Question 1

Which of the following is not a characteristic of a market participant under IFRS 13?

Accepted Answer

A)  Buyers and sellers that are able to enter into a transaction for the asset or liability. 
B)  Buyers and sellers that are willing to enter into a transaction for the asset or liability, 
C)  Buyers and sellers that are dependent on each other. 
D)  Buyers and sellers that are knowledgeable, having a reasonable understanding about the asset or liability and the transaction using all available information. 
A)  Buyers and sellers that are able to enter into a transaction for the asset or liability. 
B)  Buyers and sellers that are willing to enter into a transaction for the asset or liability, 
C)  Buyers and sellers that are dependent on each other. 
D)  Buyers and sellers that are knowledgeable, having a reasonable understanding about the asset or liability and the transaction using all available information. C

Question 2

Valuation techniques that convert future amounts to a single current amount and determines the fair value on the basis of the value indicated by current market expectations about those future amounts is an example of:

Accepted Answer

A)  the fair value approach 
B)  the income approach 
C)  the cost approach 
D)  the market approach 
A)  the fair value approach 
B)  the income approach 
C)  the cost approach 
D)  the market approach B

Question 3

In which circumstance will it be necessary to determine the fair value of an entity's own equity instruments?

Accepted Answer

A)  where the entity is preparing for listing 
B)  where the entity undertakes a business combination and issues its own equity instruments in exchange for a business 
C)  where the entity undertakes a share buy-back 
D)  where there is a change in the shareholding of the entity. 
A)  where the entity is preparing for listing 
B)  where the entity undertakes a business combination and issues its own equity instruments in exchange for a business 
C)  where the entity undertakes a share buy-back 
D)  where there is a change in the shareholding of the entity. B

Question 4

Which of the following disclosure are required under IFRS 13?

Accepted Answer

A)  the valuation techniques used to measure fair value 
B)  the level of the fair value hierarchy within which the fair value measurements are categorised 
C)  quantitative information about the significant unobservable inputs used in the fair value measurement 
D)  all of the options are correct. 
A)  the valuation techniques used to measure fair value 
B)  the level of the fair value hierarchy within which the fair value measurements are categorised 
C)  quantitative information about the significant unobservable inputs used in the fair value measurement 
D)  all of the options are correct.

Question 5

Which of the following is not a valuation technique prescribed by IFRS 13?

Accepted Answer

A)  the fair value approach 
B)  the income approach 
C)  the cost approach 
D)  the market approach 
A)  the fair value approach 
B)  the income approach 
C)  the cost approach 
D)  the market approach

Question 6

Which of the following documents issued alongside IFRS 13 do not form an integral part of the standard?
I Basis for Conclusions
II Illustrative Examples
III Appendix A: Defined terms
IV Appendix B: Application guidance

Accepted Answer

A)  I and II 
B)  II and III 
C)  III and IV 
D)  I and IV 
A)  I and II 
B)  II and III 
C)  III and IV 
D)  I and IV

Question 7

The fair value of an equity instrument is based on determining a/an _________ price which may relate to the price paid for an entity to repurchase its shares.

Accepted Answer

A)  transfer 
B)  settlement 
C)  entry 
D)  exit. 
A)  transfer 
B)  settlement 
C)  entry 
D)  exit.

Question 8

The market with the greatest volume and level of activity for the asset or liability is defined as the:

Accepted Answer

A)  active market 
B)  principal market 
C)  liquid market 
D)  most advantageous market 
A)  active market 
B)  principal market 
C)  liquid market 
D)  most advantageous market

Question 9

Which of the following is the definition of fair value per IFRS 13?

Accepted Answer

A)  The amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's length transaction 
B)  The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. 
C)  The price that would be received to sell an asset or paid to transfer a liability. 
D)  A transaction that assumes exposure to the market for a period before the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets or liabilities; it is not a forced transaction (eg a forced liquidation or distress sale). 
A)  The amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's length transaction 
B)  The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. 
C)  The price that would be received to sell an asset or paid to transfer a liability. 
D)  A transaction that assumes exposure to the market for a period before the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets or liabilities; it is not a forced transaction (eg a forced liquidation or distress sale).

