INVESTMENT IN ASSOCIATION b.
Purchase price + Share in the associate's profit - Dividend
1. This distinguishes an investment in associate from other
types of investment?
a. ownership interest of less than 20%.
b. ownership interest of 20% or more.
c. presence of significant influence
d. representation in the board of directors.
2. Significant influence is presumed to exist when ownership
interest is
a. less than 20%.
b. 20% or more.
c. more than 50%.
d. 100%.
3. Significant influence
a. cannot be inferred from the presence of potential voting
rights.
b. is presumed to exist if ownership interest is at least 10%.
c. cannot be obtained from ownership of preference shares.
d. can only be obtained from ownership of shares in an
incorporated entity.
4. Potential voting rights that are currently exercisable
a. are considered when determining the existence of
significant influence.
b. are ignored when making mathematical calculations for
the share in the profit or loss of the associate
c. may give rise to significant influence when actually
exercised
d. all of these
5. When computing for its share in the associate's profit or
loss, the investor uses
a. its present ownership interest.
b. its present ownership interest plus any potential voting
rights held.
c. its present ownership interest plus any potential voting
rights held that are currently exercisable.
d. A or c
6. Under the equity method, the investment in an associate is
initially recognized at
a. cost.
b. fair value.
c. cost adjusted for any share in the profits or losses of the
associate.
d. whichever is lower of b and c
7. Which of the following may be used to compute for the
ending balance of an investment in associate account?
a. Purchase price + Share in the associate's profit - Dividends
received - Amortization/Depreciation of undervaluation
of assets
received + Amortization/Depreciation of undervaluation of
assets
c. Purchase price+ Share in the associate's total
comprehensive income - Dividends received
Amortization/Depreciation of undervaluation of assets
d. Purchase price + Share in the associate's profit - Dividends
received + Amortization/Depreciation of undervaluation of
assets
8. For an investment accounted for under the equity method,
the investment income recognized in profit or loss for the
year may be computed as
a. cash dividends received or receivable.
b. share in the profit or loss of the associate plus amortization
of undervaluation of assets.
c. share in the profit or loss of the associate minus
amortization of undervaluation of assets.
d. share in the total comprehensive income of the associate
minus amortization of undervaluation of assets.
9. When the associate has outstanding cumulative preference
shares, the investor computes for its share in the associate's
profit
a. after deducting one-year dividend on the cumulative
shares, whether declared or not.
b. after deducting one-year dividend on the cumulative
shares, only when declared.
c. before deducting one-year dividend on the cumulative
shares, whether declared or not.
d. before deducting one-year dividend on the cumulative
shares, only when declared.
10. The equity method is not applicable in all of the following
cases, except
a. when the investment is classified as "held for sale."
b. when the investment significantly impairs the ability of the
investee to transfer funds to the investor but the investor
continues to have significant influence over the investee
c. when the investment is acquired with the exclusively view
of sale within one year.
d. when the investment is classified as an interest in joint
operation.
PROPERTY, PLANT, AND EQUIPMENT
1. The initial cost of an item of property, plant and equipment
includes
a. purchase cost
b. direct costs
c. decommissioning and restoration costs
d. all of these
2. Income earned from incidental operations before an asset
is put to use is

