Question 1

Under IFRS 8, certain reconciliations, such as total reportable segment revenues to the entity's revenues, are required. Why are these reconciliations required?

Accepted Answer

A) To prove that the consolidated financial statements balance 
B) To ensure that all reportable segments have been identified 
C) To show the relative contribution of each segment to the total 
D) To show how reportable segments were identified 
A) To prove that the consolidated financial statements balance 
B) To ensure that all reportable segments have been identified 
C) To show the relative contribution of each segment to the total 
D) To show how reportable segments were identified

Question 2

Which of the following is not a requirement in defining an operating segment?

Accepted Answer

A) The particular component must be generating revenue. 
B) The particular component's operating results must be reviewed regularly by responsible company officers. 
C) The particular component's financial information is routinely available through the organization's financial reporting system. 
D) The particular component incurs expenses in its normal cost of activities. 
A) The particular component must be generating revenue. 
B) The particular component's operating results must be reviewed regularly by responsible company officers. 
C) The particular component's financial information is routinely available through the organization's financial reporting system. 
D) The particular component incurs expenses in its normal cost of activities.

Question 3

Sparky Limited (SPL)is a public company and must file interim statements. SPL experienced the following events during the second quarter of 20X11:
1. In the first quarter, an impairment loss on goodwill was recognized in the amount of $5 million. The circumstances leading to this loss have now changed, and the value of the goodwill is once again above its original cost.
2. During the second quarter, the company shut down its manufacturing plant for annual maintenance. The annual maintenance costs totalled $7.5 million in the quarter.
3. As per a lease agreement, the company must pay additional rent charged at 3% of sales if annual sales are greater than $12 million. The contingent rent is payable on the total annual sales. The company reported sales in the first quarter related to this leased location of $3 million, and in the second quarter sales totalled $4 million. It is expected that sales for the third and fourth quarters will be $5 million and $3 million, respectively.
4. The company made a large sale to a new customer for $6 million. This sale relates to a contract of services that will be provided over the next nine months, which commences in the first month of the second interim period.
Required:
For each event, indicate the impact on the interim statement for the second quarter using the guidance required by IAS 34.

Accepted Answer

The discussion below outlines the treatm

Question 4

The following information on sales and operating profit is available for the company's three operating segments (in 000s): $$\begin{array} { | l | r | r | r | r | } 
\hline & \text { Segment D } & \text { Segment E } & \text { Segment F } & \text { Total } \
\hline \text { Sales } & \$ 6,000 & \$ 1,000 & \$ 10,000 & \$ 17,000 \
\hline \text { Operating profit } & \$ 225 & \$ 20 & \$ 5 & \$ 235 \
\hline
\end{array}$$ Which of the operating segments must be reported separately?

Accepted Answer

A) Only Segment E 
B) Only Segments D and F 
C) Only Segments E and F 
D) Segments D, E, and F 
A) Only Segment E 
B) Only Segments D and F 
C) Only Segments E and F 
D) Segments D, E, and F

Question 5

Rules for interim reporting require that comparative information be presented. What comparative information should the current statement of financial position include?

Accepted Answer

A) The same quarter, last year 
B) The immediate preceding quarter 
C) The year end, last year 
D) As budgeted for the period 
A) The same quarter, last year 
B) The immediate preceding quarter 
C) The year end, last year 
D) As budgeted for the period

Question 6

Which organizations are required to issue interim financial statements?

Accepted Answer

A) Public companies 
B) Private enterprises 
C) Both public companies and private enterprises 
D) No organizations are required to issue interim financial statements. 
A) Public companies 
B) Private enterprises 
C) Both public companies and private enterprises 
D) No organizations are required to issue interim financial statements.

Question 7

Which of the following organizations does IFRS 8 not apply to?

Accepted Answer

A) Banks 
B) Mutual life insurance companies 
C) Private companies 
D) Cooperative business enterprises 
A) Banks 
B) Mutual life insurance companies 
C) Private companies 
D) Cooperative business enterprises

Question 8

When can benefits of an income tax loss in an interim period not be recognized in that period?

Accepted Answer

A) If the loss will be offset by taxable income later in that year 
B) If the loss can be used as a loss carryback 
C) If it is more likely than not that a tax loss carryforward benefit will be realized 
D) If the loss occurs in the first interim period 
A) If the loss will be offset by taxable income later in that year 
B) If the loss can be used as a loss carryback 
C) If it is more likely than not that a tax loss carryforward benefit will be realized 
D) If the loss occurs in the first interim period

Question 9

The recommendation for interim income tax expense requires the use of which of the following rates in the first quarter?

Accepted Answer

A) Estimated average 
B) Marginal 
C) Applicable progressive 
D) Loss carryforward 
A) Estimated average 
B) Marginal 
C) Applicable progressive 
D) Loss carryforward

Question 10

Which of the following segment information must be disclosed?

