Certificate in International Financial Reporting Leases, Provisions, and Employee Benefits 3

Question 1

Under IAS 19, short-term employee benefits (e.g., wages, paid annual leave) are measured:

Accepted Answer

At the undiscounted amount expected to be paid

Answer

Short-term benefits are not discounted because they are expected to be settled within 12 months.

Question 2

Under IAS 19, which component of defined benefit cost is recognised in profit or loss?

Accepted Answer

Current service cost and net interest cost

Answer

Service cost (including past service cost) and net interest cost are recognised in profit or loss under IAS 19.

Question 3

Under IFRS 2, share-based payment transactions where the entity receives goods or services are measured at:

Accepted Answer

The fair value of the goods or services received, or the fair value of the equity instruments if indirectly measured

Answer

IFRS 2 measures share-based transactions at the fair value of goods/services, or equity instruments if that can't be estimated.

Question 4

Under IFRS 2, for equity-settled share-based payment transactions with employees, the expense is recognised:

Accepted Answer

Over the vesting period based on fair value at grant date

Answer

IFRS 2 requires the grant date fair value to be spread over the vesting period.

Question 5

Under IAS 37, when discounting a provision, the discount rate used should be:

Accepted Answer

A pre-tax rate reflecting current market assessments of the time value of money and specific risks

Answer

IAS 37 specifies a pre-tax market-based discount rate that reflects risks specific to the liability.

Certificate in International Financial Reporting Practice Test