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IAS & IFRS Standards Overview > Last Minute Revision > Flashcards

Last Minute Revision Flashcards

1
Q

When to recognise provision?

A

When it’s a contractual or legal obligation

> 50%

Can be measured reliably

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2
Q

Restructuring provision?

A

Detailed plan for restructuring

Communicated to interested aprties

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3
Q

What is a constructive obligation?

A

an obligation that arises from an entity’s actions where there is no formal agreement, but the entity has created a valid expectation in another party that it will discharge a duty

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4
Q

Goods in transit double entry?

A

Debit: inventory
Debit: Payables (CL)
Credit: receivable

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5
Q

What must be tested annually for impairment?

A

Indefinite life and assets not yet completion

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6
Q

What is only recognised as an asset in IAS 38?

A

Development coists

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7
Q

What can’t be included in a restructuring provision?

A

Training costs relating to an ongoing business

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8
Q

Events that affect going concern?

A

Are always adjusted

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9
Q

Is staff training a valid provision?

A

No

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10
Q

If another plant is acquired udring the year?

A

That plant is depreciated separately

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11
Q

Amount recognised for a valuation list in consolidation?

A

What it was at acquisition

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12
Q

How are performance obligations allocated to the transaction price?

A

Transaction price allocated to eachs eparate performance obligation with reference to standalone price

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13
Q

Significant financing component calculation in year 3 for $10000, offering interest-free credit for a three year period? Provision is 5%

A

10000 * 1/1.05^3 = 8638

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14
Q

If there is a technical support package for over two years?

A

Recognise revenue over two years, not when determining the transaction price

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15
Q

How is technical support package for over two years?

A

As deferred income split into current liability and non-current liability

Also recognise months used in revenue

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16
Q

Allocating revenue for a service support package over two years? (double entry)

A

Debit: Bank/receivable
Credit: Revenue
Credit: Deferred income

Current deferred income (what is due in 12 months)
Non-current (the remainder)

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17
Q

Gross profit in revenue?

A

Is deducted

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18
Q

Gross profit margin in agent vs principal?

A

Not relevant

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19
Q

When is the timing significant in the five step process for revenue?

A

In the revenue recognition stage

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20
Q

George Co had 400,000 $1 equity shares in issue on 1 April 20X5. On 1 October 20X5, it issued 60,000 shares at the market price. Profit for the year ended 31 March 20X6 was $57,000?

How is it time apportioned?

A

400000 * 6/12

460000 * 6/12

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21
Q

Is bonus issue prospective or retrospective?

A

Retrospective

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22
Q

When there’s a bonus issue?

A

Calculate for the whole year

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23
Q

Options calculation (dilutive)

A

Shares * exercise price/market price

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24
Q

How is carrying amonut of disposal treated?

A

The same as depreciation, but not time apportioned

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25
Q

How is held for sale asset recorded in SFP?

A

Lower of FVLCOD and carrying amount.

Impairment loss (difference between) debit COS. No depreciation once held for sale

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26
Q

DEPRECIATION AFTER IFRS 5?

A

NO

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27
Q

What happens after there’s an impairment?

A

Keep depreciating

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28
Q

Proceeds in SCF?

A

Always positive

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29
Q

Received in SCF?

A

Always positive

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30
Q

Paid in SCF?

A

Always negative

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31
Q

Bonus issue?

A

Added in the issue of shares working

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32
Q

Depreciation in cash flow

A

Positive

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33
Q

Investment income in cash flow

A

Negative

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34
Q

Interest expense in cash flow

A

Positive

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35
Q

Profit in operating expenses cash flow?

A

Negative

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36
Q

Loss in operating expenses cash flow?

A

Positive

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37
Q

Increase in current assets working capital in SCF?

A

Negative

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38
Q

Increase in current liabilities working capital in SCF?

A

Positive

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39
Q

Payment of lease liabilities working?

