International Financial Reporting Standards
Exam Solutions
Course Introduction
International Financial Reporting Standards (IFRS) is a course designed to provide students with a comprehensive understanding of the globally recognized accounting standards developed by the International Accounting Standards Board (IASB). The course covers the conceptual framework, recognition, measurement, presentation, and disclosure requirements for key financial statements prepared under IFRS. Students will explore critical topics including the accounting for assets, liabilities, revenues, and expenses, as well as the differences between IFRS and other major accounting frameworks. Through case studies, practical exercises, and real-world examples, students gain the skills necessary to interpret, apply, and analyze financial reports in a global business environment. This course prepares students for professional roles in accounting and finance, especially in organizations that operate internationally.
Recommended Textbook
Accounting for Corporate Combinations and Associations 7th Australian Edition by Neal Arthur
Available Study Resources on Quizplus
11 Chapters
368 Verified Questions
368 Flashcards
Source URL: https://quizplus.com/study-set/3411 Page 2
Chapter 1: Text Objectives and Introduction to Consolidation
Available Study Resources on Quizplus for this Chatper
28 Verified Questions
28 Flashcards
Source URL: https://quizplus.com/quiz/67731
Sample Questions
Q1) What are the major criticisms of the control criterion applied to the definition of the group?
Answer: Criticisms of control criterion:
- Lack of clear guidelines as to what constitutes control where there is less than 50% ownership
- Current proposals attempt to clarify this ambiguity
Diff.Moderate Page: 28
Q2) An 'extended group' includes:
A) controlled entities
B) associates
C) joint ventures
D) all the above
Answer: A
Q3) All companies must prepare 'separate financial statements'.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Principles of Consolidation
Available Study Resources on Quizplus for this Chatper
42 Verified Questions
42 Flashcards
Source URL: https://quizplus.com/quiz/67732
Sample Questions
Q1) Goodwill on acquisition is recorded when:
A) the cost of the acquisition of the subsidiary is less than the fair value of the subsidiary equity
B) the cost of the acquisition is more than the fair value of the subsidiary equity
C) the cost of the acquisition is equal to the fair value of the subsidiary equity
D) none of the above
Answer: B
Q2) Consolidation worksheet adjusting journal entries are recorded:
A) A in the general ledger of the parent entity
B) B in the general ledger of the subsidiary
C) C in the consolidation working papers
D) D none of the above
Answer: C
To view all questions and flashcards with answers, click on the resource link above.
4
Chapter 3: Fair Value Adjustments and Tax Effects
Available Study Resources on Quizplus for this Chatper
34 Verified Questions
34 Flashcards
Source URL: https://quizplus.com/quiz/67733
Sample Questions
Q1) Accounting Standard AASB 3 Business Combinations requires the recognition of contingent assets in a business combination
A)True
B)False
Answer: False
Q2) Goodwill recorded by an acquiree in a business combination must be:
A) recognised at fair value on acquisition
B) recognised at carrying amount on acquisition
C) not recognised in the business combination
D) none of the above
Answer: C
Q3) An acquirer in a business combination can acquire:
A) the assets and liabilities of a business
B) the issued shares of an acquire company
C) either A or B
D) none of the above
Answer: C
To view all questions and flashcards with answers, click on the resource link above.
Page 5
Chapter 4: Intra-Group Transactions
Available Study Resources on Quizplus for this Chatper
36 Verified Questions
36 Flashcards
Source URL: https://quizplus.com/quiz/67734
Sample Questions
Q1) Unrealised profits on intra-group sale of inventories arise if:
A) the sale is an upstream transaction
B) the sale is a downstream transaction
C) the inventories are held within the group at date of consolidation
D) none of the above
Q2) P Ltd acquired inventories for $150,000 which were sold to its subsidiary S Ltd for $120,000 (assume a tax rate of 30%)On consolidation a deferred tax liability would be recorded for:
A) $45,000
B) $36,000
C) $9,000
D) Not recorded
Q3) A Ltd sells inventory to its parent P Ltd for $60,000 representing a mark up of 50% on cost.At year end 3/4 of the goods are still held by P Ltd.The unrealised profit to be eliminated on consolidation is:
A) $20,000
B) $15,000
C) $30,000
D) $10,000
Q4) Explain why cash will never be adjusted in consolidation journal entries
Page 6
To view all questions and flashcards with answers, click on the resource link above.
