Question 1

Which of the following items is not reported as a liability in the financial reports of a defined contribution plan?

Accepted Answer

A)  Income tax payable. 
B)  Accounts payable. 
C)  Accrued member benefits. 
D)  None of the given choices are correct. 
A)  Income tax payable. 
B)  Accounts payable. 
C)  Accrued member benefits. 
D)  None of the given choices are correct. D

Question 2

Wear and tear of assets is not considered when determining market values of assets.

Accepted Answer

A) True 
 B)False  False

Question 3

A superannuation plan is defined in AAS 25 as an arrangement whereby it is agreed between trustees and employers,employees or self-employed persons,that benefits be provided upon the retirement of plan members or upon their resignation,death,disablement or other specified events.

Accepted Answer

A) True 
 B)False  True

Question 4

Discuss the options available for defined benefit superannuation plans.

Accepted Answer

The obligation of a defined benefit supe

Question 5

It is common for superannuation plans to recognise depreciation expense for its non-current assets.

Accepted Answer

A) True 
 B)False

Question 6

Happy-go-lucky Superannuation Plan provides the following information relating to the period ended 30 June 2014: $$\begin{array} { | l | r | } 
\hline \text { Gross benefit payment to an individual based on an actuarial analysis as at 30 June } 2014 & \$ 500000 \
\hline \text { Commonwealth government guaranteed securities } & 5 \% \
\hline \text { Current anticipated rate of return on assets (for the period of the benefit liability) } & 9 \% \
\hline \text { Quality corporate bond rate for the period of the benefit liability } & 7 \% \
\hline
\end{array}$$ The actuarial assumption used to calculate the liability was that the individual would take the benefit as a lump sum on retirement in 6 years' time.What is the present value of the expected future benefit payment (rounded to the nearest dollar)?

Accepted Answer

A)  $333 171 
B)  $298 134 
C)  $373 108 
D)  $121 613 
A)  $333 171 
B)  $298 134 
C)  $373 108 
D)  $121 613

Question 7

In a defined contribution plan,accrued benefits are the difference between the carrying amount of the assets and the sum of all other liabilities of the superannuation plan.

Accepted Answer

A) True 
 B)False

Question 8

A description of the regulatory framework relevant to superannuation plans in Australia is:

Accepted Answer

A)  AAS 25 provides legally backed, mandatory requirements for financial reporting by superannuation funds. The reporting required covers both general purpose financial reporting and statements of contributions and entitlements for individual members. APRA and ASIC have a role in supervising and monitoring superannuation plans in line with legislation contained in the Superannuation Industry Supervision Act 1993. 
B)  ASIC has a supervisory role and APRA monitors trusts that are superannuation plans. Regulations regarding the plans are set out in the Superannuation Industry Supervision Act 1993. AAS 25 provides guidance for reporting for general purpose users and individual members and it is recommended by APRA that plans conform with AAS 25. 
C)  APRA is the regulatory body that supervises reporting and financial standards for superannuation trusts. ASIC monitors those superannuation plans established as companies. In general, superannuation plans are regulated through the Superannuation Industry Supervision Act 1993. This Act mandates compliance with AAS 25 for all superannuation plans. 
D)  Superannuation plans are monitored and regulated by APRA and ASIC, with specific regulations set out in the Superannuation Industry Supervision Act 1993. AAS 25 provides guidance for general purpose financial reports and it is recommended by APRA that plans follow AAS 25. 
A)  AAS 25 provides legally backed, mandatory requirements for financial reporting by superannuation funds. The reporting required covers both general purpose financial reporting and statements of contributions and entitlements for individual members. APRA and ASIC have a role in supervising and monitoring superannuation plans in line with legislation contained in the Superannuation Industry Supervision Act 1993. 
B)  ASIC has a supervisory role and APRA monitors trusts that are superannuation plans. Regulations regarding the plans are set out in the Superannuation Industry Supervision Act 1993. AAS 25 provides guidance for reporting for general purpose users and individual members and it is recommended by APRA that plans conform with AAS 25. 
C)  APRA is the regulatory body that supervises reporting and financial standards for superannuation trusts. ASIC monitors those superannuation plans established as companies. In general, superannuation plans are regulated through the Superannuation Industry Supervision Act 1993. This Act mandates compliance with AAS 25 for all superannuation plans. 
D)  Superannuation plans are monitored and regulated by APRA and ASIC, with specific regulations set out in the Superannuation Industry Supervision Act 1993. AAS 25 provides guidance for general purpose financial reports and it is recommended by APRA that plans follow AAS 25.

