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?

Under IAS 36, reversal of impairment loss is allowed if

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?

According to IAS 36, an asset is impaired if:

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

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.

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

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?

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

According to IAS 38 Intangible assets, intangible assets with a finite useful life should be measured at cost and tested annually for impairment.

Doogie Plc’s draft net profit for the year ended 31 December 20X4 was £67,890 before recording the depreciation charge on a new machine. Doogie Plc acquired this machine on 1 October 20X4 for £50,000. Doogie Plc planned to depreciate this new machine monthly on the straight-line basis over four years to its residual value of £2,000. What is Doogie Plc’s net profit for the year ended 31 December 20X4 after charging depreciation on the machine?

According to IAS 36, goodwill should be tested for impairment

At the commencement date, a lessee shall measure the lease liability at the future value of the lease payments that are paid at that date.

Oysle Ltd is preparing its trial balance for the year ended 30 September 20X8. Total purchases in the period were £490,850. Opening inventories were valued at £29,980 and closing inventories were valued at £28,730. Which amount should appear as the cost of sales in the trial balance?

An entity shall account for each business combination by applying the equity method.

An entity shall apply IFRS 16 to all leases, except leases of right-of-use assets in a sublease.

On 1 April 20X1, Cake plc acquired a property for £500,000. This property is depreciated on the straight-line basis over 25 years to its residual value of £50,000. On 31 March 20X6, Cake plc performed an impairment review and determined that the property had a fair value less disposal costs of £380,000 and a value in use of £370,000. What is the impairment loss in respect of the property as at 31 March 20X6?

According to IAS 38 Intangible assets, intangible assets cannot be treated as having an indefinite useful life.

According to IAS 36, costs of disposal are:

The cost of goods manufactured by an entity cannot include overhead costs.

In a period of rising prices, applying the FIFO method in measuring cost of inventories would result in a lower gross profit figure than the AVCO method.

Under IFRS 16 Leases, which two of the following dates are used to identify the inception of a lease?

Under IAS 36 Impairment of assets are the following statements relating to an active market true or false? 1. Willing buyers and sellers are usually found. 2. Prices are available to the public.

Under IAS 36 Impairment of assets is the following statement relating to an active market true or false? 'Prices are available to the public.'

TheMarkab Company has acquired a trademark relating to the introduction of a new
manufacturing process. The costs incurred were as follows:
According to IAS38 Intangible assets, what is the total cost that should be capitalised as
an intangible non-current asset in respect of the new process?

According to IAS 12 Income taxes, 'The tax base for a machine for tax purposes is greater than the carrying amount in the financial statements up to the end of the reporting period. This will give rise to a deferred tax asset.'

Which of the following shall a lessee recognise in profit or loss after the commencement date?

The information includes everything necessary to reflect what happened for all of the business activities for which the firm is reporting.

TheGrandCompany placed an order with TheLittle Company for new specialist
machinery. Theorder was non-cancellable once signed and Grand agreedto pay for
the machinery at the time the order was signed on1February 20X9.Little held the
machinery to Grand's order from 1June 20X9,the date onwhich it was completed.
Grand commencedusingthe machinery on1August20X9when Little completed
the installation process.Little had staff onstandby to deal with any operating
problems until the warranty period ended on1November 20X9.Under IFRS 15
Revenue from contracts with customers,Little should recognise the revenue from
the sale of this specialist machinery on:

According to IAS 12 Income taxes, where accumulated depreciation on an asset is greater than accumulated tax depreciation, the amount should be classified under deductible temporary differences.

The financial statements of the Farren Company for the year ended 31 December 20X8 included a provision for restructuring of £7 million and an environmental provision of £3 million. At 31 December 20X9, the environmental provision was no longer required and £2 million of the restructuring provision was no longer required. Under IAS 37, the environmental provision is to be written back to profit or loss.

Geek is developing a new product and expects to be able to capitalise the costs. Which one of the following would preclude capitalisation of the costs?

Which one of the following would be recognised as an investment property under IAS 40 in the consolidated financial statements of Buildco?

Thefinancial statements of the Farren Company for the year ended 31 December 20X8
included a provision for restructuring of £7 million. At 31 December 20X9, £2 million of
the restructuring provision was no longer required. An additional provision of £2 million
was needed for legal claims against the company. Under IAS37, £2 million of the
restructuring provision no longer required is to be re-allocated to cover the legal claims.

Which TWO of the following are listed in the IASB Framework as enhancing qualitative characteristics regarding financial statements?

Spring Cospent $25,000 on a patent for the new technique on 30 March 20X7. The
company capitalized it as an intangible asset in the financial statements.
Spring Coexpected to use the patent for 5 years.
According to IAS38, which one of the following journal entry is correct to record the
amount of the patent amortized for the year ended 30 March 20X7?

The Chadwick Company sells electrical goods covered by a one-year warranty for any
defects.
Of sales of CU70million for the year, the company estimates that 3%will have major
defects, 5%will have minor defects and 92%will have no defects.
Thecost of repairs would be CU5million if all the products sold had major defects and
CU3million if all had minor defects.
What amount should Chadwick recognise as a warranty provision?