a. immediately recognized in profit or loss together with the
related expense.
b. depreciated over the estimated useful life of the asset.
c. deducted from the cost of the asset.
d. added to the cost of the asset.
3. Costs of uninsured hazards or claims for uninsured
accidents during construction
a. are included as cost of property, plant and equipment.
b. are charged immediately as expense.
c. are necessary overheads, thus, are included as cost of
property, plant and equipment.
d. ignored for financial reporting purposes.
4. The cost of razing an old building is
a. accounted for depending on the reason for the demolition.
b. added to the cost of building, net of salvage proceeds.
c. added to the cost of the land net of salvage proceeds.
d. added to the cost of the land plus any salvage proceeds.
5. Savings from self-constructed building is
a. recognized immediately.
b. capitalized.
c. amortized.
d. ignored.
6. The cost of option on properties not acquired is
a. expensed immediately.
b. capitalized.
c. amortized.
d. ignored.
8. The acquisition cost of items of property, plant and
equipment purchased on a lump-sum price is allocated to the
individual assets based on their
a. relative fair values.
b. relative book values.
c. need not be allocated.
d. relative useful lives.
8. An item of property, plant and equipment acquired in an
exchange with commercial substance is measured at the
a. fair value of asset given up.
b. fair value of asset given up minus cash paid or plus cash
received.
c. fair value of asset given up plus cash paid or minus cash
received.
d. fair value of asset received plus cash paid or minus cash
received.
9. PAS 16 Property, Plant and Equipment states that if the
transaction causes a significant change in cash flows, the
transaction has commercial substance. In transactions of this
type, at what amount should the entity record the asset
received?
a. Book Value
b. Book Value plus Boot
c. Fair Value
d. Intrinsic Value
10. May Co. and Sty co. exchanged nonmonetary assets and
May paid cash to Sty in the transaction. May stated that the
exchange had commercial substance. However, the assets
exchanged were so specialized that there was not an
objective basis to determine a fair value. In cases like this, the
standards suggest that May record the asset at
a. Estimated Fair Value.
b. Book Value.
C. Carrying amount of asset given up plus cash paid.
d. Intrinsic Value
PROBLEM 2: FOR CLASSROOM DISCUSSION
1. According to PAS 16, subsequent to initial recognition, a
entity shall an item of property, plant and equipment using
a the cost model
b. the revaluation model
c. the fair value model
d. either a or b as a matter of accounting policy choice
2. Under this model, an item of property, plant and
equipment is measured at its cost less any accumulated
depreciation and any accumulated impairment losses.
a. the cost model
b. the revaluation model
c. the fair value model
d. either a or b
3. In accounting, depreciation means
a. the systematic allocation of the depreciable amount of an
asset over its estimated useful life.
b. the decline in the value of an asset.
c. the decrease in the quality, productive capacity or
efficiency of an asset.
d. all of these
5. During the year, ABC Co. purchased a machine with an
estimated useful life of 10 years. of the following most closely
parallels the requirement of PAS 16?
a. ABC Co. shall depreciate the machine using straight line
basis over 10 years.
b. Since the machine's economic life is greatly affected by
usage, ABC Co. shall depreciate it using the units of
production method.
c. ABC Co. shall initially ignore any residual value when
depreciating the machine using the digits method.
d. ABC Co. shall depreciate separately each major part of the
machine.
PROBLEM 5: MULTIPLE CHOICE-THEORY 1.
1. Subsequent to initial recognition, an entity shall use this
model to account for its items of property, plant and 9.Leasehold improvement is depreciated over the
equipment a. useful life of the improvement
b. remaining lease term
a. cost model c. shorter of a and b
b. fair value model d. longer of a and b
c. revaluation model
d. a or b as an accounting policy choice 10. An asset is said to be fully depreciated when its carrying
amount is
2. The carrying amount of an item of property, plant and
equipment subsequently accounted for under the cost model a. zero
is equal to b. equal to its residual value
C. a or b
a. the historical cost less any accumulated depreciation d. equal to accumulated depreciation
b. the fair value less any accumulated depreciation e. any of these
c. the historical cost less any accumulated depreciation and
any accumulated impairment loss 11. Revaluation of items of property, plant and equipment is
d. the fair value less any accumulated depreciation and any made
accumulated impairment loss
a. simultaneously.
3. It is the systematic allocation of the depreciable amount of b. every year.
asset over its estimated useful life. c. on all assets in a class.
a. depreciation d. a and c
c. impairment
b. revaluation 12. Revaluation surplus is equal to
d. all of these
a. Fair value minus Carrying amount
4. Changes in depreciation methods, useful lives, or residual b. Carrying amount minus Depreciated replacement cost
value are changes in accounting estimate that are accounted c. Value in use less Present value of future cash flows
for d. Present value of future cash flows less Carrying amount

a. prospectively. 13. Which of the following is not an acceptable method of

b. retrospectively. measuring the fair value of a property that is being revalued?
c. a or b
d. not accounted a. Market approach
b. Proportional approach
5. Depreciation of an asset begins when the asset <List A> c. Income approach
and ceases when the asset <List B> d. Cost approach

