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CFAS (FINALS) > PAS 34 > Flashcards

PAS 34 Flashcards

1
Q

pertains to the preparation and presentation of interim financial report for an interim period.

A

Interim financial reporting

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2
Q

a financial reporting period shorter than a full financial year or less than one year.

A

Interim period

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3
Q

Interim financial report means a financial report containing either:

A

a. a complete set of financial statements (PAS 1): or
b. a set of condensed financial statements (PAS 34)
for an interim period.

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4
Q

An interim financial report shall include, as a minimum, the following components using PAS 34:

A
  1. Condenses statement of financial position
  2. Condensed statement of profit or loss and
    other comprehensive income
  3. Condensed statement of changes in equity
  4. Condensed statement of cash flows
  5. Selected explanatory notes
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5
Q

The term “condensed” means

A

an entity needs only to provide the
minimum information required under PAS 34. However, an entity is not prohibited from publishing a complete set of financial statements in accordance with PAS I in its interim financial
report.

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6
Q

in the interest of timeliness and cost considerations, less information may be provided at interim dates.

A

Relevance over Reliability

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7
Q

an entity may rely on estimates to
a greater extent when preparing interim financial reports.

A

Materiality and Estimates

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8
Q

only selected explanatory notes are provided in interim financial reports to avoid repetition.

A

Note disclosures

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9
Q

What are the two views on interim financial reporting?

A
  1. The integral view means each interim period is an integral part of the annual accounting period.
  2. The independent or discrete view means each interim period is a basic accounting period and the results of operations shall be determined in essentially the same way as if the interim period were an annual accounting period.
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10
Q

Explain the integral view of interim financial reporting

A

Under the integral view, annual operating expenses are estimated and then allocated to the interim periods based on forecasted revenue or sales volume.

In other words, costs incurred which clearly benefit the entire year are allocated to the interim periods benefited.

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11
Q

Explain the independent view of interim reporting.

A

Under the independent view or discrete view, each interim period is considered a separate accounting period with status equal to a fiscal year.

Thus, no estimations or allocations are made for interim Pour, unless such estimations or allocations are allowed for annual reporting.

The same expense recognition rules shall apply as under annual reporting and no special interim accruals or deferrals are permitted.

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12
Q

this are designed to provide an explanation of significant events and transactions arising since the last annual financial statements.

A

selected explanatory notes

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13
Q

Interim financial reports shall be published

A

a. Once a year at any time during the year.
b. Within a month of the half year-end.
c. On a quarterly basis.
d. Whenever the entity wishes.

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14
Q

If an entity does not prepare interim financial reports

A

a. The year-end financial statements are deemed not to comply with IFRS
b. The year-end financial statements’ compliance with IFRS is not affected..
c. The year-end financial statements shall not be acceptable under local jurisdiction.
d. Interim financial reports shall be included in the year-end financial statements.

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15
Q

Interim financial reports shall be published

a. Once a year at any time during the year.
b. Within a month of the half year-end.
c. On a quarterly basis.
d. Whenever the entity wishes.

A

d. Whenever the entity wishes.

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16
Q

If an entity does not prepare interim financial reporta

a. The year-end financial statements are deemed not to comply with IFRS.

b. The year-end financial statements’ compliance with IFRS is not affected.

c. The year-end financial statements shall not be acceptable under local jurisdiction.

d. Interim financial reports shall be included in the year-end financial statements.

A

b. The year-end financial statements’ compliance with IFRS is not affected.

17
Q

Interim financial reports shall include as a minimum

a. A complete set of financial statements.

b. A condensed set of financial statements and selected notes.

c. A condensed statement of financial position and an income statement.

d. A condensed statement of financial position, income statement and statement of cash flows.

A

b. A condensed set of financial statements and selected notes

18
Q

An interim financial report shall include as a minimum all of the following components, except

a. Condensed statement of financial position and statement of comprehensive income

b. Condensed statement of cash flow Condensed statement of changes in equity

d. Accounting policies and explanatory notes

A

d. Accounting policies and explanatory notes

19
Q

There is a presumption that anyone reading interin financial reports shall

a. Understand all International Financial Reporting Standards

b. Have access to the records of the entity.

c. Have access to the most recent annual report

d. Not make decisions based on the report.

