IFRS for SMEs refreshed

Multiple-choice questions. In order to be awarded CPD units you must answer the following five random questions correctly. If you fail the test, please reread the article before attempting the questions again.

What will be a key term in relation to the principles of revenue recognition going forwards?

The new definition of the term 'sale'

Performance obligations and whether they are satisfied

None of these

Risks and rewards and whether they transfer

When is the new IFRS for SME Accounting Standard effective?

Accounting periods beginning on or after 1 January 2027

Accounting periods beginning on or after 1 January 2026

Accounting periods beginning on or after 1 January 2025

Accounting periods beginning on or after 1 January 2029

The changes in revenue recognition will make IFRS for SMEs more comparable with which standard?

IFRS 15

IFRS 16

IFRS 17

IFRS 12

Which, if any, of the following statements are true about the proposed IFRS for SMEs standard? Statement 1, Two financial instruments sections have been merged into one. Statement 2, There will be a new section on fair value

Statement 1 only

Both statements

Statement 2 only

Neither statement

Which of these is a proposed change to financial instruments under IFRS for SMEs?

Amortised cost can no longer be used

All financial assets will be held at cost less impairment

Convertible loans will all be shown in liabilities

Removal of the option to apply the principles of IAS 39

What is the impairment model which will be applied to assets held under amortised cost?

Prudent cost model

Provision for loss model

Expected credit loss model

Retained loss model

Which of these statements is true in respect of the proposed treatment of accounting for leases under the IFRS for SMEs standard?

None of these

It will become largely consistent with IFRS 16 Leases

It will remain largely consistent with IAS 17 Leases

Lessee accounting will change but lessor accounting will not

Which, if any, of the following statements are true in respect of the proposed changes to IFRS for SMEs? Statement 1, They are applicable in all jurisdictions that apply full IFRS Accounting Standards. Statement 2, Early adoption can be made

Both statements are correct

Statement 2 only is correct

Statement 1 only is correct

Neither statement is correct

Which of the following reflects the proposed treatment of control for subsidiaries?

It is in line with the definition of control in IFRS 10 Consolidated Financial Statements

None of the above

It is only applicable to special purpose entities

It is unchanged

Which, if any, of the following statements is or are true regarding the proposed changes to IFRS for SMEs? Statement 1, The new revenue section allows entities to continue to follow an IAS 18 approach. Statement 2, The new revenue section follows a five step approach