IFRS

Explain the core principle of revenue recognition under IFRS.

• Recognize revenue only when the product is delivered

• Recognize revenue when it is probable that economic benefits will flow to the entity and these benefits can be reliably measured.

• Recognize revenue when the company needs cash flow

• Recognize revenue based on the company's budget projections

What are the two main categories of financial instruments under IFRS?

• Tangible assets and intangible assets

• Current assets and non-current assets

• Financial assets and financial liabilities

• Operating assets and non-operating assets

Describe the acquisition method used in business combinations under IFRS.

• The acquisition method under IFRS does not require recognizing goodwill

• The acquisition method involves recognizing liabilities only

• The acquisition method in business combinations under IFRS involves identifying the acquirer, determining the acquisition date, recognizing and measuring the identifiable assets acquired, liabilities assumed, and any non-controlling interest, and recognizing goodwill or gain from a bargain purchase.

• The acquisition method does not involve identifying the acquirer

How is fair value defined in the context of fair value measurement under IFRS?

• Value based on historical cost

• Value based on competitor's pricing

• Value based on management's estimate

• Price received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

What are the criteria for recognizing revenue from the sale of goods under IFRS?

• Transfer of risks and rewards, no managerial involvement, reliable measurement, and probable economic benefits.

• Managerial involvement required

• Transfer of risks only

• Unreliable measurement

What is the difference between amortized cost and fair value through profit or loss for financial instruments under IFRS?

• Amortized cost is based on historical cost adjusted for amortization, while fair value through profit or loss reflects changes in fair value in the profit or loss statement.

• Amortized cost is used for short-term investments, while fair value through profit or loss is used for long-term investments

• Amortized cost reflects changes in fair value, while fair value through profit or loss is adjusted for amortization

• Amortized cost is based on market value, while fair value through profit or loss is based on historical cost

What are the steps involved in the purchase method of accounting for business combinations under IFRS?

• Exclude presenting and disclosing in financial statements

• Skip determining acquisition date

• Identify acquirer, Determine acquisition date, Recognize and measure identifiable assets and liabilities, Recognize and measure goodwill or gain, Present and disclose in financial statements

• Identify seller instead of acquirer

How is the fair value of an asset or liability determined under IFRS?

• Fair value is determined based on historical cost

• Fair value is determined based on random selection

• Fair value is determined based on market prices or valuation techniques if market prices are not available.

• Fair value is determined based on personal opinion

What is the impact of the point of transfer on revenue recognition under IFRS?

• Revenue is recognized when the payment is received

• Revenue is recognized when the goods are produced

• The impact of the point of transfer on revenue recognition under IFRS is that revenue is recognized when control of goods or services is passed to the customer.

• Revenue is recognized when the customer places an order

Explain the concept of impairment in relation to financial instruments under IFRS.

• Impairment is the recognition of an increase in the value of an asset under IFRS

• Impairment in relation to financial instruments under IFRS is the recognition of a decrease in the value of an asset when its carrying amount exceeds its recoverable amount, leading to an impairment loss on the balance sheet.

• Impairment losses are not reflected on the balance sheet under IFRS

• Impairment in financial instruments is only applicable to tangible assets