ACCA financial reporting Questions With Complete Solution

How is revenue treated that is receivable 2 years after the goods are delivered? correct answer: The amount of revenue initially recognised is the amount receivable discounted to present value. Interst is then applied to the receivable as interest income over 2 years IFRS 9 requires investments in equity instruments to be measured and accounted for ( in the absence of any election at initial recognition)? correct answer: Fair value with changes going through profit or loss What are acceptable methods of accounting for a goverment grant relating to an asset in accordance with IAS? correct answer: set up the grant as deffered income deduct the grant from the carrying amount of the asset A sale and leaseback transaction involves the sale of an asset and the leasing back of the same asset. If the arrangement meets the IFRS 15 criteria to be recognised as a sale, how should any 'profit' on the sale be treated? correct answer: Recognise proportion to related to right-of-use transferred. How is a gain or loss arising on a biological transformation according to IAS 41? correct answer: Included in profit or loss for the year. What is a constructive obligation? correct answer: An obligation whereby past practice has created a valid expectation that the entity woll discharge responsibilities. Company has decided its deprecetion method to better reflect pattern of use its equipment. How this change should be applied? correct answer: It's change of accounting estimate and should be applied prospectively To recognise provision we need correct answer: present obligation past event reliable measured Is irrecoverable debt allowance required to be shown on the face of sofp according to IAS 1? correct answer: Not A contingent liability is normally simply disclos