IAS & IFRS

Question 1

Related party transaction IAS number ?

Answer 1

IAS 24

Question 2

What is IAS 24 related party disclosure objective?

Answer 2

To ensure that the FS contain the correct disclosure relating to related party transactions to draw the attention to the users that could affect the profit and loss as a result of the these transactions

Question 3

IAS 24 - related parties - what does this define as?

Answer 3

A transfer from a related party regardless if a price has been charged

Question 4

IAS 24 - for a person to have significant control, what share holding must they have?

Answer 4

20 - 50 %

Question 5

IAS 24 - Related party of an entity - what three are the types?

Answer 5

Members of group, joint venture and associates post employment benefit plan

Question 6

IAS 24 - Related parties - what requirement of disclosures?

Answer 6

Name of entity, nature if transaction, amount of transaction, outstanding balance and any possible write offs

Question 7

IFRS 15 and definition?

Answer 7

Revenue from contracts with customers - help to assist in when revenue is recognised

Question 8

IAS 16 Definition?

Answer 8

PPE are tangible items that are held by an entity for the production or the supply of goods or services that are expected to be used for more than one year

Question 9

IAS 16 - what is the measure at recognition?

Answer 9

Two conditions should be met: 1) probable future economic benefits will flow to the entity 2) the cost of the item can be measure reliable

Question 10

IAS 23 + definition

Answer 10

Borrowing costs - capitalisation of finance costs including interest are required on any qualifying asset

Question 11

IFRS 13 + definition?

Answer 11

Fair value measurement - defined as fair value as the price that would be received or paid in the market at the measurement date

Question 12

IFRS 13 - Fair value - where does the excess dep’n go on revaluated amounts?

Answer 12

transferred to the revaluation surplus - reserve is optional

Question 13

IAS 38 + definition?

Answer 13

Intangible assets - identifiable non current asset without physical substance

Question 14

IAS 38 - what two criteras for intangibles to be recognised?

Answer 14

Probable that the entity will receive proable future economic benefits from the asset and the cost can be measured reliably

Question 15

IAS 38 - what is the measurement after recognition?

Answer 15

Cost model or revaluation module - revaluation module can only be used in an active market

Question 16

IAS 38 - what is the residual value normally and when does amortisation being?

Answer 16

Zero and when the asset is available for use

Question 17

IAS 38 - what is the purpose of an indefinite useful life?

Answer 17

No foreseeable limit to a period which the asset is expected to generate net cash flow

Question 18

IAS 38 - When an asset has a indefinite life what should you do?

Answer 18

Test annually for impairment

Question 19

IAS 40 and definition ?

Answer 19

Investment property which should be measured at cost and then depreciated or revalued under revaluation

Question 20

IAS 40 - what happens when a company changes the use from investment to a commercial property?

Answer 20

New cost of the property taken at the fair value at the date of the use and then depreciated under PPE

Question 21

IAS 40 - what happens when a commercial property becomes a investment property?

Answer 21

Carry value compared to the fair value and any differences are put between the revaluation surplus

Question 22

IAS 36 and definition?

Answer 22

Impairment of assets, and entity should assess whether there have been any indications that an asset may be impaired

Question 23

IFRS 12 - and definition?

Answer 23

Disclosure of interest in other entities - requires the company to disclose the interest held in other entities

Question 24

Definition of business ?

Answer 24

An integrated set of activities and assets that are capable to be managed for purpose of goods and services to generate investment

Question 25

What three elements makes up a business?

Answer 25

Inputs - economic resources / processes - systems, standards / outputs - goods and services to customers

Question 26

What is the two stage process for whether this is a acquisition of a business ?

Answer 26

1) is all the funds for identifiable assets = acq of assets / 2) does it have inputs, processes to create outputs = yes - acq of business

Question 27

What is IAS 21

Answer 27

Effect if change in foreign exchange rate differences

Question 28

IAS 21 - what is the definition of functional currency ?

Answer 28

Currency of the primary environment which the entity operates in, taking into account currency if sales price, currency of operating costs and currency of operating costs

Question 29

IAS 21 - foreign currency - functional currency of a foreign subsidiary, what to consider?

Answer 29

Activities that are carried out as an extension of a reporting entity and whether the transactions of the parent represent proportion of the subs activities

Question 30

IAS 21 - what does functional currency represent?

Answer 30

Measurement of the currency financially, such as in the financial statements

Question 31

IAS 21 - what is the rate used for p&l and assets and liabilities?

Answer 31

P&l @ average and asset and liabilities at year end closing rate

Question 32

IAS 21 - How is goodwill calculated at acq?

Answer 32

You will calc at the sub functional currency (local currency)

Question 33

IAS 21- Foreign currency - what are the principles of functional currency?

Answer 33

Not dependant on the group for finance / influence operating costs / currency of which sales prices are set / operating cash balances

Question 34

Under IAS 21 - when disposal of a foreign operation, what happens to the exchange rate differences ?

Answer 34

These are reclassified through the profit and loss from the OCI