Hyperinflation
IAS 29 shall be applied to the financial statements, including the consolidated financial statements, of any entity __________.
a. Whose functional currency is the currency of a hyperinflationary economy
b. Which is located in a country of a hyperinflationary economy
c. Which operates in a country of a hyperinflationary economy
d. All of the above
a. Whose functional currency is the currency of a hyperinflationary economy
This Standard shall be applied to the financial statements, including the consolidated financial statements, of any entity whose functional currency is the currency of a hyperinflationary economy. [IAS 29.1]
If a financial instrument contains both liability and equity elements it should be split into two
components that are reported separately.
a. Split accounting
b. 2 in 1 accounting
c. Flexible accounting
a. Split accounting
T/F: Put options on ordinary shares are contracts that give the holder the right to buy ordinary shares at a specified price for a given period.
False
Which of the following is not an objective of IAS 34?
a. To prescribe the minimum content of an interim financial report
b. To prescribe which entities are required to publish interim financial reports, how frequently and how soon after the end of the reporting period
c. To prescribe the principles for recognition and measurement in complete or condensed financial statements for an interim period
d. None of the above
c. To prescribe the principles for recognition and measurement in complete or condensed financial statements for an interim period
An onerous contract is a contract in which __________ of meeting the obligations under the contract __________ the economic benefits expected to be received under it.
a. Sunk costs; exceed
b. Unavoidable costs; exceed
c. Opportunity costs; are less than
d. Avoidable costs; are less than
b. Unavoidable costs; exceed
In a hyperinflationary economy, reporting of operating results and financial position in the local currency without restatement is __________.
a. Preferable
b. Not useful
c. Prohibited unless preparation of restated financial statements is impracticable
d. Permitted, unless an entity prepares consolidated financial statements
b. Not useful
In a hyperinflationary economy, reporting of operating results and financial position in the local currency without restatement is not useful. Money loses purchasing power at such a rate that comparison of amounts from transactions and other events that have occurred at different times, even within the same accounting period, is misleading. [IAS 29.2]
In accordance with IAS39 Financial instruments: recognition and measurement, which ONE of the following terms best describes a compound financial instrument component of a hybrid instrument that also includes a non-derivative host contract?
a. An available-for-sale financial asset
b. An embedded derivative
c. A held-to-maturity investment
d.A financial asset held for trading
b. An embedded derivative
How shall an entity calculate the basic earnings per share?
a. By dividing the weighted average number of ordinary shares outstanding during the period by profit or loss attributable to ordinary equity holders of the parent entity
b. By dividing the weighted average number of ordinary shares outstanding at the end of the reporting period by profit or loss attributable to ordinary equity holders of the parent entity
c. By dividing profit or loss attributable to ordinary equity holders of the parent entity by the weighted average number of ordinary shares outstanding during the period
d. By dividing profit or loss attributable to ordinary equity holders of the parent entity by the weighted average number of ordinary shares outstanding at the end of the reporting period
d. By dividing profit or loss attributable to ordinary equity holders of the parent entity by the weighted average number of ordinary shares outstanding at the end of the reporting period
What does the International Accounting Standards Committee encourage publicly traded entities to do?
a. To provide interim financial reports at least as of the end of the first quarter of their financial year
b. To make their interim financial reports available not later than 60 days after the end of the interim period
c. To apply the same accounting policies in its interim financial report as are applied in its annual financial statements, including accounting policy changes made after the date of the most recent annual financial statements that are to be reflected in the next annual financial statements
d. All of the above
d. All of the above
Which of the following statements about the requirements of IAS 37 Provisions, contingent liabilities and contingent assets are correct?
a. A contingent asset should be disclosed by note if an inflow of economic benefits is probable.
b. No disclosure of a contingent liability is required if the possibility of a transfer of economic benefits arising is remote.
c. Contingent assets must not be recognized in financial statements unless an inflow of economic benefits is virtually certain to arise.
Choices:
a. All statements are correct
b. A only
c. B and C
D. C and A
a. All statements are corrects
T/F: In a period of inflation, an entity holding an excess of monetary assets over monetary liabilities loses purchasing power and an entity with an excess of monetary liabilities over monetary assets gains purchasing power to the extent the assets and liabilities are not linked to a price level.
