PAS 1 Presentation of financial statements

Question 1

prescribes the basis for presentation of general purpose financial statements to improve
comparability

Answer 1

PAS 1

Question 2

comparability both with the entity’s financial statements of previous periods

Answer 2

intra-comparability

Question 3

comparability both with financial statements of other entities

Answer 3

inter-comparability

Question 4

those intended to serve users who do not have the authority to demand financial reports tailored for their own needs

Answer 4

General Purpose Financial Statements

Question 5

General purpose financial statements cater to most of
the _____________ of a wide range of ______________

Answer 5

common needs

external users

Question 6

General purpose financial statements are the subject
matter of the ___________________

Answer 6

Conceptual Framework and the PFRSs.

Question 7

Complete set of financial statements:

Answer 7

1. Statement of financial position
2. Statement of profit or loss and other comprehensive income
3. Statement of changes in equity
4. Statement of cash flows
5. Notes

     (5a) comparative information in respect of the preceding period; and

6. Additional statement of financial position (required only when certain instances occur)

Question 8

What are the general features of financial statements?

Answer 8

1. Fair Presentation and Compliance with PFRSs
2. Going Concern
3. Accrual Basis of Accounting
4. Materiality & Aggregation
5. Offsetting
6. Frequency of reporting
7. Comparative Information
8. Consistency of presentation

Question 9

The Fair Presentation and Compliance with PFRSs is the ______________, with additional ___________ when necessary, is presumed to result in financial statements that achieve a ____________.

Answer 9

application of PFRSs

disclosure

fair presentation.

Question 10

An entity is not a going concern if, as of the financial reporting date or prior to the date of
authorization of the financial statements for issue, management either:

Answer 10

a. Intends to liquidate the entity or to cease trading, or

b. Has no realistic alternative but to do so.

Question 11

The assessment of going concen is at least ______________.

Answer 11

12 months

Question 12

An entity shall prepare its
financial statements, except for _______________, using
the ________________

Answer 12

cash flow information

accrual basis of accounting.

Question 13

In materiality and aggregation, each material class of similar items must be _______________
in the financial statement

Answer 13

presented separately

Question 14

Assets and liabilities, and income and expenses, shall __________ unless required or permitted by a PFRS

Answer 14

not be offset

Question 15

Measuring assets net of valuation allowances, for example, obsolescence allowances on inventories, allowances for doubtful accounts on receivables, and accumulated
depreciation on property, plant, and equipment are ________

Answer 15

not offsetting.

Question 16

____________ - An entity shall present a complete set of financial statements (including
comparative information) ________.

Answer 16

Frequency of reporting

at east annually.

Question 17

When an entity changes the end of its reporting period and presents financial statements for a period longer or shorter than one year, an entity shall
disclose the following:

Answer 17

1. The period covered by the financial statements,
2. The reason for using a longer or shorter period, and
3. The fact that amounts presented in the financial
   statements are not entirely comparable.

Question 18

An entity shall present _________ in respect of the _______ for all amounts reported in the current period’s financial statements, unless other standards permit or require otherwise

Answer 18

comparative information

preceding period

Question 19

_____ - An entity shall retain the __________ of items in the financial statements from one period to the next

Answer 19

Consistency of presentation

presentation and classification

Question 20

An entity shall retain the
presentation and classification of items in the financial
statements from one period to the next unless:

Answer 20

a. it is apparent that another presentation or classification
would be more appropriate following a significant change
in the nature of the entity’s operations or a review of its
financial statements; or

b. a PFRS requires a change in presentation.

Question 21

An additional statement of financial position is
presented as at the beginning of the preceding period when an entity:

Answer 21

1. Applies an accounting policy retrospectively, or
2. Makes a retrospective restatement of items in its
   financial statements, or
3. reclassifies items in its financial statements.

…..and the effect of the event to the statement of financial position as at the beginning of the preceding period is material.

Question 22

A statement of financial position may be presented as either:

Answer 22

Classified
Unclassified (based on liquidity)

Question 23

showing distinctions between current and noncurrent assets and liabilities

Answer 23

classified

Question 24

showing no distinction between current and noncurrent items

Answer 24

Unclassified or based on liquidity

Question 25

An entity shall classify an asset as current when:

Answer 25

1. it expects to realize the asset or intends to sell or consume it, in its normal operating cycle; 2. it holds the asset primarily for the purpose of trading; 3. it expects to realize the asset within twelve months after the reporting period; or 4. the asset is cash or a cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

Question 26

An entity shall classify a liability as current when:

Answer 26

1. it expects to settle the liability in its normal operating cycle; 2. it holds the liability primarily for the purpose of trading; 3. the liability is due to be settled within twelve months after the reporting period; or 4. the entity does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period.

