International Financial Reporting Standards
Quiz:
Reporting financial
performance
Joint World Bank and IFRS Foundation
‘train the trainers’ workshop hosted by the
ECCB, 30 April to 4 May 2012
The views expressed in this presentation are those of the
The
views expressed
in this
presentation
areor
those
presenter,
not necessarily
those
of the IASB
IFRSof the
presenter,
Foundation.
not necessarily those of the IASB or IFRS Foundation.
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Quiz: Reporting financial
performance
2
Question 1: Which of the following are not
within the scope of IAS 18 Revenue?
a. Revenue from lease agreements?
b. Changes in FV of financial assets and
financial liabilities or their disposal?
c. Change in FV of biological assets relating to
agricultural activity?
d. All of the above?
© IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK | www.ifrs.org
Quiz: Reporting financial
performance
3
Question 1: Which of the following are not
within the scope of IAS 18 Revenue?
a. Revenue from lease agreements?
b. Changes in FV of financial assets and
financial liabilities or their disposal?
c. Change in FV of biological assets relating to
agricultural activity?
d. All of the above
© IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK | www.ifrs.org
Quiz: Reporting financial
performance
4
Question 2: Goods with list price of 1,000 sold
to customer on normal credit terms. Customer
pays 690 in full settlement. The 690 = 1,000
list, less 200 trade discount, less 100 volume
rebate, less 10 prompt payment discount. Of
the 690, 50 is sales tax to be remitted to
government. How much revenue should be
recognised?
a. 640? b. 1,000? c. 700? d. 690?
© IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Quiz: Reporting financial
performance
5
Question 2: How much revenue should be
recognised?
a. 640? b. 1,000? c. 700? d. 690?
1,000 list price less 200 trade discount less
100 volume rebate less 10
prompt-settlement discount less 50 sales
tax collected on behalf of the government
= 640.
© IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Quiz: Reporting financial
performance
6
Question 3: Percentage of completion must be
used to recognise revenue from:
a. rendering of services and construction
contracts?
b. rendering of services only when the outcome
can be estimated reliably?
c. construction contracts only when the outcome
can be estimated reliably?
d. both b and c?
© IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Quiz: Reporting financial
performance
7
Question 3: Percentage of completion must be
used to recognise revenue from:
a. rendering of services and construction
contracts?
b. rendering of services only when the outcome
can be estimated reliably?
c. construction contracts only when the outcome
can be estimated reliably?
d. both b and c?
© IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Quiz: Reporting financial
performance
8
Question 4: Car dealer sales promotion—free
servicing and 2-years zero interest credit.
Recognise revenue separately for:
a. entirely sale of goods?
b. sale of goods and rendering of maintenance
services?
c. sale of goods, rendering of services, and a
financing element (interest) related to the
deferred payment?
© IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Quiz: Reporting financial
performance
9
Question 4: Car dealer sales promotion —free
servicing and 2-years zero interest credit.
Recognise revenue separately for:
a. entirely sale of goods?
b. sale of goods and rendering of maintenance
services?
c. sale of goods, rendering of services, and a
financing element (interest) related to the
deferred payment?
© IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Quiz: Reporting financial
performance
10
Question 5: A sells goods to B for 950 on
1/1/20X1, and incurs selling cost of 20 at the
same time. B negotiates one year interest-free
credit (payment due 31/12/20X1). If B had
borrowed to pay up front, interest rate = 10%.
How much revenue from sale of goods does A
recognise at 1/1/20X1?
a. 950? b. 863? c. 970 d. 930?
© IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Quiz: Reporting financial
performance
11
Question 5: How much revenue from sale of
goods does A recognise at 1/1/20X1?
a. 950? b. 863? c. 970 d. 930?
A financing transaction is included.
Calculation: 950 ÷ 1.10 = 863. ¶23.5
© IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Quiz: Reporting financial
performance
12
Question 6: Fixed price construction contract
1,000,000. Contractor incurs costs of 10,000,
890,000, and 200,000 in Years 1, 2, 3. At end
of Year 1 outcome cannot be estimated
reliably, but 10,000 costs are recoverable. At
end of Year 2, can make a reliable estimate of
200,000 future costs to complete. How much
revenue and cost should contractor recognise
in Year 2?
See next slide...
© IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Quiz: Reporting financial
performance
Question 6 continued How much revenue and
cost should contractor recognise in Year 2?
a.
b.
c.
d.
Revenue 818,182 and costs 900,000?
Revenue 808,182 and costs 890,000?
Revenue 808,182 and costs 908,182?
Revenue 808,182 and costs 900,000?
© IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
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Quiz: Reporting financial
performance
Question 6 continued How much revenue and
cost should contractor recognise in Year 2?
a. Revenue 818,182 and costs 900,000?
b. Revenue 808,182 and costs 890,000?
c. Revenue 808,182 and costs 908,182?
