Reference no: EM132794360

Question -

Q1. During 2020, Bear Co. incurred $0.5m of legal costs to obtain a $20m specific construction loan for financing the construction of a qualifying asset. During 2020, the loan incurred $2m of interest costs, and $0.25m of interest income was earned on the unused principal. Under IAS 23, what is the amount of the borrowing/interest costs that must be capitalized as part of the qualifying asset's initial cost during 2020?

A) $2,000,000

B) $2,500,000

C) $2,250,000

D) $1,750,000

Q2. What is the primary focus of IAS 1 Presentation of Financial Statements?

A) Establish the framework that is to guide the IASB in setting accounting standards

B) Provide guidance to first-time adopters of IFRS issued by the IASB

C) To establish the guidelines for the presentation of financial statements

D) None of the above.

Q3. According to IAS 40 Investment Property, any gain resulting from the revaluation of a property held for investment purposes, rather than use, should be:

A) credited to income

B) credited to revaluation reserve

C) ignored, as all property is valued at historic cost

D) debited to income

Q4. Under the SEC regulatory framework for accounting, what are the reporting requirements for a limited liability company listed on an EU stock exchange?

A) Prepare its parent's accounts in accordance with IFRS for SMEs

B) Prepare its consolidated group accounts in accordance with national GAAP

C) Prepare its consolidated group accounts in accordance with IFRS as issued by the IASB

D) Prepare its consolidated group accounts in accordance with EU-adopted IFRS

Q5. Section 302 of the Sarbanes Oxley Act, 2002, requires the CEO or CFO of a public company certify that the financial statements, and other financial information included in the report:

A) provides a true and fair view of the financial condition and results of operations.

B) fairly present in all material respects the financial condition and results of operations.

C) are correct and reflect the financial condition and results of operations of the issuer.

D) are conservative and reflect the financial condition and results of operations.

Q6. Which group of entities may use IFRS for SMEs to prepare their financial statements?

A) All privately-held UK & U.S. limited liability entities, regardless of their public accountability.

B) UK & U.S. privately-held limited liability entities that have no public accountability, no publicly-traded debt or equity, and do not hold assets as fiduciary for outsiders.

C) All publically-held UK and U.S limited liability companies.

D) Only UK privately-held limited liability companies with no public accountability, as all U.S. privately-held companies cannot use any form of IFRS.