Question 27

What are the general rule in currently maturing long-term liabilities?

Answer 27

Currently maturing long term liabilities are presented as current liabilities

Question 28

Currently maturing long term liabilities are presented as current liabilities, what are the exceptions?

Answer 28

1. Refinancing agreement is fully completed on or before the balance sheet date – non-current liability 2. Refinancing agreement after the balance sheet date but before the financial statements are authorized for issue – noncurrent liability if the entity expects, and has the discretion, to refinance it on a long-term basis under an existing loan facility. Conceptual Framework & Acctg. Standards

Question 29

What are the general rule in breach of loan agreement?

Answer 29

A liability that is payable on demand is a current liability.

Question 30

A liability that is payable on demand is a current liability. What are the exceptions?

Answer 30

It is presented as non-current liability if the lender provides the entity, on or before the balance sheet date, a grace period ending at least 12 months after the balance sheet date to rectify a breach of loan covenant.

Question 31

presented as noncurrent items in a classified statement of financial position, irrespective of their expected dates of reversal.

Answer 31

Deferred tax liabilities (assets)

Question 32

Minimum line items in the statement of financial position:

Answer 32

a. Property, plant and equipment; b. Investment property; c. Intangible assets; d. Financial assets (excluding amounts shown under (e), (h) and (i)); e. Investments accounted for using the equity method; f. Biological assets; g. Inventories; h. Trade and other receivables; i. Cash and cash equivalents; j. Assets (or disposal groups) classified as held for sale in accordance with PFRS 5 k. Trade and other payables; l. Provisions; m. Financial liabilities (excluding amounts shown under (k) and (l)); n. Liabilities and assets for current tax, as defined in PAS 12 Income Taxes; o. Deferred tax liabilities and deferred tax assets, as defined in PAS 12; p. Liabilities included in disposal groups classified as held for sale in accordance with PFRS 5; q. Non-controlling interests, presented within equity; and r. Issued capital and reserves attributable to owners of the parent

Question 33

True or false PAS 1 does prescribe the order or format in which an entity presents items.

Answer 33

false- it does not

Question 34

An entity shall present all items of income and expense recognized in a period:

Answer 34

1. in a single statement of profit or loss and other comprehensive income; or 2. in two statements: (1) a statement displaying the profit or loss section only (separate ‘statement of profit or loss’ or ‘income statement’) and (2) a second statement beginning with profit or loss and displaying components of other comprehensive income.

Question 35

True or false PAS 1 prohibits the presentation of any items of income or expense as extraordinary items in the statement(s) presenting profit or loss and other comprehensive income or in the notes.

Answer 35

True

Question 36

Other comprehensive income for the period:

Answer 36

a. Changes in revaluation surplus b. Unrealized gains and losses on investments in FVOCI securities c. Remeasurements of the net defined benefit liability (asset) d. Gains and losses arising from translating the financial statements of a foreign operation e. Effective portion of gains and losses on hedging instruments in a cash flow hedge * OCI may be presented either (a) net of tax or (b) gross of tax.

Question 37

________ are amounts reclassified to profit or loss in the current period that were recognized in other comprehensive income in the current or previous periods.

Answer 37

Reclassification adjustments

Question 38

Total comprehensive income comprises all components of:

Answer 38

1.Profit or loss; and 2.Other comprehensive income.

Question 39

Presentation of Expenses:

Answer 39

1. Nature of expense method 2. Function of expense method

Question 40

If an entity classifies expenses by ______, it shall _____ additional information on the __________

Answer 40

function disclose nature of expenses

Question 41

Dividends declared by an entity are disclosed either in the .

Answer 41

(a) notes or (b) statement of changes in equity

Question 42

Order of presentation of disclosures in the Notes

Answer 42

1. Statement of compliance with PFRSs; 2. Summary of significant accounting policies applied; 3. Supporting information for items presented in the other financial statements; and 4. Other disclosures.