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Questions On IFRS

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Simritha K S
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14 views2 pages

Questions On IFRS

Uploaded by

Simritha K S
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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IAS 1

1.X Ltd provides you the following information: Raw material stock holding
period : 3 months Work-in-progress holding period : 1 month Finished goods
holding period : 5 months Debtors collection period : 5 months The trade
payables of the Company are paid in 12.5 months. Should these be classified
as current or non-current?

2.An entity shall classify a liability as current when it expects to settle the
liability in its normal operating cycle. An entity develops tools for customers
and this normally takes a period of around 2 years for completion. The
material is supplied by the customer and hence the entity only renders a
service. For this, the entity receives payment upfront and credits the amount
so received to “Income Received in Advance”. How should this “Income
Received in Advance” be classified, i.e., current or non-current?

3.X Ltd. provides you the following information: Raw material stock holding
period : 3 months Work-in-progress holding period : 1 month Finished goods
holding period : 5 months Debtors collection period : 5 months You are
requested to compute the operating cycle of X Ltd.

4.An entity prepares its financial statements that contain an explicit and
unreserved statement of compliance with IFRS. However, the auditor’s report
on those financial statements contains a qualification because of
disagreement on application of one Accounting Standard. In such case, is it
acceptable for the entity to make an explicit and unreserved statement of
compliance with IFRS?

IAS 8
1.Entity ABC acquired a building for its administrative purposes and presented
the same as property, plant and equipment (PPE) in the financial year
2021-2022. During the financial year 2022-2023, it relocated the office to a
new building and leased the said building to a third party. Following the
change in the usage of the building, Entity ABC reclassified it from PPE to
investment property in the financial year 2022-2023. Should Entity ABC
account for the change as a change in accounting policy?
2.An entity has presented certain material liabilities as non-current in its
financial statements for periods upto 31st March, 2021. While preparing
annual financial statements for the year ended 31st March, 2022,
management discovers that these liabilities should have been classified as
current. The management intends to restate the comparative amounts for the
prior period presented (i.e., as at 31st March, 2021). Would this
reclassification of liabilities from non-current to current in the comparative
amounts be considered to be correction of an error?

3.Whether an entity can change its accounting policy of subsequent


measurement of property, plant and equipment (PPE) from revaluation model
to cost model?

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