Chapter 5: Non-Controlling Interest
Available Study Resources on Quizplus for this Chatper
37 Verified Questions
37 Flashcards
Source URL: https://quizplus.com/quiz/67735
Sample Questions
Q1) Under the fair value (100% of goodwill)method used in Question 14 the NCI in goodwill is:
A) $34,000
B) $104,000
C) $150,000
D) none of the above
Q2) P Ltd purchased 80% of the issued ordinary shares of S Ltd.S Ltd capital structure is:
Ordinary shares 200,000 fully paid shares x $1
Preference shares 50,000 fully paid shares x $1
Preference shares have the same rights as ordinary shares
The NCI in S Ltd is:
A) 20%
B) 16%
C) 36%
D) none of the above
Q3) The consolidation technique of 'NCI allocation' is based on the proposition that non controlling shareholders have an ownership interest in group equity
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 7
Chapter 6: Partly-Owned Subsidiaries: Indirect
Non-Controlling Interest
Available Study Resources on Quizplus for this Chatper
27 Verified Questions
27 Flashcards
Source URL: https://quizplus.com/quiz/67736
Sample Questions
Q1) Indirect NCI are entitled to a share of the pre acquisition equity of subsubsidiaries.
A)True
B)False
Q2) Parent Ltd owns 90% of S1 Ltd and S1 Ltd owns 60% of S2 Ltd.Parent Ltd's indirect ownership interest in S2 Ltd is:
A) 90%
B) 60%
C) 54%
D) none of the above
Q3) The sequential consolidation method uses a 'top down' approach
A)True
B)False
Q4) When a parent does not have an ownership interest in a subsidiary the NCI is 100% A)True B)False
Q5) Why does the multiple consolidation method adopt a revaluation approach to the net assets of subsubsidiaries?
Page 8
Q6) Discuss the disadvantages of the sequential consolidation method.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 7: Consolidated Cash Flow Statements
Available Study Resources on Quizplus for this Chatper
25 Verified Questions
25 Flashcards
Source URL: https://quizplus.com/quiz/67737
Sample Questions
Q1) The classification of an item as a cash equivalent means that changes in the balance:
A) will be disclosed in the statement of cash flows
B) will not be disclosed in the statement of cash flows
C) may be disclosed at discretion of the entity
D) none of the above
Q2) Discuss the treatment of subsidiaries acquired and disposed of in the consolidated statement of cash flows.
Q3) The following items must be separately disclosed in a statement of cash flows:
A) interest paid and received
B) dividends paid and received
C) Both A and B
D) No separate disclosure required
Q4) Discuss why Australia moved from a requirement to prepare a statement of sources and application of funds to a statement of cash flows.
Q5) Why is cash flow from operating activities seen as a performance measure?
Q6) The time to maturity is relevant in the classification of cash equivalents
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Accounting for Joint Arrangements
Available Study Resources on Quizplus for this Chatper
44 Verified Questions
44 Flashcards
Source URL: https://quizplus.com/quiz/67738
Sample Questions
Q1) On November 1 20X6,a parent entity Helios Ltd acquired 25% (500,000 shares)of the share capital of Havers Ltd and the power to significantly influence the operating and financial policies of that company for $4,000,000 cash.In the period from the date of acquisition to June 30 20X7,Havers Ltd earned a profit for the period of $500,000 (after tax of $200,000)and declared a dividend of $100,000.At June 30 20X7,Helios Ltd recognised its equity in the dividend.At June 30 20X7,the quoted market value of the shares in Havers was $10 per share.At June 30 20X7,in the separate balance sheet of Helios Ltd and in the consolidated balance sheet of the group controlled by Helios Ltd,the investment in Havers Ltd would be reported as:
A) $4,000,000 and $4,100,000 respectively.
