FR B Inventories, agriculture, provisions and events after the reporting period

Inventories are measured at:

• 1 Fair value
• 2 Cost
• 3 Selling price
• 4 The lower of cost and net realisable value

Which cost-flow method is not allowed under IAS 2?

• 1 Weighted average cost
• 2 LIFO
• 3 Specific identification
• 4 FIFO

How are biological assets measured under IAS 41?

• 1 At fair value less costs to sell, with changes in profit or loss
• 2 At historical cost less depreciation
• 3 At cost
• 4 At net realisable value

When is a provision recognised under IAS 37?

• 1 When the entity intends to spend money
• 2 When a possible obligation exists
• 3 When the board approves a budget
• 4 When there is a present obligation, a probable outflow and a reliable estimate

What is a constructive obligation?

• 1 A possible obligation
• 2 An obligation that arises from an entity's actions creating a valid expectation
• 3 An obligation created by law
• 4 An obligation created by a contract

Under IAS 37, when can a restructuring provision be recognised?

• 1 When there is a detailed formal plan and a valid expectation has been raised in those affected
• 2 Never
• 3 At the start of the financial year
• 4 When the board first discusses the plan

A court case is possible but not probable and the amount cannot be estimated. How is it treated?

• 1 It is ignored completely
• 2 It is disclosed as a contingent liability
• 3 It is recognised as a provision
• 4 It is recognised as an asset

A major customer goes into liquidation after the year end, and the debt related to sales made before the year end. This is:

• 1 A non-adjusting event
• 2 A contingent asset
• 3 A change in accounting policy
• 4 An adjusting event after the reporting period