Far Ifrs Good To Know

Front 1

A company has a long-lived asset with a carrying value of $120,000, expected future cash flows of $130,000, present value of expected future cash flows of $100,000, and a market value of $105,000. Under IFRS what amount of impairment loss should be reported?

Back 1

$15,000
This response is the difference between carrying value and recoverable amount. According to IFRS the recoverable amount is the greater of fair value less cost to sell ($105,000) or value in use ($100,000). Value in use is the discounted cash flows. Therefore, this asset is has an impairment of $15,000 because the recoverable amount is $105,000 and the carrying value is $120,000.

Front 2

Recognizing an Impairment Loss (GAAP)

Back 2

Compare Carrying Value to Expected Future Cash Flows (Recoverable Cost). Carrying Value less RC, you have a loss to recognize: difference of Carring Value and Book Value. Present Value is not a factor here.

Front 3

Recognizing an Impariment Loss (IFRS)

Back 3

Recovery Cost is the greater of Market Value or DISCOUNTED Cash Flows.

Front 4

IFRS requires a classified Statement of Financial Position. What are the required classifications?

Back 4

CURRENT and NON-CURRENT assets and liabilities.
Under IFRS, the classified Statement of Financial Position has just two classifications: Current and Non-current. Both assets and liabilities are divided into these two classifications, with Non-current being the default category.

Front 5

Identify which of the following is an assumption(s) underlying the preparation and presentation of financial statements under the IASB Framework.

Back 5

There are two assumptions underlying the preparation and presentation of financial statements: ACCRUAL BASIS and GOING CONCERN. IASB Framework, para 22-23.

Front 6

Bensol Co. and Sable Co. exchanged similar trucks with fair values in excess of carrying amounts. In addition, Bensol paid Sable to compensate for the difference in truck values.
The exchange has commercial substance.
As a consequence of the exchange, Sable recognizes

Back 6

A gain equal to the difference between the fair value and carrying amount of the truck given up.
With commercial substance, the exchange is measured at fair value. The full gain is recognized and is equal to the difference between the fair value of the asset given up and its book value.

Front 7

With COMMERCIAL SUBSTANCE the exchange is measured at what?

Back 7

FAIR VALUE.

Front 8

If an exchange LACKED COMMERCIAL SUBSTANCE the gain is limited to what? Fair Value or a proportion of cash received?

Back 8

The gain is limited to the proportion of cash to the total consideration received.