IFRS PRACTICAL IMPLEMENTATION GUIDE AND WORKBOOK

Chapter 33 / First-Time Adoption of Int ernal Financial Reporting Standards (IFRS 1)

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MULTIPLE-CHOICE QUESTIONS 1. Under which one of the following circumstances wou ld an entity' s current year' s financial statements not qualify as first (FRS financial statements? (a) The entity prepared its financial statements under IFRS in the previous year and these were meant for interna l purposes only. (b) The entity prepared the previous year's financia l statements under its national GAAP . (c) The entity prepared its previous year's fi– nancial statements in conformity with all re– quirements of IFRS, but these statements did not contain an explicit and unreserved statement that they comp lied with IFRS. (d) The entity prepared its previous year' s Answer: (d) 2. XYZ Inc. is a first-time adopter under IFRS I. The most recent financial statements it presented un– der its previous GAAP were as of December 3 1, 2005. It has adopted IFRS for the first time and in– tends to present the first IFRS financial statements as of December 3 1, 2006. It plans to present two-year comp arative information for the years 2005 and 2004. The opening IFRS balance sheet should be prepared as of Answer : (c) 3. Which one of the following is not a required adjustment in preparing an opening IFRS balance sheet? (a) Recognize all assets and liabiliti es whose recognition is required under IFRS . (b) Derecognize items as assets or liabilities if IFRS do not permit such a recogniti on. (c) Disclose as comparative information all fig– ures under previous GAAP alongside figures for the current year presented under IFRS. (d) Measure all recognised assets and liabilities accord ing to principles contained in IFRS. Answer: (e) 4. Which one of the following does not qualify for an exemp tion allowed by IFRS I? (a) Business combinations that occurred before or prior to the date of transition to IFRS. (b) Financial instrument s (other than compound financial instruments). (c) Cumulative translation differences. (d) Cumulative unrecognised actuaria l gains and losses under lAS 19. Answer: (b) (a) January 1, 2005. (b) January 1, 2003. (c) January 1, 2004. (d) January 1, 2006. financial statements in conformity with all requirements of IFRS, and these statements did contain an explicit and unreserved statement that they comp lied with IFRS.

5. Which one of the following does not qualify for exemption under IFRS I for the purposes of retro– spective application? (a) Hedge accountin g. (b) Financial assets and financial liabilitie s derecog nised prior to Janu ary 1, 200 I . (c) Estimates made under previous GAAP. (d) Fair value accou nting for investment prop– erty. Answer : (d)