According to IFRS 15, Revenue from contracts with customers, an entity should disclose which TWO of the following?

Are the following statements true or false, according to IAS 38 Intangible assets?

1. Expenditure during the research phase of a project may sometimes be capitalised as an intangible asset.

2. Expenditure during the development phase of a project may sometimes be capitalised as an intangible asset.

According to IAS 2 Inventories, maintenance expenses for an item of equipment used in the manufacturing process should be included in the cost of inventories.

Are the following statements true or false, according to IAS2 Inventories?
1. Cost of factory management should be included in the cost of inventories.
2. Maintenance expenses for an item of equipment used in the manufacturing process
should be included in the cost of inventories

According to IAS38 Intangible assets, expenditure during the development phase of a
project may sometimes be capitalised as an intangible asset.

Under IAS 16,usingthe cost model,the asset in accountedfor at:

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?

When allocating an impairment loss, such a loss should reduce the carrying amount of which asset first?

Which of the following does not define an 'asset'?

M Cosets up his demolition business from scratch on 1 January20X0. Which items should
be represented as capital expenditure

UggyCoentered into a 4-year lease agreement on 1 January20X5. The agreement meets
the definition of a lease in accordance with IFRS16. An initial payment of $150,000 was
made on 1 January20X5 followed by three annual payments on 1 Januaryof $110,000
each. Therate implicit in the lease is 10%. UggyCoincurred initial direct costs of $20,000
to set up the lease
What is the carrying amount of the lease liability at 31 December 20X6?

According to IAS 37 Provisions, contingent liabilities and contingent assets, a present obligation that arises from past events but cannot be reliably measured is a contingent liability.

Specific identification method, first in-first out (FIFO) and average cost (AVCO) are inventory valuation methods. Which of the following statements is correct?

Which of the following is not included as part of the definition of control under IFRS 10 Consolidated Financial Statements?

According to IAS 02 - Inventories, which of the following should be included in the cost of an inventory?

Are the following statements in relation to a contingent liability true or false, according to IAS 37 Provisions, contingent liabilities and contingent assets? 1. An obligation as a result of the entity creating a valid expectation that it will discharge its responsibilities is a contingent liability. 2. A present obligation that arises from past events but cannot be reliably measured is a contingent liability.

According to IAS 2 Inventories, which TWO of the following should be accounted for in the cost of an inventory item?

According to IAS 37 Provisions, contingent liabilities and contingent assets, an obligation as a result of the entity creating a valid expectation that it will discharge its responsibilities is a contingent liability.

Which of the following shall be accounted in accordance with IAS 38?

On 1 April 20X0, Slow and Steady Co held non-current assets that cost $312,000 and had accumulated depreciation of $66,000 at this date. During the year ended 31 March 20X1, Slow and Steady Co disposed of non-current assets which had originally cost $28,000 and had a carrying amount of $11,200. Slow and Steady Co's policy is to charge depreciation of 40% on the reducing balance basis, with no depreciation charged in the year of disposal. What is the depreciation charge to the statement of profit or loss for the year ended 31 March 20X1?

Muse plc begins trading on 1 January 20X8 and has zero inventories at that date. During 20X8 it makes purchases of £45,500, incurs carriage inwards of £2,400, and carriage outwards of £2,900. Closing inventories at 31 December 20X8 are valued at £5,200. In the statement of profit or loss for the year ended 31 December 20X8 the cost of sales figure is:

The Hook Company entered into two new lease arrangements on 1 January 20X9: 1. A lease of a large piece of plant with an 18 month term, so that there were only six months left to run by the year end of 31 December 20X9. 2. A lease of a colour printer for the Chief Executive's office. Which of the leases would qualify for a recognition exemption under IFRS 16 Leases?

Which one of the following is not required to be disclosed in a lessee's financial statements in relation to its leases, to comply with the requirements of IFRS 16 Leases?

An entity should treat any difference between the measurement of an IAS 16 property and the measurement of an IAS 40 Investment Property at the date of transfer as an expense to the profit or loss.

According to IFRS 16 Leases, any initial direct costs incurred by a lessee are added to the amount of the asset recognised in the statement of financial position.

Whether the following statement is TRUE or FALSE in accordance with IAS 40 Investment Property? An investment property is initially measured at cost, including transaction costs.

Under IFRS 15 Revenue from contracts with customers, which of the following is not given as a method that can be used to establish the standalone selling price of the separate performance obligations in a contract?

Under IAS 36 Impairment of assets, which one of the following statements best describes 'value in use'?

IAS 36 applies to which of the following assets?

According to IAS 38 Intangible assets, expenditure during the research phase of a project may sometimes be capitalised as an intangible asset.

The lease payments shall be discounted using__________, if that rate can be readily determined.

According to IAS 36, value-in-use is

According to IAS 36, if the fair value less costs to sell cannot be determined

According to IAS 2 Inventories, cost of factory management should be included in the cost of inventories.

A company sells goods with a warranty for the cost of repairs required in the first 2 months after purchase. Past experiences suggest: 88% of the goods sold will have no defects, 7% will have minor defects, 5% will have major defects. If minor defects were detected in all products sold, the cost of repairs will be £24,000; if major defects were detected in all products sold, the cost would be £200,000. What amount of provision should be made?

