SMEs – random topics

Storage costs incurred that are necessary during the production process before a further
production stage shall be expensed outright.
Answer: False

All investments in associates under the PFRS for SMEs may be accounted for using the fair
value, cost and equity model while under full PFRS, such investments are only accounted for
using the equity model.
Answer: TRUE

Loans from a government bearing no interest can be considered government grant

TRUE

If the equity instruments are issued after the entity receives cash, the entity shall present the
amount receivable as an offset to equity and not as an asset. ANS: False

Full PFRS permits the presentation of a single statement of income and retained earnings.
(False, Full PFRS does not permit)

It is inappropriate for an entity to leave accounting policies unchanged when better and
acceptable alternatives exist. (TRUE)

PFRS for SMEs and FULL PFRS share the same principles in the matter of presenting the
notes to financial statements.
Answer: True.

Under PFRS for SMEs, any implied goodwill included in the carrying amount of the investment
need not be amortized, as well as under full PFRS.
Answer: FALSE

Government grant shall be measured at fair value.

TRUE

Interest incurred from a finance lease is part of borrowing costs

TRUE

Summary of significant accounting policies applied ranks second in the order of presenting the
notes.
Answer: True.

To be relevant, financial information must have predictive and confirmatory value. TRUE

PFRS for SMEs have the same provisions with Full PFRS in which of the following? a.
Presentation of
total comprehensive income
b. Preparation and presentation of statement of changes in equity
c. Preparation and presentation of the statement of cash flows
d. All of the above
Answer: D