FAR Concepts IFRS

Question 1

IFRS Revaluation Model

Answer 1

IFRS–> individual fixed asset revalued, entire class of fixed assets to which that asset belongs must be revalued. Individual fixed assets cannot be revalued alone

Question 2

Impairment Loss Revaluations

Answer 2

Under IFRS, reversals of impairment losses are allowed increase would be booked to the CURRENT YEAR INCOME STATEMENT

*If Gain of 30 in OCI then impairment loss of 20, would be 20 loss in OCI and net 10 would go to AOCI

Question 3

Impairment Loss Revaluations

Answer 3

Under IFRS, reversals of impairment losses are allowed increase would be booked to the CURRENT YEAR INCOME STATEMENT

Question 4

IFRS Lease Classification

Answer 4

Sale Leaseback
1. Gain deferred if classified as finance lease

Operating Lease
1. Gain deferred if Sale Price GREATER FV

2. Sale Price EQUAL FV Gain recognized immediately
3. Sale Price LESS FV recognize immediately

GAAP
- Refer to 10%, 10-90, and 90% rule

Question 5

Inventory IFRS vs GAAP

Answer 5

IFRS
Cost
$18.00
Net realizable value
$25.00 ($30.00 selling price - $5.00 cost to sell)

GAAP
Market:
Net realizable value
$25.00
Replacement cost
$17.00
NRV - profit margin
$17.50 [$25.00 - ($30.00 x 25%)] KEY !!