CHAPTER 5
1. Which following organization(s) is (are) the founder(s) –
A. AICPA
B. FAF
C. FASB
D. NASBA
E. All of the above
2. The Blue Ribbon Panel was in charge of recommending an approach to standard
setting for private companies in the U.S. to the FAF, what did the Blue Ribbon
Panel determine?
A. A separate standard setting board for private company financial reporting should be
B. Initially the new Board should focus on making exceptions and modifications to U.S.
GAAP for private companies rather than moving toward a separate, self-contained
GAAP for private companies.
C. The new Board should also work to develop a framework for determining which
standards should be exempted or modified for private companies.
D. All of the above
3. Which is one criterion of SMEs?
A. Have no publicly-traded assets or equity
B. Publish general-purpose financial statements
C. Not hold assets as fiduciary for a broad group of outsiders
D. Pass the certain size test created by the IASB to qualify
4. Which of the foll
A. Pro forma financial reporting
B. Segment reporting
C. Special accounting for securities held for sale
D. Revaluation of intangibles
5. Which of the following entities may not gain distinct advantages from adopting
IFRS for SMEs?
A. Entities owned by a foreign parent currently using IFRS
B. Entities that have cooperation with foreign companies using IFRS
C. Entities with foreign investors familiar with IFRS
D. Growing entities preparing to enter public markets where a full IFRS would otherwise
be required
6. Which is one of the options from full IFRS eliminated for SMEs?
A. For inventory, measurement is driven by circumstances rather than allowing an
accounting policy choice between the FIFO and Lower of Cost or Market models
B. Various options for non-profit organization grants eliminated in favor of a single
simplified model.
C. Biological assets measured at fair value with changes taken to profit and loss only
when fair value is readily determinable without undue cost or effort. Otherwise, use
cost-depreciation-impairment model.
D. Share-based payments require use future value of the compensation option
7. Which comparison between full IFRS and IFRS for SMEs is incorrect?
Full IFRS IFRS for SMEs
A Always amortize goodwill and indefinite-life
intangibles.
An intangible with an indefinite life shall
not be amortized
B Borrowing costs on qualifying assets must be
capitalized. Other borrowing costs are
expensed.
All borrowing costs are expensed when
incurred.
C Research costs are expensed. Development
costs must be capitalized and amortized if
criteria are met.
Research and development costs are
expensed when incurred.
D Residual value, useful life and depreciation
method are reviewed annually as part of
impairment tests.
Residual value, useful life and
depreciation method are reviewed only if
there is an indication of related asset
impairment.