Question 1

According to IAS 37,how should contingent assets be recognized?

Accepted Answer

A) They should be disclosed in the notes to the financial statements if the inflow of resources is probable. 
B) They should be recognized like any other asset,with a debit to "contingent assets." 
C) They should not be disclosed anywhere in the financial statements due to their uncertainty. 
D) They should only be disclosed in the notes to the financial statements if the inflows of resources are virtually certain. 
A) They should be disclosed in the notes to the financial statements if the inflow of resources is probable. 
B) They should be recognized like any other asset,with a debit to "contingent assets." 
C) They should not be disclosed anywhere in the financial statements due to their uncertainty. 
D) They should only be disclosed in the notes to the financial statements if the inflows of resources are virtually certain.

Question 2

What is a "contingent asset?"

Accepted Answer

A) There is no such thing,in either IASB standards or U.S.GAAP,as a "contingent asset." 
B) This is an asset that has been put up as collateral against a loan. 
C) This is a possible inflow of resources arising from a future activity. 
D) It is a probable asset,arising from past events ,whose existence is yet to be confirmed definitively by a future event. 
A) There is no such thing,in either IASB standards or U.S.GAAP,as a "contingent asset." 
B) This is an asset that has been put up as collateral against a loan. 
C) This is a possible inflow of resources arising from a future activity. 
D) It is a probable asset,arising from past events ,whose existence is yet to be confirmed definitively by a future event.

Question 3

Under IAS 37,how are contingent liabilities treated in the financial statements?

Accepted Answer

A) IAS 37 does not address contingent liabilities. 
B) They are recorded as current liabilities if the amount is reasonably measured. 
C) They are disclosed in the notes to the financial statements when there is more than a remote possibility of an outflow of resources. 
D) They are not disclosed. 
A) IAS 37 does not address contingent liabilities. 
B) They are recorded as current liabilities if the amount is reasonably measured. 
C) They are disclosed in the notes to the financial statements when there is more than a remote possibility of an outflow of resources. 
D) They are not disclosed.

Question 4

Which of the following represents a difference in the classification of current liabilities between IFRS and U.S.GAAP?

Accepted Answer

A) refinanced short-term debt 
B) amounts payable on demand due to violation of debt covenants 
C) bank overdrafts 
D) all of the above 
A) refinanced short-term debt 
B) amounts payable on demand due to violation of debt covenants 
C) bank overdrafts 
D) all of the above

Question 5

Under IAS 32,how should an equity instrument be classified?

Accepted Answer

A) It must always be classified as equity by its very nature. 
B) The entity has the option of classifying it as a liability or equity. 
C) If it contains a contractual obligation that meets the definition of a financial liability,it should be classified as a liability. 
D) The entity should apportion the classification between liability and equity if there is a contractual obligation that meets the definition of a financial liability. 
A) It must always be classified as equity by its very nature. 
B) The entity has the option of classifying it as a liability or equity. 
C) If it contains a contractual obligation that meets the definition of a financial liability,it should be classified as a liability. 
D) The entity should apportion the classification between liability and equity if there is a contractual obligation that meets the definition of a financial liability.

Question 6

The primary difference between IAS 37,and U.S.GAAP concerning the treatment of contingent liabilities pertains to:

Accepted Answer

A) definition of terms. 
B) measurement. 
C) classification on the balance sheet. 
D) disclosure of relevant information. 
A) definition of terms. 
B) measurement. 
C) classification on the balance sheet. 
D) disclosure of relevant information.

Question 7

Under U.S.GAAP,a deferred tax asset must be realized when:

Accepted Answer

A) realization is probable. 
B) realization is possible. 
C) realization is more likely than not. 
D) realization is greater than 75% likely. 
A) realization is probable. 
B) realization is possible. 
C) realization is more likely than not. 
D) realization is greater than 75% likely.

Question 8

Under IAS 12,Income Taxes,how is the relationship between a hypothetical tax expense based on statutory rates and reported tax expense based on the effective tax rate explained?

