Annual improvements to IFRS: your essential round-up

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

  1. The amendment to IFRS 2 defines a performance condition and a service condition. Which of the following is incorrect as regards these amendments?

  2. IFRS 3 Business Combinations currently says that contingent consideration must be measured at fair value at the time of the business combination. If the amount of contingent consideration changes as a result of a post-acquisition event, the accounting for the change depends on whether the additional consideration is classified as an equity instrument, an asset or liability. What change does the amendment bring to the accounting for contingent consideration?

  3. IFRS 3 has been amended to clarify that both joint arrangements and joint ventures are outside the scope of IFRS 3. To whose financial statements does this amendment apply?

  4. An amendment relating to IAS 40 Investment Property, aims to clarify that judgement is needed to determine whether the acquisition of investment property is the acquisition of an asset, or is a business combination. Which accounting standard should be used to guide preparer's of financial statements in the use of this judgement?

  5. IFRS 8 Operating Segments states that two or more operating segments may be aggregated into a single operating segment if aggregation is consistent with the core principles of the standard, as long as the segments have similar economic characteristics and are similar in certain qualitative aspects. What does the amendment require regarding the aggregation criteria?

  6. The IFRS 8 Operating Segments' amendment arose as a result of a submission by the European Securities and Markets Authority (ESMA ) asking the IASB to consider the application of the aggregation criteria. What was the additional disclosure requested by ESMA?

  7. The IASB has clarified the position in IFRS 13 Fair Value Measurement as regards short-term receivables and payables. What was the confusion that had arisen as regards short-term receivables and payables?

  8. IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets provide two different treatments for accumulated depreciation/amortisation at the date of a revaluation. The restatement of accumulated depreciation proportionate to the gross carrying amount is not possible in cases in which the residual value, the useful life or the depreciation method has been changed before a revaluation. Which of the following methods is now acceptable on revaluation after the amendments to IAS 16?

  9. IFRS 13 includes a scope exception for measuring the fair value of a group of financial assets and financial liabilities on a net basis, which is known as the portfolio exception. It was not clear whether this exception included all contracts that are within the scope of IAS 39 or IFRS 9 which includes such things as commodity derivatives which do not meet the definitions of financial assets or financial liabilities in IAS 32. What was the intention of the IASB as regards such contracts and the portfolio exception?

  10. IFRS 1 First-time Adoption of International Financial Reporting Standards sets out the procedures that an entity must follow when it adopts IFRSs for the first time. What is the purpose of the amendment to IFRS 1?