Queries about IFRS 18

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 is the effective date of IFRS 18, Presentation and Disclosure in Financial Statements?

1 January 2026

1 January 2027

1 January 2028

1 January 2025

Which accounting standard is replaced by IFRS 18?

IFRS 15

IAS 7

IFRS 9

IAS 1

Which other standard has been issued at the same time as IFRS 18 but affects fewer entities?

IFRS 17, Insurance Contracts

IAS 12, Income Taxes

IFRS 19, Subsidiaries without Public Accountability: Disclosures

IFRS 16, Leases

What is the primary area of financial statements affected by the major changes in IFRS 18?

Statement of financial position

Statement of profit or loss

Statement of cashflows

Notes to the financial statements

Which body considers stakeholder questions on the application of IFRS Accounting Standards?

The IFRS Interpretations Committee

The Financial Reporting Council

National standard-setters

International Accounting Standards Board directly

What happens if the IFRS Interpretations Committee decides that no standard-setting is required?

A tentative agenda decision is published for comment

A binding amendment is issued immediately

Enforcement guidance is issued by regulators

The issue is ignored

Under IFRS 18, where must income and expenses relating to an entity’s main business activity be presented?

Financing category

Investing category

Operating category

Other comprehensive income

Which of the following is a required subtotal in IFRS 18, Presentation and Disclosure in Financial Statements?

Gross profit

Operating profit

Underlying profit

Profit before interest and tax

What key conclusion was reached regarding differences between separate and consolidated financial statements?

Main business activities may differ between separate and consolidated financial statements

Main business activities must always be identical

Separate financial statements override consolidated ones

Measurement differences are prohibited

If a company classifies operating expenses by function, which of the following must be separately disclosed in a single note under IFRS 18?

Depreciation, amortisation and employee benefits

Revenue by geography only

Tax expenses by jurisdiction

Cash balances and borrowings

1 Unit