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FR Textbook > Standards > Flashcards

Standards Flashcards

1
Q

What is IAS 16?

A

Property plant and equipment

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2
Q

When we dispose of PPE (IAS 16), how do we calculate proceed?

A

Disposal proceeds

Less: Carrying amount

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3
Q

With a revaluation gain of PPE (IAS 16), what do we do with gains or losses?

A

Gain:
Credit revaluation reserve (Other comprehensive income)

Loss:
Charge to P+L as expense

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4
Q

What is IAS 23?

A

Borrowing costs

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5
Q

According to IAS 23 Borrowing costs

Borrowing costs must be capitalised if the cost of an asset is one which…

A

Necessarily takes a substantial period of time to get ready for its intended use or sale

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6
Q

According to IAS 23 Borrowing costs

We commence capitalisation of borrowing costs when…

A

Expenditure is being incurred
Borrowing being incurred
Work commenced

Stops when ready for use or construction supenced

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7
Q

According to IAS 23 Borrowing costs

When do we stop capitalising?

A

Stops when ready for use or construction suspended

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8
Q

What is IAS 20?

A

Accounting for government grants and disclosures

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9
Q

According to IAS 20 Accounting for government grants and disclosures

How can a revenue grant be presented?

A
  • As a credit in P+L

- Deducted from related asset

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10
Q

According to IAS 20 Accounting for government grants and disclosures

What are Capital grants?

A

Government contribution towards cost of new machinery

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11
Q

According to IAS 20 Accounting for government grants and disclosures

How can a capital grant be presented?

A

-Net off against cost and depreciate reduced amount

-Capitalise and depreciate as normal
Treat grant as deferred income
Release over useful life in P+L as finance cost

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12
Q

What is IAS 40?

A

Investment properties

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13
Q

According to IAS 40, what is an investment property held for?

A

Land or building held for

Rentals,
Capital appreciation; or
Both of above

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14
Q

According to IAS 40 Investment properties, how do we initially measure investment property?

A

At cost

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15
Q

What are the two accounting choices under IAS 40 Investment properties?

A

Cost model

Fair value model

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16
Q

What is the cost model under IAS 40 Investment properties?

A

Capitalise at cost

Depreciate as normal

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17
Q

What is the fair value model under IAS 40 Investment properties?

A

Capitalise at cost
Each year revalue to fair value
Gain or loss goes to P+L (Not revaluation surplus!!)
No depreciation

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18
Q

What is IAS 38?

A

Intangible assets

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19
Q

Under IAS 38 Intangible assets, what are the four recognition criteria?

A
  • Identifiable
  • Controlled by entity
  • Future economic benefits are probable
  • Reliably measured
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20
Q

What are the two types of intangible assets under IAS 38?

A

Purchased intangibles

Internally generated intangibles

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21
Q

Under IAS 38 Intangible assets

How to we recognise Purchased intangibles with a finite life?

A

Capitalise at cost

Amortise over useful life

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22
Q

Under IAS 38 Intangible assets

How to we recognise Purchased intangibles with a infinite life?

A

Capitalise at cost

Review annually for impairment

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23
Q

Under IAS 38 Intangible assets

How to we recognise internally generated intangibles?

A

Do not capitalise!!

Only exception is research and development

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24
Q

What is IAS 36?

A

Impairment of assets

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25
Q

Under IAS 36 Impairment of assets, how should assets be carried?

A

Lower of

Carrying amount

Recoverable amount

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26
Q

What is the recoverable amount?

A

Higher of

Fair value less costs to sell

Value in use

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27
Q

Under IAS 36 Impairment of assets, what are three indicators of impairment?

A
  • Operating losses
  • Technological advances
  • Obsolescence /Physical damage
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28
Q

How do we account for Impairment under IAS 36 Impairment of assets?

A

Dr Impairment expense
Cr Non-Current asset

Unless previously revalued

Dr Revaluation surplus
Dr Impairment expense
Cr Non-Current asset

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29
Q

What is described below?

The smallest group of identifiable assets that generate independent cashflows

A

Cash generating unit

30
Q

What is IFRS 5?

A

Non-current assets held for sale and discontinued operations

31
Q

What is the definition of a Non-current asset held for sale under IFRS 5?

A

Its carrying amount will be recovered principally through a sale transaction rather than continued use

32
Q

How do we measure Non-current assets held for sale under IFRS 5?

A

Lower of:

Carrying amount

Fair value less costs to sell

33
Q

Do we depreciate non-current assets held for sale?

34
Q

How do we recognise gains of losses on reclassification of Non-current assets held for sale under IFRS 5?

A

Losses recognised in P+L

Gains taken to revaluation surplus

35
Q

What is IAS 8

A

Accounting policies, changes in accounting estimates and errors

36
Q

Under IAS 8 Accounting policies, changes in accounting estimates and errors

Do we treat changes in accounting policy retrospectively or prospectively?

