Other Reporting Issues

Question 1

What is IAS 20?

Answer 1

Accounting for Government Grants and Disclosure of Government Assistance

Question 2

When should a company recognise a grant?

Answer 2

When there is reasonable assurance that it will comply with the conditions attaching a grant and that the grant will be received

Question 3

What are the two types of grant?

Answer 3

Those relating to income and those relating to assets

Question 4

Explain the grant relating to income

Answer 4

The grant should be recognised as other income in the same periods relation to the costs. Alternatively it can be deducted from the relevant expense

Question 5

Explain the grant relating to assets

Answer 5

Either as deferred income and amortised over the asset’s li fe or by deducting the grant from the cost of the asset acquired and reporting the net amount on the S)FP

Question 6

How should the repayment of grants be accounted for?

Answer 6

Income as an expense

Assets by increased the carrying amount or reducing deferred income

Question 7

Explain the key points of IAS 41 Agriculture?

Answer 7

Entities that grow or rear biological assets such as cows and plants

Question 8

What is the accounting standard for Agriculture?

Answer 8

IAS 41

Question 9

Explain how a biological asset is measured?

Answer 9

At fair value less costs to sell at initial recognition

Question 10

Explain how agricultural produce is measured?

Answer 10

At fair value less costs to sell at initial harvest. It then becomes inventory and then is subsequently valued in accordance with IAS 2. The sale is dealt with in accordance with IFRS 13.

Question 11

Explain what bearer plants are

Answer 11

Bearer plants are living plants that are; used in production or supply of agricultural produce; are expected to bear produce for more than one period; and have a remote likelihood of being sold as agricultural produce

Question 12

How are bearer plants treated

Answer 12

Tangible non current assets in accordance with IAS 16

Question 13

How are the produce of bearer plants treated?

Answer 13

Agricultural produce under IAS 41

Question 14

What should the minimum components of an interim financial report contain?

Answer 14

• condensed SOFP
• condensed SPLOCI
• condensed SOCE
• condensed Statements of cashflows
• selected explanatory notes

Question 15

What is the accounting standard for Accounting Policies. Changes in Accounting Estimates and Errors?

Answer 15

IAS 8

Question 16

What does IAS 8 require?

Answer 16

That an entity selects its accounting policy by applying the relevant IFRSs

Question 17

When is a change in accounting policy allowed?

Answer 17

• it is required by an IFRS

- it results in the FS providing reliable and more relevant information

Question 18

How are changes in accounting policy applied?

Answer 18

Retrospectively (as if it has always been in place)

Question 19

How are changes in accounting policy applied if it is a new IFRS?

Answer 19

Follow and transitional rules set out in that IFRS

Question 20

How are changes in accounting estimates adjusted for?

Answer 20

In the period in which they arise

Question 21

How are prior period errors adjusted for?

Answer 21

Retrospectively

Question 22

What are prior period errors?

Answer 22

Omission from and misstatements in FS for one or more period periods arising from a failure to use or misuse of reliable information that:

• was available at the time
• could reasonably be expected to have been obtained

Question 23

Explain the change in the ED 2018/1 Accounting Policy Changes

Answer 23

If an entity choose to change an accounting policy as a result of explanations included in an agenda decision it need only apply the change retrospectively to the extent that the benefit to users exceeds the cost of determining the period specific effects or the cumulative effect of the change

Question 24

What accounting standard is for First time adoption of international financial reporting standard?

Answer 24

IFRS 1

Question 25

Explain IFRS 1

Answer 25

An entity applies IFRS 1 when it prepares its first IFRS financial statements

• must prepare an opening IFRS SOFP at the date of the transition
• use same accounting throughout all periods
• estimates must be consistent
• allows a number of exemptions
• include disclosures explain the affect of transitioning