IFRS final Exam With Correct Answers

IFRS final Exam With Correct Answers

the |old |IFRS |rev |rec |standard |- |VERIFIED |ANSWERS |**✔18



IFRS |standard |for |construction |contracts |- |VERIFIED |ANSWERS |**✔11



What |two |standards |make |up |the |old |standards |for |revenue? |- |VERIFIED |ANSWERS |**✔18 |and |11



what |is |the |new |IFRS |standard |for |revenue? |- |VERIFIED |ANSWERS |**✔IFRS |15



When |is |the |new |IFRS |standrd |for |revenue |effective: |

1) |for |international |preparers |

2) |For |FASB |- |VERIFIED |ANSWERS |**✔january |1 |2018 |

December |15th |2017



Where |are |all |revenue |standard |standards |for |GAAP |now? |- |VERIFIED |ANSWERS |**✔under |topic |
606



under |the |old |revenue |standard |revenue |would |be |measured |at |- |VERIFIED |ANSWERS |**✔the |FV |of
|the |consideration |recieved |(IAS |18)




For |IAS |18 |if |there |is |a |financing |component |of |the |transaction |what |do |you |need |to |do? |- |VERIFIED
|ANSWERS |**✔Figure |what |the |interest |income |on |the |contract |is |and |determine |what |amount |of |

the |revenue |from |the |contract |is |contract |revenue |or |interest |income



Measurement |for |exchange |transactions |in |IAS |18 |Revenue |

If |the |assets |exchanged |are |similar |in |nature |then |

if |the |assets |exchanged |are |NOT |similar |in |nature |then |- |VERIFIED |ANSWERS |**✔no |revenue |is |
recognized |

revenue |is |recognized |at |FV |of |received |or |FV |of |whats |given |up |if |FV |received |not |findable

,Under |IAS |18 |(old) |you |must |identify |the |transaction |

This |means |that |

one |contract |can |have |

revenue |needs |to |- |VERIFIED |ANSWERS |**✔multiple |units |of |account |

be |divided |between |the |multiple |transactions



IAS |18 |Example: |sale |of |a |car |with |a |service |contract |

Cash |15,000 |

Revenue |14,000 |
|



|________ |1000 |- |VERIFIED |ANSWERS |**✔Deferred |revenue |- |defer |the |revenue |until |the |service |is |
actually |performed



Sale |of |a |car |plus |a |service |plan |are |sold |for |20,000 |told |

Normally |the |car |sells |for |20,000 |by |itself

The |service |plan |generally |sells |for |5000 |by |itself |

25,000 |total |FV |

Entry? |- |VERIFIED |ANSWERS |**✔Cash |20,000 |

Revenue |16000
|



Def |Rev. |4000
|




IAS |18 |Requirements |for |Recognizing |Revenue |



Entity |transferred |________________ |of |ownership |to |buyer.

There |is |no |_____________ |to |the |degree |associated |with |ownership |or |effective |control.

The |amount |of |revenue |can |________________.

Probable |that |economic |benefits |associated |with |transaction |will |____________.

Costs |incurred |or |to |be |incurred |with |respect |to |the |transaction |can |be |_______________.

,Transfer |of |risks |and |rewards |generally |includes |transfer |of



If |seller |cant |estimate |right |of |return |then |wont |meet |first |criteria |but |if |ca |estimate |amount |of |
returns |then |they |can |recognize |a |portion |of |revenue |based |off |estimate |- |VERIFIED |ANSWERS |
**✔significant |risks |and |rewards |

continued |managerial |involvement

be |measured |reliably

flow |to |entity
|



measured |reliably |



legal |title



If |goods |are |sold |and |need |to |be |installed |and |they |aren't |installed |then |- |VERIFIED |ANSWERS |
**✔transfer |of |risks |and |rewards |isnt |complete |and |no |revenue |is |recognized



Under |IAS |18 |for |rendering |of |services: |



To |determine |if |outcome |can |be |estimated |reliably:

Revenue |amount |can |be |___________ |_________

Probable |future |economic |benefits |_____________

________ |___ |________ |can |be |measured |reliably

______ |incurred |for |the |transaction |and |to |complete |the |transaction |can |be |measured |reliably |- |
VERIFIED |ANSWERS |**✔reliably |estimated

flow |to |the |entity

stage |of |completion

costs



Long |term |service |contracts |will |be |recognized |using |the |percentage |of |competion |method |under |
_______ |___ |- |VERIFIED |ANSWERS |**✔IFRS |11

, - |If |the |revenue |can |be |estimated |reliably |you |use |_____________ |___ |__ |___

US |GAAP |___ |____ |permit |the |percentage |of |completion |with |service |contracts |- |VERIFIED |
ANSWERS |**✔% |of |completion |method

does |not



On |January |1, |year |1, |Mandela |Entity |contracts |to |provide |HR |services |over |a |period |of |two |years |
for |a |fixed |fee |of |$240,000, |with |$120,000 |payable |annually |over |the |service |period. |

Based |on |past |experience, |Mandela |estimates |that |total |costs |for |this |contract |will |equal |$180,000. |

By |the |end |of |the |first |year, |Mandela |has |incurred |$72,000 |of |actual |costs.

Record |the |journal |entry |for |the |end |of |year |1. |- |VERIFIED |ANSWERS |**✔Cash |120,000 |- |does |the |
company |recognize |all |of |this |as |revenue |- |negatory |

72/180 |* |120,000 |= |the |amount |of |obligation |completed |= |96,000 |

Cash |120,000 |

Revenue |96,000 |
|



Def. |rev. |24,000
|




Other |Revenues |

interest- |

royalties |

dividends |- |VERIFIED |ANSWERS |**✔effective |interest |method |

accrual |basis

right |to |receive |payment |is |established



Under |IAS |11 |what |two |types |of |construction |contracts |are |there? |- |VERIFIED |ANSWERS |**✔cost-
plus |

fixed |price



a |contract |where |the |costs |of |providing |the |service |are |determined |and |then |a |ceratin |markup |is |
applied |to |those, |very |common |in |government |contracts |- |VERIFIED |ANSWERS |**✔cost-plus |
contract