ACA Accounting (IFRS/UK GAAP) 4

Question 1

Under IAS 33, basic earnings per share is calculated as:

Accepted Answer

Profit attributable to ordinary shareholders divided by weighted average ordinary shares outstanding

Answer

IAS 33 defines basic EPS as profit or loss attributable to ordinary equity holders divided by the weighted average number of ordinary shares outstanding during the period.

Question 2

Under IFRS 3, which method must be used to account for a business combination?

Accepted Answer

Acquisition method

Answer

IFRS 3 mandates the acquisition method (formerly purchase method) for all business combinations, requiring identification of the acquirer and measurement of identifiable assets and liabilities at fair value.

Question 3

Under IAS 28, the equity method requires the investor to recognise its share of the associate's:

Accepted Answer

Post-acquisition profit or loss in profit or loss

Answer

Under the equity method, the investment is initially recognised at cost and adjusted for the investor's share of the associate's post-acquisition profits or losses.

Question 4

Which standard requires disclosure of related party transactions?

Accepted Answer

IAS 24

Answer

IAS 24 requires disclosure of relationships, transactions, and outstanding balances with related parties so users can assess how those relationships might affect financial statements.

Question 5

Under FRS 102, a small entity applying the small entities regime must prepare:

Accepted Answer

A balance sheet and profit and loss account as a minimum

Answer

Under the FRS 102 Section 1A small entities regime, the minimum requirement is a balance sheet and profit and loss account, with reduced disclosure requirements.

ACA ICAEW Practice Test

ACA ICAEW Practice Test

ACA Accounting (IFRS/UK GAAP) 4