IFA Financial Reporting & Accounting Standards 2

Question 1

Under IAS 36, an impairment loss is recognized when an asset's carrying amount exceeds its:

Accepted Answer

Recoverable amount

Answer

IAS 36 requires an impairment loss when carrying amount exceeds the recoverable amount, which is the higher of fair value less costs to sell and value in use.

Question 2

Which financial statement shows changes in equity between two reporting dates?

Accepted Answer

Statement of changes in equity

Answer

The statement of changes in equity reconciles the opening and closing equity balances including profit, dividends, and other comprehensive income.

Question 3

Under IFRS 15, revenue is recognized when or as a performance obligation is:

Accepted Answer

Satisfied

Answer

IFRS 15's core principle is that revenue is recognized when (or as) a performance obligation is satisfied by transferring a promised good or service to a customer.

Question 4

A company receives a government grant to purchase equipment. Under IAS 20, this grant may be presented as:

Accepted Answer

Deferred income or deducted from the asset's carrying amount

Answer

IAS 20 allows grants related to assets to be presented either as deferred income or by deducting the grant from the asset's carrying amount.

Question 5

Under IAS 2, which inventory cost formula is NOT permitted?

Accepted Answer

LIFO

Answer

IAS 2 prohibits the LIFO (Last-In, First-Out) cost formula; only FIFO, weighted average, and specific identification are permitted.

(IFA) Institute of Financial Accountants Certification Practice Test

(IFA) Institute of Financial Accountants Certification Practice Test

IFA Financial Reporting & Accounting Standards 2