Current assets and current liabilties

Question 1

Probability threshold

Answer 1

50% more likely than not that that the outcome is probable

Question 2

If the outcome is probable, what is the treatment?

Answer 2

It is not a contingency

It is a provision

Question 3

Under IFRS, a provision is

Answer 3

a liability that is uncertain in timing and amount

Question 4

How are financial assets measured under IFRS?

Answer 4

1. At amortized cost if the objective is

• to hold the asset to collect contractual cash flows
• terms have specific dates of payment

2. At election of FVTPL

Question 5

How are financial liabilities measured under IFRS?

Answer 5

2 methods:

1. at amortized cost using interest method
2. at election of FVTPL

Question 6

Short term obligations can be classified as non-current if

Answer 6

there is an agreement to refinance PRIOR to BS date