A

c/f - (b/f + RoU)

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40
Q

Dividend paid?

A

Financing and negative

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41
Q

When is cash in transit adjusted?

A

In receiver’s books assuming they’ve recorded the cash

Debit: Cash
Credit: Trade receivable

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42
Q

Next step for cash in transit adjustment?

A

Remove intra-company balances (receivables and payables)

Debit: Payables
Credit: Receivables

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43
Q

Inventory in transit?

A

Debit: Inventory
Credit: Payables

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44
Q

Treatment of associate in CSFP?

A

Investment in associate working

Group share of post-acq profits treated the same as subsidiary in RE working

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45
Q

Investment in associate?

A

Non-current asset (debit)

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46
Q

What happens with non-monetary item?

A

Not retranslated at reporting date

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47
Q

Forex loss treatment in SPL (monetary)

A

Debit Forex loss

Total amount at end:
Debit payable
Credit cash

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48
Q

Do non-monetary items have a Forex gain/loss?

A

No as they can’t be retranslated

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49
Q

Far value increase in non-monetary items (foreign exchange)

A

Credit OCI

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50
Q

If development expenditure criteria is met?

A

Must be recognised as an asset

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51
Q

Get selling price from the gross profit margin?

A

COS / gross profit margin

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52
Q

Calculate total revenue for multiple years?

A

Revenue in current year - revenue in previous years

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53
Q

Bill and hold arrangement double entry?

A

Debit: COS
Credit: Inventory

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54
Q

Consignment treatment?

A

Revenue and COS not recognised. Inventory remains in the books

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55
Q

When an entity is acting like an agent for the sale of products?

A

Does not recognise any inventory as there’s no legal ownership

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56
Q

Additional warranty treatment?

A

IFRS 15. Standard warranty is IAS 37

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57
Q

If repurchase price greater than or equal to selling price?

A

It is a financing arrangement

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58
Q

If repurchase price less than selling price

A

It is treated as a lease

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59
Q

3 types of repurchase agreement

A

Forward
Call
Put

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60
Q

What is a forward (repurchase)

A

Entity has an bligation to repurchase asset

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61
Q

What is a call option?

A

Entity has the right to repurchase the asset

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62
Q

What is a put option

A

Entity must repurchase the asset if requested to do so by the customer

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63
Q

Servicing standalone price for allocating to transaction price?

A

Multiply the years

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64
Q

Warranties that customers pay for separately?

A

Accounted for under IFRS 15

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65
Q

Contingent liability treatment

A

Not included in FS, disclosed in notes

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66
Q

Gain/loss on equity investments

A

Adjusted for in retained earnings

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67
Q

IFRS 5 profit on disposal treatment in consolidation?

A

Credit to RE

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68
Q

Dividend received?

A

Credit investment income

69
Q

Where is goodwill impairment concluded in consolidation?

A

Deducted from RE

70
Q

Goodwill on disposal calculation

A

Goodwill - amount of goodwill impaired

71
Q

Single entity disposal?

A

Proceeds - cost of investment (amount of consideration calculated in goodwill working)

72
Q

Gross profit margin of 20% for PURP?

A

What’s remaining * 20%

73
Q

Mark up on cost of 15% for PURP?

A

What’s remaining * 15/115

74
Q

Goods in transit double entry

A

Debit Inventory
Debit Payables (B)
Credit Trade receivable

75
Q

Dividends paid in consolidation?

A

Deducted in RE

76
Q

What must be done with deferred consideration?

A

Discount must be unwound

77
Q

Impairment of goodwill in CSPL?

A

Added in administrative expenses

78
Q

Share capital to be recorded in CSFP?

A

100% P

79
Q

Is investment in associate a non-current asset?

A

Yes

80
Q

Impairment in CSPL measurement?

A

Always at FV

81
Q

Cancel an intragroup loan?