6. The denominator in the sum-of-years' digits method (SYD)

depreciation rate is computed as 14. This fair valuation technique reflects the amount that
would required currently to replace the service capacity of an
a. (Life divided by 2)+1 multiplied by Life asset
b. (Life-1 divided by 2) multiplied by Life a. Market approach
c. (Life x 2)+1+Life b. Proportional approach
d. (Life + 1 divided by 2) multiplied by Life c. Income approach
d. Cost approach
6. The depreciation rate under the double declining balance
is computed as 15. This fair valuation technique uses prices and other
relevant information generated by market transactions
a. Life divided by 2 involving identical or comparable assets, liabilities, or a group
b. 2 times life of assets and liabilities.
c. 2 divided by life
d. 2 plus life a. Market approach
b. Proportional approach
8. Which of the following depreciation methods is prohibited c. Income approach
by PAS 16 Property, Plant and Equipment? d. Cost approach

a. Straight-line method
b. Sum-of-the-years' digits method
c. Depreciation based on revenue 15. Revaluations of items of property, plant and equipment:
d. None of these are recorded using the

a. proportional method.
b. elimination method.
c. replacement method.
d. a or b
17. Subsequent to a revaluation, the depreciation on the
revalued asset is computed on the
a. fair value on revaluation date.
b. carrying amount before the revaluation.
c. historical cost.
d. any of these
18. If the revalued asset is depreciable,
a. only the depreciated replacement cost can be used in the
revaluation procedures.
b. revaluation shall be made with sufficient regularity -
atleast every three years.
c. a portion of the revaluation surplus is transferred
periodically to profit or loss.
d. a portion of the revaluation surplus may be transferred
periodically to retained earnings.
19. Under the cost model, the gain or loss on disposal of an
item of property, plant and equipment is computed as
a. the difference between the net disposal proceeds and the
carrying amount.
b. the difference between
revalued amount. the net disposal proceeds and the the
difference between the net disposal proceeds and
b. accumulated depreciation.
d. the difference between the sale price and the carrying
amount.
20.Under the revaluation model, the gain or loss on disposal
of an item of property, plant and equipment is computed as
a. the difference between the net disposal proceeds and the
carrying amount.
b. the difference between the net disposal proceeds and the
revalued amount.
C. the difference between the net disposal proceeds and
accumulated depreciation.
d. the difference between the sale price and the carrying
amount.
GOVERNMENT GRANTS
1. Government grants are recognized only when there is
reasonable assurance that the entity
a. will comply with the conditions attaching to them.
b. the grants are received.
c. the grants will be received.
d. a and b
e. a and c
2. According to PAS 20 Accounting for Government Grants
and Disclosure of Government Assistance, which of the
following is a government grant?
a. Tax benefits
b. Free technical or marketing advice
c. Public improvements that benefit the entire community
d. Provision of guarantees
e. Noninterest-bearing loan from the government
2. According to PAS 20 Accounting for Government Grants
and Disclosure of Government Assistance, which of the
following is not a government grant?
a. Aid from the government to compensate for casualty
losses already incurred.
b. Cash received from the government to be used to acquire
land.
c. Government procurement policy that is responsible for a
portion of the entity's sales.
d. Aid from the government to defray expenses which are yet
to be incurred.
3. According to PAS 20 Accounting for Government Grants
and Disclosure of Government Assistance, non-monetary
grants are measured at
a. fair value.
b. nominal amount.
c. cost
d. a or b
5. The repayment of government grants are accounted for
a. prospectively.
b. retrospectively.
c. a or b
d. not accounted for
6.In relation to a benefit included in the term 'government
assistance', are the following statements true or false
according to PAS 20 Government grants and government
assistance?
1) The provision of infrastructure in developing areas is a
benefit.
2) The imposition of trading constraints on competitors is a
benefit.
A
7. On 1 January 20X8 The Ebro Company commenced trading
to provide key skills education facilities in a region identified
for technology development. Also on 1 January 20X8, the
company received two grants from its government for setting
up its operations in this location:
Grant (a) was paid to give financial assistance for start-up
costs already incurred.
Grant (b) was paid to subsidize the costs of purchasing
computer software over the five-year period.
The company is almost certain to keep the facilities
