UNIVERSIDAD DE MANILA

COLLEGE OF BUSINESS ADMINISTRATION

UPDATES IN FINANCIAL ACCOUNTING STANDARDS

Name: ___________________________________ Section: ____________

Student Number: __________________________ Date: ____________

PAS 21 – The Effects of Changes in Foreign Exchange Rates

1. PAS 21 prescribes the following except
a. to include foreign currency transactions and foreign operations in the financial statements.
b. to translate financial statements into a presentation currency
c. to determine which exchange rates to use and how to report the effects of changes in exchange rates in the
financial statements
d. to mandatorily require the entity to use the functional currency in presenting financial statements

2. Factors to be consider during determining the functional currency, except

a. Sales prices for goods and services are denominated and settled
b. Currency of competitive forces and regulations
c. Currency that mainly influences the materials, labor and other costs
d. Currency in which funds from investing activities

3. Which of the following is incorrect?

a. Monetary items are translated using spot rate
b. Non-monetary items that are measured in terms of historical cost are translated using exchange rate at the
date of the transaction
c. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange
rates at the date when the fair value was measured.
d. Monetary items are translated using closing rate

4. The following shall be disclosed under PAS 21, except

a. Functional currency
b. Amount of exchange differences recognized in P/L and OCI
c. The reason for using a different presentation currency
d. All exchange rates including spot rate and closing rate

PAS 20 – Accounting for Government Grants and Disclosure of Government Assistance

5. In the case of a nonmonetary grant, which of the following accounting treatments is prescribed by PAS 20? C
a. Record the asset at replacement cost and the grant at a nominal value.
b. Record the grant at a value estimated by management
c. Record both the grant and the asset at fair value of the nonmonetary asset.
d. Record only the asset at fair value; do not recognize the fair value of the grant.

6. Which of the following is within the scope of PAS 20? C

a. Government assistance provided in the form of tax benefits
b. Public improvements that benefit the entire community
c. Forgivable loan from the government
d. Government grants covered by PAS 41

7. Government assistance include the following, except

a. Tax benefits
b. Free technical or marketing advice
c. Imposition of trading constraints on competitors
d. Government procurement policy that is responsible for a portion of the entity’s sale.

8. Monetary grants are measured at, except

a. Amount of cash received
b. Fair value of amount receivable
c. Nominal amount or zero plus direct cost

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 d. Carrying amount of loan payable to government for which repayment is forgiven

9. Which of the following is not correct about accounting for government grants?
a. Government grants are recognized in profit or loss on a systematic basis over the periods in which the
entity recognizes as expense the related costs for which the grants intended to compensate.
b. Grants related to depreciable assets are recognized in P/L on a systematic basis over the periods and in the
proportions in which depreciation expense on those assets is recognized.
c. Grants related to non-depreciable assets recognized in profit or loss when the cost of fulfilling the attached
condition are not yet incurred.
d. Grants received as financial aid for expenses or losses already incurred are recognized immediately in P/L
when the grant becomes receivable.

PAS 19 – Employee Benefits

10.All the following are categories of employee benefits, except
a. Short-term employee benefits
b. Post-employment benefits
c. Termination benefits
d. Share-based payment benefits

11.Short-term employee benefits include, except

a. Wages, salaries and social securities
b. Shor-term compensated absences
c. Stocks-sharing and bonuses
d. Non-monetary benefits

12.Categories of compensated absences are the following except

a. Accumulating - Vesting
b. Accumulating- Non-vesting
c. Non-accumulating – Vesting
d. Non-accumulating – Non-vesting

PFRS 15 – Revenue from Contracts with Customers

Enumerate the five-step model framework in order to comply with PFRS 15 in recognizing revenue. (5 points)

TRUE OR FALSE
1. There is a recognition of net income once we recognized an expense related to the grant we received from the
government.
2. The mere receipt of a grant is not conclusive evidence that the attached condition has been or will be satisfied.
3. When the grant is a forgivable loan from the government, we measure it on its carrying amount.
4. Deferred income from government grant is a liability of the business.
5. Grants received as financial aid for expenses or losses already incurred are recognized immediately in profit or
loss when the grant becomes payable.
6. Actuarial assumption is an estimate of certain variable input into a financial model, normally for the purposes of
calculating premiums or benefits.
7. Unpaid short-term employee benefits shall be recognized as prepaid expenses.
8. An obligation under profit-sharing and bonus plans results from employee service and not from a transaction
with the entity’s owners.
9. Under contributory employment benefits, the employer pays the entire benefits.
10. In defined contribution plans, both the employer and employee commit to make fixed contributions to a fund.
11. In defined contribution plans, the benefit is definite, but the contribution is indefinite.
12. The employer commits to pay a definite amount of retirement benefits in defined benefit plans.

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13. In defined benefit plans, the contribution is definite, but the benefit is indefinite.

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