Accepted Answer

A) A numerical reconciliation between tax expense based on the statutory rate in the home country and tax expense based on the effective tax rate must be presented. 
B) A numerical reconciliation between tax expense based on the weighted-average statutory rate across jurisdictions in which the company pays income taxes and tax expense based on the effective tax rate must be presented. 
C) Either (
A) or (
B) are acceptable explanations. 
D) Neither (
A) nor (
B) are acceptable explanations. 
A) A numerical reconciliation between tax expense based on the statutory rate in the home country and tax expense based on the effective tax rate must be presented. 
B) A numerical reconciliation between tax expense based on the weighted-average statutory rate across jurisdictions in which the company pays income taxes and tax expense based on the effective tax rate must be presented. 
C) Either (
A) or (
B) are acceptable explanations. 
D) Neither (
A) nor (
B) are acceptable explanations.

Question 9

Under IAS 18,when it is probable that the economic benefits of interest,royalties,and dividends will flow to the enterprise and can be measured reliably,how should revenue be recognized?

Accepted Answer

A) Interest income shall be recognized based on an effective yield basis. 
B) Royalties are recognized on an accrual basis with reference to the terms of the agreement. 
C) Dividends are recognized when the shareholders' right to receive payment is established. 
D) All of the above govern revenue recognition under these circumstances. 
A) Interest income shall be recognized based on an effective yield basis. 
B) Royalties are recognized on an accrual basis with reference to the terms of the agreement. 
C) Dividends are recognized when the shareholders' right to receive payment is established. 
D) All of the above govern revenue recognition under these circumstances.

Question 10

Under IAS 32,which of the following is a financial asset?

Accepted Answer

A) investment in equity instruments accounted for under the equity method 
B) investment in special-purpose entities 
C) a 30% investment in a subsidiary 
D) loans to other entities 
A) investment in equity instruments accounted for under the equity method 
B) investment in special-purpose entities 
C) a 30% investment in a subsidiary 
D) loans to other entities

According to IAS 37,how should contingent assets be recognized?

What is a "contingent asset?"

Under IAS 37,how are contingent liabilities treated in the financial statements?

Which of the following represents a difference in the classification of current liabilities between IFRS and U.S.GAAP?

Under IAS 32,how should an equity instrument be classified?

The primary difference between IAS 37,and U.S.GAAP concerning the treatment of contingent liabilities pertains to:

Under U.S.GAAP,a deferred tax asset must be realized when:

Under IAS 12,Income Taxes,how is the relationship between a hypothetical tax expense based on statutory rates and reported tax expense based on the effective tax rate explained?

Under IAS 18,when it is probable that the economic benefits of interest,royalties,and dividends will flow to the enterprise and can be measured reliably,how should revenue be recognized?

Under IAS 32,which of the following is a financial asset?

Introduction to International Accounting

Worldwide Accounting Diversity

International Convergence of Financial Reporting

International Financial Reporting Standards: Part I

Comparative Accounting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

Additional Financial Reporting Issues

Analysis of Foreign Financial Statements

International Taxation

International Transfer Pricing

Strategic Accounting Issues in Multinational Corporations

Comparative International Auditing and Corporate Governance

International Corporate Social Reporting

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Exam 5: International Financial Reporting Standards: Part II

According to IAS 37,how should contingent assets be recognized?

What is a "contingent asset?"

Under IAS 37,how are contingent liabilities treated in the financial statements?

Which of the following represents a difference in the classification of current liabilities between IFRS and U.S.GAAP?

Under IAS 32,how should an equity instrument be classified?

The primary difference between IAS 37,and U.S.GAAP concerning the treatment of contingent liabilities pertains to:

Under U.S.GAAP,a deferred tax asset must be realized when:

Under IAS 12,Income Taxes,how is the relationship between a hypothetical tax expense based on statutory rates and reported tax expense based on the effective tax rate explained?

Under IAS 18,when it is probable that the economic benefits of interest,royalties,and dividends will flow to the enterprise and can be measured reliably,how should revenue be recognized?

Under IAS 32,which of the following is a financial asset?

Introduction to International Accounting

Worldwide Accounting Diversity

International Convergence of Financial Reporting

International Financial Reporting Standards: Part I

Comparative Accounting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

Additional Financial Reporting Issues

Analysis of Foreign Financial Statements

International Taxation

International Transfer Pricing

Strategic Accounting Issues in Multinational Corporations

Comparative International Auditing and Corporate Governance

International Corporate Social Reporting

Filters