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8 ACCA Strategic Professional questions with answers and explanations.
Printable worksheet with answer key
A machine with a carrying amount of $600,000 is revalued to $750,000. Where is the $150,000 recorded?
Correct answer: Other comprehensive income, accumulated in a revaluation surplus
Revaluation gains go to OCI unless they reverse a previous loss on the same asset that went to profit or loss.
An asset has a carrying amount of $500,000, fair value less costs of disposal of $420,000 and value in use of $450,000. The impairment loss is:
Correct answer: $50,000
Recoverable amount is the higher of 420,000 and 450,000, which is 450,000. The loss is 500,000 - 450,000 = 50,000.
An impairment loss on a cash-generating unit is allocated first to:
Correct answer: Goodwill
The loss reduces goodwill first and then the other assets pro rata, but not below the individual recoverable amount.
Under IAS 38, development expenditure is capitalised only when:
Correct answer: Technical feasibility, intention, ability to use or sell, future benefits, resources and reliable measurement are shown
IAS 38 sets six criteria. Research costs are always expensed.
A non-current asset classified as held for sale is measured at:
Correct answer: The lower of carrying amount and fair value less costs to sell
Under IFRS 5, the asset is no longer depreciated and is presented separately.
A contract bundles products A and B for $1,000. Their stand-alone selling prices are $900 and $300. The amount allocated to A under IFRS 15 is:
Correct answer: $750
Allocation is based on relative stand-alone selling prices: 900 / 1,200 x 1,000 = 750.
A lessee has three annual payments of $10,000 in arrears and a discount rate of 10 percent. The initial lease liability is closest to:
Correct answer: $24,869
The present value is 10,000 x (0.9091 + 0.8264 + 0.7513) = about $24,869.
Under IFRS 16, a lessee normally recognises in its statement of financial position:
Correct answer: A right-of-use asset and a lease liability
Most leases are on balance sheet, apart from short-term and low-value leases where an exemption is elected.