Certificate in International Financial Reporting IFRS Framework and Financial Statements 2

Question 1

Under IAS 1, which basis of accounting must entities use when preparing financial statements?

Accepted Answer

Accrual basis

Answer

IAS 1 requires financial statements to be prepared using the accrual basis of accounting.

Question 2

What is the definition of 'other comprehensive income' under IAS 1?

Accepted Answer

Items of income and expense not recognised in profit or loss as permitted or required by IFRS

Answer

OCI captures gains and losses excluded from profit or loss, such as revaluation surpluses and actuarial gains.

Question 3

Under IAS 1, when can an entity offset assets and liabilities?

Accepted Answer

Only when permitted or required by an IFRS standard

Answer

IAS 1 prohibits offsetting unless a specific IFRS standard permits or requires it.

Question 4

According to IAS 1, what is the minimum frequency for presenting a complete set of financial statements?

Accepted Answer

Annually

Answer

IAS 1 requires a complete set of financial statements to be presented at least annually.

Question 5

Which element of the financial statements is defined as 'a present economic resource controlled by the entity as a result of past events'?

Accepted Answer

Asset

Answer

The Conceptual Framework defines an asset as a present economic resource controlled through past events.

Certificate in International Financial Reporting Practice Test