ACCA SP Strategic Business Reporting

Question 1

Under IFRS 3, how is goodwill measured at acquisition?

Accepted Answer

As fair value of consideration plus fair value of NCI minus fair value of identifiable net assets acquired

Answer

As the excess of the purchase price over the book value of net assets

Answer

As the present value of expected future super-profits

Answer

As the difference between market capitalisation and total equity

Question 2

Under IFRS 10, which of the following criteria must be met for one entity to control another?

Accepted Answer

Power over the investee, exposure to variable returns, and ability to use power to affect those returns

Answer

Ownership of more than 50% of voting rights only

Answer

Owning more than 20% of shares

Answer

Providing more than half of the entity's funding

Question 3

How are associates accounted for in consolidated financial statements under IAS 28?

Accepted Answer

Equity method (share of net assets and share of profit recognised)

Answer

Full consolidation (line by line)

Answer

Fair value through profit or loss

Answer

Cost method only

Question 4

Under IFRS 5, a non-current asset classified as 'held for sale' should be measured at:

Accepted Answer

The lower of carrying amount and fair value less costs to sell

Answer

Cost

Answer

Carrying amount (cost less accumulated depreciation)

Answer

Net realisable value only

Question 5

Under IAS 12, a deferred tax liability arises when:

Accepted Answer

The carrying amount of an asset exceeds its tax base (creating a taxable temporary difference)

Answer

The tax base of an asset exceeds its carrying amount

Answer

A loss is carried forward for tax relief

Answer

A provision is recognised in the accounts before tax relief is available

Question 6

Which of the following is a component of 'other comprehensive income' (OCI) under IAS 1?

Accepted Answer

Gains on revaluation of PPE under IAS 16

Answer

Revenue from ordinary activities

Answer

Finance costs

Answer

Dividends paid to shareholders