IFRS Strategic Planning and Decision Making 2

Question 1

Under IFRS, when management commits to a formal plan to sell a non-current asset, the asset must be classified as held for sale only if it is available for immediate sale and sale is highly probable within:

Accepted Answer

12 months

Answer

IFRS 5 requires the sale to be completed within 12 months of classification as held for sale.

Question 2

A company is evaluating a strategic acquisition. Under IFRS 3, the acquirer must measure identifiable assets acquired and liabilities assumed at:

Accepted Answer

Fair value at the acquisition date

Answer

IFRS 3 requires all identifiable assets and liabilities to be recognized at fair value on the acquisition date.

Question 3

When a company decides strategically to change its functional currency, how should the change be accounted for under IAS 21?

Accepted Answer

Prospectively from the date of the change

Answer

IAS 21 requires a change in functional currency to be applied prospectively from the date of the change.

Question 4

For strategic decision making, management uses IFRS segment reporting (IFRS 8) to evaluate performance. Reportable segments are identified based on:

Accepted Answer

The chief operating decision maker's internal reporting

Answer

IFRS 8 uses the management approach, identifying segments based on how the CODM reviews internal reports.

Question 5

A strategic plan involves significant restructuring. Under IAS 37, a provision for restructuring costs can only be recognized when:

Accepted Answer

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

Answer

IAS 37 requires both a detailed formal plan and communication to those affected before a restructuring provision is recognized.

(IFRS) International Financial Reporting Standards Practice Test

(IFRS) International Financial Reporting Standards Practice Test

IFRS Strategic Planning and Decision Making 2