Accepted Answer

A)  $$\begin{array} { | l | l | } 
\hline& \text { Sales to single customers that } \
 \text { Breakdown between domestic } &\text { had more than 10\% of } \
\text { and foreign non-current assets } & \text { company's revenues } \
\hline \text { Yes } & \text { Yes } \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | l | } 
\hline& \text { Sales to single customers that } \
 \text { Breakdown between domestic } &\text { had more than 10\% of } \
\text { and foreign non-current assets } & \text { company's revenues } \
\hline \text { Yes } & \text { No } \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | l | } 
\hline& \text { Sales to single customers that } \
 \text { Breakdown between domestic } &\text { had more than 10\% of } \
\text { and foreign non-current assets } & \text { company's revenues } \
\hline \text { No } & \text { Yes } \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | l | } 
\hline& \text { Sales to single customers that } \
 \text { Breakdown between domestic } &\text { had more than 10\% of } \
\text { and foreign non-current assets } & \text { company's revenues } \
\hline \text { No } & \text { No } \
\hline
\end{array}$$ 
A)  $$\begin{array} { | l | l | } 
\hline& \text { Sales to single customers that } \
 \text { Breakdown between domestic } &\text { had more than 10\% of } \
\text { and foreign non-current assets } & \text { company's revenues } \
\hline \text { Yes } & \text { Yes } \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | l | } 
\hline& \text { Sales to single customers that } \
 \text { Breakdown between domestic } &\text { had more than 10\% of } \
\text { and foreign non-current assets } & \text { company's revenues } \
\hline \text { Yes } & \text { No } \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | l | } 
\hline& \text { Sales to single customers that } \
 \text { Breakdown between domestic } &\text { had more than 10\% of } \
\text { and foreign non-current assets } & \text { company's revenues } \
\hline \text { No } & \text { Yes } \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | l | } 
\hline& \text { Sales to single customers that } \
 \text { Breakdown between domestic } &\text { had more than 10\% of } \
\text { and foreign non-current assets } & \text { company's revenues } \
\hline \text { No } & \text { No } \
\hline
\end{array}$$

Question 11

Yang Ltd. will issue interim financial statements for its second quarter. Which statement(s)must report details of the second quarter as well as for the year to date?

Accepted Answer

A) Statement of comprehensive income only 
B) Statement of changes in equity only 
C) Statement of comprehensive income and statement of changes in equity only 
D) Statement of comprehensive income, statement of changes in equity, and statement of cash flows only 
A) Statement of comprehensive income only 
B) Statement of changes in equity only 
C) Statement of comprehensive income and statement of changes in equity only 
D) Statement of comprehensive income, statement of changes in equity, and statement of cash flows only

Question 12

Under IAS 34, companies generally should use the discreet approach for interim reporting. However, IAS 34 outlines exceptions to this rule. Explain what these exceptions are and how they are treated in interim reports. What argument does IAS 34 provide for this treatment?

Accepted Answer

IAS 34 specifically discusses year-end b

Question 13

Sharst Link Company (SLC)is a public company and must file interim statements. SLC experienced the following events during the third quarter of 20X9:
1. A large marketing plan was rolled out for a new product costing $9,000,000. The plan is expected to drive sales for the next four quarters.
2. A lawsuit was settled and the company must pay $15 million within the next 90 days. There was no payment made by the end of the third quarter. In previous quarters, there was no provision made for this settlement since it was determined to be not probable.
3. Goodwill was tested for impairment and determined to have an impairment loss of $10 million.
4. In the previous interim period, due to a significant drop in the selling price of the inventory, the inventory was written down to its net realizable value of $9 million from a cost of $10 million. In this quarter, the inventory is still on hand and the circumstances have again changed, resulting in the net realizable value increasing to $12 million.
5. Customers earn volume rebates when annual sales volumes exceed $6 million. This is a contractual agreement that the company has made to pay rebates of 4% on total sales for the year once the amount of $6 million is achieved. Currently, there were sales of $2 million to one customer for the quarter. In each of the previous quarters, sales of $1.5 million had been made to this customer. It is expected that sales of $2 million will be made in quarter four to this customer also.
Required:
For each event, indicate the impact on the interim statement for the third quarter using the guidance required by IAS 34.

Accepted Answer

The discussion below outlines the treatm

Question 14

In Canada and the United States, at a minimum, how often are interim financial statements required to be issued?

Accepted Answer

A) Monthly 
B) Bi-monthly 
C) Quarterly 
D) Semi-annually 
A) Monthly 
B) Bi-monthly 
C) Quarterly 
D) Semi-annually

Question 15

Which of the following is not included among requirements for interim financial reports for public companies?

