ACA Accounting (IFRS/UK GAAP) 2

Question 1

Under IAS 37, a provision should be recognised when:

Accepted Answer

A present obligation exists, an outflow is probable, and a reliable estimate can be made

Answer

IAS 37 requires all three conditions: a present obligation (legal or constructive), a probable outflow of economic benefits, and a reliable estimate of the amount.

Question 2

Under IAS 18 / IFRS 15, revenue from the sale of goods is recognised when:

Accepted Answer

Performance obligations are satisfied

Answer

IFRS 15 requires revenue to be recognised when (or as) performance obligations are satisfied, i.e., when control of goods or services transfers to the customer.

Question 3

Which accounting standard deals with the presentation of financial statements under IFRS?

Accepted Answer

IAS 1

Answer

IAS 1 sets out the overall requirements for the presentation of financial statements, guidelines for their structure, and minimum requirements for their content.

Question 4

Under FRS 102, investment property is measured after initial recognition using:

Accepted Answer

Either the cost model or the fair value model

Answer

FRS 102 allows entities to choose between the cost model and the fair value model for investment property, whereas IAS 40 under IFRS also allows both.

Question 5

Which of the following is NOT a component of equity under IAS 1?

Accepted Answer

Trade payables

Answer

Trade payables are a liability, not a component of equity. Equity comprises share capital, share premium, retained earnings, and other reserves such as the revaluation surplus.

ACA ICAEW Practice Test

ACA ICAEW Practice Test

ACA Accounting (IFRS/UK GAAP) 2