Certificate in International Financial Reporting IFRS Framework and Financial Statements 3

Question 1

Under IAS 8, how should an entity account for a change in accounting estimate?

Accepted Answer

Prospectively

Answer

Retrospectively

Answer

By restating all prior periods

Answer

By prior period adjustment in equity

Question 2

Which IAS standard addresses accounting policies, changes in accounting estimates, and errors?

Accepted Answer

IAS 8

Answer

IAS 1

Answer

IAS 10

Answer

IAS 2

Question 3

Under IAS 8, how should material prior period errors be corrected?

Accepted Answer

By restating the comparative amounts for prior periods presented

Answer

By including the correction in current period profit or loss

Answer

By disclosing in the notes only

Answer

By adjusting the current period opening balance sheet only

Question 4

What is the hierarchy for selecting accounting policies under IAS 8 when no specific IFRS standard applies?

Accepted Answer

IFRSs dealing with similar issues, then Conceptual Framework

Answer

Conceptual Framework first, then other IFRSs

Answer

Local GAAP, then Conceptual Framework

Answer

Management's preference, then auditors' recommendation

Question 5

Under IAS 10, which of the following is an example of an adjusting event after the reporting period?

Accepted Answer

Resolution of a court case confirming a liability that existed at period end

Answer

A major acquisition after the reporting date

Answer

Destruction of a major plant by fire after the reporting date

Answer

Announcement of a restructuring after the reporting date

Question 6

Under IAS 10, non-adjusting events after the reporting period should be:

Accepted Answer

Disclosed in the notes if material

Answer

Recognised in the financial statements

Answer

Ignored entirely

Answer

Reported as prior period adjustments