See next slide
d. Revenue 808,182 and costs 900,000?
© IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
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Quiz: Reporting financial
performance
15
Revenue = 900,000 costs for work performed
÷ 1,100,000 total expected costs = 81.82%
completion x 1,000,000 price = 818,182
contract revenue recognised to end of Year 2.
818,182 less 10,000 revenue recognised in
Year 1 (limited to recoverable costs) = 808,182
recognised in Year 2.
continued...
© IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Quiz: Reporting financial
performance
Cost = 81.82% x 1,100,000 expected total =
900,000 recognised to end of Year 2. 900,000 less
10,000 costs recognised in Year 1 = 890,000
recognised Year 2. BUT, total contract costs will
exceed total revenue, so recognise additional loss:
Total revenue 1,000,000 less 818,182 already
recognised = 181,818 for Year 3. Expected costs
Year 3 = 200,000. Excess Year 3 costs over
revenue = 18,182 loss in Year 2.
Expense Year 2 = 908,182 = 890,000 incurred +
18,182 in respect of the onerous contract.
© IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
16
Quiz: Reporting financial
performance
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Question 7: A government grant is:
a. assistance from the government in the form of a
transfer of resources to an entity in return for
past or future compliance with specified
conditions relating to the operating activities of
the entity.
b. unconditional assistance from the government
in the form of a transfer of resources to an
entity.
c. any type of assistance from the government to
the entity from which the entity has benefited
directly.
© IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Quiz: Reporting financial
performance
18
Question 7: A government grant is:
a. assistance from the government in the form
of a transfer of resources to an entity in
return for past or future compliance with
specified conditions relating to the
operating activities of the entity.
b. unconditional assistance from the government
in the form of a transfer of resources to an
entity.
c. any type of assistance from the government to
the entity from which the entity has benefited
directly.
© IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Quiz: Reporting financial
performance
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Question 8: Government grants exclude which
of the following forms of government
assistance?
a. those forms of government assistance that
cannot reasonably have a value placed upon
them.
b. transactions with government that cannot be
distinguished from the normal trading
transactions of the entity.
c. both (a) and (b).
© IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Quiz: Reporting financial
performance
20
Question 8: Government grants exclude which
of the following forms of government
assistance?
a. those forms of government assistance that
cannot reasonably have a value placed upon
them.
b. transactions with government that cannot be
distinguished from the normal trading
transactions of the entity.
c. both (a) and (b).
© IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Quiz: Reporting financial
performance
Question 9: An entity must measure all
government grants:
a. at the amount of cash or cash equivalents
received
b. at the amount of cash or cash equivalents
received or receivable
c. at the fair value of the asset received or
receivable
d. none of the above
© IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
21
Quiz: Reporting financial
performance
Question 9: An entity must measure all
government grants:
a. at the amount of cash or cash equivalents
received
b. at the amount of cash or cash equivalents
received or receivable
c. at the fair value of the asset received or
receivable
d. none of the above
© IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
22
Quiz: Reporting financial
performance
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Question 10: The numerator used in the
calculation of basic earnings per share is the:
a. profit or loss attributable to all holders of all
shares issued by the parent entity
b. profit or loss attributable to all holders of
ordinary shares issued by the parent entity
c. profit or loss attributable to all holders of
ordinary shares issued by the parent entity
and its subsidiaries
© IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Quiz: Reporting financial
performance
24
Question 10: The numerator used in the
calculation of basic earnings per share is the:
a. profit or loss attributable to all holders of all
shares issued by the parent entity
b. profit or loss attributable to all holders of
ordinary shares issued by the parent
entity
c. profit or loss attributable to all holders of
ordinary shares issued by the parent entity
and its subsidiaries
© IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Quiz: Reporting financial
performance
25
Question 11: A potential ordinary share shall be
treated as dilutive when conversion to ordinary
shares would:
a. decrease earnings per share from continuing
operations
b. increase loss per share from continuing
operations
c. both a. and b.
© IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Quiz: Reporting financial
performance
26
Question 11: A potential ordinary share shall be
treated as dilutive when conversion to ordinary
shares would:
a. decrease earnings per share from continuing
operations
b. increase loss per share from continuing
operations
c. both a. and b.
© IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Questions or comments?
Expressions of individual views
by members of the IASB and its
staff are encouraged.
The views expressed in this
presentation are those of the
presenter.
Official positions of the IASB on
accounting matters are
determined only after extensive
due process and deliberation.
© IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
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The requirements are set out in International Financial
Reporting Standards (IFRSs), as issued by the IASB at
1 January 2012 with an effective date after 1 January
2012 but not the IFRSs they will replace.
The IFRS Foundation, the authors, the presenters and
the publishers do not accept responsibility for loss
caused to any person who acts or refrains from acting
in reliance on the material in this PowerPoint
presentation, whether such loss is caused by
negligence or otherwise.
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