Intro to SFA

Front

What is the key determinant of whether client money is recognized as an asset?

Back

The contractual terms and control over the funds

Front

According to MFRS 132, client money is classified as a financial asset if:

Back

It has potential economic benefits and is controlled by the entity

Front

Which of the following is NOT an example of an entity holding client money?

• A law firm managing trust accounts
• A restaurant collecting payments for food
• A stockbroker holding funds for client transactions
• An insurance broker holding policyholder premiums

Back

A restaurant collecting payments for food

Front

When client money is held in a trust account and cannot be used by the entity, it should:

Back

Not be recognized as an asset

Front

What is the purpose of disclosing restricted cash separately in financial statements?

Back

To provide transparency about funds not available for general use

Front

Why does a bank recognize both an asset and a liability when it holds client deposits?

Back

The bank controls the cash and has an obligation to the clients

Front

What is a key disclosure requirement under MFRS 101 related to client money?

Back

The judgments made in recognizing or not recognizing client money

Front

If an entity benefits from interest income on client money, this indicates:

Back

The money should be recognized as an asset

Front

Why might a futures broker recognize client money as an asset?

Back

The funds are commingled with the broker's money

Front

What factor affects whether a lawyer's client money is recognized as an asset?

Back

Whether the lawyer controls the funds