IFRS for SMEs) Cheat Sheet 2026

The 30 highest-yield IFRS for SMEs) facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. How should construction contract revenue be recognized under IFRS for SMEs when the outcome can be reliably estimated? → Using the percentage of completion method
2. Under IFRS for SMEs, deferred tax assets and liabilities should be presented in the balance sheet as: → Non-current assets and liabilities
3. Which of the following is a key criterion for recognizing revenue under IFRS for SMEs? → It is probable that economic benefits will flow to the entity
4. Under IFRS for SMEs, actuarial gains and losses on defined benefit plans are recognized: → Either in profit or loss or in other comprehensive income, as an accounting policy choice
5. Under IFRS for SMEs, contingent consideration in a business combination is included in the cost of the combination only if: → Payment is probable and the amount can be measured reliably
6. Under IFRS for SMEs, which method is used to account for a business combination where an acquirer cannot be clearly identified based on equity interests issued? → The acquirer is still identified using other indicators of control
7. How are government grants related to assets accounted for under IFRS for SMEs? → Recognized in income on a systematic basis over the useful life of the asset
8. In a business combination under IFRS for SMEs, which of the following would qualify for separate recognition as an intangible asset apart from goodwill? → A customer list that is separable and can be sold independently
9. Under IFRS for SMEs, the cost of a defined contribution pension plan for the period is: → The contribution payable for the period
10. Under IFRS for SMEs, which of the following disclosures is required for income taxes? → The major components of income tax expense
11. Under IFRS for SMEs, which of the following temporary differences does NOT give rise to a deferred tax liability? → Initial recognition of goodwill not deductible for tax purposes
12. Under IFRS for SMEs, how are termination benefits recognized? → When the entity is demonstrably committed to providing termination benefits
13. When should an entity recognize an impairment loss under IFRS for SMEs? → When the carrying amount of an asset exceeds its recoverable amount
14. Under IFRS for SMEs, a defined contribution plan is one where: → The entity pays fixed contributions and has no further obligation
15. What is the purpose of impairment testing in IFRS for SMEs? → To ensure assets are not carried above their recoverable amount
16. Which of the following disclosures is required for inventories under IFRS for SMEs? → The accounting policies adopted, including the cost formula used
17. Under IFRS for SMEs, how does a lessee account for an operating lease? → Lease payments are recognized as an expense on a straight-line basis over the lease term
18. Under IFRS for SMEs, a deferred tax liability arises when: → The carrying amount of an asset exceeds its tax base
19. Under IFRS for SMEs, a sale and leaseback that results in an operating lease at fair value is accounted for by: → Recognizing any gain or loss on sale immediately
20. What is the subsequent measurement basis for basic trade receivables under IFRS for SMEs? → Amortized cost using the effective interest method
21. Why does IFRS for SMEs simplify recognition and measurement compared to full IFRS? → To reduce compliance costs and administrative burdens
22. What is the purpose of impairment testing in IFRS for SMEs? → To ensure assets are not carried above their recoverable amount
23. What is the principle of recognition in IFRS for SMEs? → An item must meet the definition of an asset, liability, income, or expense
24. Why is the statement of cash flows important? → To show cash inflows and outflows from operations, investing, and financing
25. Under IFRS for SMEs, if share options are granted with no vesting conditions (immediately vested), the expense is recognized: → Immediately on the grant date
26. How are financial liabilities measured under IFRS for SMEs? → Usually at amortized cost, unless held for trading
27. How does IFRS for SMEs require an entity to measure the liability for a defined benefit plan? → Using the projected unit credit method or a simplified method
28. Under IFRS for SMEs, after initial recognition, goodwill is subsequently carried at: → Cost less accumulated amortization and accumulated impairment losses
29. If a share option plan has a three-year vesting period, IFRS for SMEs requires the share-based payment expense to be recognized: → Evenly over the three-year vesting period
30. Under IFRS for SMEs, a taxable temporary difference arises when: → An asset's carrying amount exceeds its tax base