Introduction & Conceptual Framework
Under capital maintenance, profit is recognized only after maintaining which two types of capital?
Financial capital or Physical capital.
True or False: Fair value assumes a forced transaction.
False (It assumes an orderly transaction).
Under Ind AS 16, can revaluation increase be recognized in P&L?
No (Recognized in OCI).
Revenue is recognized when
when control of goods or services is transferred to the customer.
Can liabilities expected to be settled after 12 months still be classified as current?
Yes, if they are part of the normal operating cycle.
Neutrality is a component of this fundamental characteristic
Faithful Representation
The market with highest activity is
Principal market
Investment property under Ind AS 40 follows the
Cost model
Control includes transfer of
legal Title
OCI forms part of:
A) Profit before tax
B) Total comprehensive income
C) Revenue
D) Equity only
B) Total comprehensive income
What are carve-ins and carve-outs in Ind AS?
Carve-outs: Deviations from IFRS made while adopting in India.
Carve-ins: Additional guidance included in Ind AS but not present in IFRS.
The fair value hierarchy prioritises:
A. Entity judgment
B. Historical cost
C. Observable inputs over unobservable inputs
D. Management assumptions over market data
C. Observable inputs over unobservable inputs
Which of the following is included in the cost of inventories?
A. Abnormal wastage
B. Selling expenses
C. Import duties and non-recoverable taxes
D. Administrative overheads unrelated to production
C. Import duties and non-recoverable taxes
What is transaction price?
The amount of consideration expected in exchange for goods or services.
Financial statements are prepared under the assumption of:
A) Accrual only
B) Going concern
C) Prudence
D) Fair value
B) Going concern
Revenue is recognised when earned, not when cash is received. This is based on:
A. Cash Concept
B. Matching Concept
C. Accrual Concept
D. Realisation Concept
C. Accrual Concept
4. Transaction costs are:
A) Included in fair value
B) Added separately
C) Deducted from fair value
D) Excluded from fair value
D) Excluded from fair value
Investment Property is property held to:
A. Sell in ordinary course of business
B. Use in production of goods
C. Earn rentals or for capital appreciation
D. Use for administrative purposes
C. Earn rentals or for capital appreciation
The first step in the revenue recognition model is:
A. Determine transaction price
B. Identify performance obligations
C. Identify the contract with a customer
D. Recognise revenue
C. Identify the contract with a customer
If management intends to liquidate the entity, financial statements should NOT be prepared under:
A. Accrual basis
B. Going concern assumption
C. Cash basis
D. Cost model
B. Going concern assumption
What are the elements of financial statements as per the Conceptual Framework.
Asset
Liability
Equity
Income
Expense
Core Principles of Ind AS 113
Exit Price Concept
Market-Based Measurement
Orderly Transaction
Principal or Most Advantageous Market
Highest and Best Use (for Non-Financial Assets)
Fair Value Hierarchy
what are the measurement of inventories under Ind AS 2.
Cost of purchase
Cost of conversion
Other costs
Exclusion of abnormal wastage
Lower of cost and NRV rule
Explain the five-step model.
Identify contract
Identify performance obligations
Determine transaction price
Allocate transaction price
Recognize revenue when control transfers
Components of complete financial statements.
Balance Sheet
Statement of Profit & Loss
Statement of Changes in Equity
Cash Flow Statement
Notes to Accounts