ACCA International Financial Reporting Standards 3

Question 1

Under IAS 37, a provision should be recognized when:

Accepted Answer

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

Answer

IAS 37 requires all three criteria: a present obligation (legal or constructive), probable outflow of economic benefits, and a reliable estimate.

Question 2

IFRS 3 requires acquired intangible assets in a business combination to be recognized separately from goodwill if they meet which criteria?

Accepted Answer

They are identifiable (separable or arising from contractual/legal rights) and their fair value can be measured reliably

Answer

Under IFRS 3, intangible assets are recognized separately when they are identifiable — either separable or arising from contractual/legal rights — and their fair value can be reliably measured.

Question 3

Under IAS 40, investment property measured under the fair value model is revalued with gains and losses recognized in:

Accepted Answer

Profit or loss

Answer

Under the IAS 40 fair value model, all fair value changes are recognized directly in profit or loss in the period they arise.

Question 4

Which of the following is NOT a component of equity under IAS 1?

Accepted Answer

Deferred tax liabilities

Answer

Deferred tax liabilities are non-current liabilities, not equity components; equity comprises share capital, reserves, and retained earnings.

Question 5

IFRS 5 classifies a non-current asset as 'held for sale' when it is available for immediate sale in its present condition and sale is:

Accepted Answer

Highly probable and expected to complete within 12 months from classification

Answer

IFRS 5 requires the sale to be highly probable, with active marketing at a reasonable price and expected completion within one year of classification.

ACCA - Association of Chartered Certified Accountants Practice Test

ACCA - Association of Chartered Certified Accountants Practice Test

ACCA International Financial Reporting Standards 3