IFRS 9 Financial Instruments and IAS 1 Quiz
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Questions and Answers

What is the classification of gains and losses from financial assets designated at fair value through other comprehensive income?

  • Statement of financial position
  • Statement of cash flows
  • Other comprehensive income (correct)
  • Profit or loss

    • What is the treatment of the effective portion of gains and losses from hedging instruments for cash flow hedges?

  • Recognized in profit or loss
  • Excluded from the financial statements
  • Deferred and then recognized in profit or loss
  • Recognized in other comprehensive income (correct)

    • How are changes in the fair value of options separated into intrinsic value and time value?

  • Both the intrinsic value and time value are recognized, but only the intrinsic value is designated as a hedging instrument (correct)
  • Neither the intrinsic value nor the time value is recognized
  • Only the time value is recognized
  • Only the intrinsic value is recognized

    • Which IFRS standard deals with insurance contracts?

    <p>IFRS 17</p> Signup and view all the answers

    What is the treatment of the fair value change of the time element of a forward contract when separated into a time element and a cash flow element?

    <p>Recognized in other comprehensive income</p> Signup and view all the answers

    Which IFRIC deals with uncertainty over income tax treatments?

    <p>IFRIC 23</p> Signup and view all the answers

    How are insurance contracts accounted for under IFRS 17?

    <p>Using a building block approach</p> Signup and view all the answers

    Which standard deals with Fair Value Measurement?

    <p>IFRS 13</p> Signup and view all the answers

    What is the treatment of insurance contracts that are reinsured?

    <p>Accounted for separately from the original insurance contract</p> Signup and view all the answers

    Which standard deals with financial instruments?

    <p>IFRS 7</p> Signup and view all the answers

    What is the purpose of paragraph 88(b) of IFRS 17?

    <p>To allocate the insurance contract's cash flows to different components</p> Signup and view all the answers

    Which IFRIC deals with service concession arrangements?

    <p>IFRIC 12</p> Signup and view all the answers

    What is the treatment of the currency basis spread of a financial instrument?

    <p>Recognized in other comprehensive income</p> Signup and view all the answers

    Which standard deals with revenue from contracts with customers?

    <p>IFRS 15</p> Signup and view all the answers

    What is the classification of gains and losses from financial investments in equity instruments designated at fair value through other comprehensive income?

    <p>Other comprehensive income</p> Signup and view all the answers

    Which IFRIC deals with levies?

    <p>IFRIC 21</p> Signup and view all the answers

    What is the treatment of the fair value change of a financial instrument that is designated as a hedging instrument?

    <p>Recognized in other comprehensive income</p> Signup and view all the answers

    Which standard deals with consolidated financial statements?

    <p>IFRS 10</p> Signup and view all the answers

    Which IFRIC deals with foreign currency transactions?

    <p>IFRIC 22</p> Signup and view all the answers

    Which standard deals with business segments?

    <p>IFRS 8</p> Signup and view all the answers

    According to IFRS 15, what is the basis for recognizing revenue from contracts with customers?

    <p>The revenue is recognized based on the amount of consideration that the entity expects to receive.</p> Signup and view all the answers

    What should be considered when determining the revenue recognition from contracts with customers?

    <p>The price of the goods or services provided, including any discounts or rebates.</p> Signup and view all the answers

    How should an entity present the results of transactions that do not generate revenue?

    <p>By offsetting the revenue with the corresponding expenses.</p> Signup and view all the answers

    What is the treatment of gains and losses from the disposal of non-current assets?

    <p>They are offset against the corresponding assets and expenses.</p> Signup and view all the answers

    How should an entity account for expenses incurred in connection with a provision that is reimbursed by a third party?

    <p>The expenses are offset against the corresponding reimbursement.</p> Signup and view all the answers

    According to IFRS 15, what is the basis for recognizing revenue from contracts with customers?

    <p>The revenue is recognized based on the consideration that the entity expects to receive.</p> Signup and view all the answers

    What should be considered when determining the revenue recognition from contracts with customers?

    <p>The price of the goods or services provided, including any discounts or rebates.</p> Signup and view all the answers

    Why should an entity present the results of transactions that do not generate revenue?

    <p>To provide a complete picture of the entity's financial performance.</p> Signup and view all the answers

    Study Notes

    IFRS Regulations

    • IFRS 9 regulates financial instruments, including those designated at fair value through other comprehensive income.
    • IFRS 15 regulates revenue recognition from contracts with customers.
    • IFRS 17 regulates insurance contracts.

    Other Comprehensive Income

    • Gains and losses on financial investments in equity instruments designated at fair value through other comprehensive income.
    • Gains and losses on financial assets designated at fair value through other comprehensive income.
    • Effective portion of gains and losses on hedging instruments used to hedge cash flows and fair value of equity investments.
    • Changes in fair value of certain financial liabilities designated at fair value through profit or loss.
    • Changes in time value of options separated from the underlying instrument, with only the changes in intrinsic value designated as a hedging instrument.
    • Changes in the time value of forward elements of forward contracts separated from cash flow elements, with only changes in cash flow elements designated as a hedging instrument.

    Insurance Contracts

    • Insurance contract revenues and expenses from written contracts, excluded from profit or loss, presented separately.
    • Insurance contract revenues and expenses from reinsurance contracts, excluded from profit or loss, presented separately.

    Revenue Recognition

    • Revenue recognition from contracts with customers based on the transaction price, adjusted for discounts and rebates.
    • Revenue recognition includes transaction prices, discounts, and rebates, presented separately.

    Segment Reporting

    • IFRS 8 regulates operating segment reporting.
    • IFRS 12 regulates disclosures of interests in other entities.

    IFRIC and SIC Interpretations

    • IFRIC 1: Changes in existing decommissioning, restoration, and similar liabilities.
    • IFRIC 2: Members' shares in cooperative entities and similar instruments.
    • IFRIC 5: Rights to interests in reclamation trusts for environmental remediation.

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    Description

    Test your knowledge of financial instruments and accounting standards, specifically IFRS 9 and IAS 1. This quiz covers financial investments, capital instruments, and their treatment in financial reporting.

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