ACA Accounting (IFRS/UK GAAP) 1

Question 1

Under IAS 16, which cost model allows an asset to be carried at fair value less accumulated depreciation?

Accepted Answer

Revaluation model

Answer

IAS 16 permits the revaluation model, where assets are carried at revalued amount (fair value) less subsequent accumulated depreciation and impairment losses.

Question 2

Under UK GAAP (FRS 102), goodwill arising on acquisition must be:

Accepted Answer

Capitalised and amortised over its useful life

Answer

FRS 102 requires goodwill to be capitalised and amortised systematically over its useful economic life, unlike IFRS 3 which prohibits amortisation.

Question 3

Which IFRS standard governs the recognition and measurement of financial instruments for most entities?

Accepted Answer

IFRS 9

Answer

IFRS 9 replaced IAS 39 and now governs classification, measurement, impairment, and hedge accounting for financial instruments.

Question 4

Under IAS 2, inventories must be measured at:

Accepted Answer

The lower of cost and net realisable value

Answer

IAS 2 requires inventories to be stated at the lower of cost and net realisable value, recognising any write-down to NRV in profit or loss.

Question 5

A finance lease under IFRS 16 requires the lessee to recognise:

Accepted Answer

Both a right-of-use asset and a lease liability

Answer

IFRS 16 eliminated the distinction for lessees; virtually all leases require recognition of both a right-of-use asset and a corresponding lease liability.

ACA ICAEW Practice Test

ACA ICAEW Practice Test

ACA Accounting (IFRS/UK GAAP) 1