operational for the five years. The company's accounting year
end is 31 December. Are the following statements concerning
recognition of the income from the two government grants
true or false, according to PAS 20 Government grants and
government assistance?
1) Income from Grant (a) should be recognized in full on
receipt in 20X8.
2) Income from Grant (b) should be recognized in full at the
end of 5 years.
c d. A ship that normally takes one to two years to complete.
7. Which of the following statements are correct according to
PAS 20 Government grants and government assistance?
I Any adjustment needed when a government grant
becomes repayable is accounted for as a change in
accounting estimate
II. In respect of loans from the government at an interest rate
of 0%, an imputed interest charge should be made in profit or
loss
III. Where conditions apply to a government grant, it should
only be recognized when there is reasonable assurance that
the conditions will be met
IV. A government grant should not be recognized received in
cash until it is
a. I, III
b. I, II, III
c. I, III, IV
d. II, III, IV
8. Which of these disclosures is not required by IAS 20?
a. The accounting policy adopted for government grants,
including methods of presentation adopted in the financial
statements.
b. Unfulfilled conditions and other contingencies attaching to
government assistance.
c. The names of the government agencies that gave the
grants along with the dates of sanction of the grants by these
government agencies and the dates when cash was received
in case of monetary grants.
d. The nature and extent of government grants recognized in
the financial statements and an indication of other forms
of government assistance from which the entity has
directly benefited.
10. Which of the following is not specifically excluded from
the purview of PAS 20?
a. Government participation in ownership of the entity.
b. Government grant covered by PAS 41.
c. Government assistance provided in the form of tax
benefits.
d. Forgivable loan from the government.
BORROWING COSTS
1. Which of the following may not be considered a "qualifying
asset" under PAS 23?
a. A power generation plant that normally takes two years to
construct.
b. An expensive private jet that can be purchased from a
local vendor.
C. A toll bridge that usually takes more than a year to build.
Adapted)
2. An asset is being constructed for an enterprise's own use.
The asset has been financed with a specific new borrowing.
The interest cost incurred during the construction period as a
result of expenditures for the asset is a
A. part of the historical cost of acquiring the asset to be
written off over the estimated useful life of the asset.
b. interest expense in the construction period.
c. recorded as a deferred charge and amortized over the term
of the borrowing.
d. a part of the historical cost of acquiring the asset to be
written off over the term of the borrowing used to finance
the construction of the asset.
3. Which of the following costs may not be eligible for
capitalization as borrowing costs under PAS 23?
a. Interest on bonds issued to finance the construction of a
qualifying asset
b. Amortization of discounts or premiums relating to
borrowings that qualify for capitalization.
b. Imputed cost of equity.
c. d. Exchange differences arising from foreign currency
borrowings to the extent they are regarded as an adjustment
to interest costs pertaining to a qualifying asset.
4. Capitalization of borrowing costs
a. Shall be suspended during temporary periods of delay.
b. May be suspended only during extended periods of delays
in which active development is delayed.
c. Should never be suspended once capitalization
commences. d. Shall be suspended only during extended
periods of
delays in which active development is delayed.
1. Borrowing costs that are directly attributable to the
acquisition, construction or production of a qualifying asset
are
a. capitalized; other borrowing costs are expensed.
b. expensed; other borrowing costs are capitalized.
C. capitalized; other borrowing costs are also capitalized.
d. expensed; other borrowing costs are also expensed.
2. Which of the following statements is true?
a. Borrowing costs are generally expensed except when they
are avoidable and relate to the acquisition or construction of
a qualifying asset.
b. Borrowing costs are generally capitalized except when they
do not relate to the acquisition or construction of a
qualifying asset.
c. Borrowing costs may or may not be capitalized depending
on the accounting policy chosen by an entity.
d. Exchange differences are ignored when determining
borrowing costs.
a. interest expense less investment income.
b. investment income less interest expense.
c average expenditure multiplied by capitalization rate.
d. a plus c, after deducting specific borrowing from average
expenditure.