A

Debit: Payable
Credit: Receivable

Debit: Group finance income
Credit: Group finance cost

82
Q

FV increase in contingent consideration

A

Debit: Current liability
Credit: RE

83
Q

Cash paid during the year in consideration? (not deferred)

A

Credit investment

84
Q

Development expenditure in SCF?

A

Negative

85
Q

FUCKING INTERNALLY GENERATED

A

Can’t be recognised as an intangible asset

86
Q

First payment due on commencement of the lease agreement (advance or arrears)

A

Means in advance

87
Q

Calculate overstatement/understatement in PFY for leases?

A

Total expense to profit or loss - annually in arrears

88
Q

What is included in total finance costs?

A

Cash interest, discount on issue, premium on redemption

89
Q

Opening deferred tax liability? (debit or credit)

A

Credit

90
Q

Are warranties included in cost of non-current assets?

A

No

91
Q

Reversing depreciation for a residual value of 20%?

A

Carrying amount / (1 - 20%)

92
Q

What must be the case for an investment property under IAS 40?

A

Must be reliably measured

93
Q

Unrealised profit 20% of cost price?

A

Mark up is needed

94
Q

Positive purchased goodwill treatment?

A

Test annually for impairment

95
Q

FV of identifiable net assets and consolidation?

A

Can be used for FV of NCI

96
Q

Cost of sales if margin is at 25%

A

75%

97
Q

Goodwill impairment at FV treatment for retaiend earnings

A

Goodwill * impairment & * RE percentage
(Is a debit)

98
Q

When should a company prepare a consolidated financial statement/

A

If it is a subsidiary

99
Q

What qualitative characteristic does separate presentation allow?

A

Comparability

100
Q

Criteria for an associate?

A

Significant influence, equity accounting

101
Q

When does goodwill arise?

A

Value of business as a whole > FV of net assets acquired

102
Q

What are examples of control a parent has in a potential subsidiary?

A

Power to direct relevant activities
Exposure or rights to variable returns
Ability to use power to affect the amount of returns

103
Q

Examples of power?

A

Voting rights
Rights relating to management personnel
Decision making rights in a management contract

104
Q

How are dividends paid on preference shares treated/

A

As a finance cost

105
Q

Does group share of profit in RE apply to associates and subsidiaries?

A

Yes

106
Q

Is impairment loss included in investment in associate working?

A

Yes

107
Q

Assets held for use under research and development?

A

Tangible non-current assets

108
Q

No goods in inventory?

A

Unrealised profit is not recognised

109
Q

Is an enhancing cost included in cash flows?

A

No

110
Q

What is meant by must be shown separately in the income statement?

A

MUST HAVE IT’S OWN LINE. NOT COMBINED WITH OTHER LINES

111
Q

Gross profit margin of 25% in servicing?

A

100/75

112
Q

Removing an accounting policy affects which characteristic?

A

Comparability

113
Q

Asset on disposal calculation?

A

Proceeds + carrying amount - original cost

114
Q

Where is a contingent liability recorded in consolidation?

A

In consolidation

115
Q

IS FUCKING PROFIT TIME APPORTIONED WHNE IT SAYS ACCRUED EVENLY?

A

YES

116
Q

Payable before commencement of lease? (arrears or advance)

A

In arrears

117
Q

Cumulative gain in FVTOCI?

A

Does not reclassify to SPL

118
Q

Dismantling cost?

A

Discount to PV

119
Q

A product, PeBo, held at another warehouse was measured at cost, $460,000, as at 31 March 20X7. In April 20X7, 70% of this inventory was sold for $280,000 on which Waxworks Co s’ sales staff earned a commission of 15% of the selling price.

Calcualte carrying value of inventory?

A

280000/70% - 15% commission

120
Q

Hold shares for trading (FVTPL or FVTOCI)?

A

FVTPL

121
Q

Election hadn’t been made (FVTPL or FVTOCI)?

A

FVTPL

122
Q

Election has been made (FVTPL or FVTOCI)?

