QUESTION BANK 8 CORRECT DETAILED
ANSWERS (VERIFIED ANSWERS) GRADED A+
PFRS 5 requires
A. Assets that meet the criteria to be classified as held for sale to be measured at fair
value less costs to sell
B. Depreciation on held for sale assets to cease but amortization should still be
provided for
C. Assets that meet the criteria to be classified as held for sale to be presented
separately on the face of
The statement of financial position and the results of discontinued operations to be
presented separately in the statement of profit or loss and other comprehensive income.
D. Assets and liabilities of a disposal group to be off-set and presented as one item on
the face of the statement of financial position - Right Ansa -c. Assets that meet the
criteria to be classified as held for sale to be presented separately on the face of
The statement of financial position and the results of discontinued operations to be
presented separately in the statement of profit or loss and other comprehensive income.
— According to PFRS 5 assets classified as held for sale are not depreciated,
measured a lower of carrying amount and fair value less cost of disposal and presented
separately in Statement of Financial Position. Any adjustment to its carrying amount
should be included in profit or loss.
Which of the following statements is incorrect?
A. PFRS 5 specifies that assets or disposal groups that are classified as held for sale
are carried at fair value less costs to sell.
B. PFRS 5 specifies that an asset classified as held for sale, or included within a
disposal group that is classified as held for sale, is not depreciated.
C. PFRS 5 specifies that an asset classified as held for sale, and the assets and
liabilities included within a disposal group classified as held for sale, are presented
separately in the statement of financial position.
D. PFRS 5 specifies that assets classified as non-current in accordance with PAS 1
Presentation of Financial Statements shall not be reclassified as current assets until
they meet the criteria to be classified as held for sale in accordance with this PFRS. -
Right Ansa -a. PFRS 5 specifies that assets or disposal groups that are classified as
held for sale are carried at fair value less costs to sell.
,— According to PFRS 5, paragraph 15, provides that an entity shall measure a non
current asset or disposal group classified as held for sale at lower of carrying amount or
fair value less cost of disposal.
A non-current asset is an asset that
A. Is being depreciated or amortized
B. Is not expected to be realized within 12 months
C. Is restricted cash
D. Does not meet the definition of a current asset. - Right Ansa -d. Does not meet the
definition of a current asset.
— PAS 1, paragraph 66, states that what is not included in the definition of current
assets is deemed classified as non current.
Which of the following assets is outside the scope of PFRS 5?
A. Property, plant and equipment
B. Investment property carried under the Cost model
C. Deferred tax assets
D. Intangible assets - Right Ansa -c. Deferred tax assets
— Deferred tax assets is included in the scoped-out assets of PFRS 5.
Which of the following assets is within the scope of PFRS 5?
A. Assets arising from employee benefits
B. Investment property carried under the fair value model
C. Deferred tax assets
D. Intangible assets - Right Ansa -d. Intangible assets
— All other choices are included in the list of measurement exceptions.
To which of the following types of asset do the measurement provisions of PFRS5 Non-
current assets held for sale and discontinued operations apply?
I. Financial assets
II. Intangible development assets
III. Leasehold buildings
IV. Biological assets
V. Contractual rights under insurance contracts
, A. I, IV, V
B. II, III
C. II, III, IV
D. III - Right Ansa -b. II, III
— Financial Assets, Biological Assets and Contractual rights under insurance contracts
are scoped-out assets.
It is a group of assets to be disposed of, by sale or otherwise, together as a group in a
single transaction, and liabilities directly associated with those assets that will be
transferred in the transaction. The group includes goodwill acquired in a business
combination if the group is a cash-generating unit to which goodwill has been allocated
or if it is an operation within such a cash-generating.
A. Discontinued operations
B. Disposal group
C. Cash generating unit
D. Component of an entity - Right Ansa -b. Disposal group
— Refer to IFRS 5.8
Assets which are previously classified as non-current in accordance with PAS 1
Presentation of Financial Statements when they meet the criteria to be classified as
held for sale are to be presented separately on the face of the balance sheet and
included as
A. Non-current asset
B. Current asset
C. Neither current nor noncurrent
D. Any of these - Right Ansa -b. Current asset
— PFRS 5, paragraph 3, states that noncurrent assets that is already classified as held
for sale shall be presented separately as current assets.
An entity shall classify a non-current asset (or disposal group) as held for sale when
A. The non-current asset's (or disposal group's) carrying amount will be recovered
principally through continuing use rather than through a sale transaction.
