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  • Exam Name: International Financial Reporting Standards for Compensation Professionals Exam
  • Last Update: 16-Apr-2024
  • Questions and Answers: 89
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T7 Questions and Answers

Question # 1

What is a constructive obligation?


When a company recognizes the expected cost of profit-sharing and bonus payments


When a company has no realistic alternative but to make payments


When a change in the company’s informal practices would cause unacceptable damage to its relationship with employees


The required accounting entry for liabilities or accrued expenses or cash paid

Question # 2

How do noncurrent assets (long-term assets) differ from current assets?


Noncurrent assets cannot be easily converted to cash within a year


Noncurrent assets are not affected by the fiscal year


Noncurrent assets cannot be easily converted to cash within two years


Noncurrent assets can only be converted to cash until the subsequent fiscal year

Question # 3

Which of the following best defines the term “asset”?


The residual interest in the assets of the entity after deducting all its liabilities.


A resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity


A present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits


Increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions from equity participants

Question # 4

What is the difference between the present value of defined benefit obligation and fair value of plan assets at the end of the reporting period called?


The financial position


The deficit or surplus


The discount


The present fair value

Question # 5

Which statement best describes the revalued amount of an asset?


Its fair value at the date of revaluation less accumulated impairment


Its fair value at the date of revaluation less accumulated depreciation


Its fair value, less retained earnings


Its fair value at the date of revaluation less accumulated depreciation and accumulated impairment

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