IFRS Standards 3

Question 1

Under IFRS 9, which category of financial assets must be measured at fair value through other comprehensive income (FVOCI) for debt instruments?

Accepted Answer

Assets managed on a hold-to-collect-and-sell business model with SPPI cash flows

Answer

Debt instruments held under a hold-to-collect-and-sell business model that pass the SPPI test are mandatorily measured at FVOCI under IFRS 9.

Question 2

IAS 19 requires the net defined benefit liability to be presented on the balance sheet. How is this amount calculated?

Accepted Answer

Present value of defined benefit obligation minus fair value of plan assets

Answer

The net defined benefit liability equals the present value of the defined benefit obligation minus the fair value of plan assets, which may result in a net asset if assets exceed the obligation.

Question 3

Under IAS 12, a deferred tax liability arises when:

Accepted Answer

The carrying amount of an asset exceeds its tax base

Answer

A deferred tax liability arises when the carrying amount of an asset exceeds its tax base, meaning more tax will be payable in future periods when the asset is recovered.

Question 4

Which of the following describes the 'highly probable' threshold required for cash flow hedge accounting under IFRS 9?

Accepted Answer

Significantly more likely than probable (probability well above 50%)

Answer

Under IFRS 9, 'highly probable' means significantly more likely than probable, generally interpreted as a probability well above 50% — considerably more than merely likely.

Question 5

IAS 41 Agriculture requires biological assets to be measured at:

Accepted Answer

Fair value less costs to sell, unless fair value cannot be measured reliably

Answer

IAS 41 requires biological assets to be measured at fair value less costs to sell at each reporting date, with changes recognized in profit or loss.

(IFRS) International Financial Reporting Standards Practice Test

(IFRS) International Financial Reporting Standards Practice Test

IFRS Standards 3