Accepted Answer

A) Statement of comprehensive income 
B) Statement of financial position 
C) Statement of cash flows 
D) Summary of significant accounting policies 
A) Statement of comprehensive income 
B) Statement of financial position 
C) Statement of cash flows 
D) Summary of significant accounting policies

Question 16

Ravens Inc. sells office furniture, including desks, chairs, partitioning walls, and office supplies, in more than six countries. The company is publicly traded and files annual statements with the securities regulator. The following information was provided by the controller for the most recent year ended December 31, 20X9.
 $$\begin{array} { | l | r | } 
\hline & \begin{array} { r } 
\text { Revenues } \
\text { (in millions) }
\end{array} \
\hline \text { Desks } & \$ 75 \
\hline \text { Chairs } & 40\
\hline \text { Partitions } & 115 \
\hline \text { Office supplies } & \underline { 10 } \
\hline & \$ 240 \
\hline &  \
\hline \text { Canada } &  \$ 75\
\hline \text { United States } & 109 \
\hline \text { Australia } &30  \
\hline \text { Europe } &15\
\hline \text { Asia } & \underline { 11 } \
\hline &\$ 240 \
\hline
\end{array}$$ Required:
Explain the nature of the disclosures that would be required by Ravens.

Accepted Answer

Ravens Inc. is a public company and must

Question 17

Blue Sky Inc. (BSI)is a public company that is required to file interim statements on a quarterly basis. BSI has a loss carryforward available of $150,000, which has not been recognized as a deferred tax asset. In the first interim period, the company earns $80,000, and it is expected that it will earn the following amounts in each of the next three quarters: $50,000 in quarter two, $170,000 in quarter three, and $200,000 in quarter four. The company pays a tax rate of 30%, excluding any loss carryforwards.
Required:
Calculate the tax expense for each interim period assuming that the company follows the requirements of IAS 34.

Accepted Answer

The amount of tax expected to be paid fo

Question 18

An organization has identified the following segments: $$\begin{array} { | c | c | } 
\hline \text { Segment } & \text { Operating Profit (Loss) } \
\hline \text { A } & \$ ( 32,000 ) \
\hline \text { B } & 108,000 \
\hline \text { C } & 95,000 \
\hline \text { D } & ( 14,000 ) \
\hline \text { E } & \underline { 21,000 } \
\hline & \$ 178,000 \
\hline
\end{array}$$ Which of the identifiable segments above are reportable?

Accepted Answer

A) Segments A, B, and C only 
B) Segments B, C, and E only 
C) Segments B and C only 
D) Segments A, B, C, and E only 
A) Segments A, B, and C only 
B) Segments B, C, and E only 
C) Segments B and C only 
D) Segments A, B, C, and E only

Question 19

Faulk Ltd. has provided the following information: $$\begin{array} { | c | r | r | r | } 
\hline \text { Segment } & \text { Assets } & \text { Revenues } & \text { Profits } \
\hline \text { A } & \$ 60,000 & \$ 18,000 & \$ 9,000 \
\hline \text { B } & 120,000 & 90,000 & 3,000 \
\hline \text { C } & 120,000 & 52,500 & 15,000 \
\hline \text { D } & 30,000 & 300,000 & 120,000 \
\hline
\end{array}$$
-Under the asset test only, which segments are reportable?

Accepted Answer

A) Segments A, B, and C only 
B) Segments A and D only 
C) Segments B and C only 
D) All the segments are reportable. 
A) Segments A, B, and C only 
B) Segments A and D only 
C) Segments B and C only 
D) All the segments are reportable.

Question 20

Explain what entity-wide disclosures are required by a public company. Why is this disclosure required under IFRS 8, and how is this information useful?

Accepted Answer

Entity-wide disclosures are required to

Under IFRS 8, certain reconciliations, such as total reportable segment revenues to the entity's revenues, are required. Why are these reconciliations required?

Which of the following is not a requirement in defining an operating segment?

The following information on sales and operating profit is available for the company's three operating segments (in 000s): Segment D Segment E Segment F Total Sales \ 6,000 \ 1,000 \ 10,000 \ 17,000 Operating profit \ 225 \ 20 \ 5 \ 235 Which of the operating segments must be reported separately?

Rules for interim reporting require that comparative information be presented. What comparative information should the current statement of financial position include?

Which organizations are required to issue interim financial statements?

Which of the following organizations does IFRS 8 not apply to?

When can benefits of an income tax loss in an interim period not be recognized in that period?

The recommendation for interim income tax expense requires the use of which of the following rates in the first quarter?

Which of the following segment information must be disclosed?

Yang Ltd. will issue interim financial statements for its second quarter. Which statement(s)must report details of the second quarter as well as for the year to date?

