Certificate in International Financial Reporting (CertIFR) — Questions and Answers

Question 1: Under IAS 38, how is an intangible asset with a finite useful life subsequently measured?

At cost less impairment only (no amortisation)
At fair value at each reporting date
At net realisable value
At cost or revalued amount less accumulated amortisation and impairment losses (Correct answer)

Correct answer: At cost or revalued amount less accumulated amortisation and impairment losses

Finite-life intangibles are amortised over their useful life and tested for impairment under IAS 36.

Question 2: Under IAS 12, a deferred tax liability arises when:

The tax base of an asset exceeds its carrying amount
Tax losses are carried forward
The carrying amount of an asset exceeds its tax base (Correct answer)
A temporary difference reverses

Correct answer: The carrying amount of an asset exceeds its tax base

A taxable temporary difference—carrying amount exceeds tax base—creates a deferred tax liability.

Question 3: Under IFRS 9, a financial guarantee contract is classified as:

A financial liability measured at the higher of ECL provision and initial recognition amount (Correct answer)
An off-balance sheet item
An equity instrument
An insurance contract under IFRS 17

Correct answer: A financial liability measured at the higher of ECL provision and initial recognition amount

IFRS 9 treats financial guarantee contracts as financial liabilities subject to ECL and fair value requirements.

Question 4: Under the Conceptual Framework, what is the primary objective of general purpose financial reporting?

Satisfy tax authorities' information needs
Demonstrate compliance with local laws
Provide information useful to existing and potential investors, lenders, and creditors (Correct answer)
Show historical cost of assets

Correct answer: Provide information useful to existing and potential investors, lenders, and creditors

The Framework states that financial reporting aims to help capital providers make resource allocation decisions.

Question 5: Under IAS 38, internally generated goodwill is:

Recognised at cost
Capitalised when it can be measured reliably
Not recognised as an asset (Correct answer)
Amortised over 10 years

Correct answer: Not recognised as an asset

IAS 38 prohibits recognition of internally generated goodwill because it cannot be reliably measured.

Question 6: When translating the financial statements of a foreign subsidiary for consolidation, IAS 21 requires income and expense items to be translated at:

The lowest rate recorded during the reporting period
The historical rate at the date of acquisition of the subsidiary
The closing rate at the reporting date
Exchange rates at the dates of the transactions, with the average rate permitted as a practical approximation (Correct answer)

Correct answer: Exchange rates at the dates of the transactions, with the average rate permitted as a practical approximation

IAS 21 requires income and expenses to be translated at exchange rates at the dates of transactions, but an average rate may be used when rates do not fluctuate significantly.

Question 7: Under IAS 40, investment property is defined as property held for:

Use in production or supply of goods
Rental income, capital appreciation, or both (Correct answer)
Administrative purposes
Sale in the ordinary course of business

Correct answer: Rental income, capital appreciation, or both

IAS 40 defines investment property as property held to earn rentals or for capital appreciation.

Question 8: Under IFRS 16, the lease liability is initially measured at:

The nominal value of minimum lease payments
The present value of future lease payments not paid at commencement (Correct answer)
The fair value of the leased asset
The sum of undiscounted lease payments

Correct answer: The present value of future lease payments not paid at commencement

IFRS 16 requires discounting future lease payments using the rate implicit in the lease or the incremental borrowing rate.

Question 9: Under IFRS 15, revenue is recognised when an entity satisfies a performance obligation by transferring a promised good or service. When is control transferred in a point-in-time recognition?

When cash is received
When the invoice is issued
When the customer obtains control of the asset (Correct answer)
When the contract is signed

Correct answer: When the customer obtains control of the asset

IFRS 15 requires revenue recognition when control of the good or service passes to the customer.

Question 10: Which of the following is an enhancing qualitative characteristic under the IASB Conceptual Framework?

Faithful representation
Relevance
Comparability (Correct answer)
Materiality

Correct answer: Comparability

Comparability, verifiability, timeliness, and understandability are enhancing qualitative characteristics.

Question 11: Under IAS 32, a financial instrument is classified as equity rather than a financial liability when:

Dividends are discretionary
The instrument has no fixed maturity
The instrument is listed on a stock exchange
The issuer has no contractual obligation to deliver cash or another financial asset (Correct answer)

Correct answer: The issuer has no contractual obligation to deliver cash or another financial asset

IAS 32 classifies instruments as equity when the issuer has no contractual obligation to pay cash.

Question 12: Under IAS 29, why are monetary items NOT restated at the reporting date?

Because IAS 21 already handles the retranslation of monetary items
Because monetary items are immaterial in hyperinflationary environments
Because monetary items are excluded from the scope of IAS 29
Because monetary items are already expressed in the measuring unit current at the reporting date (Correct answer)

Correct answer: Because monetary items are already expressed in the measuring unit current at the reporting date

Monetary items are already expressed in current monetary units at the reporting date and therefore require no restatement under IAS 29.

Question 13: Under IAS 38, an intangible asset can be recognised only if:

It is identifiable, controlled by the entity, and expected to generate probable future economic benefits (Correct answer)
It has a finite useful life
It is separable from the entity
It was purchased externally

Correct answer: It is identifiable, controlled by the entity, and expected to generate probable future economic benefits

IAS 38 requires identifiability, control, and probable future benefits for intangible asset recognition.

Question 14: Under IFRS 9, the Expected Credit Loss (ECL) model applies to which financial instruments?

