FINALS EXAM - CFAS
Correct answer: Cost
Question 1
 Exploration and evaluation expenditures are
incurred
Correct answer: when the legal rights to explore a
specific area have been obtained but the technical
feasibility and commercial viability of extracting a
mineral resource are not yet demonstrable.
Question 2
 Goodwill shall be recognized only when
Correct answer: it is acquired through the purchase
of another entity.
Question 3
 At commencement date, which of the following will
be recognized by a lessee?
Correct answer: Both right-of-use asset and lease
liability
Question 4
 Share options are what type of share-based
payment?
Correct answer: Equity-settled share-based
payment transaction
Question 5
 Agricultural produce is
Response: the harvested product from biological
asset.
Correct answer: measured at the time of harvest at
the cost of production.
Question 6
 When a financial asset at FVPL is reclassified to
FVOCI, the new carrying amount is equal to
Correct answer: fair value at reclassification date.
Question 7
 Directly attributable expenditures related to
investment property include
Correct answer: professional fees for legal
services, property transfer taxes and other
transaction cost.
Question 8
 At commencement date, at what amount should
the lessee initially recognize the right-of-use asset?
Response: Present value of lease payments
Question 9
 Entity-wide disclosures include all, except
Correct answer: information about intersegment
revenue.
Question 10
 If the transfer of an asset by the seller-lessee does
not satisfy the requirements of PFRS 15 to be
accounted for as a sale of the asset
Correct answer: All of these.
Question 11
 The cost of an internally generated asset includes
all of the following, except
Correct answer: expenditure on training staff to
operate this asset.
Question 12
 Which accounting standard covers revenues from
contracts with customers?
Correct answer: PFRS 15
Question 13
 What is a ‘lease’ in accordance with PFRS 16?
Correct answer: A contract, or part of a contract,
that conveys the right to use an asset (the
underlying asset) for a period of time in exchange
for consideration.
Question 14
 Which of the following is not a criterion for a
contract to be accounted for under PFRS 15?
Correct answer: The contract does not have
commercial substance.
Question 15
 An entity shall classify a non-current asset or
disposal group as held for sale when
Correct answer: the carrying amount of the asset or
disposal group is recovered through a sale
transaction.
Question 16
 An entity classified a non-current asset accounted
for under the cost model as held for sale at the
current year-end. Because no offers were received
at an acceptable price, the entity decided at the end
of next year not to sell the asset but continue to use
it.
The asset shall be measured at the end of next
year at what amount?
Correct answer: The lower of carrying amount on
the basis that the asset had never been classified
as held for sale and recoverable amount.
Question 17
 An operating segment is a component of an entity
Correct answer: all of these characterize an
operating segment.
Question 18
 Which of the following a disclosure required in
relation to exploration and evaluation expenditures?
Response: Information recognized in the financial
statements arising from the exploration and
evaluation of mineral resources.
Correct answer: Information about commercial
reserve quantity
Question 19
 Which disclosure shall be made when the fair
value model has been adopted?
Correct answer: Net gain or loss from fair value
adjustments
Question 20
 Which disclosure is not required with respect to
intangible assets?
Correct answer: Fair value of similar intangible
asset used by the competitor
Question 21
 Statement 1: In share options, the services
received shall be measured at the fair value of the
employee's services.
Statement 2: In share appreciation rights, the total
amount of compensation is not known until the date
the share appreciation right is exercised.
Correct answer: The first statement is wrong, while
the second statement is correct.
Question 22
 The fair value at initial recognition is
Correct answer: the price paid to acquire asset.
Question 23
 Fair value of an asset should be based on
Correct answer: the price that would be received to
sell the asset at measurement date.
Question 24
 Which of the following is not a valuation technique
used in fair value measurement?
Correct answer: Residual value approach
Question 25
 In financial reporting for operating segments, an
entity shall disclose all of the following, except
Correct answer: the title of the chief operating
decision maker.
Question 26
 Which of the following is an assumption used in
fair value measurement?
Correct answer: The asset is in the highest and
best use.
Question 27
 A living plant with a dual use is classified as.
Correct answer: biological asset.
Question 28
 Reclassifications of investments between
categories are accounted for
Correct answer: prospectively, at the beginning of
the period after the change in the business model.
Question 29
 An entity recently moved to a new building. The old
building is being actively marketed for sale and the
entity expects to complete the sale in four months.
Which of the following statements is incorrect
regarding the old building?
Response: It will be reclassified as an asset held
for sale.
Correct answer: It will be measured at historical
cost.
Question 30
 Which of the following is not likely an effect of
IFRS 16 on lessee’s financial statements?
Correct answer: Increase in operating expenses
Question 31
 A lease that transfers substantially all the risks and
rewards incidental to ownership of an underlying
asset.
Correct answer: Finance lease
Question 32
 When a performance obligation is satisfied, at what
amount will the revenue be recognized?
Response: To the extent of transaction price
allocated to the performance obligation
Correct answer: Full contract price
Question 33
 An entity had a plantation forest that is likely to be
harvested and sold in 30 years. The income shall
be accounted for in which of the following?
Correct answer: Income shall be measured
annually and reported using a fair value approach
that recognizes and measures biological growth.
Question 34
 Where there is a long aging or maturation process
after harvest, the accounting for such products shall
be dealt with by
Correct answer: PAS 2
Question 35
 PFRS 9 permitted which of the following
requirements to be applied without applying the
other requirements at the same time?
Response: The general hedge accounting
requirements.
Correct answer: The requirements related to the
fair value option for financial liabilities that address
own credit risk.
Question 36
 For segment reporting purposes, which test must
be applied to determine if a component is a
reportable operating segment?
Correct answer: Revenue test, asset test and profit
or loss test
Question 37
 Statement 1: Market share and customer loyalty
can be recognized as intangible asset.
Statement 2: Intangible assets with indefinite useful
life are amortized and tested for impairment at least
annually.
Correct answer: Both statements are wrong.
Question 38
 In accordance with PFRS 16, the classification of a
lease for lessors as either an operating or finance
lease is based on
Correct answer: the transfer of the risks and
rewards of ownership.
Question 39
 All of the following financial assets shall be
measured at fair value through profit or loss, except
Correct answer: financial assets at amortized cost.
Question 40
 A cash-settled share-based payment transaction
increases
Correct answer: a liability.
Question 41
 Compensation expense from a share option is
generally
Correct answer: allocated over the service period of
the employees.
Question 43
 Which statement is incorrect in determining the fair
value of an investment property?
Correct answer: An entity shall determine the fair
value of investment property by deducting
transaction cost that may be incurred upon
disposal.
Question 44
 Transfers from investment property to property,
plant, and equipment are appropriate
Correct answer: when there is change of use.
Question 45
 If the fair value less cost of disposal is lower than
the carrying amount of a non-current asset
classified as held for sale, the difference is
Correct answer: accounted for as an impairment
loss.
Question 46
 The net investment in the lease is
Response: The gross investment in the lease
discounted at the interest rate implicit in the lease.
Correct answer: The lease payments receivable by
the lessor under a finance lease.

Question 47
 Which of the following describes a principal market
for establishing fair value of an asset?
Correct answer: The market that has the greatest
volume and level of activity for the asset.

Question 48
 What financial assets are assessed for
impairment?
Correct answer: Debt investment at amortized cost
and debt investment at FVOCI

Question 49
 The most common method of computing depletion
is
Correct answer: production method.

Question 50
 Information needed to compute a depletion charge
per unit includes the
Correct answer: estimated total amount of
resources available.