Strategic Business Reporting Flashcards

Under IFRS 16, how does a lessee account for a lease on commencement date?

Answer: Recognize a right-of-use asset and a corresponding lease liability

IFRS 16 requires lessees to recognize a right-of-use asset and a lease liability on commencement for virtually all leases (except short-term and low-value exemptions).

Non-controlling interests (NCI) in a consolidated statement of financial position are presented:

Answer: Within equity, separately from the parent shareholders' equity

Under IFRS 10 and IAS 1, NCI is presented within the equity section of the consolidated statement of financial position, separately from the equity of the owners of the parent.

When calculating goodwill using the full goodwill method, which of the following is included?

Answer: The fair value of the NCI at acquisition date is included in the goodwill calculation

Under the full goodwill method, NCI is measured at fair value, which means the full goodwill attributable to both the parent and NCI is recognized.

Under IFRS 2 Share-based Payment, how are equity-settled share-based transactions measured?

Answer: At the fair value of the equity instruments granted, measured at the grant date

For equity-settled transactions with employees, IFRS 2 requires measurement at the fair value of the equity instruments at grant date, which is not subsequently remeasured.

In a consolidated income statement, the profit attributable to non-controlling interests is:

Answer: Shown as an allocation of group profit, below the profit for the period line

The consolidated profit for the period is allocated between owners of the parent and NCI as a split at the foot of the consolidated income statement.

Which standard requires disclosure of related party transactions and relationships in financial statements?

Answer: IAS 24

IAS 24 Related Party Disclosures requires entities to identify and disclose material related party relationships, transactions, and balances.