Under IAS 34, companies generally should use the discreet approach for interim reporting. However, IAS 34 outlines exceptions to this rule. Explain what these exceptions are and how they are treated in interim reports. What argument does IAS 34 provide for this treatment?

In Canada and the United States, at a minimum, how often are interim financial statements required to be issued?

Which of the following is not included among requirements for interim financial reports for public companies?

An organization has identified the following segments: Segment Operating Profit (Loss) A \ (32,000) B 108,000 C 95,000 D (14,000) E \ 178,000 Which of the identifiable segments above are reportable?

Faulk Ltd. has provided the following information: Segment Assets Revenues Profits A \ 60,000 \ 18,000 \ 9,000 B 120,000 90,000 3,000 C 120,000 52,500 15,000 D 30,000 300,000 120,000 -Under the asset test only, which segments are reportable?

Explain what entity-wide disclosures are required by a public company. Why is this disclosure required under IFRS 8, and how is this information useful?

Setting the Stage

Intercorporate Equity Investments: an Introduction

Business Combinations

Appendix A: AIncome Tax Allocation

Wholly Owned Subsidiaries: Reporting Subsequent Acquisitions

Appendix A: Wholly Owned Subsidiaries: Reporting Subsequent Acquisitions

Appendix B: Wholly Owned Subsidiaries: Reporting Subsequent Acquisitions

Consolidation of Non-Wholly Owned Subsidiaries

Appendix A: Step Purchases

Appendix B: Decreases in Ownership Interest

Subsequent-Year Consolidations: General Approach

Appendix A: Preferred and Restricted Shares of Investee Corporation

Appendix B: Intercompany Bond Holdings

Foreign Currency Transactions and Hedges

Reporting Foreign Operations

Financial Reporting for Not-For-Profit Organizations

Appendix A: Fund Accounting

Public Sector Financial Reporting

Filters

Exam 7: Segment and Interim Reporting

Under IFRS 8, certain reconciliations, such as total reportable segment revenues to the entity's revenues, are required. Why are these reconciliations required?

Which of the following is not a requirement in defining an operating segment?

The following information on sales and operating profit is available for the company's three operating segments (in 000s): Segment D Segment E Segment F Total Sales \ 6,000 \ 1,000 \ 10,000 \ 17,000 Operating profit \ 225 \ 20 \ 5 \ 235 Which of the operating segments must be reported separately?

Rules for interim reporting require that comparative information be presented. What comparative information should the current statement of financial position include?

Which organizations are required to issue interim financial statements?

Which of the following organizations does IFRS 8 not apply to?

When can benefits of an income tax loss in an interim period not be recognized in that period?

The recommendation for interim income tax expense requires the use of which of the following rates in the first quarter?

Which of the following segment information must be disclosed?

Yang Ltd. will issue interim financial statements for its second quarter. Which statement(s)must report details of the second quarter as well as for the year to date?

Under IAS 34, companies generally should use the discreet approach for interim reporting. However, IAS 34 outlines exceptions to this rule. Explain what these exceptions are and how they are treated in interim reports. What argument does IAS 34 provide for this treatment?

In Canada and the United States, at a minimum, how often are interim financial statements required to be issued?

Which of the following is not included among requirements for interim financial reports for public companies?

An organization has identified the following segments: Segment Operating Profit (Loss) A \ (32,000) B 108,000 C 95,000 D (14,000) E \ 178,000 Which of the identifiable segments above are reportable?

Faulk Ltd. has provided the following information: Segment Assets Revenues Profits A \ 60,000 \ 18,000 \ 9,000 B 120,000 90,000 3,000 C 120,000 52,500 15,000 D 30,000 300,000 120,000 -Under the asset test only, which segments are reportable?

Explain what entity-wide disclosures are required by a public company. Why is this disclosure required under IFRS 8, and how is this information useful?

Setting the Stage

Intercorporate Equity Investments: an Introduction

Business Combinations

Appendix A: AIncome Tax Allocation

Wholly Owned Subsidiaries: Reporting Subsequent Acquisitions

Appendix A: Wholly Owned Subsidiaries: Reporting Subsequent Acquisitions

Appendix B: Wholly Owned Subsidiaries: Reporting Subsequent Acquisitions

Consolidation of Non-Wholly Owned Subsidiaries

Appendix A: Step Purchases

Appendix B: Decreases in Ownership Interest

Subsequent-Year Consolidations: General Approach

Appendix A: Preferred and Restricted Shares of Investee Corporation

Appendix B: Intercompany Bond Holdings

Foreign Currency Transactions and Hedges

Reporting Foreign Operations

Financial Reporting for Not-For-Profit Organizations

Appendix A: Fund Accounting

Public Sector Financial Reporting

Filters