Podcast
Questions and Answers
According to IAS-28, how is goodwill/capital reserve computed on acquisition?
According to IAS-28, how is goodwill/capital reserve computed on acquisition?
- Acquisition value basis
- Historical cost basis
- Present value basis
- Net fair value basis (correct)
What is the requirement under IAS-34 for restatement of figures in case of a change in accounting policy?
What is the requirement under IAS-34 for restatement of figures in case of a change in accounting policy?
- Restate only previous year's figures
- Restate figures of prior interim periods of the current financial year and comparable figures of previous periods (correct)
- No restatement is required
- Restate only current period figures
What is the presumption under AS-26 regarding the useful life of an intangible asset?
What is the presumption under AS-26 regarding the useful life of an intangible asset?
- There is no presumption
- There is a rebuttable presumption (correct)
- The useful life is perpetual
- The useful life is infinite
What is the treatment under IAS-34 for provision for Leave encashment?
What is the treatment under IAS-34 for provision for Leave encashment?
What is the requirement under IAS-28 for impairment testing?
What is the requirement under IAS-28 for impairment testing?
What is the requirement under AS-25 for disclosure of changes in equity?
What is the requirement under AS-25 for disclosure of changes in equity?
Which method does IAS-10 require for the proposed dividends?
Which method does IAS-10 require for the proposed dividends?
How should changes in accounting policies be accounted for according to IAS-8?
How should changes in accounting policies be accounted for according to IAS-8?
Under which item should prior period items be included as per AS-5?
Under which item should prior period items be included as per AS-5?
How does IAS-18 prescribe recognizing revenue from rendering services?
How does IAS-18 prescribe recognizing revenue from rendering services?
What method does IAS-18 require for recognizing interest income?
What method does IAS-18 require for recognizing interest income?
In the context of accounting for proposed dividends, why should they not be shown as a disclosure?
In the context of accounting for proposed dividends, why should they not be shown as a disclosure?
What is the primary purpose of the consistency principle in accounting?
What is the primary purpose of the consistency principle in accounting?
According to the accrual principle, when should revenue be recorded?
According to the accrual principle, when should revenue be recorded?
What type of assets are inventories?
What type of assets are inventories?
What is the purpose of the prudence principle in accounting?
What is the purpose of the prudence principle in accounting?
What is the main objective of the materiality principle?
What is the main objective of the materiality principle?
Which principle ensures that transactions are recorded in accordance with their economic reality?
Which principle ensures that transactions are recorded in accordance with their economic reality?
Study Notes
- Accounting policies should be consistent from one period to another.
- The principle of accrual in accounting involves recording revenue or costs in financial statements based on when they are related, regardless of actual receipt or payment.
- Prudence in accounting refers to making accurate estimates in uncertain conditions when preparing financial statements.
- Substance over form principle dictates that transactions should be recorded based on actual economic reality, not just legal form.
- Materiality in financial reporting requires disclosing items that are significant enough to impact the decisions of financial statement users.
- Inventories include assets held for sale, in production for sale, or as materials for production or services, excluding machinery.
- Proposed dividends should not be disclosed as a liability according to IAS-10 and AS-4 regulations.
- Changes in accounting policies must be accounted for retrospectively, with adjustments made to opening retained earnings.
- Revenue recognition for services under IAS-18 allows only the percentage of completion method.
- AS-23 prescribes historical cost basis for goodwill/capital reserve identification, while IAS-28 requires a fair value basis.
- Impairment testing is necessary for investments under IAS-28 but not under AS-23.
- Interim financial reporting requirements differ between IAS-34 and AS-25, with specific guidelines for different provisions and restatements.
- Under AS-26, there is a rebuttable presumption about the useful life of intangible assets, unlike under IAS-38.
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Description
Test your knowledge on IAS-10, AS-4, and IAS-8 related to consolidated financial statements. Explore topics like proposed dividends, treatment of prior period items, and changes in accounting policies.
