IFRS Operations and Process Management 2

Question 1

Under IAS 2, which cost formula is prohibited for measuring inventories?

Accepted Answer

Last-in, first-out (LIFO)

Answer

First-in, first-out (FIFO)

Answer

Weighted average cost

Answer

Specific identification

Question 2

A manufacturer incurs abnormal waste during production. Under IAS 2, how should abnormal waste costs be treated?

Accepted Answer

Expensed in the period incurred

Answer

Included in inventory cost

Answer

Capitalized as a production asset

Answer

Deferred to the next reporting period

Question 3

Under IFRS 15, when a contract contains a significant financing component, how should revenue be recognized?

Accepted Answer

At the cash selling price adjusted for the time value of money

Answer

At the total undiscounted contract price

Answer

At the higher of cash price or present value

Answer

At the nominal contract amount less estimated returns

Question 4

Which standard governs the accounting for service concession arrangements where a private operator provides public services?

Accepted Answer

IFRIC 12

Answer

IAS 16

Answer

IFRS 16

Answer

IAS 38

Question 5

A company operates a loyalty points program. Under IFRS 15, loyalty points awarded at the time of sale are accounted for as:

Accepted Answer

A separate performance obligation allocated part of the transaction price

Answer

A marketing expense at the point of award

Answer

A contingent liability until points are redeemed

Answer

A discount reducing the original sale revenue

Question 6

Under IAS 37, a provision for restructuring costs may only be recognized when:

Accepted Answer

A detailed formal plan exists and a valid expectation has been raised in those affected

Answer

Management has decided internally to restructure

Answer

Board approval has been obtained

Answer

The restructuring has commenced and costs are being incurred

Question 7

Under IFRS 16, a lessee's operating lease treated as a finance lease on adoption will initially recognize:

Accepted Answer

A right-of-use asset and a lease liability

Answer

Only a lease liability at the present value of future payments

Answer

An intangible asset and deferred revenue

Answer

A finance charge and operating expense