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

IAS 2 explicitly excludes abnormal waste, storage costs (unless required in production), administrative overheads, and selling costs from inventory cost.

Question 2

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

Accepted Answer

IFRS 15

Answer

IFRS 15 requires entities to disaggregate revenue into categories that depict how revenue and cash flows are affected by economic factors.

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

Variable lease payments linked to an index or rate are included in the lease liability measurement using the index or rate applicable at the commencement date.

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

IAS 38 requires intangible assets acquired separately to be initially measured at cost, comprising purchase price plus directly attributable costs.

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

IAS 37 does not require certainty — only that a reliable estimate can be made; certainty is not a recognition criterion for provisions.

(IFRS) International Financial Reporting Standards Practice Test

(IFRS) International Financial Reporting Standards Practice Test

IFRS Operations and Process Management 4