A

FVTOCI

123
Q

How are assets measured in consolidation?

A

At historic cost

124
Q

Mark up cost on inventory of 30%?

A

Same as consolidation

Inventory amonut/130

125
Q

Settlement discounts and trade discounts in NRV?

A

Settlement discounts not included

Trade discounts are

126
Q

Comparability examples?

A

When an entity changes accounting policy and the disclosure of accounting policies

127
Q

Removal of disposal?

A

Allows company to repay debt

128
Q

Long-term investment (FVTOCI and FVTPL)?

A

FVTOCI

129
Q

Operating lease calculation?

A

Operating lease rental - cash back incentive received

130
Q

Convertible loan notes used?

A

Liability component * discount rate * post-tax added

131
Q

Ways to reverse impairment loss?

A

An impairment loss can only be reversed if change in estimate used to determine recoverable amount

132
Q

FVTOCI and amortised asset?

A

Intiial amount + transaction costs

133
Q

FVTPL asset?

A

Initial amonut

134
Q

Amortised liability?

A

Proceeds received - transaction costs

135
Q

Liability FVTPL?

A

Proceeds received

136
Q

Short-term investment (FVTPL)?

A

Held to trade

137
Q

Medium-term investment (FVTOCI)?

A

Expected to be held until maturity

138
Q

Lease liabiltiy initial measurement?

A

Penalty + fixed lease payments

139
Q

Restructuring provision?

A

Debit RE

140
Q

Bargain purchase?

A

Debit SPL
Credit RE

141
Q

FV gain in IP in consolidation?

A

Debit PPE
Credit RE

142
Q

In a restructuring provision?

A

Redundancy is recognised

143
Q

Tax base of a liability?

A

Carrying amount - deductible amount in the future

144
Q

New accounting policy for current year?

A

Apply new policy

145
Q

New accounting policy for comparative years?

A

Restate using new policy

146
Q

New accounting policy for earlier years?

A

Prior-year adjustment in retained earnings

147
Q

Cost of opening facility and cost of introducing new product/service?

A

Not included in IAS 16

148
Q

One asset revalued?

A

All assets in class must be revalued

149
Q

Goodwill arising as a result of business combination?

A

Recognised positive goodwill in group accounts

150
Q

Both parteis have to be committed for a contract to be carried out?

A

Yes

151
Q

When is discounting not required when recognising the transaction price?

A

When it is less than one year

152
Q

Non-cash consideration (determining transaction price)?

A

Measured at FV

153
Q

Variable consideration (determining transaction price)

A

The two most likely outcomes

154
Q

Deferred income recognition?

A

Debit Cash
Credit Deferred income

155
Q

What are dividends, interest debt, changes in value of investment in group accounts?

A

Variable returns

156
Q

Grant repayment?

A

An accounting estimate

157
Q

How are repayment of assets recognised?

A

Increasing the carrying amount of asset

Reducing the deferred income

158
Q

Testing of a product?

A

Is recognised as an asset

159
Q

Goodwill arising on consolidation treatment for impairment?

A

Impairment is tested annually

160
Q

Is substance always > legal form?

A

Yes

161
Q

How is contingent consideration measured?

A

At FV at acquisition date

162
Q

Internally generated intangible assets in consolidation?

A

Recognised as non-current assets

163
Q

Restructuring plan and future losses in consolidation?

A

Not recognised

164
Q

NCI at disposal calculation?

A

NCI at acquisition - % difference in net assets

165
Q

Goodwill impairment test?

A

Must be annual

166
Q

Future operating losses and provision

A

Not recognised for provision

167
Q

Self-insurance and provision?

A

Not recognised for provision

168
Q

Discontinued operationc riteria?

A

Separable
Distinguishable
Single coordinated plan

169
Q

Customer list unable to value?

A

Included in goodwill

IAS & IFRS Standards Overview (73 decks)

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