Strategic Business Reporting Flashcards
6 cards from real ACCA SP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Strategic Business Reporting flashcards as text
Under IFRS 3, how is goodwill measured at acquisition?
Answer: As fair value of consideration plus fair value of NCI minus fair value of identifiable net assets acquired
IFRS 3: Goodwill = Fair value of consideration transferred + Fair value of non-controlling interest (NCI) − Fair value of identifiable net assets acquired at the acquisition date.
Under IFRS 10, which of the following criteria must be met for one entity to control another?
Answer: Power over the investee, exposure to variable returns, and ability to use power to affect those returns
IFRS 10 defines control through three elements: (1) power over the investee, (2) exposure/rights to variable returns, and (3) ability to use power to affect returns. All three must be present.
How are associates accounted for in consolidated financial statements under IAS 28?
Answer: Equity method (share of net assets and share of profit recognised)
IAS 28 requires associates (significant influence, typically 20-50% ownership) to be accounted for using the equity method: the investment is carried at cost adjusted for the investor's share of net assets and profits.
Under IFRS 5, a non-current asset classified as 'held for sale' should be measured at:
Answer: The lower of carrying amount and fair value less costs to sell
IFRS 5: assets held for sale are measured at the lower of (a) carrying amount and (b) fair value less costs to sell, and are no longer depreciated.
Under IAS 12, a deferred tax liability arises when:
Answer: The carrying amount of an asset exceeds its tax base (creating a taxable temporary difference)
A deferred tax liability arises from taxable temporary differences — when the carrying amount of an asset exceeds its tax base, meaning more taxable profit will arise in the future than the accounting profit suggests.
Which of the following is a component of 'other comprehensive income' (OCI) under IAS 1?
Answer: Gains on revaluation of PPE under IAS 16
IAS 1 requires OCI to include items not recognised in profit or loss, such as gains on revaluation of PPE (IAS 16), remeasurements of defined benefit pension plans (IAS 19), and translation differences (IAS 21).