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Chapter
33 /
First-Time Adoption of Int ernal Financial Reporting Standards (IFRS
1)
381
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
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.
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
(a) January 1, 2005.
(b) January 1, 2003.
(c) January 1, 2004.
(d) January 1, 2006.
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)
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)