Financial assets measured at amortised cost and FVOCI, and loan commitments (Correct answer)
Only credit cards and mortgages
Only financial assets at FVTPL
All financial instruments including derivatives

Correct answer: Financial assets measured at amortised cost and FVOCI, and loan commitments

IFRS 9's ECL impairment model applies to debt instruments at amortised cost or FVOCI, and certain off-balance sheet exposures.

Question 15: Which IAS standard addresses accounting policies, changes in accounting estimates, and errors?

IAS 10
IAS 1
IAS 2
IAS 8 (Correct answer)

Correct answer: IAS 8

IAS 8 covers the selection and application of accounting policies, estimate changes, and prior period errors.

Question 16: Under IFRS 2, for equity-settled share-based payment transactions with employees, the expense is recognised:

When the awards vest
Over the vesting period based on fair value at grant date (Correct answer)
Based on fair value at each reporting date
When the shares are issued

Correct answer: Over the vesting period based on fair value at grant date

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

Question 17: Under IAS 19, the net interest cost on a defined benefit plan is calculated as:

Net defined benefit liability × discount rate (Correct answer)
Projected benefit obligation × expected return
Current service cost × inflation rate
Expected return on plan assets × discount rate

Correct answer: Net defined benefit liability × discount rate

Net interest is the discount rate applied to the net defined benefit liability (or asset) at the start of the period.

Question 18: An entity with a USD functional currency holds a EUR-denominated trade receivable. Between the transaction date and year-end, the EUR strengthens against the USD. Where is the resulting exchange difference recognized?

Deferred in equity until settlement
In profit or loss for the period (Correct answer)
Adjusted retrospectively against the original revenue figure
In other comprehensive income until the receivable is collected

Correct answer: In profit or loss for the period

Under IAS 21, exchange differences on monetary items (such as trade receivables) are recognized in profit or loss in the period they arise.

Question 19: What is the hierarchy for selecting accounting policies under IAS 8 when no specific IFRS standard applies?

Local GAAP, then Conceptual Framework
IFRSs dealing with similar issues, then Conceptual Framework (Correct answer)
Conceptual Framework first, then other IFRSs
Management's preference, then auditors' recommendation

Correct answer: IFRSs dealing with similar issues, then Conceptual Framework

IAS 8 requires management to look at IFRSs for analogous situations, then the Conceptual Framework.

Question 20: Under IAS 21, an entity's presentation currency differs from its functional currency. Which statement best describes the required translation approach?

All items are translated at the average rate for the reporting period for simplicity
This situation is prohibited; the presentation currency must match the functional currency
Assets and liabilities are translated at the closing rate; income and expenses at transaction-date rates; and equity at historical rates (Correct answer)
The entity must seek approval from its tax authority before changing presentation currency

Correct answer: Assets and liabilities are translated at the closing rate; income and expenses at transaction-date rates; and equity at historical rates

IAS 21 permits a presentation currency different from the functional currency and requires assets/liabilities at closing rate, income/expenses at transaction-date rates, and equity at historical rates.

Question 21: Net realisable value (NRV) under IAS 2 is defined as:

Estimated selling price less estimated costs of completion and selling costs (Correct answer)
Fair value less costs to sell
Carrying amount of inventory
Current replacement cost

Correct answer: Estimated selling price less estimated costs of completion and selling costs

NRV is the expected selling price in ordinary business less costs to complete and sell the item.

Question 22: Which element of the financial statements is defined as 'a present economic resource controlled by the entity as a result of past events'?

Equity
Liability
Income
Asset (Correct answer)

Correct answer: Asset

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

Question 23: Under IAS 2, which cost formula is NOT permitted for measuring inventory cost?

FIFO (First-In, First-Out)
LIFO (Last-In, First-Out) (Correct answer)
Specific identification
Weighted average cost

Correct answer: LIFO (Last-In, First-Out)

IAS 2 explicitly prohibits the use of LIFO as a cost formula for inventory.

Question 24: Under IFRS 9, gains and losses on financial assets designated as FVOCI (equity instruments) are:

Recognised in profit or loss on disposal
Recognised in OCI and never recycled to profit or loss (Correct answer)
Recognised in OCI and recycled on disposal
Recognised directly in retained earnings

Correct answer: Recognised in OCI and never recycled to profit or loss

For equity instruments designated at FVOCI, gains/losses remain in OCI permanently and are not recycled.

Question 25: Under IAS 8, how should an entity account for a change in accounting estimate?

Retrospectively
Prospectively (Correct answer)
By prior period adjustment in equity
By restating all prior periods

Correct answer: Prospectively

Changes in accounting estimates are applied prospectively, affecting current and future periods.

Certificate in International Financial Reporting (CertIFR)

The ACCA CertIFR is an online, on-demand certificate-level qualification that tests knowledge and application of International Financial Reporting Standards (IFRS), covering topics from the Conceptual Framework and group accounting to financial instruments and foreign currency.

Questions

60 min

Time Limit

50%

To Pass

Checking for saved progress...

Exam Rules

You can skip questions and return to them later
Flag questions for review before submitting
No feedback shown until you submit the entire exam
Unanswered questions count as wrong — answer everything
10 pretest questions are mixed in and don't affect your score
Timer auto-submits when time runs out
Your progress is auto-saved every 30 seconds

These practice questions were written with AI tools. They are not real exam questions. Exam facts are checked against the official sources listed below. Not reviewed by a subject-matter expert. Editorial policy

Sources & references

Exam facts on this page (fees, format, dates, passing scores) are checked against these official sources; the date is our last check. Editorial policy

accaglobal.com — Passing score, registration, retake policy, test dates, time limit, test delivery, exam format, fees, eligibility, exam information · verified Oct 2026