Topic 4 (Interim Financial Reporting and Operating segments)

Question 1

Write-downs of inventories to NRV or reversal thereof

Accounting treatment?

Answer 1

DISCRETE VIEW—recognize in ful

Question 2

Impairment losses and reversal thereof

Accounting treatment?

Answer 2

DISCRETE VIEW—recognize in full

Question 3

Gains and losses on changes in fair values, exchange rates, and other market-related factors

Accounting treatment?

Answer 3

DISCRETE VIEW—recognize in full

Question 4

Contingent rent

Accounting treatment?

Answer 4

DISCRETE VIEW—recognize in full

Question 5

Dividend income

Accounting treatment?

Answer 5

DISCRETE VIEW—recognize in full

Question 6

Dividend declared

Accounting treatment?

Answer 6

DISCRETE VIEW—recognize in full

Question 7

Depreciation or amortization

Accounting treatment?

Answer 7

INTEGRAL VIEW—allocated except when ‘units of production’ method is used

Question 8

Income tax expense

Accounting treatment?

Answer 8

DISCRETE VIEW—allocated using best estimate

Question 9

Year-end bonuses or Compensation absences

Accounting treatment?

Answer 9

INTEGRAL VIEW—allocated to periods when the entity has an obligation to pay for them

Question 10

Changes in accounting estimates

Accounting treatment?

Answer 10

DISCRETE VIEW—accounted for prospectively

Question 11

Changes in accounting policy

Answer 11

RETROSPECTIVELY at the beginning of the earliest comparative period presented

Question 12

Correction of prior period error

Answer 12

Accounted for retrospectively