IFRS for SMEs

There are a number of accounting standards and disclosures that may not provide useful information the users of SME financial statements. Which of the following topics does the standard for SMEs not address?

Revenue

Earnings per share

Provisions and contingencies

Liabilities and equity

There are certain accounting treatments that are not allowable under the standard for SMEs. Which of the following accounting treatments are not allowable under the standard?

Equity method for associates

Temporary difference approach for deferred taxation

Revaluation model for property, plant and equipment

Weighted average method for inventory

If SMEs choose to follow the standard, there are certain classifications of financial instruments that are not required by the standard. Which of the following statements is a key requirement of the standard, if SMEs choose to follow it?

Loans and receivables are accounted for at amortised cost

Held to maturity investments must be held to maturity

All financial instruments are measured at amortised cost with some exceptions

Available-for-sale assets are accounted for at fair value

Which of the following statements reflects the accounting for financial instruments under the standard?

The hedge accounting requirements of IAS 39 must be followed in full

All financial instruments should be measured at fair value

Reversal of an impairment loss is not allowed

All amortised cost instruments must be tested for impairment

The standard contains a section on transition that allows all of the exemptions in IFRS 1 'First-time Adoption of International Financial Reporting Standards'. It also contains certain exemptions for comparative information and the restatement of the opening statement of financial position. What is the basis for the latter exemptions to IFRS 1?

Relevance

Impracticability

Materiality

Cost

The IFRS for SMEs is intended for use by certain types of entity. Which of the following descriptions accurately describes the definition of a SME used by the IASB?

Entities that have a specified number of employees

Entities that have a certain annual turnover

Entities that have no public accountability

Entities that have a certain balance sheet total

The IFRS for SMEs makes numerous simplifications to the recognition, measurement and disclosure requirements in full IFRSs. Which of the following is not a simplification of an accounting practice allowed by the standard?

The cost model is permitted for investments in associates and joint ventures

A simplified calculation is allowed if measurement of defined benefit pension plan obligations involves undue cost or effort

SMEs do not have to de-recognise a financial asset when the entity transfers to another party substantially all of the risks and rewards of the asset

Goodwill and other indefinite-life intangibles are amortised over their useful lives

Which of the following approaches has the IASB taken in developing a standard for SMEs?

The standard is an independently developed set of standards

The standard is a simplified self-contained set of accounting principles that are based on full IFRS

The exemptions given to smaller entities are prescribed in the mainstream accounting standards

GAAP for SMEs is to be developed on a national basis

Where financial statements are prepared using the standard, the basis of presentation note and the auditor's report will refer to compliance with the IFRS for SMEs. Which of the following statements suitable describes the nature of the compliance with the standard?

The accounting practices used are a mix of local GAAP and the standard for SMEs

The accounting practices used are a mix of full IFRS and the standard for SMEs

The SME has followed the standard in its entirety

The accounting practices used are a mix of full IFRS and local GAAP

The IASB sets effective dates for standards, which are sometimes prospective, and sometimes the standards become almost immediately effective. What is the effective date for the standard for SMEs?

The date will be set by the IASB as soon as possible

The effective date was the date of the release of the standard

The IASB has not set an effective date for the standard because the decision as to whether to adopt the IFRS for SMEs is a matter for each jurisdiction

The IASB will set the date when the standard has been in existence for a while in order to gauge the acceptance of the standard

There are a number of accounting standards and disclosures that may not provide useful information the users of SME financial statements. Which of the following topics does the standard for SMEs not address?

There are certain accounting treatments that are not allowable under the standard for SMEs. Which of the following accounting treatments are not allowable under the standard?

If SMEs choose to follow the standard, there are certain classifications of financial instruments that are not required by the standard. Which of the following statements is a key requirement of the standard, if SMEs choose to follow it?

Which of the following statements reflects the accounting for financial instruments under the standard?

The IFRS for SMEs is intended for use by certain types of entity. Which of the following descriptions accurately describes the definition of a SME used by the IASB?

The IFRS for SMEs makes numerous simplifications to the recognition, measurement and disclosure requirements in full IFRSs. Which of the following is not a simplification of an accounting practice allowed by the standard?

Which of the following approaches has the IASB taken in developing a standard for SMEs?

Where financial statements are prepared using the standard, the basis of presentation note and the auditor's report will refer to compliance with the IFRS for SMEs. Which of the following statements suitable describes the nature of the compliance with the standard?

The IASB sets effective dates for standards, which are sometimes prospective, and sometimes the standards become almost immediately effective. What is the effective date for the standard for SMEs?

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