A

c. Have access to the most recent annual report

20
Q

When the business is seasonal, what does IFRS suggest?

a. Additional notes be written in the interim reports about seasonal nature of the business

b. Disclosure of financial information for the latest 12- month period and comparative information for the prior comparable 12-month period in addition to the interim report

c. Additional disclosure in the accounting policy note

d. No additional disclosure

A

b. Disclosure of financial information for the latest 12- month period and comparative information for the prior comparable 12-month period in addition to the interim report

21
Q

Which basic financial statements are prepared as a minimum for interim financial reporting?

a. Statement of financial position and income statement

b. Statement of financial position, income statement and statement of comprehensive income

c. Statement of financial position, statement of comprehensive income and statement of cash flows

d Statement of financial position, statement of comprehensive income, statement of cash flows and statement of changes in equity

A

d. Statement of financial position, statement of comprehensive income, statement of cash flows and statement of changes in equity

22
Q

Which statement is true regarding interim reporting?

a. The independent view is required for interim financial statements.

b. Interim reports are required on a quarterly basis.

c. Interim reports are not required.

d. Interim reports require the preparation of only a statement of comprehensive income and a statement of financial position.

A

c. Interim reports are not required.

23
Q
  1. Which statement about an interim report is true?

a. An interim financial report must consist of a complete set of financial statements.

b. An interim financial report must consist of a condensed set of financial statements.

c. An interim financial report may consist of a condensed set or complete set of financial statements.

d. All of these statements are true.

A

c. An interim financial report may consist of a condensed set or complete set of financial statements.

24
Q

Interim financial statements are usually presented on a

a. Monthly basis

b. Quarterly basis

c. Semiannual basis

d. Nine-month basis

A

b. Quarterly basis

25
Q

For interim reporting, an inventory loss from a market decline in the second quarter shall be recognized

a. In the fourth quarter

b. Proportionately in each of the second, third and fourth quarters

e. Proportionately in each of the first, second, third and fourth quarters

For interim reporting, an inventory loss from a market decline in the second quarter shall be recognized

a. In the fourth quarter

b. Proportionately in each of the second, third and fourth quarters

e. Proportionately in each of the first, second, third and fourth quarters

d. In the second quarter

A

d. In the second quarter

26
Q

It is appropriate to use estimated gross profit rate to determine the cost of goods sold for

a. Interim reporting

b. Year-end reporting

c. Interim reporting and year-end reporting

d. Neither interim reporting nor year-end reporting

A

a. Interim reporting

27
Q

For interim financial reporting, an expropriation gain occurring in the second quarter shall be

a. Recognized ratably over the last three quarters b. Recognized ratably over all four quarters with the first quarter being restated

c. Recognized in the second quarter

d. Disclosed in the second quarter

A

c. Recognized in the second quarter

28
Q
  1. For interim financial reporting, the income tax expete for the second quarter should be computed by using the

a. Statutory tax rate for the year.

b. Effective tax rate expected or the second quarter.

c. Effective tax rate expected for the full year as estimated at the end of the first quarter.

d. Effective tax rate expected for the full year as estimated at the end of the second quarter.

A

a. Statutory tax rate for the year.

29
Q

Interim statements can be described as emphasizing

a. Timeliness over reliability

b. Reliability over relevance

c. Relevance over comparability

d. Comparability over neutrality

A

a. Timeliness over reliability

30
Q

Interim financial reporting should be viewed

a. As a type of reporting that need not follow IFRS

b. As useful only if activity is evenly spread throughout the year so that estimates are unnecessary.

c. As reporting for an integral part of an annual period.

d. As reporting for a separate accounting period.

A

c. As reporting for an integral part of an annual period.

31
Q

Which statement about interim reporting is true?

a. All entities that issue an annual report must issue interim financial report.

b. The integral view is the appropriate approach in preparing interim financial report.

c. A complete set of financial statements must be presented for an interim period.

d. The same accounting principles used for the annual report should be employed for interim report.

A

d. The same accounting principles used for the annual report should be employed for interim report.

CFAS (FINALS) (9 decks)

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