Question 10

Trademarks would be measured primarily using which type of inputs?

Accepted Answer

A)  Level 1 inputs 
B)  Level 2 inputs 
C)  Level 3 inputs 
D)  Level 4 inputs 
A)  Level 1 inputs 
B)  Level 2 inputs 
C)  Level 3 inputs 
D)  Level 4 inputs

Question 11

Which of the following is an indication of an active market?

Accepted Answer

A)  there are few recent transactions 
B)  price quotations vary substantially over time 
C)  price quotations vary substantially among market-makers 
D)  price quotations are based on current market information. 
A)  there are few recent transactions 
B)  price quotations vary substantially over time 
C)  price quotations vary substantially among market-makers 
D)  price quotations are based on current market information.

Question 12

Non-performance risk refers to the risk that:

Accepted Answer

A)  a market participant will not fulfil an obligation 
B)  the holder of the liability will not fulfil an obligation 
C)  the counterparty will not fill an obligation 
D)  the holder of a corresponding asset will not fulfil an obligation. 
A)  a market participant will not fulfil an obligation 
B)  the holder of the liability will not fulfil an obligation 
C)  the counterparty will not fill an obligation 
D)  the holder of a corresponding asset will not fulfil an obligation.

Question 13

Which of the following steps in not relevant when valuing liabilities?

Accepted Answer

A)  the particular liability that is the subject of the measurement 
B)  the valuation premise that is appropriate for the measurement 
C)  the principal (or most advantageous) market for the liability 
D)  the valuation technique(s) appropriate for the measurement, considering the availability of data with which to develop inputs that represent the assumptions that market participants would use when pricing the asset or liability and the level of the fair value hierarchy within which the inputs are categorised. 
A)  the particular liability that is the subject of the measurement 
B)  the valuation premise that is appropriate for the measurement 
C)  the principal (or most advantageous) market for the liability 
D)  the valuation technique(s) appropriate for the measurement, considering the availability of data with which to develop inputs that represent the assumptions that market participants would use when pricing the asset or liability and the level of the fair value hierarchy within which the inputs are categorised.

Question 14

In measuring an equity instrument at fair value the objective is to estimate an exit price at measurement date from the perspective of:

Accepted Answer

A)  the issuer of the equity instrument 
B)  the party to whom the instrument will be transferred 
C)  the party who intends to repurchase the instrument. 
D)  a market participant who holds the instrument as an asset. 
A)  the issuer of the equity instrument 
B)  the party to whom the instrument will be transferred 
C)  the party who intends to repurchase the instrument. 
D)  a market participant who holds the instrument as an asset.

Question 15

Which of the following disclosures are not required under IFRS 13?

Accepted Answer

A)  the valuation techniques used to measure fair value 
B)  the inputs used to measure fair value 
C)  the level of the fair value hierarchy within which the fair value measurements are categorised 
D)  quantitative information about all unobservable inputs used in the fair value measurement 
A)  the valuation techniques used to measure fair value 
B)  the inputs used to measure fair value 
C)  the level of the fair value hierarchy within which the fair value measurements are categorised 
D)  quantitative information about all unobservable inputs used in the fair value measurement

Question 16

Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date are an example of:

Accepted Answer

A)  a Level 2 input 
B)  a Level 1 input 
C)  a Level 3 input 
D)  a Level 4 input 
A)  a Level 2 input 
B)  a Level 1 input 
C)  a Level 3 input 
D)  a Level 4 input

Question 17

Which of the following is the definition of exit price per IFRS 13?

Accepted Answer

A)  A transaction that assumes exposure to the market for a period before the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets or liabilities; it is not a forced transaction (e.g. a forced liquidation or distress sale). 
B)  The amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's length transaction 
C)  The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. 
D)  The price that would be received to sell an asset or paid to transfer a liability. 
A)  A transaction that assumes exposure to the market for a period before the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets or liabilities; it is not a forced transaction (e.g. a forced liquidation or distress sale). 
B)  The amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's length transaction 
C)  The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. 
D)  The price that would be received to sell an asset or paid to transfer a liability.

