IFRS PRACTICAL IMPLEMENTATION GUIDE AND WORKBOOK

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Wiley IFRS: Practical Implementation Guide and Workbook

MULTIPLE·CHOICE QUESTIONS 1. What are the principal objectives of IFRS 7? (a) To provide presentation and disclosure requirements for financial instruments. (b) To require disclosures about the significance of financial instrumen ts for an entity's financial position and financi al performance and qualitative and quantitative information about exposure to risks arising from financial instruments. (c) To set out specified balance sheet and income statement format s for financial entities. (d) To require disclosures about an entity' s exposure to off- balance-sheet instruments and other complex transaction s. Answer: (b) 2, Which of the following types of information does IFRS 7 not require to be disclosed about the significance of financ ial instrumen ts? (a) Carrying amounts of categories of financial instrumen ts. (b) Fair values of financial instruments. (c) Information about the use of hedge accounting. (d) Information about financial instruments, contracts, and obligations under share-based payment transaction s. Answer: (d) 3. Which of the following types of information does IFRS 7 not require to be disclosed about exposure to risks arising from financial instruments? (a) Qualitative and quantitative information about market risk. (b) Qualitative and quantitative information about credit risk. (c) Qualitative and quantitative information about operational risk. (d) Qualitative and quantitative information about liquidity risk. Answe r : (c) 4. How does IFRS 7 define "liquidity risk" ? (a) The risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. (b) The risk that an entity will encou nter difficulty in disposing a financi al asset due to lack of market liquid ity. (c) The risk that an entity will encounter difficulty in meeti ng cash flow needs due to cash flow problems. (d) The risk that an entity' s cash inflows will not be sufficient to meet the entity's cash outflows. Answe r : (a) 5. When is an entity required to apply IFRS 7 for the first time? (a) For annual periods beginning on or after January 1,2005.

(b) For annual periods beginning on or after January I, 2006. (c) For annual periods beginning on or after January I, 2007. (d) For annual periods beginn ing on or after January 1,2010.

Answer : (c)