APPLYING IFRS STANDARDS EXAM SCRIPT
COMPLETE QUESTIONS AND ANSWERS
GRADED A+
●● IFRS 2: Share-based Payment
Answer: "OBJECTIVE: To specify the financial reporting by an entity
when it undertakes a share-based payment transaction, particularly the
measurement of the transaction and the recognition of the related
expense or asset. REQUIREMENTS: Recognise equity-settled share-
based payments at fair value of goods/services received (or equity
instruments granted if fair value cannot be estimated reliably) measured
at grant date; recognise cash-settled share-based payments at fair value
of liability remeasured at each reporting date until settled; recognise
expense over vesting period based on best estimate of number of
instruments vesting."
●● IFRS 3: Business Combinations
Answer: "OBJECTIVE: To improve the relevance, reliability and
comparability of the information that a reporting entity provides in its
financial statements about a business combination and its effects.
REQUIREMENTS: Apply acquisition method; identify acquirer;
determine acquisition date; recognise and measure identifiable assets
acquired, liabilities assumed and any non-controlling interest at fair
value; recognise and measure goodwill or gain from bargain purchase;
measure consideration transferred at fair value; disclose information
,enabling users to evaluate nature and financial effects of business
combination."
●● IFRS 4: Insurance Contracts
Answer: "OBJECTIVE: To specify the financial reporting for insurance
contracts by any entity that issues such contracts (described as an
insurer) until the IASB completes the second phase of its project on
insurance contracts. REQUIREMENTS: Permits continuation of existing
accounting policies for insurance contracts; prohibits provisions for
possible future claims from claims not arising from existing contracts;
requires impairment testing of reinsurance assets; requires unbundling of
deposit components when required by IAS 39; requires liability
adequacy testing; requires disclosure of amount, timing and uncertainty
of future cash flows."
●● IFRS 5: Non-current Assets Held for Sale and Discontinued
Operations
Answer: "OBJECTIVE: To specify the accounting for assets held for
sale, and the presentation and disclosure of discontinued operations.
●● REQUIREMENTS: Classify non-current assets as held for sale if
carrying amount will be recovered principally through sale rather than
continuing use; measure at lower of carrying amount and fair value less
costs to sell; cease depreciation; present discontinued operations
separately in statement of comprehensive income; disclose pre-tax
profit/loss, tax expense, and gain/loss on disposal."
Answer:
, ●● IFRS 6: Exploration for and Evaluation of Mineral Resources
Answer: "OBJECTIVE: To specify the financial reporting for the
exploration for and evaluation of mineral resources. REQUIREMENTS:
Permits entities to develop accounting policies for exploration and
evaluation assets without considering IAS 8 hierarchy; permits
classification as tangible or intangible; requires impairment indicators
specific to exploration and evaluation; requires impairment testing when
facts and circumstances suggest carrying amount may exceed
recoverable amount; requires disclosure of accounting policies and
amounts recognised."
●● IFRS 7: Financial Instruments: Disclosures
Answer: "OBJECTIVE: To require entities to provide disclosures in
their financial statements that enable users to evaluate the significance of
financial instruments and the nature and extent of risks arising from
them. REQUIREMENTS: Disclose significance of financial instruments
for financial position and performance; disclose qualitative and
quantitative information about exposure to risks (credit risk, liquidity
risk, market risk); provide sensitivity analysis for market risk; disclose
transfers of financial assets; provide maturity analysis for financial
liabilities."
●● IFRS 8: Operating Segments
Answer: "OBJECTIVE: To require an entity to disclose information to
enable users of its financial statements to evaluate the nature and
financial effects of the business activities in which it engages and the
COMPLETE QUESTIONS AND ANSWERS
GRADED A+
●● IFRS 2: Share-based Payment
Answer: "OBJECTIVE: To specify the financial reporting by an entity
when it undertakes a share-based payment transaction, particularly the
measurement of the transaction and the recognition of the related
expense or asset. REQUIREMENTS: Recognise equity-settled share-
based payments at fair value of goods/services received (or equity
instruments granted if fair value cannot be estimated reliably) measured
at grant date; recognise cash-settled share-based payments at fair value
of liability remeasured at each reporting date until settled; recognise
expense over vesting period based on best estimate of number of
instruments vesting."
●● IFRS 3: Business Combinations
Answer: "OBJECTIVE: To improve the relevance, reliability and
comparability of the information that a reporting entity provides in its
financial statements about a business combination and its effects.
REQUIREMENTS: Apply acquisition method; identify acquirer;
determine acquisition date; recognise and measure identifiable assets
acquired, liabilities assumed and any non-controlling interest at fair
value; recognise and measure goodwill or gain from bargain purchase;
measure consideration transferred at fair value; disclose information
,enabling users to evaluate nature and financial effects of business
combination."
●● IFRS 4: Insurance Contracts
Answer: "OBJECTIVE: To specify the financial reporting for insurance
contracts by any entity that issues such contracts (described as an
insurer) until the IASB completes the second phase of its project on
insurance contracts. REQUIREMENTS: Permits continuation of existing
accounting policies for insurance contracts; prohibits provisions for
possible future claims from claims not arising from existing contracts;
requires impairment testing of reinsurance assets; requires unbundling of
deposit components when required by IAS 39; requires liability
adequacy testing; requires disclosure of amount, timing and uncertainty
of future cash flows."
●● IFRS 5: Non-current Assets Held for Sale and Discontinued
Operations
Answer: "OBJECTIVE: To specify the accounting for assets held for
sale, and the presentation and disclosure of discontinued operations.
●● REQUIREMENTS: Classify non-current assets as held for sale if
carrying amount will be recovered principally through sale rather than
continuing use; measure at lower of carrying amount and fair value less
costs to sell; cease depreciation; present discontinued operations
separately in statement of comprehensive income; disclose pre-tax
profit/loss, tax expense, and gain/loss on disposal."
Answer:
, ●● IFRS 6: Exploration for and Evaluation of Mineral Resources
Answer: "OBJECTIVE: To specify the financial reporting for the
exploration for and evaluation of mineral resources. REQUIREMENTS:
Permits entities to develop accounting policies for exploration and
evaluation assets without considering IAS 8 hierarchy; permits
classification as tangible or intangible; requires impairment indicators
specific to exploration and evaluation; requires impairment testing when
facts and circumstances suggest carrying amount may exceed
recoverable amount; requires disclosure of accounting policies and
amounts recognised."
●● IFRS 7: Financial Instruments: Disclosures
Answer: "OBJECTIVE: To require entities to provide disclosures in
their financial statements that enable users to evaluate the significance of
financial instruments and the nature and extent of risks arising from
them. REQUIREMENTS: Disclose significance of financial instruments
for financial position and performance; disclose qualitative and
quantitative information about exposure to risks (credit risk, liquidity
risk, market risk); provide sensitivity analysis for market risk; disclose
transfers of financial assets; provide maturity analysis for financial
liabilities."
●● IFRS 8: Operating Segments
Answer: "OBJECTIVE: To require an entity to disclose information to
enable users of its financial statements to evaluate the nature and
financial effects of the business activities in which it engages and the
