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WorksheetsPFRS 6, 5 and PAS 37
Total questions: 10
Worksheet time: 3mins
the search for mineral
resources after the entity has obtained legal rights to explore in a specific area as well as the
determination of the technical feasibility and commercial viability of extracting the mineral
resources.
exploration and evaluation of mineral resources
mining and extraction of natural resources
exploration and mining of essential resources
mining and evaluation of natural resources
exploration and evaluation expenditures is defined as
expenditures incurred by an entity in connection with the exploration and evaluation of
mineral resources before the technical feasibility and commercial viability of extracting a
mineral resource
expenditures incurred by an entity in connection with the exploration and evaluation of
mineral resources after the technical feasibility and commercial viability of extracting a
mineral resource
expenditures incurred by an entity in connection with legal acquisition of mining rights
expenditures incurred by an entity in connection with the extraction of
mineral resources when geodetic engineers determine the commercial viability of a mineral site
An entity shall classify a non-current asset (or disposal group) as held for sale if its carrying
amount __________ .
will be recovered principally through a sale transaction rather than through continuing
use
will be recovered principally through continuing
use.
will be recovered principally through a sale transaction and through continuing
use.
will be recovered principally through temporary suspension of the active use of the asset.
An entity shall measure a non-current asset (or disposal group) classified as held for sale at the ________ .
lower of its carrying amount and fair value less costs to sell
higher of its carrying amount and fair value less costs to sell
lower of its carrying amount and value in use
higher of its carrying amount and net realizable value
a liability of uncertain timing or amount
provision
contingent liabilities
Legal liabilities
Constructive Obligation
possible obligation that arises from past events and whose existence will be confirmed
only by the occurrence or non‑occurrence of one or more uncertain future events not
wholly within the control of the entity
provision
contingent liabilities
contingent asset
constructive liabilities
Provisions are recognized when the following are present, except
a present obligation has arisen as a result of a past event
an outflow of economic benefit to settle the obligation is probable
the amount of the obligation can be estimated reliably
a probable inflow of economic benefit will flow to the entity
What is the correct accounting for Contingent Liabilities?
An entity shall not recognise a contingent liability
A contingent liability is disclosed unless the possibility of an outflow of resources embodying
economic benefits is probable
It should not be recognised but should be disclosed where an inflow of
economic benefits is probable.
Contingent liabilities are not recognised in financial statements since
this may result in the recognition of income that may never be realised
The amount recognised as a provision should be the _____ of the expenditure required
to settle the present obligation at the financial reporting date, that is, the amount that an entity
would rationally pay to settle the obligation at the end of the financial reporting period or to
transfer it to a third party.
best estimate
exact amount
present value
revalued amount
Where the provision being measured involves a large population of items, the obligation is
estimated by weighting all possible outcomes by their associated probabilities. The name for
this statistical method of estimation is ‘computed value’.
TRUE
FALSE