ANSWERS (VERIFIED ANSWERS) GRADED A+
PFRS 5 requires
A. Assets that meet the criteria to be classified as held for sale to be measured at fair
value less costs to sell
B. Depreciation on held for sale assets to cease but amortization should still be
provided for
C. Assets that meet the criteria to be classified as held for sale to be presented
separately on the face of
The statement of financial position and the results of discontinued operations to be
presented separately in the statement of profit or loss and other comprehensive income.
D. Assets and liabilities of a disposal group to be off-set and presented as one item on
the face of the statement of financial position - Right Ansa -c. Assets that meet the
criteria to be classified as held for sale to be presented separately on the face of
The statement of financial position and the results of discontinued operations to be
presented separately in the statement of profit or loss and other comprehensive income.
— According to PFRS 5 assets classified as held for sale are not depreciated,
measured a lower of carrying amount and fair value less cost of disposal and presented
separately in Statement of Financial Position. Any adjustment to its carrying amount
should be included in profit or loss.
Which of the following statements is incorrect?
A. PFRS 5 specifies that assets or disposal groups that are classified as held for sale
are carried at fair value less costs to sell.
B. PFRS 5 specifies that an asset classified as held for sale, or included within a
disposal group that is classified as held for sale, is not depreciated.
C. PFRS 5 specifies that an asset classified as held for sale, and the assets and
liabilities included within a disposal group classified as held for sale, are presented
separately in the statement of financial position.
D. PFRS 5 specifies that assets classified as non-current in accordance with PAS 1
Presentation of Financial Statements shall not be reclassified as current assets until
they meet the criteria to be classified as held for sale in accordance with this PFRS. -
Right Ansa -a. PFRS 5 specifies that assets or disposal groups that are classified as
held for sale are carried at fair value less costs to sell.
,— According to PFRS 5, paragraph 15, provides that an entity shall measure a non
current asset or disposal group classified as held for sale at lower of carrying amount or
fair value less cost of disposal.
A non-current asset is an asset that
A. Is being depreciated or amortized
B. Is not expected to be realized within 12 months
C. Is restricted cash
D. Does not meet the definition of a current asset. - Right Ansa -d. Does not meet the
definition of a current asset.
— PAS 1, paragraph 66, states that what is not included in the definition of current
assets is deemed classified as non current.
Which of the following assets is outside the scope of PFRS 5?
A. Property, plant and equipment
B. Investment property carried under the Cost model
C. Deferred tax assets
D. Intangible assets - Right Ansa -c. Deferred tax assets
— Deferred tax assets is included in the scoped-out assets of PFRS 5.
Which of the following assets is within the scope of PFRS 5?
A. Assets arising from employee benefits
B. Investment property carried under the fair value model
C. Deferred tax assets
D. Intangible assets - Right Ansa -d. Intangible assets
— All other choices are included in the list of measurement exceptions.
To which of the following types of asset do the measurement provisions of PFRS5 Non-
current assets held for sale and discontinued operations apply?
I. Financial assets
II. Intangible development assets
III. Leasehold buildings
IV. Biological assets
V. Contractual rights under insurance contracts
, A. I, IV, V
B. II, III
C. II, III, IV
D. III - Right Ansa -b. II, III
— Financial Assets, Biological Assets and Contractual rights under insurance contracts
are scoped-out assets.
It is a group of assets to be disposed of, by sale or otherwise, together as a group in a
single transaction, and liabilities directly associated with those assets that will be
transferred in the transaction. The group includes goodwill acquired in a business
combination if the group is a cash-generating unit to which goodwill has been allocated
or if it is an operation within such a cash-generating.
A. Discontinued operations
B. Disposal group
C. Cash generating unit
D. Component of an entity - Right Ansa -b. Disposal group
— Refer to IFRS 5.8
Assets which are previously classified as non-current in accordance with PAS 1
Presentation of Financial Statements when they meet the criteria to be classified as
held for sale are to be presented separately on the face of the balance sheet and
included as
A. Non-current asset
B. Current asset
C. Neither current nor noncurrent
D. Any of these - Right Ansa -b. Current asset
— PFRS 5, paragraph 3, states that noncurrent assets that is already classified as held
for sale shall be presented separately as current assets.
An entity shall classify a non-current asset (or disposal group) as held for sale when
A. The non-current asset's (or disposal group's) carrying amount will be recovered
principally through continuing use rather than through a sale transaction.