3.What is a qualifying asset? 9. The capitalizable borrowing cost on general borrowings is

a. A qualifying asset is an asset that is financed by
borrowings.
b. A qualifying asset is a long-term asset that is specialized in
nature that only the entity can use without any substantial
modification.
c. A qualifying asset is an asset that necessarily takes a
substantial period of time to get ready for its intended use
or sale.
d. All of these
4. Which of the following is a qualifying asset?
a. A large vessel that can be purchased from a manufacturer.
b. Inventories that are mass produced on a routine basis,
c. A building classified as investment property that takes
three years to complete and is measured under the fair value
model.
d. A self-generated intangible asset that takes 2 years to
complete.
5. Borrowing costs on borrowings obtained for the purpose
of acquiring or constructing a qualifying asset are capitalized
the borrowing costs
computed as
a. interest expense less investment income.
b. investment
income less interest expense.
c.average expenditure multiplied by capitalization rate.
d. a plus c, after deducting specific borrowing from average
expenditure.
10.The capitalization rate is computed as
a. Total interest expense on general borrowings divided by
Total general borrowings.
b. Average expenditure divided by 2.
C. a or b
d. Total general borrowings divided by Total interest expense
on general borrowings.
AGRICULTURE
Which of the following does not apply to the PAS 41?
a. Biological assets, except bearer plants
b. Agricultural produce at the point of harvest
c. Government grants related to bearer plants
d. Land related to agricultural activity

a. are incurred regardless of whether the expenditure on the Which of the following is an agricultural activity?
acquisition or construction of the qualifying asset had been
made. a. poaching
b. are avoidable. b. hunting in the forest
c. are not eligible for recognition as expense. c. deforestation
d. a or b d. fish farming

