FR-IAS 2,13,41,8,16, 20, 40,23 & Framework (2024)

Which of the following is stated as an underlying assumption according to the IFRS Conceptual Framework for Financial Reporting?

• 1. Neutrality

• 1. Accruals

• 1. Relevance

• 1. Going concern

Identify, by clicking on the relevant box in the table below, whether each of the following statements regarding financial information is true or false.
(1) Faithful representation means that the legal form of a transaction must be reflected in financial statements, regardless of the economic substance
(2) Only items that can be depicted by a monetary amount can be recognised in the statement of financial position or statement of financial performance
(3) It may sometimes be necessary to exclude information that is relevant and reliable from financial statements because it is too difficult for some users to understand
(4) Information is material if it exceeds a quantitative threshold; any transaction that does not exceed that threshold does not need to be disclosed

• (1) True
  (2) False
  (3) True
  (4) False

• (1) True
  (2) False
  (3) False
  (4) False

• (1) False
  (2) True
  (3) False
  (4) False

• (1) True
  (2) False
  (3) True
  (4) True

The IFRS Conceptual Framework for Financial Reporting identifies qualitative characteristics of financial statements.

Which TWO of the following characteristics are fundamental qualitative characteristics according to the IFRS Conceptual Framework for Financial Reporting?

• 1. Relevance

• 1. Understandability

• 1. Faithful representation

• 1. Comparability

Which TWO of the following are required to meet the comparability characteristic of useful financial information?

• 1. Entities are required to disclose their accounting policies

• 1. Corresponding information is required to be provided in financial statements

• 1. Entities must use the same accounting policies from period to period

• 1. All assets within a class should be depreciated at the same rate

Under what conditions can borrowing costs be capitalised?

• 1. The borrowing costs are incurred for purchases of inventory items

• 1. The borrowing costs are directly attributable to the acquisition, construction, or production of a qualifying asset

• 1. The borrowing costs are directly attributable to the acquisition, construction, or production of routinely manufactured assets

• 1. The borrowing costs are incurred for purchases of property, plant and equipment

For which THREE of the following categories of funds used to construct a factory, that is a qualifying asset, can borrowing costs be capitalised?

• 1. Funds borrowed specifically to construct the factory

• 1. Funds borrowed in advance of expenditure on the factory

• 1. An overdraft used to help finance working capital

• 1. General borrowed funds used to finance the building of the factory

• 1. Funds borrowed that have been applied to the construction of a new office

QI is incurring expenditure on project 275 which meets the definition of a qualifying asset, in accordance with IAS 23 Borrowing Costs. The company has the following debt components:

1. (1) 6% $100,000 debt used specifically to finance project 274

2. (2) 7% $500,000 preference share capital

3. (3)10% $80,000 short-term loan

4. (4) 4% $200,000 convertible debt

What capitalisation rate would QI apply to expenditure incurred on project 275 (to one decimal place)?

• 6.4%

• 6.5%

• 6.3%

• 6.6%

Which of the following is investment property according to IAS 40 Investment Property?

• 1. An investment in land and or buildings other than leased property

• 1. A property owned and occupied by an entity for its own purposes

• 1. A property which is held to earn rentals or for capital appreciation

• 1. An investment in land and or buildings whether let to third parties or occupied by an entity within a group

In accordance with IAS 40 Investment Property, which TWO of the following are classified as investment property?

• 1. Property held for long-term capital appreciation

• 1. Owner-occupied property

• 1. Land held for an undetermined future use

• 1. Property occupied by employees

Which of the following is an investment property under IAS 40 Investment Property?

• 1. A building that is vacant but held to be rented to third parties

• 1. Property under construction on behalf of third parties

• 1. Property that is available for sale in the ordinary course of business

• 1. Owner-occupied property