IFRS PRACTICAL IMPLEMENTATION GUIDE AND WORKBOOK

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Chapter 24 / Financial Instruments: Presentation (lAS 32)

8. What is the accounting for treasury share transac– tions? (a) On repurchase of treasury shares. a gain or loss is recognized equal to the difference between the amount at which the shares were issued and the repurcha se price for the shares. (b) On reissuance of treasury shares, a gain or loss is recognized equal to the difference between the previous repurchase price and the reissuance price. (c) On repurchase or reissuance of previously repurchased own shares , no gain or loss is recognized . (d) Treasury shares are accoun ted for as finan- cial assets in accordance with lAS 39. Answer : (c) 9. What are the conditions for offsetting (net presentation) of financial assets and financial liabili– ties? (a) A legal right of set-off. (b) A legal right of set-off and an intention to settle net or simultaneously. (c) The existence of a clearing mechanism or other market mechanism for net settlement and an expectation of net settlement. (d) A netting agreement and an expectation of net settlement. Answer : (b)