B) $5,000,000 and $4,100,000 respectively.
C) $5,000,000 and $5,100,000 respectively.
D) None of the above.
Q2) The equity carrying amount of an investment will always be equal to the investor's proportional share of the net assets of the investee.
A)True
B)False
Q3) What is the rationale for the extensive note disclosure requirements under AASB128?
To view all questions and flashcards with answers, click on the resource link above.
10
Chapter 9: Accounting for Associates and Joint Ventures: the Equity Method
Available Study Resources on Quizplus for this Chatper
37 Verified Questions
37 Flashcards
Source URL: https://quizplus.com/quiz/67739
Sample Questions
Q1) The one line method of accounting for joint ventures is the same as the equity method of accounting for investments in associates
A)True
B)False
Q2) Midstream Ltd and Delta Ltd enter into a business undertaking to lease a 100-hectare vineyard from Pinot Ltd.There is a contractual agreement between the two companies whereby they share control and must agree on all strategic financial and operating decisions.The two companies appoint Todman Management Pty Ltd as the vineyard manager.A separate set of accounting database is established for the undertaking and each investor contributes cash capital to the undertaking.The intention of the investing companies is to market the produce of the vineyard and make a profit.The business undertaking is:
A) A joint venture operation since the investors have agreed to a sharing of control.
B) A joint venture entity since it has been established to operate the vineyard with the intention of making a profit.
C) A simple partnership in which two companies operate as partners in a business undertaking.
D) None of the above.
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Translation and Consolidation of Foreign Currency Financial Statements
Available Study Resources on Quizplus for this Chatper
31 Verified Questions
31 Flashcards
Source URL: https://quizplus.com/quiz/67740
Sample Questions
Q1) A 'natural hedge' occurs when an Australian company's foreign operation is financed using:
A) debt denominated in AUD
B) debt denominated in same currency as investment
C) debt denominated in any foreign currency
D) none of the above
Q2) The transactions of a foreign company must be recorded in:
A) its functional currency
B) its presentation currency
C) either functional or presentation currency
D) none of the above
Q3) Alternative exchange rates which can be used to translate foreign currency amounts are:
A) historical or average
B) opening or closing
C) all of the above
D) none of the above
Q4) Discuss the treatment of differences in accounting standards when consolidating foreign operations.
Page 12
To view all questions and flashcards with answers, click on the resource link above.
Chapter 11: Segment Reporting by Diversified Entities
Available Study Resources on Quizplus for this Chatper
27 Verified Questions
27 Flashcards
Source URL: https://quizplus.com/quiz/67741
Sample Questions
Q1) On revenue criteria only,the reportable business segments are:
A) Piebalds, Pintos and Crillos.
B) Piebalds, Skewbalds, Pintos and Crillos.
C) Piebalds, Skewbalds, Pintos, Crillos and Others.
D) None of the above.
Q2) Under Accounting Standard AASB1039 Concise Financial Reports segment information is required to be presented:
A) in the financial statements
B) in the notes to the financial statements
C) not required
D) none of the above
Q3) On the basis of revenue,asset and results,the reportable business segments are:
A) Piebalds, Pintos and Crillos.
B) Piebalds, Skewbalds, Pintos and Crillos.
C) Piebalds, Skwsbalds, Pintos, Crillos and Others.
D) None of the above.
Q4) Discuss the issues involved in allocating revenues,profits and assets to segments.
Q5) Outline the requirements to report information on geographical segments under current accounting standards
To view all questions and flashcards with answers, click on the resource link above. Page 13