ACCA International Financial Reporting Standards 2

Question 1

Under IFRS 16, how should a lessee classify lease payments in the statement of cash flows?

Accepted Answer

Principal repayments as financing and interest as operating or financing

Answer

IFRS 16 requires lessees to present principal repayments of the lease liability within financing activities and interest paid per IAS 7 policy (operating or financing).

Question 2

IAS 36 requires an impairment test for goodwill at minimum how often?

Accepted Answer

Annually, regardless of indicators

Answer

Goodwill must be tested for impairment annually and whenever there is an indicator of impairment, even if no indicator is present.

Question 3

Which method is prohibited under IAS 2 for measuring the cost of inventories?

Accepted Answer

Last-in, first-out (LIFO)

Answer

IAS 2 explicitly prohibits the LIFO method because it does not represent an approximation of actual cost flows.

Question 4

Under IFRS 15, when does a performance obligation become distinct?

Accepted Answer

When the customer can benefit from the good or service on its own or with other readily available resources, and it is separately identifiable

Answer

A performance obligation is distinct if the customer can benefit from it on its own and it is separately identifiable from other promises in the contract.

Question 5

Under IAS 21, monetary items denominated in a foreign currency are retranslated at year-end using which rate?

Accepted Answer

Closing rate at the balance sheet date

Answer

IAS 21 requires monetary items to be retranslated using the closing (spot) rate at the reporting date, with exchange differences recognized in profit or loss.

ACCA - Association of Chartered Certified Accountants Practice Test

ACCA - Association of Chartered Certified Accountants Practice Test

ACCA International Financial Reporting Standards 2