CPA PROGRAM AUSTRALIA FINANCIAL REPORTING .-DIGITAL FINANCE REAL ACTUAL EXAM QUESTION AND CORRECT DETAILED ANSWERS- GRADED A+

CPA PROGRAM AUSTRALIA FINANCIAL REPORTING .-DIGITAL
FINANCE REAL ACTUAL EXAM QUESTION AND CORRECT
DETAILED ANSWERS- GRADED A+
CPA Program - ANSWER A professional accounting program designed to produce future CPAs
with technical skills and strategic leadership abilities.



Financial Reporting - ANSWER The process of preparing general purpose financial statements in
accordance with the International Financial Reporting Standards (IFRSs) to provide information
for corporate leadership and assurance services.



International Financial Reporting Standards (IFRSs) - ANSWER Global accounting standards
issued by the International Accounting Standards Board (IASB) for the preparation of financial
statements.



John Wiley & Sons Australia, Ltd - ANSWER The publisher of the sixth edition of the CPA
Program Financial Reporting.



Nikole Gyles - ANSWER Author of the CPA Program Financial Reporting with a BCom (Hons)
UTas, CA, CPA qualification.



Janice Loftus - ANSWER Author of the CPA Program Financial Reporting with a BBus NSWIT,
MCom (Hons) UNSW, FCPA qualification.



Carmen Ridley - ANSWER Author of the CPA Program Financial Reporting with a BSc (Hons)
Mathematics, FCA, AICD qualification.



Dean Hanlon - ANSWER Author of the CPA Program Financial Reporting with a BEc,
GradDipCom, MCom (Hons), PhD Monash University, FCPA, CA qualification.

,Sorin Daniliuc - ANSWER Author of the CPA Program Financial Reporting with a BEc (Hons) UAIC
Iasi, PhD ANU, GradCertEd ANU, CPA qualification.



John Lourens - ANSWER Author of the CPA Program Financial Reporting with a BBus (Acc),
GradDip (Acc & Fin), MAdmin, PhD Monash University, DipEd qualification.



Sishuo Jack Liu - ANSWER Author of the CPA Program Financial Reporting with a BCom (Acc &
Fin), MBA Cornell University, CICPA, CFA, FRM qualification.



Peter Gerhardy - ANSWER Member of the advisory panel for the CPA Program Financial
Reporting from Ernst & Young.



Shan Goldsworthy - ANSWER Member of the advisory panel for the CPA Program Financial
Reporting from Shans Accounting Services.



Kris Peach - ANSWER Member of the advisory panel for the CPA Program Financial Reporting
from KPMG.



Daen Soukseun - ANSWER Member of the advisory panel for the CPA Program Financial
Reporting from Department of Transport, Planning and Local Infrastructure, Victoria.



Themin Suwardy - ANSWER Member of the advisory panel for the CPA Program Financial
Reporting from Singapore Management University.



Anne Vuong - ANSWER Member of the advisory panel for the CPA Program Financial Reporting
from National Australia Bank.



Mark Shying - ANSWER Member of the advisory panel for the CPA Program Financial Reporting
from CPA Australia.

,Ram Subramanian - ANSWER Member of the advisory panel for the CPA Program Financial
Reporting from CPA Australia.



David Hardidge - ANSWER Member of the advisory panel for the CPA Program Financial
Reporting from Telstra.



IFRS Foundation - ANSWER The organization that issues and maintains the International
Financial Reporting Standards (IFRSs).



IASB - ANSWER The International Accounting Standards Board responsible for developing and
issuing the International Financial Reporting Standards (IFRSs).



Module 1 - ANSWER Covers the role and importance of financial reporting, the IASB Conceptual
Framework, and the qualitative characteristics of useful financial information.



Module 2 - ANSWER Covers the presentation of financial statements, including the statement of
profit or loss and other comprehensive income, the statement of changes in equity, the
statement of financial position, and the statement of cash flows.



Module 3 - ANSWER Covers revenue recognition from contracts with customers, provisions,
contingent liabilities, and contingent assets.



Module 4 - ANSWER Covers income taxes, including current tax, deferred tax, recognition of
deferred tax assets and liabilities, and comprehensive examples.



Module 5 - ANSWER Covers business combinations, including the acquisition method, deferred
tax arising from a business combination, and disclosures for business combinations.

, Module 6 - ANSWER Covers financial instruments, including the definition of financial
instruments, recognition and derecognition of financial assets and liabilities, and classification
of financial assets and financial liabilities.



Module 7 - ANSWER Covers impairment of assets, including the basic principles of impairment,
measurement of recoverable amount, and disclosures of impairment losses and reversals.



Accounts receivable



Financial Reporting (ASPE) - ANSWER Accounts receivable (ASPE)

· Considered a financial instrument (financial asset), as it represents a contractual right to
receive cash or another financial asset from another party

· As such, accounts receivable must be tested for impairment at the end of the reporting period
if significant adverse changes during the period cast doubt on collectability

· If impaired, then should be written down to the amount expected to be collected through the
use of an allowance account

· The amount of the reduction shall be recognized as a bad debt expense in net income.



Reference: ASPE 3856.05(h), .16, .17



Inventory valuation



Financial Reporting (ASPE) - ANSWER Inventory valuation (ASPE)

· Inventories shall be measured at the lower of cost and net realizable value (NRV).

· The cost of inventories shall comprise all costs of purchase, costs of conversion, and other
costs incurred in bringing the inventories to their present location and condition.

· NRV is the estimated selling price in the ordinary course of business less estimated selling costs