File 7 CMKTQT (1)

Repairs and maintenance costs are normally:

• Recorded as deferred expenses

• Expensed in the profit or loss as incurred

• Capitalised

Happy Plc vacated an office building and let it out to a third party on 30 June 20X8. The building had an original cost of $800,000 on 1 January 20X0 and was being depreciated over 50 years. It was judged to have a fair value on 30 June 20X8 of $800,000. At the year end date of 31 December 20X8 the fair value of the building was estimated at $1.1 million. Happy Plc uses the fair value model for investment property. What amount will be shown in revaluation surplus at 31 December 20X8 in respect of this building?

• 136,000

• 144,000

• 444,000

• 0

Under IAS 36, reversal of impairment loss is allowed if

• The recoverable amount of the asset becomes higher than its carrying amount because of the 'unwinding' of the discount.

• The loss is related to acquired goodwill

• Either A or B

• Neither A nor B

The Huang Company has a non-current asset which had a carrying amount in the financial statements of $18,000 at 31 December 20X9. Its tax written down value (the tax base) at that date was $9,000. The tax rate is 30%. In accordance with IAS 12 Income taxes, what is the deferred tax balance in respect of this asset at 31 December 20X9?

• 2,700 asset

• 2,700 liability

• 900 asset

• 9,000 liability

According to IAS 36, an asset is impaired if:

• Its carrying amount equals the amount to be recovered through use (or sale) of the asset

• If it has been damaged

• Its carrying amount exceeds the amount to be recovered through use (or sale) of the asset

• The amount to be recovered through use (or sale) of the asset exceeds its carrying amount

A gain or loss arising from a change in the fair value of an investment property should be recognised in the revaluation surplus.

• True

• False

If a company builds an office building for its own use, it may account for the building at historical cost less accumulated depreciation and impairment losses, with depreciation and impairment losses recognised in profit or loss.

• True

• False

The personal transactions of the business owner that do not involve the business are not recorded in the books of accounts of the business. This relates to the concept of

• Business entity concept

• Accounting currency

• Accounting period

• Accrual basis

Should the fees paid to accountants to effect the combination be included in the consideration transferred in a business combination, according to IFRS 3 Business combinations?

• Yes

• No

Select the correct statement with regards to intragroup balances and transactions during consolidation:

• Intragroup balances and transactions must be eliminated

• Intragroup balances and transactions must be eliminated to the extent of non-controlling interest

• Intragroup balances and transactions must be eliminated in proportion to the percentage of effective ownership

• Intragroup balances and transactions do not have to be eliminated