Other standards

Question 1

Definition of accounting policies

Answer 1

Accounting policies are the specific principles, bases, conventions, rules and practices applied by an entity in preparing and presenting financial statements

Question 2

IFRS 13 Fair Value Measurement

Answer 2

Fair value is ‘the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants’

Question 3

Hierarchy of inputs -

Answer 3

 Level 1: quoted prices (observable) in active markets for identical items, the most reliable evidence of fair value
 Level 2: observable inputs other than level 1, e.g. similar items in active markets or identical items in inactive markets. Some adjustment necessary to reach fair value
 Level 3: unobservable inputs, based upon best information available.

Question 4

IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors

Answer 4

‘Accounting policies are the specific principles, bases, conventions, rules and practices applied by an entity in preparing and presenting financial statements

Question 5

IAS 8 requires an entity to select and apply appropriate accounting policies to ensure that the information in financial statements

Answer 5

is relevant to the decision- making needs of users, and

faithfully represents the entity’s performance and position.

Question 6

Changes in accounting policy

Answer 6

applied retrospectively, as if new policy had always been in place

restate comparatives

restate relevant brought forward balances.

Question 7

Changes in accounting estimate

Answer 7

 appliedprospectively,fromcurrentperiodonwards
 disclose,ifimpactismaterial

Question 8

Errors

Answer 8

applied retrospectively, amending error

restate affected comparatives

restate relevant brought forward balances.

Question 9

A change of policy will be amended X
A change of estimate will be amended X

Except for X which is accounted for X

Answer 9

Retrospectivly
Prospectivly

PPE from one model to another
Prospectivly

Question 10

Cost is

Answer 10

the cost of bringing items to their present location and condition.

Question 11

Inventories valued at the lower of:

Answer 11

Cost and NRV

Question 12

NRV

Answer 12

Expected selling price less expected costs to sell

Question 13

Cost

Answer 13

Actual
Average
FIFO

Question 14

IAS 41 Agriculture

Answer 14

A biological asset is a living plant or animal.

Agricultural produce is the produce harvested from a biological asset.

Question 15

Agricultural grants

Answer 15

Recognise in SPL when conditions satisfied

Question 16

Biological assets

Answer 16

Initially:
Recognise at fair value less costs to sell

At year end:
Revalue to fair value less costs to sell
Gain or loss in SPL

If fair value not available then measure at cost less depreciation

Question 17

Agricultural produce

Answer 17

Initially:
Recognise at fair value less costs to sell
Immediately reclassify as inventories

If fair value not available then measure at cost less depreciation