Question Mistakes (Yellow) Flashcards
Order of Steps towards implementing a new IFRS standard
- Advisory Committee
- Advisory Council
- Discussion Paper
- Exposure Draft
- Final standard issued
What type of accounting uses “physical capital maintenance” or “productive capacity changes”?
Current Cost Accounting
Are receivables still an asset if they’ve been factored?
Yes, as long as recourse for the debt still exists
Fundamental Qualitative Characteristics of financial info
Relevance
Materiality
Faithful representation
Enhancing Qualitative Characteristics of Financial Info
Comparability
Verifiability
Timeliness
Understandability
Following initial recognition, at what carrying amount can investment property be held?
Cost or Fair Value
What is the carrying amount of an Intangible Asset?
= Capitalized cost - Amortization
Capitalized cost is cost incurred once feasible
What charge is made to SOPL regarding intangible assets?
= Expensed costs + Amortization for the year
Expensed costs are costs incurred pre-feasability
The Steps to finding the value of a single element in a CGU post-impairment
Find total impairment
Subtract goodwill and any specific damages from total impairment
Allocate the remainder weighted according to the carrying amount of other elements
Subtract allocated impairment to find the new value of the CGU element in question
Value in Use is equal to
= Annual amount of cash inflow * ( 1 / (1 + % capital costs)^year number)
What happens to revaluations of investment property?
It is credited to profit and loss
IAS 16 - Property, Plant, and Equipment, doesn’t apply to…
Biological assets or Mineral reserves
But does apply to the PPE used to develop these
If, for instance, a costly safety assessment must be implemented every five years, how would it be accounted for?
Cost would be capitalized when incurred
Amortized over the next five years
What is revenue equal to when no control of goods has been transferred?
Nothing.
Under what circumstances can a subsidiary be excluded from the group consolidated accounts?
None.
Must be included.
How is a bargain purchase accounted for?
Credited to profit and loss as an economic gain
Equity Component of a financial instrument
= Principal amount of instrument - Present value of interest - Repayment in that year
where, PV of interest = loan amount * interest % * decimal value of dollar then
The value of a debt instrument at year end
= Year start value + interest owed - interest earned
Should a provision be created when a contract becomes onerous
Yes
What is included in the charge to SOPL relating to a lease?
Lease Liability
Depreciation of the asset covered by the lease
(Use future value of lease payments and useful life to calculate depreciation and interest)
At what value does IAS 41 Agriculture require initial measurement of biological assets?
Fair value Less Estimated costs to sell
