VACPA QUIZ

Quiz 1

•Entity X, an electronics manufacturer, has an arrangement with Retailer Y to sell televisions. Retailer Y requests for Entity X to sell televisions through them and arrange for the shipping.

•The contract states that legal the title and risk of loss passes to Retailer Y when the televisions are picked up by the carrier at Entity X's shipping dock.

•Entity X is precluded from selling the televisions to another retailer (for example, by redirecting the shipment) once the televisions are picked up by the carrier at Entity X's shipping dock.

•Retailer Y concludes that it obtains control of the televisions when they are shipped.

How many performance obligations are included in the bundled package offered by Entity X?

• A. One

• B. Two

• C. Three

Quiz 2

Entity C is a freight railway entity that enters into a contract with a shipper to transport goods from location A to location B for C1,000. The shipper has an unconditional obligation to pay for the service when the goods reach location B.

When should entity C recognise revenue from this contract?

• A. Point in time

• B. Over time

• C. Both A and B

IAS 36

Quiz 1

Which of the following assets does IAS 36 apply to?

• (A) Assets held for sales

• (B) Work in process

• (C) Financial assets

• (D)Property, plant, and equipment

IAS 36

Quiz 2

Value in use:

• (A)The higher of an assets fair value less cost to sell and its market value. Intangible assets

• (B) The discounted present value of future cash flows arising from use of the asset and from its disposal

• (C)Carrying amount

• (D)Realisable value

IAS 36

Quiz 3

If the fair value less costs to sell cannot be determined then:

• (A)The recoverable amount is the value in use

• (B)The carrying value of the asset is used

• (C)The asset is not impaired

• (D)The replacement cost is used

IFRS 16

Quiz 1

•A company enters into a contract with a warehouse owner to use space to keep goods for a three-year period.

•The contract states the exact amount of space and that the space must be located in a specific area.

•The warehouse owner can change the location at any time; minimal costs to warehouse owner are associated with doing so.

Do the contract contain a lease?

Quiz 2

Lessee A leases a building from Landlord B. The lease is for a 10-year period, with LesseeA’s option to extend for another  5 years. At the lease commencement date, Leasee A is not reasonably certain to exercise the extension option ⇒ lease term = 10  years.

How frequently should Lessee A reassess its reasonable certainty to exercise the extension option and accordingly the  lease term?

• A. At each reporting date

• B. Only upon the occurrence of a significant event or change in circumstances

Quiz 2

Should a ROUA be always tested for impairment as part of the CGU that it belongs to?

• A. Yes, because  a ROUA is unable to generate cash flows  independently of other assets (e.g. plant and  machineries)

• B. No, a ROUA asset should be tested on a standalone  basis because it is able to generate independent cash flows

• C. Depends