Question 9

Discuss why the Australian Accounting Standards Board decided not to adopt IAS 26 Accounting and Reporting by Retirement Benefit Plans.

Accepted Answer

The AASB decided to retain AAS 25 beyond

Question 10

How are the accrued benefits of a defined contribution plan measured?

Accepted Answer

A)  They are measured as the market value of the assets of the plan with no accumulated depreciation deducted. 
B)  They are a residual amount: the difference between the carrying amount of the assets and the sum of the income tax and sundry liabilities of the plan. 
C)  They are measured in a detailed actuarial review to determine the present value of expected future benefit payments arising as a result of membership of the fund up to measurement date. 
D)  They are measured as the difference between the carrying value of the plan's assets and the liability to pay funds out to members on retirement. 
A)  They are measured as the market value of the assets of the plan with no accumulated depreciation deducted. 
B)  They are a residual amount: the difference between the carrying amount of the assets and the sum of the income tax and sundry liabilities of the plan. 
C)  They are measured in a detailed actuarial review to determine the present value of expected future benefit payments arising as a result of membership of the fund up to measurement date. 
D)  They are measured as the difference between the carrying value of the plan's assets and the liability to pay funds out to members on retirement.

Question 11

What is the key distinction between a defined benefit superannuation plan and a defined contribution superannuation plan?

Accepted Answer

A)  A defined benefit plan accumulates funds through investments in real assets such as land and buildings whereas a defined contribution plan accumulates funds through investments in shares and other more liquid assets. 
B)  A defined benefit plan is run by professional trustees who seek the support of investment advisors and consultants. A defined contribution plan is normally run by trustees appointed by the employer and focuses on simple formulas for investment. 
C)  The assets of a defined benefit plan are the focus in determining the benefits that will be paid out to members, whereas for a defined contribution plan the benefits are measured through the liability to members. 
D)  A defined benefit plan's accrued benefits are determined by reference to the provisions of the superannuation plan trust deed's payment formulas. A defined contribution plan's accrued benefits are determined as the difference between the assets and other liabilities of the fund. 
A)  A defined benefit plan accumulates funds through investments in real assets such as land and buildings whereas a defined contribution plan accumulates funds through investments in shares and other more liquid assets. 
B)  A defined benefit plan is run by professional trustees who seek the support of investment advisors and consultants. A defined contribution plan is normally run by trustees appointed by the employer and focuses on simple formulas for investment. 
C)  The assets of a defined benefit plan are the focus in determining the benefits that will be paid out to members, whereas for a defined contribution plan the benefits are measured through the liability to members. 
D)  A defined benefit plan's accrued benefits are determined by reference to the provisions of the superannuation plan trust deed's payment formulas. A defined contribution plan's accrued benefits are determined as the difference between the assets and other liabilities of the fund.

Question 12

The assets of a superannuation fund include:

Accepted Answer

A)  contributions receivable from employer and employees. 
B)  cash and other monetary assets. 
C)  investments of the plan. 
D)  all of the given answers. 
A)  contributions receivable from employer and employees. 
B)  cash and other monetary assets. 
C)  investments of the plan. 
D)  all of the given answers.

Question 13

Which of the following measurement rules is not in accordance with AAS 25 Financial Reporting by Superannuation Plans?

