Question

Question 1. Which of the following are enhancing qualitive characteristics of financial statements according to the Board's Conceptual Framework for Financial Reporting?

1 Understa

ndablilty
2 Accuracy
3 Timeliness
4 Comparability

(A) 1, 2, 3 and 4

(B) 2, 3 and 4 only

(C) 1, 3 and 4 only

(D)1, 2 and 3 only

Question 2. In accordance with IAS 41 Agriculture, which of the following statements is correct?

(A) A fruit tree is initially measured at cost

(B) Dairy cattle are initially measured at fair value

(C) Stores of harvested tea are within the scope of IAS 41

(D) A gain on remeasurement of sheep to fair value is reported in other comprehensive income

Question 3. In 20X5 Leasy Co sells and leases back a manufacturing asset by way of a lease. The transfer does not qualify as a sale in accordance with IFRS 15. The sale proceeds were in excess of fair value and exceeded carrying amount of the asset. Which of the following statements is true?

(A) The sale proceeds are recognised as a financial liability

(B) The excess of sale proceeds over fair value are recognised as a financial liability

(C) A right of use asset is recognised

(D) The asset is derecognised and a gain or loss on disposal arises.

Answer 1

1. Option C is correct (1, 3 and 4 only).

So, Understandablilty, Timeliness, Comparability are enhancing qualitative characteristics as per board's conceptual framework for financial reporting.

Reason :Board's Conceptual Framework for Financial Reporting identifies comparability, verifiability, timeliness, and understandability as the four enhancing qualitative characteristics.

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