Accounting (IFRS/UK GAAP) Flashcards
6 cards from real ACA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Accounting (IFRS/UK GAAP) flashcards as text
Under IFRS 15, the five-step revenue recognition model starts with:
Answer: Identifying the contract with a customer
The five steps are: (1) identify the contract, (2) identify performance obligations, (3) determine the transaction price, (4) allocate the price, and (5) recognise revenue when obligations are satisfied.
Under IAS 16, subsequent expenditure on a tangible non-current asset is capitalised when:
Answer: It is probable that future economic benefits will flow to the entity
Subsequent expenditure is capitalised when it meets the general recognition criteria: it is probable that future economic benefits will flow to the entity and the cost can be measured reliably.
Which statement correctly describes a contingent liability under IAS 37?
Answer: It is a possible obligation that may arise depending on uncertain future events
A contingent liability is either a possible obligation dependent on uncertain future events, or a present obligation where an outflow is not probable or cannot be reliably estimated; it is disclosed but not recognised.
Under IAS 12, a deferred tax liability arises when:
Answer: The carrying amount of an asset exceeds its tax base
A deferred tax liability arises from a taxable temporary difference, where the carrying amount of an asset exceeds its tax base, resulting in higher future taxable amounts.
Under FRS 102, intangible assets acquired in a business combination must be recognised separately from goodwill when:
Answer: They arise from contractual or other legal rights, or are separable
FRS 102 requires separate recognition of intangible assets that arise from contractual/legal rights or are separable (can be sold, transferred, or licensed separately from the business).
The accruals concept requires that:
Answer: Expenses are matched to the period in which the related revenue is recognised
The accruals (or matching) concept requires income and expenses to be recognised in the period to which they relate, regardless of when cash is received or paid.