5. The capitalization of borrowing costs starts when the

entity C. rice plant
Which of the following is a biological asset that is accounted
a. incurs expenditures for the asset. for under PAS 41?
b. incurs borrowing costs.
c. necessary activities are being undertaken. a. mango tree
d. on the date when all of the items listed above exist. b. harvested mango fruit
c. rice plant
7. In which of the following instances is the capitalization of d. extra rice
borrowing costs suspended?

a. during periods of suspension where substantial technical D. dairy cattle used to produce milk
and administrative work is being performed. Which of the following is a biological asset that is accounted
b. during extended periods of suspension of active for under PAS 41?
development of a qualifying asset.
c. during periods of temporary delay which is a necessary a. plant used for beautification
part of the process of getting an asset ready for its intended b. bearer plant
use or sale. c. dead animals used for display
d. any of these d. dairy cattle used to produce milk

8. The capitalizable borrowing cost on specific borrowing is

computed as

According to PAS 41, a biological asset or agricultural
produce is recognized when all of the following criteria are
met except
a. the entity controls the asset as a result of past events
b. it is probable that future economic benefits associated
with the asset will flow to the entity
c. the fair value or cost of the asset can be measured reliably
d. the asset represents a present obligation as at the end of
the reporting period
D. without exception.
Agricultural produce is measured at fair value less cost to
sell at the point of harvest
a. except when fair value cannot be measured reliably, in
which case, the initial measurement is at cost.
b. except when costs to sell cannot be measured reliably, in
which case, the initial measurement is at fair value.
c. a and b
d. without exception.
D. mango trees and other plants that produce agricultural
products repeatedly over a long period of time
Which of the following is outside the scope of PAS 41?
a. dairy cattle used in the production of milk
b. chickens used in the production of meat
c. rice plants and other crops that produce agricultural
products only once
d. mango trees and other plants that produce agricultural
products repeatedly over a long period of time
C. Pig
Which of the following is considered a biological asset?
a. Carcass
b. Ham
c. Pig
d. Piggy bank
C. picked or harvested fruit
Which of the following is considered an agricultural
produce?
a. fruit cocktail
b. fruit tree
c. picked or harvested fruit
d. dried fruit
Initial measurement Subsequent measurement
A. fair value less costs to sell fair value less costs to sell
According to PAS 41, biological assets are measured as
follows:
Initial measurement Subsequent measurement
a. fair value less costs to sell fair value less costs to sell
b. cost cost less accum. depreciation
c. cost cost less accum. depreciation
and impairment losses
d. fair value less costs to sell cost
Which of the following statements is correct regarding the
measurement of assets related to agricultural activities?
a. Biological assets are initially and subsequently measured at
fair value.
b. No gain or loss can arise on the initial recognition of a
biological asset.
c. Agricultural produce is initially and subsequently measured
at fair value less costs to sell.
d. The gain or loss arising from the initial measurement of
biological asset or agricultural produce is recognized in profit
or loss.
C. A loss may not arise on initial recognition of a biological
asset
Which statement is incorrect regarding gains and losses on
biological assets?
a. A gain may arise on initial recognition of a biological asset
b. A gain or loss on biological asset measured at fair value
less cost to sell shall be included in profit or loss for the
period
c. A loss may not arise on initial recognition of a biological
asset
d. None of the above
A. Fair value less costs to sell at the point of harvest
Inventories comprising agricultural produce that an entity has
harvested from its biological assets are measured on initial
recognition at
a. Fair value less costs to sell at the point of harvest
b. Fair value less cost to sell
c. Cost
d. Lower of cost and net realizable value
D. Incidental scrap sales would prevent the plant from
satisfying the definition of a bearer plant
Which statement is incorrect regarding bearer plants?
a. Tea, bushes, grape vines, oil palms and rubber trees usually
meet the definition of a bearer plant.
b. The produce growing on bearer plants, for example tea
leaves, grapes, oil palm fruit and latex is within the scope of
PAS 41
c. None of the above
d. Incidental scrap sales would prevent the plant from
satisfying the definition of a bearer plant
C. Land related to agricultural produce
Which of the following is not considered a biological asset?
a. Trees in a plantation forest
b. Hogs and poultry
c. Land related to agricultural produce
d. Strawberry plants
B. Livestock from which milk is produced
Bearer biological assets include
a. Livestock intended for the production of meat
b. Livestock from which milk is produced
c. Livestock held for sale
d. Crops such as maize and wheat
D. Trees being grown for lumber
Consumable biological assets include
a. Grape vines
b. Trees from which firewood is harvested while the trees
remain
c. Fruit trees
d. Trees being grown for lumber
B. The processing of agricultural produce after harvesting
Which of the following is not dealt with by PAS 41
(Agriculture)?
a. The accounting for biological assets
b. The processing of agricultural produce after harvesting
c. The initial measurement of agricultural produce harvested
from the entity's biological assets
d. The accounting treatment of government grants received
in respect of biological assets
A. In profit or loss only
An entity owns a number of herd of cattle. Where should
changes in fair value of a herd cattle be recognized in the
financial statements?
a. In profit or loss only
b. In profit or loss or other comprehensive income
c. In other comprehensive income
d. In the statement of cash flows only
I only
Cost may sometimes approximate fair value, particularly
when
I. little biological transformation has taken place since initial
cost incurrence
II. The impact of the biological transformation on price is
expected to be material
A. income when grant becomes receivable
An unconditional government grant related to a biological
asset that has been measured at fair value less costs to sell
should be recognized as
a. income when grant becomes receivable
b. income when the grant application has been submitted
c. a deferred credit when the grant becomes receivable
d. a deferred credit when the grant has been approved
D. Apple
Which of the following would be classified as agricultural
produce?
a. Lumber
b. Butter
c. Bush
d. Apple
Where the fair value of the biological asset cannot be
determined reliably, the biological asset should be measured
at
a. cost
b. cost less accumulated depreciation and accumulated
impairment loss
c. cost less accumulated depreciation
d. net realizable value
Transfers from investment property to property, plant
and equipment are appropriate
a. When there is change of use.
b. Based on the discretion of management.
c. Only when the entity adopts the fair value model.
d. The entity can never transfer property into another
classification once it is classified as investment property
Chapter 19 Borrowing Costs
1. According to PAS 23, borrowing costs are capitalized when
a. they relate directly to the acquisition, construction or
production of a qualifying asset.
b. the entity chooses to capitalize them.
c. they are material and are expected to be incurred over
more than one reporting period.
d. all of these
2. Which of the following is a qualifying asset?
a. Investment property measured at fair value
b. Building that is ready for its intended use upon purchase
c. Inventories that are routinely produced in large
quantities on a continuous basis
d. An application software (intangible asset) that takes 3
years to develop
3. An entity starts the capitalization of borrowing costs to the
cost of a qualifying asset when
a. expenditures for the asset are being incurred.
b. borrowing costs are being incurred.
c. activities necessary to prepare the asset for its
intended use or sale are being undertaken.
d. all of the above conditions are met.
An entire of class of PPE is subsequently measured at the
FAIR VALUE MODEL
Income approach
Which of the following approaches is used in the
accounting government grants under pas 20?

A. Capital approach
B. Income approach
C. Gentle approach
D. Direct approach

Accrual basis
Which of the following principles applied most to
accounting government grants?

A. Accrual basis
B. Cash basis
C. Materiality
D. Prudence

the amount of cash received and the fair value of the

amount receivable :/ D. A or b, whichever is more
appropriate
Monetary grants are measured at

a. the amount of cash received

B. the fair value of the amount receivable
C. Nominal amount
D. A or b, whichever is more appropriate

a or b
Non monetary grants are measured at

A. The fair value of the non monetary asset

B. Nominal amount
C. The amount of cash received or receivable
D. A or b

Cancellation of an existing loan from the government

Which of the following is considered a government grant
under PAS 20?

A. Award of major government contracts

b. Cancellation of an existing loan from the government
C. Free technical advice
d. Public improvements

Depreciation does not cease when the asset becomes idle

or is retired from active use and held for disposal unless
the asset is fully depreciated