True
In a period of inflation, an entity holding an excess of monetary assets over monetary liabilities loses purchasing power and an entity with an excess of monetary liabilities over monetary assets gains purchasing power to the extent the assets and liabilities are not linked to a price level. [IAS 29.27]
An entity should derecognize a financial asset when:
a. The contractual rights to the cash flows from the financial asset expire
b. It transfers substantially all the risks and rewards of ownership of the financial asset to another
party.
c. All of the above
c. All of the above
T/F: Any excess of the carrying amount of preference shares over the fair value of the consideration paid to settle them is added in calculating profit or loss attributable to ordinary equity holders of the parent entity.
False
Any excess of the carrying amount of preference shares over the fair value of the consideration paid to settle them is added in calculating profit or loss attributable to ordinary equity holders of the parent entity. [IAS 33.18]
Interim financial report means a financial report containing __________ for an interim period.
A) A complete set of financial statements
B) An adjusted set of financial statements
C) A set of condensed financial statements
D) A or C
D. A or C
Interim financial report means a financial report containing either a complete set of financial statements (as described in IAS 1 Presentation of Financial Statements) or a set of condensed financial statements (as described in this Standard) for an interim period. [IAS 34.4]
These WILL NOT be recognized in the financial statements.
It will ONLY be DISCLOSED.
When a _____ is disclosed, they will be assessed continually to determine whether there is a probable outflow of FEB. If this occurs, a provision is recognized.
Disclosure of Contingent Liability
The gain or loss on the net monetary position is __________.
a. Capitalized as part of the cost of the asset
b. Capitalised as part of the cost of the liability
c. Included in profit or loss
d. Included in other comprehensive income
e. A and B
c. Included in profit or loss
An entity should derecognise a financial liability when it is extinguished - ie, when the obligation specified in the contract is discharged or cancelled or expires.
It is possible for only part of a financial asset or liability to be derecognised. This is allowed if the part
comprises:
a. Only specifically identified cash flows;
b. Only a fully proportionate (pro rata) share of the total cash flows
c. All of the above
c. All of the above
When shall ordinary shares issued as a result of the conversion of a debt instrument to ordinary shares be included in the weighted average number of shares?
a. The date when cash is receivable
b. The date when dividends are reinvested
c. The date when interest ceases to accrue
d. A and B, or whatever comes first
c. The date when interest ceases to accrue
Ordinary shares issued as a result of the conversion of a debt instrument to ordinary shares are included from the date that interest ceases to accrue [IAS 33.21c]
Which of the following is true with regards to the disclosure of compliance with IFRSs provided in IAS 34?
A) If an entity’s interim financial report is not in compliance with IAS 34, that fact shall be disclosed
B) An interim financial report shall not be described as complying with IFRSs unless it complies with all the requirements of IAS 34
C) An interim financial report shall not be described as complying with IFRSs unless it complies with all the requirements of IFRSs
B) An interim financial report shall not be described as complying with IFRSs unless it complies with all the requirements of IAS 34
T/F: The PROCEEDS from disposal of an asset shall NOT be INCORPORATED into a provision by any circumstance.
True
Inflation is normally ignored in accounting due to the ______________________________________
a. stable monetary unit assumption
b. Philippine Accounting Standard 29
c. restatement procedures
a. stable monetary unit assumption
Use for equity investments
a. FAFVPL
b. FAFVOCI
c. FAAC
a. FAFVPL
Two presentation of earnings per share:
Basic and Diluted Earnings per share
For the following significant event / transaction disclosure is required as per IAS 34 on its interim period financial statements.
a. The reversal of any provisions for the costs of restructuring;
b. Acquisitions and disposals of items of property, plant and equipment;
c. Commitments for the purchase of property, plant and equipment;
d. For all above
d. For all above
T/F: Costs of restructuring can be recognized as a provision only if:
* It is directly associated with the restructuring.
* It is not associated with the ongoing activities of the entity.
True