Off balance sheet activities

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 International Accounting Standards Board (IASB) has recently issued IFRS 10, Consolidated Financial Statements, IFRS 11, Joint Arrangements and IFRS 12, Disclosure of Interests in Other Entities. The issuance of these standards completes IASB’s improvements to the accounting requirements for off- balance sheet activities and joint arrangements. Which of the following standards/parts of standards has the new IFRSs not replaced?

  2. What concept does IFRS 10 identify as the determining factor as to whether an entity should be included within the consolidated financial statements of the parent company?

  3. Which of the following factors is not a basis for determining whether the investor has control?

  4. Power is the current ability to direct the activities that significantly influence returns which can be positive, negative or both. The determination of power is based on current facts and circumstances, is continuously assessed .Which of the following circumstances would not be taken into account when determining whether the investor has power?

  5. Entities will have to assess whether they are ‘principals’ or ‘agents’ in their relationships with the investee. What will be the outcome where the investor is deemed to be an agent?

  6. On what basis will a joint operator recognise its interest in the investment?

  7. How does a joint venturer recognise its interest in a joint venture?

  8. How does a party that participates in, but does not have joint control of a joint venture, nor has significant influence account for its interest in the arrangement?

  9. IFRS 12, ‘Disclosure of interests in other entities’ sets out the required disclosures for entities reporting under the two new standards, IFRS 10 and IFRS 11.The disclosure requirements of which accounting standard ,does this standard replace?a. IFRS 3 Business Combinations

  10. Which of the following information is not required to be disclosed under IFRS 12?