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8 ACCA Strategic Professional questions with answers and explanations.
Printable worksheet with answer key
In a defined benefit plan, remeasurements of the net defined benefit liability are recognised in:
Correct answer: Other comprehensive income
Remeasurements, such as actuarial gains and losses, are in OCI and are not reclassified to profit.
The net interest cost on a defined benefit liability of $500,000 with a discount rate of 5 percent is:
Correct answer: $25,000
Net interest is the net liability multiplied by the discount rate: 500,000 x 5% = 25,000.
Past service cost is recognised:
Correct answer: In profit or loss at the earlier of the plan amendment and related restructuring costs
Under current IAS 19, past service cost is recognised immediately.
In a defined contribution plan, the employer's expense for the period is:
Correct answer: The contributions payable for that period
The employer's obligation is limited to the contributions it has agreed to pay.
100 employees each receive 1,000 share options with a grant date fair value of $3. Vesting is after three years and 90 employees are expected to remain. The year 1 expense under IFRS 2 is:
Correct answer: $90,000
90 x 1,000 x $3 x 1/3 = $90,000, with a credit to equity.
For an equity-settled share-based payment to employees, the fair value used is measured at:
Correct answer: The grant date and not remeasured
Equity-settled schemes use grant date fair value. Cash-settled schemes are remeasured to each reporting date.
A cash-settled share-based payment liability is remeasured:
Correct answer: At each reporting date until settlement, with changes in profit or loss
The liability is at fair value, and changes go to profit or loss.
An entity offers termination benefits. When is the liability recognised?
Correct answer: When it can no longer withdraw the offer or when it recognises related restructuring costs, whichever is earlier
IAS 19 sets this timing rule for termination benefits.