Other Standards

Question 1

IAS8 - Accounting policies, changes in accounting estimates and errors

Answer 1

Specific principles or rules applied by an entity presented in the financial statements.

Once chosen should be applied consistently.

Change would apply retrospectively. Resulting in restatement.

Shown in the SCOIE

Question 2

Estimates and Errors

Answer 2

Estimates - Adjusted prospectively.

Pror period errors - corrected retrospectively. opening balance adjusted accordingly.

Question 3

IFRS 13 - Fair Value Measurment

Answer 3

Level 1 Inputs: observable market prices - Active market = accurate

Level 2 Inputs: Observable, market for similar assets - best estimate

Level 3 Inputs: Unobservable - use best info available.

Does not apply to :

IAS2 - Leases
IAS 8
IAS 36 Impairment

Question 4

IAS 2 Inventories

Answer 4

Lower of cost and Net Realisable Value

Cost = purchase, costs of conversion and other costs to bring inventories to present location.

Purchase price, import duties, irrecoverable taxes, transport, handling

Cost of conversion: units of production such as direct labour.

NRV = Estimate selling price less estimated costs of completion to make the sale.

Question 5

IAS 41 - Agriculture

Answer 5

Agricultural Activity - biological transformation of biological assets for sale, not agricultural produce or into addition biological assets.

Biological Assets - living animal or plant

Harvest - detachment from biological asset.

Agricultural Produce - is after biological asset is harvested.

Bearer plants - accounted under IAS 16 PPE

Question 6

IAS 41 - Measurement

Answer 6

Biological Assets - FV less cost to sell - Shown separately on SFP.

Harvest = classified as inventory measured at FV less costs to sell. Not revalued.

Cost to sell = commission on sale.

Question 7

IAS 37 Provisions and Contingencies

Answer 7

Provision is recognised:
- Present obligation as a past result.
- Probable of an outflow of resources
- Reliable estimate of the amount

Question 8

IAS 37 Provisions and Contingencies

Answer 8

Contingent Liabilities:

Possible obligation - Not recognised in Statement but disclosed in notes

Contingent Asset:

Possible asset - no recognised unless virtually certain.
Disclosed in notes if probable.