IFRS Operations and Process Management 4

Question 1

Under IAS 2, which costs are specifically excluded from the cost of inventories?

Accepted Answer

Abnormal waste and storage costs not required in the production process

Answer

Direct labor costs

Answer

Conversion costs

Answer

Variable production overheads

Question 2

Which IFRS standard requires disclosure of 'disaggregated revenue' in the notes to financial statements?

Accepted Answer

IFRS 15

Answer

IAS 18

Answer

IFRS 8

Answer

IAS 11

Question 3

Under IFRS 16, how are variable lease payments that depend on an index or rate treated at commencement?

Accepted Answer

Included in the lease liability using the index or rate at the commencement date

Answer

Excluded from the lease liability entirely

Answer

Recognized as an expense when incurred

Answer

Capitalized as a separate intangible asset

Question 4

A company acquires a patent for use in manufacturing. Under IAS 38, the patent is initially measured at:

Accepted Answer

Cost, including purchase price and directly attributable costs to prepare the asset for use

Answer

Fair value at the acquisition date

Answer

Net book value from the seller's records

Answer

Present value of future cash flows from the patent

Question 5

Under IAS 37, which criterion is NOT required for recognition of a provision?

Accepted Answer

The amount can be determined with certainty

Answer

A present obligation as a result of a past event

Answer

It is probable that an outflow of resources will be required

Answer

A reliable estimate can be made of the obligation

Question 6

Under IFRS 15, the 'contract modification' guidance applies when parties agree to change the scope or price of a contract. If a modification adds distinct goods at a standalone selling price, it should be treated as:

Accepted Answer

A termination of the old contract and a new contract

Answer

A cumulative catch-up adjustment to revenue

Answer

A change in transaction price spread over remaining performance obligations

Answer

An error in the original contract requiring restatement

Question 7

When computing the capitalization rate for general borrowings under IAS 23, it is calculated as:

Accepted Answer

The weighted average of borrowing costs applicable to outstanding general borrowings

Answer

The rate on the most recently issued debt

Answer

The risk-free rate plus a credit spread

Answer

The effective interest rate on the qualifying asset's useful life