CFAS FINALS CHAPTER 31-40

When recognizing compensation under a share option plan, unanticipated forfeitures are treated as

A change in accounting estimate

If share-based payment transaction provides that the employees have the right to choose the settlement whether in cash or shares, the entity is deemed to have issued

A compound financial instrument

A cash-settled share-based payment transaction increases

A liability

If there is an acceleration of vesting, any payment made to the employees on the settlement of the grant shall be

Accounted for as repurchase of equity interest and any excess payment is recognized as expense.

What are the disclosures required in relation to operating segments?

All of these are required to be disclosed.

An operating segment is a component of an entity

All of these characterize an operating segment.

Which should be considered as discontinued operation?

All of these should be considered as discontinued operations.

Which statement is true in relation to share options?

All of these statements are not true.

Which statement is true about major customer disclosure?

All of these statements are true about major customer disclosures.

In accounting for share appreciation right, compensation expense is generally

Allocated over the service period of employees

Compensation expense from a share option is generally

Allocated over the service period of the employees.

When an entity discontinued an operation and disposed of the discontinued operation, the transaction should be reported in the income statement as

An amount after income from continuing operations and before net income

Segment reporting shall apply to

Both the separate financial statements of an entity and the consolidated financial statements of a group

The payment for services in cash and based on the price of the entity's ordinary shares is what type of share-based payment transaction?

Cash-settled share-based payment transaction

An entity must disclose all of the following about each reportable segment if the amounts are used by the chief operating decision maker, except

Cost of goods sold

For share appreciation rights, the measurement date for computing compensation is the

Date of exercise

The date on which total compensation expense is computed in a share option plan is

Date of grant

Which statement is incorrect concerning presentation of the discontinued operation in statement of financial position?

Depreciable assets of the component held for sale shall be depreciated.

The entity shall not have any significant continuing involvement in the operations of the component after disposal.

Disposal of a component due to a major change in business strategy.

If the entity bas the choice of settlement in a cash and share alternative, the entity shall account for the instrument initially as

Either equity or liability but not both

These are transactions in which the entity receives goods or services as consideration for equity instruments

Equity settled share-based payment transactions

Share options are what type of share-based payment?

Equity-settled share-based payment transaction

Which of the following expenditures would never qualify as an exploration and evaluation asset?

Expenditures related to the development of mineral resource

An entity shall disclose which of the following general information?

Factors used to identify the reportable segments and types of products and services

The total compensation expense in a share option plan normally is measured at

Fair value of share options on date of grant

An entity shall disclose for each reportable segment all of the following specified amounts included in the measure of profit or loss, except

General corporate expenses

For transactions with employees, the fair value of the equity instrument granted is measured on

Grant date

Which statement is true about share options?

If previous experience indicates that share options shall be forfeited before vesting, the fair value estimate on grant date should be adjusted.

When a component of an entity was discontinued during the current year, the loss on discontinued operation should

Include associated employee termination cost.

When a component of a business has been discontinued during the year, the loss on discontinued operation should

Include operating loss of the current period.

For cash settled share-based payment transaction, any change in fair value of liability is

Included in profit or loss

When a component of a business has been discontinued during the year, the component's operating loss of the current period should be included in

Income statement as part of the loss on the discontinued operations.

Which of the following is not a disclosure required in relation to exploration and evaluation expenditures?

Information about commercial reserve quantity

Entity-wide disclosures include all, except

Information about intersegment revenue

It is the difference between the fair value of the shares to be subscribed and the price required to be paid for those shares

Intrinsic value

Which option valuation technique should not be used as a measure of fair value in the first instance?

Intrinsic value

The approach used in segment reporting is known as

Management approach

Which of the following criteria is not required for the results of a component of an entity to be classified as discontinued operation?

Management must have entered into a sale agreement.

Operating segments that do not meet any of the quantitative thresholds

May be considered reportable and separately disclosed if management believes that information about the segment would be useful to the users of the financial statements.

The most important objective for share option is

Measuring the compensation expense during the service period

When an entity decided to sell a business component, the gain on the disposal should be

Netted against the loss from operations of the component as a part of discontinued operation.

Which entity in required to report on business segments?

Publicly traded

The term chief operating decision maker

Refers to a function of allocating resources to the operating segments and assessing their performance.

For segment reporting purposes, which test must be applied to determine if a component is a reportable operating segment?

Revenue test, asset test and profit or loss test

An operating segment is considered reportable when any of the following conditions is met, except

Segment liabilities are 10% or more of the combined liabilities of all segments.

It is a contract that gives the holder the right, but not the obligation, to subscribe to the entity's shares at a fixed or determinable price for a specified period of time.

Share option

What is the practical limit to the number of reportable operating segments?

Ten segments

Compensation for a share-based payment to employees classified as liability is measured at

The change in fair value for each reporting period

Which statement is not true with respect to a chief operating decision maker?

The chief internal auditor would generally qualify as chief operating decision maker.

Which is a requirement for a component of an entity to be classified as a discontinued operation?

The component must have been a cash generating unit while being held for use.

If a financial report contains both the consolidated financial statements of a parent and the parents separate financial statements, segment information is required in

The consolidated financial statements only

What is the presentation of the results from discontinued operation in the income statement?

The entity shall disclose a single amount on the face of the income statement below the income continuing operations.

The compensation associated with share option plan is

The estimated fair value of the options

Which of the following is a required enterprise-wide disclosure regarding external customers?

The fact that transactions with a particular external customer constitute at least 10% of the total entity

How is compensation expense measured for equity settled share-based payment transaction?

The fair value of share options

Which criterion does not have to be met in order for an operation to be classified as discontinued?

The operation must be sold within three months of the year-end.

What interest rate is used to discount both the exercise price of the option and the future dividend stream?

The risk-free interest rate

Which quantitative threshold is not a requirement in qualifying a reportable segment?

The segment assets are 20% or more of the combined assets of all operating segments.

Two or more operating segments may be aggregated into a single operating segment if all of the following conditions are satisfied, except

The segments have dissimilar characteristics.

What is the measurement date for share-based payment to employees classified as liability?

The settlement date

In financial reporting for operating segments, an entity shall disclose all of the following, except

The title of the chief operating decision maker.

Which statement is true regarding share appreciation right?

The total amount of compensation is not known until the date the share appreciation right is exercised.

Which statement is true concerning the 75% overall size test for reportable segments?

The total external revenue of all reportable segments is 75% or more of the entity's external revenue.

Segment reporting requires that an entity should provide reconciliations of segment information. Which is not a required reconciliation?

The total number of major customers of all segments to the total number of major customers of the entity

Share options should be reported as expense

Using the fair value or the intrinsic value method

When is an entity required to recognize exploration and evaluation expenditure as an asset?

When required by the entity's accounting policy for recognizing exploration and evaluation asset.

An entity manufactures and sells household products. The entity experienced losses associated with the small appliance group. Operations and cash flows for this group can be clearly distinguished from the rest of the entity's operations. The entity decided to sell the small appliance group. What is the earliest point at which the entity shall report the small appliance group as a discontinued operation?

When the entity classifies it as held for sale.

Exploration and evaluation expenditures are incurred

When the legal rights to explore a specific area have been obtained but the technical feasibility and commercial viability of extracting a mineral resource is not yet demonstrable.

In what circumstances is compensation expense immediately recognized under a share option plan?

When the options are immediately exercisable.

An entity is required to consider which of the following in developing accounting policy for exploration and evaluation activities?

Whether the accounting policy results in information that is relevant and reliable

When issuing share options, which of the following factors is most relevant in determining the accounting treatment?

Whether the share options are issued in lieu of salary