Set of flashcards International Accounting (Page 3 of 4)

Flashcards	126
Language	English
Category	Micro-Economics
Level	University
Created / Updated	06.01.2020 / 08.01.2020
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Why is deferred taxation accounted for in financial statements?

Taxation rates vary between countries

A mismatch can occur between IFRS balance sheet and tax balance sheet

Tax losses occur and they have to be anticipated

The prudence principle dictates that it should be so

Which tax rates are used to calculate the tax liability?

Tax rates enacted or substantively enacted by date of financial statements

Anticipated tax rates

Tax rates and tax laws that have been enacted

Tax rates substantively enacted by the date of the financial statements

Can deferred tax assets and liabilities be discounted?

Yes

No

When should an entity assess the carrying amount of a deferred tax asset?

only on initial recognition

if the net deferred tax position is a liability

at the end of each reporting period

A lease is classified as an operating lease if it does not transfer …

... substantially all the risks and rewards incidental to ownership

… more than 50% of all the risks and rewards incidental to ownership

… more than 90% of all the risks and rewards incidental to ownership

When the present value of minimum lease payments is approx equal to the fair value of the assets, than we are talking about

Operating lease

Finance lease

If at the end of the lease term, the ownership of the asset is not transferred to the lessee, one has a finance lease.

True

False

What is the depreciation period for assets under finance leases?

No purchase option: Leasing period

No purchase option: Useful life

Always the useful life

The contract of an operating lease is known as a rental agreement.

True

False

The disclosure requirements should help users of an entity's financial statements to assess..?

only the nature of the entity's interests in another entity

only the impact of the entity's interests on its financial state

only the risks related to an entity's interests in other entities

all of the mentioned

Aggregation is not allowed for the following interests:

only unconsolidated structured entities

only subsidiaries

only joint arrangements

aggregation is not allowed for any of the mentioned

Which of the following is an adequate level of aggregation?

Nature of activities

Classification of industries

Geography and location

all of them are

IFRS 12 does not hold for separate financial statements of an entity.

True

False

Which of the following is not a required disclosure?

Interest in unconsolidated subsidiaries (Investment entities)

Interest in subsidiaries

An interest in line with IFRS 9 Financial Instruments

Interest in Joint arrangements and Associates

Modifications to the significant judgements and assumptions do not have to be disclosed:

True

False

In the case of investment entities, what is not required to be disclosed?

that the entity is in fact an investment entity

The subsidiary’s name

The subsidiary’s place of incorporation and its principal place of business

all of the mentioned have to be disclosed

The proportion of voting rights held, always need to be disclosed.

TRUE

FALSE

only if it is different from the proportion of ownership interests held

Provision of information demanded by IFRS 12, former to its adoption is mandatory.

TRUE

No, but it is highly desirable.

What is highlighted in IFRS 12, in terms of providing information in financial statements?

to put in as much detailed information as possible

to not overload the statements with overly detailed information

Significant judgements and assumptions: When does the company NOT have to provide disclosure?

holds >50% voting rights of another entity where it does not have control

holds <50% of the voting rights of another entity where it has control

it is an agent or principal with respect to another entity

it holds >50% of the voting rights of another entity where it has control

For joint arrangement and associate an entity is not required to disclose:

The joint arrangement’s or associate’s name

nature of the entity’s relationship with the joint arrangement or associate

its place of incorporation and principal place of business

the overall corporate governance system

Voting rights aren't the dominant factor in determining who controls the entity in the case of:

Structured entities

Subsidiaries

Associates

Joint Ventures

Interests in other entities cannot be evidenced by:

holding of equity

holding of debt instruments

customer supplier relationship

provision of funding

Which is NOT a disclosure requirement in case of interests in subsidiaries?

The proportion of ownership interests held by non-controlling interests

The proportion of ownership interests held by controlling interests

Summary of the subsidiary’s financial information

subsidiary’s place of incorporation and its principal place of business

IFRS 16 reports information that provides a basis for users of financial statements to assess the amount of Cash Flows

True

False

Companies with operating leases will appear to be…

liability-rich

liability-poor

asset-rich

asset-poor

What is the formula for measuring the lease liability (LL)?

LL = PV Lease Rentals + PV expected payments at the end of Lease

LL = PV Lease Rentals - PV expected payments at the end of Lease

LL = PV Lease Income - PV Lease Rentals

LL = PV Lease Income + PV Lease Rentals

What does the new definition of „Lease“ focus on?

When the lease ends

Why the lease is identified as an lease

Who controls the asset

None of the above

What is a right-of-use asset?

lessee has the right to use an asset over the life of a lease

lessor has the right to use an asset over the life of a lease

lessee and lessor have the right to use an asset over the life of a lease

lessee has the right to use an asset for max. 1 month

Which of the follwoning transaction is in the scope of IRF2? Transactions in which..

...counterparties act as shareholders rather than suppliers

...the counterparty acts in its capacity not as a shareholder

...a SBP is made in exchange for control of a business

...contracts to acquire non-financial items in exchange for a SBP

A vesting condition related to the market (achieving share price target) is

service based

shareholder based

perfromance based

stakeholder based

IFRS2 also includes share.based payments for Groups

True

FAlse

IFRS2 applies to..

stock cooperations

entities with at least USD10 million turnover

only certain industires

all entities

The entity needs to decrease its error rate in a certain area.

Non-market performance conditions

Market conditions

Service Condition

None

Which of the following examples INCLUDES IFRS17 insurance contracts?

Warranties provided by a manufacturer

Employers’ assets and liabilities that arise from employee benefit

Contract between issuer and policyholder based on insured event

Contractual rights on the future use of non-financial items

The Variable free approach (VFA) is determined for

default models

contracts at the phase of inception

a group of contracts

only special industries

Which is NOT a porfolio group for insurance contracts? A group of contracts…

that are onerous at initial recognitio

that have the same data management principles

that at recognition have no significant possibility of becoming onerous

remaining contracts in the portfolio

An entity can include contracts issued more than one year apart in the same group.

True

False

Which of these contracts can NOT be considered as an insurance contract?

insurance against theft or damage

insurance against product liability

product warranties

credit-related guarantees

How is an operating lease treated on a balance sheet?

is an equity

is an asset

is an expense

International Accounting

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