Question 18

Which of the following is an example of a liability where there is no corresponding asset?

Accepted Answer

A)  a provision for decommissioning 
B)  a debenture issued by a listed company 
C)  a loan owing to a financial institution 
D)  a provision for warranties. 
A)  a provision for decommissioning 
B)  a debenture issued by a listed company 
C)  a loan owing to a financial institution 
D)  a provision for warranties.

Question 19

Where a liability is held as a corresponding asset by another entity the fair value of the liability is determined by:

Accepted Answer

A)  applying a present value technique to measure the liability 
B)  applying the cost approach to valuing the liability 
C)  measuring the fair value of the corresponding asset 
D)  determining the amount required to settle the present obligation 
A)  applying a present value technique to measure the liability 
B)  applying the cost approach to valuing the liability 
C)  measuring the fair value of the corresponding asset 
D)  determining the amount required to settle the present obligation

Question 20

Which of the following is not assumed when measuring the fair value of an equity instrument?

Accepted Answer

A)  The market participant transferee will take on the rights and responsibilities associated with the instrument 
B)  An entity's own equity instruments are transferred to a market participant at transfer date 
C)  An entity's own equity instrument would remain outstanding 
D)  The instrument would not be cancelled or otherwise extinguished on the measurement date. 
A)  The market participant transferee will take on the rights and responsibilities associated with the instrument 
B)  An entity's own equity instruments are transferred to a market participant at transfer date 
C)  An entity's own equity instrument would remain outstanding 
D)  The instrument would not be cancelled or otherwise extinguished on the measurement date.

Exam 3: Fair Value Measurement

Which of the following is not a characteristic of a market participant under IFRS 13?

Valuation techniques that convert future amounts to a single current amount and determines the fair value on the basis of the value indicated by current market expectations about those future amounts is an example of:

In which circumstance will it be necessary to determine the fair value of an entity's own equity instruments?

Which of the following disclosure are required under IFRS 13?

Which of the following is not a valuation technique prescribed by IFRS 13?

Which of the following documents issued alongside IFRS 13 do not form an integral part of the standard? I Basis for Conclusions II Illustrative Examples III Appendix A: Defined terms IV Appendix B: Application guidance

The fair value of an equity instrument is based on determining a/an _________ price which may relate to the price paid for an entity to repurchase its shares.

The market with the greatest volume and level of activity for the asset or liability is defined as the:

Which of the following is the definition of fair value per IFRS 13?

Trademarks would be measured primarily using which type of inputs?

Which of the following is an indication of an active market?

Non-performance risk refers to the risk that:

Which of the following steps in not relevant when valuing liabilities?

In measuring an equity instrument at fair value the objective is to estimate an exit price at measurement date from the perspective of:

Which of the following disclosures are not required under IFRS 13?

Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date are an example of:

Which of the following is the definition of exit price per IFRS 13?

Which of the following is an example of a liability where there is no corresponding asset?

Where a liability is held as a corresponding asset by another entity the fair value of the liability is determined by:

Which of the following is not assumed when measuring the fair value of an equity instrument?

The Conceptual Framework of the Iasb

Shareholders Equity: Share Capital and Reserves

Revenue

Provisions, Contingent Liabilities and Contingent Assets

Income Taxes

Financial Instruments

Share-Based Payments

Inventories

Employee Benefits

Property, Plant and Equipment

Leases

Intangible Assets

Business Combinations

Impairment of Assets

Accounting for Mineral Resources

Agriculture

Financial Statement Presentation

Statement of Cash Flows

Earnings Per Share

Operating Segments

Operating Segments

Consolidation: Controlled Entities

Consolidation: Wholly Owned Subsidiaries

Consolidation: Intragroup Transactions

Consolidation: Non-Controlling Interest

Consolidation: Other Issues

Translation of the Financial Statements of Foreign Entities

Associates and Joint Ventures

Joint Arrangements

Filters