Once recognized, intangible assets can be carried at

Are the following statements true or false, according to IAS 38 Intangible assets?

1. Intangible assets cannot be treated as having an indefinite useful life.

2. Intangible assets with a finite useful life should be measured at cost and tested annually for impairment.

According to IAS 40, transfer to or from investment property should only be made when there is a change in their use.

An investment property shall be measured initially at its__________.

Custom duties are included in the cost of inventories.

Under IFRS 3, the acquirer’s application of the recognition principle and conditions may result in recognising some assets and liabilities that the acquiree had not previously recognised as assets and liabilities in its financial statements.

In cases of conflict, the requirements of the Framework prevail over those of the relevant IFRS.

The Conceptual Framework normally prevails over International Financial Reporting Standards where there is a conflict between the two. Is this statement true or false?

Which of the following statements about IAS 2 Inventories are correct?

According to IAS2 Inventories, which one of the following lists consists only of items which may be included in the cost of inventories?

According to IFRS15, which one of the following criteria must be satisfied before revenue from the sale of goods should be recognised in profit or loss?

TheHogbean Company is a construction company that has the following costs on its
contracts:
1)Project managers' costs
2) Purchase of supplies for construction work
3) Payments to subcontractors.
According to IFRS15 Revenue from contracts with customers, which costs may be included within contract costs?

Which of the following disclosures is not required by IAS38?

If an investmentproperty is held at fair value, this must be applied to all of the
entity's investment properties

According to IFRS15 Revenue from contracts with customers, which of the following factors is not taken into account when establishing the transaction price of a contract?

Inventory should be valued at the lowest of cost, net realisable value and
replacement cost

IAS 16applies to bearer plants but it doesnot apply to the produce onbearer
plants

IFRS15 allows the recognition of revenue through the duration of a contract for services if
it has been demonstrated that the performance obligation is met over time

According to IAS12 Income taxes, deferred tax liabilities are the amounts of income taxes
payable in future periods in respect of taxable temporary differences

According to IAS12 Income taxes, interest expense accrued but included in taxable profit
on a cash basis should be classified under deductible temporary differences

In a period of rising prices, applying the FIFOmethod in determining cost of inventories
would result in a lower cost of sales and higher closing inventory than the AVCOmethod

Are the following statements regarding the classification of items under IAS12 Income taxes true or false?

1. Interest expense accrued but included in taxable profit on a cash basis should be classified under deductible temporary differences.

2. Where accumulated depreciation on an asset is greater than accumulated tax depreciation, the amount should be classified under deductible temporary differences.

What will be the appropriate accounting treatment to unsold goods held at the year end?

Which ONE of the following terms best describes information in financial statements that is neutral?

Atruck held for resale should be considered asa non-current asset in the statement of
financial position

An entity shall not recognise a contingent liability__________.

A contingent liability is not recognised in the statement of financial position.

No disclosure of a contingent liability is required if the possibility of a transfer of
economic benefits arising is remote.

Under the principles of IAS 16 Property, plant and equipment, which TWO of the followings should be included in the cost of an item of property, plant and equipment?

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

A company's financial statements must disclose the accounting policies used in measuring inventories.

Whether the following statement is TRUE or FALSE in accordance with IAS 40 Investment Property? Transfer from investment property to an IAS 16 property must be made at the FV of the IP at the date of the transfer.

LIFO can be applied to measure cost of inventories.

If the closing inventory is understated, then the current year's profit will be understated and next year's profit will be overstated.

Which one of the following terms best describes the removal of an asset from an entity’s statement of financial position?

When an item is revalued, any accumulated depreciation at the date of the revaluation is treated in which of the following ways:

According to IFRS 15 Revenue from contracts, which TWO of the following are indicators that a performance obligation is satisfied over time rather than at a point in time?

Which of the following shall a lessee classify in the statement of cash flows?

According to IAS 16 Property, plant and equipment, the cost includes cash equivalents paid to acquire an asset.

Candy Plc received an invoice on 31 March 20X9 for maintenance work done on one of its machines. £21,000 of the cost is actually for a machine upgrade, which will improve the machine’s efficiency. However, the accountant charged the whole amount of the invoice to maintenance costs. This machine is depreciated at 20% per annum on a straight-line basis, with a proportional charge in the years of acquisition and disposal. Which amount will be understated in respect of Candy Plc’s profit for the year ended at 30 June 20X9?

Under IFRS 3, at the acquisition date, the acquirer shall ________ the identifiable assets acquired and liabilities assumed as necessary to apply other IFRSs subsequently.

A non-erous contract is a contract in which ________ of meeting the obligations under the contract ________ the economic benefits expected to be received under it.

Which of the following statements is true with regards to an investment property?

ThePlaice Company acquired a new filing machine, the list price of which was $49,000.
Thesupplier allowed a trade discount of $1,700 off the list price. On delivery, the cost of
installing the machine in its desired location was $450. According to IAS16 Property,
plant and equipment, at what cost should the filing machine be measured in the financial
statements of Plaice?

Which of the following does not define investment property?