Accepted Answer

A)  Assets of a defined contribution plan and a defined benefit plan are measured at net market values as at the reporting date. 
B)  Accrued benefits of a defined contribution plan shall be shown as an amount equivalent to the difference between the carrying amount of the assets and the sum of all other liabilities. 
C)  Obligations for accrued benefits of a defined benefit plan are discounted to the present value of expected future payments arising from membership date to reporting date. 
D)  Long-term liabilities of a defined benefit plan are discounted to their present value at reporting date. 
A)  Assets of a defined contribution plan and a defined benefit plan are measured at net market values as at the reporting date. 
B)  Accrued benefits of a defined contribution plan shall be shown as an amount equivalent to the difference between the carrying amount of the assets and the sum of all other liabilities. 
C)  Obligations for accrued benefits of a defined benefit plan are discounted to the present value of expected future payments arising from membership date to reporting date. 
D)  Long-term liabilities of a defined benefit plan are discounted to their present value at reporting date.

Question 14

The types of reports that a superannuation plan provides fall into which two categories?

Accepted Answer

A)  reports that relate to the financial performance and position of the plan 
B)  accrual accounting reports and statements of cash flow 
C)  individual contributions and entitlements of each member and the performance and position of the plan itself 
D)  government reporting requirements and general purpose financial reports 
A)  reports that relate to the financial performance and position of the plan 
B)  accrual accounting reports and statements of cash flow 
C)  individual contributions and entitlements of each member and the performance and position of the plan itself 
D)  government reporting requirements and general purpose financial reports

Question 15

What are the implications of not having the force of law in adopting the requirements of AAS 25 on financial reports?

Accepted Answer

Unlike AASB standards,AAS standards do n

Question 16

Revenues of superannuation plans include:

Accepted Answer

A)  investment revenue. 
B)  contribution revenue. 
C)  gain on sale of non-current assets. 
D)  investment revenue and contribution revenue. 
A)  investment revenue. 
B)  contribution revenue. 
C)  gain on sale of non-current assets. 
D)  investment revenue and contribution revenue.

Question 17

The accrued benefits of a defined benefit superannuation plan are the accumulated assets that will be used to meet the plan's obligations to its members.

Accepted Answer

A) True 
 B)False

Question 18

AAS 25 requires a defined contribution plan to disclose which of the following items on the face of the operating statement or by way of note?

Accepted Answer

A)  investment revenue and its individual components, including changes in net market values for each class of investment 
B)  amounts contributed by employers 
C)  amounts contributed by members 
D)  none of the given answers 
A)  investment revenue and its individual components, including changes in net market values for each class of investment 
B)  amounts contributed by employers 
C)  amounts contributed by members 
D)  none of the given answers

Question 19

Which of the following combinations complies with the measurement rules of assets held by a superannuation fund?

Accepted Answer

A) 
$$\begin{array} { | l | l | l | l | } 
\hline     
\text { Investment in shares } & \text { Land } & \text { Property plant and equipment } & \text { Motor vehicles } \
\hline \text { Historical cost } & \text { Net market value } & \text { Historical cost } & \text { Historical cost } \
\hline
\end{array}$$ 
B) 
$$\begin{array} { | l | l | l | l | } 
\hline \text { Investment in shares } & \text { Land } & \text { Property plant and equipment } & \text { Motor vehicles } \
\hline \text { Net market value } & \text { Net market value } & \text { Historical cost } & \text { Historical cost } \
\hline
\end{array}$$ 
C) 
$$\begin{array} { | l | l | l | l | } 
\hline \text { Investment in shares } & \text { Land } & \text { Property plant and equipment } & \text { Motor vehicles } \
\hline \text { Net market value } & \text { Net market value } & \text { Net market value } & \text { Net market value } \
\hline
\end{array}$$ 
D) 
$$\begin{array} { | l | l | l | l | } 
\hline
\text { Investment in shares } & \text { Land } & \text { Property plant and equipment } & \text { Motor vehicles } \
\hline \text { Historical cost } & \text { Net market value } & \text { Historical cost } & \text { Historical cost } \
\hline
\end{array}$$ 
A) 
$$\begin{array} { | l | l | l | l | } 
\hline     
\text { Investment in shares } & \text { Land } & \text { Property plant and equipment } & \text { Motor vehicles } \
\hline \text { Historical cost } & \text { Net market value } & \text { Historical cost } & \text { Historical cost } \
\hline
\end{array}$$ 
B) 
$$\begin{array} { | l | l | l | l | } 
\hline \text { Investment in shares } & \text { Land } & \text { Property plant and equipment } & \text { Motor vehicles } \
\hline \text { Net market value } & \text { Net market value } & \text { Historical cost } & \text { Historical cost } \
\hline
\end{array}$$ 
C) 
$$\begin{array} { | l | l | l | l | } 
\hline \text { Investment in shares } & \text { Land } & \text { Property plant and equipment } & \text { Motor vehicles } \
\hline \text { Net market value } & \text { Net market value } & \text { Net market value } & \text { Net market value } \
\hline
\end{array}$$ 
D) 
$$\begin{array} { | l | l | l | l | } 
\hline
\text { Investment in shares } & \text { Land } & \text { Property plant and equipment } & \text { Motor vehicles } \
\hline \text { Historical cost } & \text { Net market value } & \text { Historical cost } & \text { Historical cost } \
\hline
\end{array}$$

