Statement of financial position

Question 1

SFP: True or false: leases are always recognised in the SFP.

Answer 1

False - circumstances will dictate whether the lease goes to SFP or SCI.

Question 2

SFP: True or false: a contingency is a liability of uncertain timing or amount.

Answer 2

False - that description belongs to provisions.

Question 3

SFP: True or false: a company shall measure inventory at the lower of cost and net realisable value.

Answer 3

True

Question 4

SFP: True or false: the statement of financial position determines the solvency and liquidity of a company.

Answer 4

True

Question 5

SFP: Define ‘solvency’

Answer 5

the ability of a company to pay all of its liabilities using its assets.

Question 6

SFP: Define ‘liquidity’

Answer 6

the ability to convert current assets to pay current liabilities.

Question 7

SFP: What options are there for the basis presenting SFP?

Answer 7

Liquidity and current/non-current.

Question 8

SFP: True or false: recoverable amount is the higher of fair value less costs to sell and value in use

Answer 8

True

Question 9

SFP: How do you determine if an asset is impaired?

Answer 9

If it’s carrying amount exceeds it’s recoverable amount, it is impaired.

Question 10

SFP: What is the definition of owner-occupied property?

Answer 10

Owner-occupied property is property held for use in the production or supply of goods
or services or for administrative purposes.