IFRS Standards 2

Question 1

Under IFRS 16, how must a lessee classify lease payments for a finance lease on the statement of cash flows?

Accepted Answer

Principal as financing; interest as financing or operating

Answer

IFRS 16 requires the principal repayment portion to be classified as financing activities, while interest paid may be classified as financing or operating activities per IAS 7 accounting policy choice.

Question 2

IFRS 15 uses a five-step model for revenue recognition. Which step involves determining the standalone selling prices of performance obligations?

Accepted Answer

Step 4 – Allocate the transaction price

Answer

Step 4 of the IFRS 15 model allocates the transaction price to each performance obligation based on relative standalone selling prices.

Question 3

Which IFRS standard governs the accounting for government grants and disclosure of government assistance?

Accepted Answer

IAS 20

Answer

IAS 20 prescribes the accounting for government grants and requires disclosure of government assistance that has benefited the entity.

Question 4

Under IAS 36, which of the following is NOT an external indicator that an asset may be impaired?

Accepted Answer

Physical damage to the asset

Answer

Physical damage to an asset is an internal indicator of impairment under IAS 36, not an external indicator.

Question 5

IFRS 3 requires acquired identifiable intangible assets to be recognized separately from goodwill if they meet certain criteria. Which criterion is NOT required?

Accepted Answer

The asset has an indefinite useful life

Answer

IFRS 3 does not require an intangible to have an indefinite life; both finite and indefinite-lived intangibles meeting the recognition criteria must be recognized separately.

(IFRS) International Financial Reporting Standards Practice Test

(IFRS) International Financial Reporting Standards Practice Test

IFRS Standards 2