question 1-100

Panda plc has an administration building which it no longer needs. On 1 July 20X9 Panda plc entered into an agreement to lease the building out to another company. The building cost $500,000 on 1 January 20X0 and is being depreciated over 50 years, based on the IAS 16 cost model. Panda plc applies the fair value model under IAS 40 Investment property and the fair value of the building was judged to be $450,000 on 1 July 20X9. This valuation had not changed at 31 December 20X9. What is the amount of the revaluation surplus that will be recognised in respect of the building?

• 35,000

• 45000

• 55000

• 65000

An entity shall not recognise a contingent liability __________.

• • Unless an entity has a present liability as a result of a past event

• • Unless it is probable that an outflow of resources embodying economic benefits will be required to settle this liability

• Unless a reliable estimate can be made of the amount of this liability

• None of the above

Using the definitions in the IASB Conceptual Framework for Financial Reporting, which two of the following are examples of 'expenses'?

• A decrease in economic benefits during the accounting period

• A decrease in equity arising from a distribution to equity participants

• • A reduction in income for the accounting period

• • A loss on the disposal of a non-current asset

Which ONE of the following statements best describes the term 'going concern'?

• • When current liabilities of an entity exceed current assets

• The ability of the entity to continue in operation for the foreseeable future

• • The potential to contribute to the flow of cash and cash equivalents to the entity

• • The expenses of an entity exceed its income

Which of the following is not an example of directly attributable costs according to IAS 16?

• • Costs of employee benefits arising directly from the construction or acquisition of the item of property, plant and equipment

• Costs of site preparation

• • Costs of conducting business in a new location or with a new class of customer

• • Initial delivery and handling costs

• Professional fees

According to IAS 36, value-in-use is

• The amount at which an asset is recognized in the statement of financial position

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

• The higher of an asset’s fair value less cost to sell and its market value.

• The market value.

Deferred tax assets are the amount of income taxes recoverable in future periods in respect of:

• • Permanent differences

• Taxable temporary differences

• • Deductible temporary differences

Which ONE of the following terms best describes the amount of cash or cash equivalents that could currently be obtained by selling an asset in an orderly disposal?

• Fair value

• Realisable value

• • Residual value

• • Value in use

The closing inventory of Jaycoon Ltd amounted to £203,000 at cost at year end of 30 September 20X4. This total figure includes the following items: (1) 600 items which had cost £25 each. These items were found defective and remedial work in October 20X4 cost £5 per item. They were sold in October 20X4 for £35 with total selling expenses of £600. (2) 1,000 items which had cost £20 each and normally sold for £30. These items were found damaged and will require rectification work costing £10 per unit before they can be sold. Selling expenses are £1 per item. What amount should be shown in the Jaycoon Ltd’s statement of financial position for inventory at 30 September 20X4?

• • £199,000

• £203,000

• £202,000

• • £200,000

The existence of which of the following in the entity’s internal reporting does indicate that an asset may be impaired?

• • Cash flows for acquiring the asset, or subsequent cash needs for operating or maintaining it, that are significantly lower than those originally budgeted

• • Actual net cash flows or operating profit or loss flowing from the asset that are significantly worse than those budgeted

• A significant decline in budgeted net cash flows or operating profit, or a significant increase in budgeted loss, flowing from the asset

• • A and B

• • B and C