A

Retrospectively

37
Q

Under IAS 8 Accounting policies, changes in accounting estimates and errors

Do we treat changes in accounting estimate retrospectively or prospectively?

A

Prospectively

38
Q

Under IAS 8 Accounting policies, changes in accounting estimates and errors

Do we treat errors retrospectively or prospectively?

A

Retrospectively

39
Q

Under IAS 8, what do we do when there is a change in accounting policy?

4 things

A
  • New policy applied
  • Restate retained earnings
  • Disclose in SOCIE
  • Restate comparatives
40
Q

Under IAS 8, what do we do when there is a change in accounting estimate?

2 things

A
  • Change current and future period

- Disclose if change is material

41
Q

Under IAS 8, what do we do when there is an error?

4 things

A
  • Restate opening assets, liabilities and equity as if error never occurred
  • Adjust retained earnings
  • Disclose in SOCIE
  • Restate comparatives
42
Q

What is IFRS 13?

A

Fair value measurement

43
Q

What is level one under IFRS 13 Fair value measurement?

A

Quoted prices in active markets

44
Q

What is level two under IFRS 13 Fair value measurement?

A

Quoted prices for similar or identical items in inactive markets

45
Q

What is level three under IFRS 13 Fair value measurement?

A

Unobservable inputs, based on best available information

46
Q

What is IAS 2?

47
Q

Under IAS 2 Inventory, how should inventory be measured?

A

Lower of:

  • Cost
  • NRV
48
Q

What is IAS 41?

A

Agriculture

49
Q

How do we measure Agriculture under IAS 41?

A

Recognise at FV less costs to sell

Revalue to FV less costs to sell at year end

Take gain or loss to statement of profit or loss

50
Q

What is IFRS 15?

A

Revenue from contracts with customers

51
Q

What are the 5 steps in recognising revenue under IFRS 15?

A

Step 1 - Identify the contract
Step 2 - Identify the separate performance obligations under the contract
Step 3 - Determine the transaction price
Step 4 - Allocate the transaction price to the performance obligations in the contract
Step 5 - Recognise revenue when or as a performance obligation is satisfied

52
Q

Under IFRS 15 how do we recognise …

Agency sales?

A

Recognise commission only in revenue

53
Q

Under IFRS 15 how do we recognise …

Sale or return?

A

If control of goods does not pass to the buyer then do not recognise revenue

54
Q

Under IFRS 15 how do we recognise …

Sale and repurchase?

A

If control does not pass to the buyer then do not recognise revenue

Treat proceeds as a loan and charge interest to date of repurchase

55
Q

How do we recognise revenue if progress is unknown?

A

Recognise revenue to level of recoverable costs

56
Q

What do we record in the SFP if…

Revenue exceeds amount received?

A

Receivable

57
Q

What do we record in the SFP if…

If cash spent exceeds cost of sales?

A

Work in progress

58
Q

What do we record in the SFP if…

If cash received exceeds revenue?

59
Q

What do we record in the SFP if…

If contract is loss making?

60
Q

What is IFRS 16?

61
Q

Under IFRS 16, under a leasing arrangement, what has to be recorded?

A

Both the asset and the liability

62
Q

What is the economic substance of a lease?

A

That the lessee has the beneficial use of that asset and has an obligation to pay for that use

63
Q

What is the subsequent measurement of the ROU asset?

A
  • Measure using cost model (unless another method chosen)

i. e cost - depn - impairment

64
Q

What timeframe is a ROU asset depreciated over?

A

Shorter of:

  • Assets useful life or
  • Lease term

Unless: It is transferred to the lessee at the end of the term in which case use useful life

65
Q

What is the subsequent measurements of a lease liability?

A

At amortised cost which is…

Initial value plus interest charge
Less: Payments made

66
Q

How do we recognise a sale and leaseback if NOT deemed a sale under IFRS 15?

A
  • Continue to recognise the asset

- Treat sale proceeds as a loan

67
Q

How do we recognise a sale and leaseback if deemed a sale under IFRS 15?

A
  • Asset disposed and re-acquired as a ROU asset

- Gain on disposal based on proportion of asset rights transferred to the buyer

68
Q

What is IAS 7?

A

Statement of cashflows

69
Q

What category under IAS 7 do the below go into?

Interest paid
Income taxes paid

A

Operating activities

70
Q

What category under IAS 7 do the below go into?

Purchase of PPE
Proceeds from sale PPE
Interest received
Government grants received
Dividends received
A

Investing activities

71
Q

What category under IAS 7 do the below go into?

Proceeds from issues of shares
Proceeds from long term borrowings
Payment of lease
Dividends paid

A

Financing activities

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