ACCA AS Financial Reporting

Question 1

Under IFRS 15, revenue is recognised when:

Accepted Answer

A performance obligation is satisfied by transferring a promised good or service to the customer

Answer

Cash is received from the customer

Answer

An invoice is raised

Answer

A contract is signed

Question 2

Under IAS 16, property, plant and equipment is initially recognised at:

Accepted Answer

Cost

Answer

Fair value

Answer

Net realisable value

Answer

Replacement cost

Question 3

The revaluation model under IAS 16 requires that when an asset is revalued upwards:

Accepted Answer

The gain is recognised in other comprehensive income and accumulated in the revaluation reserve

Answer

The gain is recognised in profit or loss

Answer

The asset is derecognised and replaced

Answer

Depreciation ceases

Question 4

Under IFRS 9, a financial asset measured at amortised cost is one held:

Accepted Answer

Within a business model to collect contractual cash flows, which are solely payments of principal and interest

Answer

To earn fair value gains

Answer

For trading in the short term

Answer

To provide collateral for borrowings

Question 5

Under IAS 37, a provision should be recognised when:

Accepted Answer

There is a present obligation, a probable outflow of resources, and a reliable estimate can be made

Answer

A possible obligation exists that depends on an uncertain future event

Answer

Management decides to make a general provision

Answer

A potential asset is identified

Question 6

Which of the following is a key difference between IFRS and UK GAAP (FRS 102)?

Accepted Answer

IFRS is mandatory for UK listed companies' consolidated statements; FRS 102 is typically used by unlisted UK entities

Answer

FRS 102 requires fair value for all non-current assets

Answer

IFRS does not permit the cost model for investment property

Answer

FRS 102 requires full IFRS disclosures