langer Co acquired the entire share capital of Gruber Co on 31 December 20X0 for €10,000. The fair value of the net assets acquired was €11,000.

In accordance with IFRS3 Business Combinations, what is the carrying amount of goodwill in the Statement of Financial Position at 31 December 20X0?

The following information relates to a transaction made by Telecom Co on 1 January 20X0 for the sale and maintenance of telecommunications equipment:              

$m        

Sale of equipment                                                                         100

Maintenance agreement for a four year period                   120     

Total                                                                                                      220

Ignoring discounting, what should be the figure for revenue recorded in profit or loss for the year ended 31 December 20X0 for the above sale?

According to IFRS 15 Revenue from contracts with customers, revenue from the sale of goods should be recognised at a single point in time when:

(i)         Goods or services have been transferred to customers

(ii)        the entity is entitled to consideration for the goods or services transferred to customers

(iii)       It is possible that the economic benefits associated with the transaction will flow to the entity

(iv)       The costs incurred or to be incurred in respect of the transaction are known with absolute certainty

Under IAS 19 Employee Benefits, which of the following statements is true in relation to accounting for pension schemes?

Tabular Co purchased a vehicle on 1 July 20X2 for $22,000. Tabular Co’s policy is to depreciate vehicles on a straight line basis over 4 years, with proportionate charges in partial years of ownership. On 1 October 20X4, Tabular Co sold the vehicle, making a profit on sale of $1,375. What amount should be included as a cash inflow from investing activities in relation to the vehicle for the year ended 31 December 20X4?

Which one of the following statements is correct according to IAS 7 Statement of Cash Flows?

Risotto Co purchased a quantity of inventory, incurring the following total costs:

$

Base cost                                                                             230,000

Irrecoverable sales tax                                                    46,000

Shipping                                                                               22,000

Storage                                                                                 15,000

Allocation of administration costs                              9,000

Total                                                                                      322,000

What amount should Risotto Co include in the statement of financial position for the batch of inventory?

Which of the following statements regarding own-occupied property and IAS 16 are correct?

1. The cost of an item of PPE may include the estimated costs of dismantling it in the future.

2. All increases and decreases in the carrying amount of a property measured using the revaluation model are recognised in OCI.

3. All items of property, plant and equipment must be depreciated.

4. A change in residual value is applied prospectively.

IFRS 9 Financial Instruments allows the use of hedge accounting if certain criteria are met. Which of the following is NOT one of these criteria?

According to IAS 29 Financial Reporting in Hyperinflationary Economies, which of the following characteristics might indicate a hyperinflationary economy?

E Co acquires 60% of the issued share capital of S Co midway through its accounting year on 30 April 20X2.

In their separate statements of profit or loss, the profits before tax of the two companies for the year ended 31 December 20X2 are:

E Co      $350,000

S Co      $600,000

What profit before tax is reported in the consolidated statement of profit or loss for the year ended 31 December 20X2, in accordance with IFRS3 Business Combinations?

Which statements are correct regarding accounting guidance produced by bodies of the IFRS Foundation?

1. The IFRS Interpretations Committee issues guidance on issues not specifically covered in IFRS Standards

2. The Board develops new IFRS Standards and amends existing ones

3. The Monitoring Board reviews topics on the Board’s work plan

4. The IFRS Advisory Council ensures that entities comply with IFRS Standards

IAS 1 Presentation of financial statements states that when items of income and expense are material there should be separate disclosure of these items if it is relevant to explain the performance of the company.

Details of these items is usually made

What is the role of the IFRS Advisory Council?