IFA Financial Reporting & Accounting Standards 4

Question 1

Earnings per share (EPS) under IAS 33 is calculated by dividing profit attributable to ordinary equity holders by:

Accepted Answer

Weighted average number of ordinary shares outstanding

Answer

IAS 33 requires EPS to be calculated using the weighted average number of ordinary shares outstanding during the period.

Question 2

Which of the following best describes a 'related party' under IAS 24?

Accepted Answer

A person or entity that has control, joint control, or significant influence over the reporting entity

Answer

IAS 24 defines related parties as those with control, joint control, or significant influence over the entity, or key management personnel and their close family members.

Question 3

Under IAS 10, events after the reporting period that provide evidence of conditions existing at the end of the reporting period are classified as:

Accepted Answer

Adjusting events

Answer

Adjusting events under IAS 10 are those that provide evidence of conditions that existed at the end of the reporting period and require adjustments to the financial statements.

Question 4

Which qualitative characteristic of financial information ensures that different knowledgeable users reach consensus about the depiction of an item?

Accepted Answer

Verifiability

Answer

Verifiability means that knowledgeable and independent observers could reach general consensus that a depiction is a faithful representation.

Question 5

Under IAS 38, research costs must be:

Accepted Answer

Expensed as incurred

Answer

IAS 38 requires all research costs to be expensed as incurred because the entity cannot demonstrate that an intangible asset will generate probable future economic benefits at the research stage.

(IFA) Institute of Financial Accountants Certification Practice Test

(IFA) Institute of Financial Accountants Certification Practice Test

IFA Financial Reporting & Accounting Standards 4