CPA Core 1 Exam Questions Answered
Correctly.
How are Accounting Changes Handles - Answer Change in Estimate > prospectively
Change in Accounting Policy > retrospectively or follow transition guidance if new standard
Correction of Error > Retrospectively
IFRS - IAS 8
ASPE 1506
To be considered as "Held for sale" a non-current asset must meet this criteria - Answer · Must
be available for immediate sale in present condition
· Terms of sale must be usual and customary
· Sale must be highly probable
o Mgmt. committed to sell
o Actively looking for buyer
o Asset must be marketed at reasonable price
o Sale should be expected to be completed within 1yr (can be waived for delays outside entity's
control)
o Actions required to complete should indicate no significant changes/withdrawals planned.
*Measurement is at lower of carry value or FV less selling costs
IFRS 5
ASPE 3475
To be considered a discontinued operation, a component must meet what criteria - Answer ·
Must meet "held for sale" criteria
Plus ONE of the following
, · It represents a separate major line of business or geographical area of operations.
· It is part of a single co-ordinated plan to dispose of a separate major line of business or
geographical area of operations.
· It is a subsidiary acquired exclusively with a view to resale.
IFRS 5
ASPE 3475
IAS 36 - What are the 4 steps to determine impairment - Answer 1.) Identify CGU
2.) Determine if item must be tested for impairment
Must test annually for > goodwill/intangibles not being amortized
3.) Determine Recoverable amount
Higher of > FV less cost of disposal
Value in use (PV of future cash flows)
4.) Complete impairment test and write down item (recoverable amt - Carry value)
Balance Sheet Audit Assertions - Answer · Existence
· Rights/Obligations
· Completeness
· Accuracy/Valuation/Allocation
· Classification
· Presentation
Transaction Level Audit Assertions - Answer · Occurrence
· Completeness
· Accuracy
· Cut-off
· Classification
· Presentation
Correctly.
How are Accounting Changes Handles - Answer Change in Estimate > prospectively
Change in Accounting Policy > retrospectively or follow transition guidance if new standard
Correction of Error > Retrospectively
IFRS - IAS 8
ASPE 1506
To be considered as "Held for sale" a non-current asset must meet this criteria - Answer · Must
be available for immediate sale in present condition
· Terms of sale must be usual and customary
· Sale must be highly probable
o Mgmt. committed to sell
o Actively looking for buyer
o Asset must be marketed at reasonable price
o Sale should be expected to be completed within 1yr (can be waived for delays outside entity's
control)
o Actions required to complete should indicate no significant changes/withdrawals planned.
*Measurement is at lower of carry value or FV less selling costs
IFRS 5
ASPE 3475
To be considered a discontinued operation, a component must meet what criteria - Answer ·
Must meet "held for sale" criteria
Plus ONE of the following
, · It represents a separate major line of business or geographical area of operations.
· It is part of a single co-ordinated plan to dispose of a separate major line of business or
geographical area of operations.
· It is a subsidiary acquired exclusively with a view to resale.
IFRS 5
ASPE 3475
IAS 36 - What are the 4 steps to determine impairment - Answer 1.) Identify CGU
2.) Determine if item must be tested for impairment
Must test annually for > goodwill/intangibles not being amortized
3.) Determine Recoverable amount
Higher of > FV less cost of disposal
Value in use (PV of future cash flows)
4.) Complete impairment test and write down item (recoverable amt - Carry value)
Balance Sheet Audit Assertions - Answer · Existence
· Rights/Obligations
· Completeness
· Accuracy/Valuation/Allocation
· Classification
· Presentation
Transaction Level Audit Assertions - Answer · Occurrence
· Completeness
· Accuracy
· Cut-off
· Classification
· Presentation
