Defining moment

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. Which of the following is a key objective of IAS 32 Presentation?

  2. In what way can the classification of a financial instrument by the issuer as either debt or equity have a significant impact on the entity's financial statements?

  3. What is the key component of the definition of a financial liability?

  4. A company has issued preference shares where the payment of any dividend is at the discretion of the directors. These shares are not cumulative and non-redeemable. How should the instrument be classified?

  5. Which of the following would be classified as a 'compound' financial instrument?

  6. Which of the following conditions would prevent a financial instrument being classified as equity?

  7. IAS 32 may require an entity to offset a financial asset and financial liability in the statement of financial position. Which of the following conditions would not require the entity to offset a financial asset and liability?

  8. Rights issues can still be classified as equity when the price is denominated in a currency other than the entity's functional currency. What is the reason for allowing this classification as a fixed price in a non-functional currency would normally fail the fixed number of shares for a fixed amount of cash requirement in IAS 32?

  9. Which of the following financial instruments would be classified as equity?

  10. How are financial liabilities, other than financial liabilities measured at fair value through profit or loss, subsequently measured under IFRS?