No. 125 Brgy.

San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : icarecpareview@gmail.com

Noncurrent Assets Held for Sale, Discontinued Operations, Biological Assets, Interim
Reporting, Segment Reporting

1. It refers to a group of assets to be disposed of, by sale or otherwise, together as a group

in a single transaction, and liabilities directly associated with those assets that will be
transferred in the transaction.
a. Disposal Group
b. Cash Generating Unit
c. Noncurrent Asset Group
d. Noncurrent Asset
2. A noncurrent asset or disposal group is classified as held for sale when the asset is
available for immediate sale in the present condition and the sale is highly probable. For
the sale to be highly probable, all of the following statements are true, except
a. Management must be committed to a plan to sell the asset.
b. A buyer must have been located and an active program to complete the plan to
sell must have been initiated.
c. The asset must be actively marketed for sale at a reasonable price in relation to
the fair value.
d. The sale is expected to qualify for recognition as a completed sale within one year
from the date of classification as held for sale.
3. Benzal Co. classified a noncurrent asset accounted for under the cost model as held for
sale during the previous year. Developments in technology caused Benzal Co. to decide
not to sell the asset but to continue to use it. The asset shall be measured at the current
year-end at what amount?
a. Fair value less cost of disposal
b. The lower of carrying amount and recoverable amount
c. The lower of carrying amount on the basis that the asset had never been classified
as held for sale and recoverable amount
d. Fair value less cost of disposal at the beginning of the year less prospective
estimate for depreciation
4. Which of the following statements is incorrect?
a. A noncurrent asset that is to be abandoned shall not be classified as held for sale
because the carrying amount will be recovered principally through continuing use.
b. A noncurrent asset classified as held for sale shall not be depreciated.
c. The assets of the disposal group shall be shown separately as current assets and
the liabilities of the disposal group shall be shown separately as current liabilities.
d. Any adjustment to the carrying amount of a noncurrent asset that ceases to be
classified as held for sale should be included in profit or loss. If the NCAHFS was
measured using revaluation model before classification as HFS, any adjustment
should be debited/credited to Retained Earnings.

1|P a g e RSORIANO/JMAGLINAO
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : icarecpareview@gmail.com

5. Statement 1: If the discontinued criteria for a component of an entity are met after the end
of the reporting period, the entity is not allowed to retroactively classify that component as
a discontinued operation as of year-end.
Statement 2: The income or loss from discontinued operation, net of tax shall be presented
as a single amount in the income statement below the income from continuing operations.
a. True, True
b. True, False
c. False, True
d. False, False
6. Which of the following statements about the financial statements presentation for
discontinued operations is true?
a. Assets of the component held for sale may be offset with the liabilities of the
component held for sale.
b. Assets of the component held for sale should be offset with the liabilities of the
component held for sale.
c. Assets of the component held for sale are measured at the lower of fair value less
cost of disposal and their carrying amount.
d. Non-current assets of the component held for sale shall not be depreciated only if
they are not being used.
7. Aside from being disposed of or classified as held for sale, a discontinued operation:
a. Represents a separate major line of business or geographical area of operations.
b. Is part of a single coordinated plan to dispose of a separate major line of business
or geographical area of operations.
c. Is a subsidiary acquired exclusively with a view to resale.
d. All of the above.
8. It is the management by an entity of the biological transformation and harvest of biological
assets for sale or for conversion into agricultural produce or into additional biological asset.
a. Biological activity
b. Farming
c. Agricultural activity
d. Horticultural activity
9. Agricultural produce as it grows on a bearer plant is measured at the end of each reporting
period prior to harvest at
a. Fair value.
b. Fair value less cost of disposal.
c. Allocated portion of carrying amount of bearer plant.
d. Fair value less cost of disposal at point of harvest.
10. A bearer plant is a living plant that
a. Is used in the production or supply of agricultural produce.
b. Is used to bear produce for more than one period.

2|P a g e RSORIANO/JMAGLINAO
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : icarecpareview@gmail.com

c. Has a remote likelihood of being sold as agricultural produce, except for incidental
scrap sales.
d. All of the above.
11. When animals are being used for recreational activities, these are accounted for using
a. IAS 41 – Agriculture
b. IAS 40 – Investment Property
c. IAS 16 – Property, Plant and Equipment
d. Either A or C depending on whether the animal is able to bear offspring.
12. Under IAS 41 – Agriculture, which of the following components of change in fair value less
cost of disposal is required to be disclosed in the notes to financial statements?
a. Physical change
b. Price change
c. Both A and B
d. Neither A nor B
13. Because of governmental regulations (Philippine setting), the most common interim
reports used are:
a. Weekly
b. Monthly
c. Quarterly
d. Semiannually
14. Statement I: Under this view, annual operating expenses are estimated and then allocated
to the interim periods based on forecasted revenue or sales volume.
Statement II: Under this view, each interim period is treated as a discrete or separate
accounting period with status equal to a fiscal year.
a. Statement I – integral view, Statement II – independent view
b. Statement I – independent view, Statement II – integral view
c. Statement I – integral view, Statement II – interim view
d. Statement I – interim view, Statement II – independent view
15. Which of the following is least likely one of the presentations of comparative interim
statements?
a. Income statement for the current interim period and comparable interim period of
the preceding year.
b. Income statement cumulatively for the current financial year to date and
comparable financial year to date of the preceding year.
c. Statement of cash flows cumulatively for the current financial year to date and
comparable financial year to date of the preceding year.
d. Statement of financial position at the end of current interim period and comparative
statement as of the same date of the preceding year.
16. For interim financial reporting, the income tax expense for the second quarter should be
computed by using the
a. Statutory tax rate for the year.

3|P a g e RSORIANO/JMAGLINAO
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : icarecpareview@gmail.com

b. Effective tax rate expected to be applicable for the second quarter.

c. Effective tax rate expected to be applicable for the full year as estimated at the end
of the first quarter.
d. Effective tax rate expected to be applicable for the full year as estimated at the end
of the second quarter.
17. Which of the following statements about interim reporting is correct?
a. PAS 34 uses a combination of integral view and independent view when
recognizing items of income and expenses.
b. A complete set of financial statements must be presented for each interim period.
c. All entities issuing an annual report must also issue an interim report.
d. Accounting principles used for an interim period may differ from that of the full year
as long as sufficient disclosure is made in the explanatory notes.
18. Which of the following is least likely to be considered as a reportable segment?
a. Segment revenue including both sales to external customers and intersegment
sales or transfers, is 10% or more of the combined revenue, internal and external,
of all operating segments.
b. The absolute amount of profit or loss of the segment is 10% or more of the greater
in absolute amount of the combined profit of all operating segments that reported
a profit or combined loss of all operating segments that reported a loss.
c. The assets of the segment are 10% or more of the combined assets of all operating
segments.
d. The net assets of the segment are 10% or more of the combined net assets of all
operating segments.
19. If the total external revenue of reportable operating segments constitutes less than _____
of the entity’s external revenue, additional operating segments shall be identified (even
below 10% threshold) until at least such threshold is met.
a. 70%
b. 75%
c. 80%
d. 85%
20. Statement I: A segment that becomes reportable during the reporting period shall have its
prior period information presented for comparative purposes, unless no information is
available or the cost to develop it would be excessive.
Statement II: An entity is required to disclose the name of a single external customer if it
provides at least 10% of the entity’s external revenue.
a. True, True
b. True, False
c. False, True
d. False, False
*End of Handout*

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