Question 20

The maximum period a defined benefit plan can have between detailed actuarial reviews of the accrued benefits is 2 years.

Accepted Answer

A) True 
 B)False

Exam 22: Accounting for Superannuation Plans

Which of the following items is not reported as a liability in the financial reports of a defined contribution plan?

Wear and tear of assets is not considered when determining market values of assets.

A superannuation plan is defined in AAS 25 as an arrangement whereby it is agreed between trustees and employers,employees or self-employed persons,that benefits be provided upon the retirement of plan members or upon their resignation,death,disablement or other specified events.

Discuss the options available for defined benefit superannuation plans.

It is common for superannuation plans to recognise depreciation expense for its non-current assets.

In a defined contribution plan,accrued benefits are the difference between the carrying amount of the assets and the sum of all other liabilities of the superannuation plan.

A description of the regulatory framework relevant to superannuation plans in Australia is:

Discuss why the Australian Accounting Standards Board decided not to adopt IAS 26 Accounting and Reporting by Retirement Benefit Plans.

How are the accrued benefits of a defined contribution plan measured?

What is the key distinction between a defined benefit superannuation plan and a defined contribution superannuation plan?

The assets of a superannuation fund include:

Which of the following measurement rules is not in accordance with AAS 25 Financial Reporting by Superannuation Plans?

The types of reports that a superannuation plan provides fall into which two categories?

What are the implications of not having the force of law in adopting the requirements of AAS 25 on financial reports?

Revenues of superannuation plans include:

The accrued benefits of a defined benefit superannuation plan are the accumulated assets that will be used to meet the plan's obligations to its members.

AAS 25 requires a defined contribution plan to disclose which of the following items on the face of the operating statement or by way of note?

Which of the following combinations complies with the measurement rules of assets held by a superannuation fund?

The maximum period a defined benefit plan can have between detailed actuarial reviews of the accrued benefits is 2 years.

An Overview of the Australian External Reporting Environment

The Conceptual Framework of Accounting and Its Relevance to Financial Reporting

Theories of Accounting

An Overview of Accounting for Assets

Depreciation of Property, plant and Equipment

Revaluations and Impairment Testing of Non-Current Assets

Inventory

Accounting for Intangibles

Accounting for Heritage Assets and Biological Assets

An Overview of Accounting for Liabilities

Accounting for Leases

Accounting for Employee Benefits

Share Capital and Reserves

Accounting for Financial Instruments

Revenue Recognition Issues

The Statement of Comprehensive Income and Statement of Changes in Equity

Accounting for Share-Based Payments

Accounting for Income Taxes

The Statement of Cash Flows

Accounting for the Extractive Industries

Accounting for General Insurance Contracts

Events Occurring After the End of the Reporting Period

Segment Reporting

Related Party Disclosures

Earnings Per Share

Accounting for Group Structures

Further Consolidation Issues I: Accounting for Intragroup Transactions

Further Consolidation Issues II: Accounting for Non-Controlling Interests

Further Consolidation Issues IV: Accounting for Changes in the Degree of Ownership of a Subsidiary

Accounting for Equity Investments,including Investments in Associates and Joint Arrangements

Accounting for Foreign Currency Transactions

Translating the Financial Statements of Foreign Operations

Accounting for Corporate Social Responsibility

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