Bài tập IFRS 9

Câu hỏi trắc nghiệm

1.Which one of the following instruments does not satisfy the sole payments of interest and
principle requirement in IFRS 9?
a. A variable rate loan where the rate varies based on LIBOR up to a specified upper cap
b. A variable rate loan where the rate varies based on LIBOR and any changes in the credit risk
c. A variable rate loan where, if the loan is repaid before maturity, the borrower pays a 25 per
cent premium as penalty for early repayment.
d. A variable rate loan where the loan can be extended and the amount to be repaid is determined
based on the amount outstanding at the applicable interest rate at the time.

2.Given the definition adopted in IAS 32 – Financial instruments: presentation, which one of the
following would not be a financial instrument?
a. Cash at bank
b.Bill of exchange
c. prepaid insurance
d. forward exchange contract

3. A company has issued preference shares that are redeemable at the option of the holder. Three
months before the end of the year, is was probable that the holders would require redemption.
Which one of the following is the appropriate classification for the annual payment of $ 12.000
to preference shareholders at the year end?
a. Dividend $ 12.000
b. Interest expense $ 12.000
c. Dividend $ 3.000 Interest expense $ 9.000
d. Dividend $ 6.000 Interest expense $ 6.000

4. According to IAS 32, which one of the following instruments would be classified as equity?
a. Redeemable preference shares with a fixed redemption date
b. Redeemable preference shares redeemable at the decretion of the issuer.
c. Redeemable preference shares redeemable in the five years at the request of the holder

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d. Redeemable preference shares redeemable at the decretion of the issuer, who has given formal
notification of such intention.

5. On 1 January 20X6, XYZ Company issues a new instrument with the following
characteristics:
i.Face value $100, issue price $90.
ii.Cumulative dividend payable at 5 per cent per annum for 10 years, the dividend is payble at
the discretion of the issuer.
iii.The holder of the note has the option to convert to ordinary shares of XYZ after 10 years, and
conversion will be 10 ordinary shares for each instrument.
iv. The holder an demand redemption for the face value at any time, with six months’ notice up
until the end of the 10 years. After 10 years, redemption is at the discretion of the issuer.
v.There is no fixed maturity date.
How should the instrument be classified by XYZ in the first 10 years in accordance with IAS32.
Select which one of the following is correct:
a.As equity
b.As a liability
c.As either equity or liability
d.As a compound instrument.

6. On 1 January 20X6, XYZ Company issues a new instrument with the following
characteristics:
i.Face value $100, issue price $90.
ii.Cumulative dividend payable at 5 per cent per annum for 10 years, the dividend is payble at
the discretion of the issuer.
iii.The holder of the note has the option to convert to ordinary shares of XYZ after 10 years, and
conversion will be 10 ordinary shares for each instrument.
iv. The holder an demand redemption for the face value at any time, with six months’ notice up
until the end of the 10 years. After 10 years, redemption is at the discretion of the issuer.
v.There is no fixed maturity date.

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How should the instrument be classified by XYZ after 10 years in accordance with IAS32. Select
which one of the following is correct:
a.As equity
b.As a liability
c.As either equity or liability
d.As a compound instrument.

7. On 1 January 20X6, XYZ Company issues a new instrument with the following
characteristics:
i.Face value $100, issue price $90.
ii.Cumulative dividend payable at 5 per cent per annum for 10 years, the dividend is payble at
the discretion of the issuer.
iii.The holder of the note has the option to convert to ordinary shares of XYZ after 10 years, and
conversion will be 10 ordinary shares for each instrument.
iv. The holder an demand redemption for the face value at any time, with six months’ notice up
until the end of the 10 years. After 10 years, redemption is at the discretion of the issuer.
v.There is no fixed maturity date.
Assume that in year 12 the issuer formally notifies the holders of the instrument that notes are to
be redeemed. How should the notes be classified in year 12 in accordance with IAS32. Select
which one of the following is correct:
a.As equity
b.As a liability
c.As either equity or liability
d.As a compound instrument.

8.XYZ Ltd issues five-year interest-bearing bonds. The bonds are convertible to a fixed number
of equity instruments of the issuer at the discretion of the holder. How should the bonds be
classified under IAS 32? Select which one of the following is correct:
a. a.As equity
b.As a liability

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c.As either equity or liability
d. as having equity and liability components

9. Acompany issues $ 100.000 of convertible notes in 20X1. Holders of the notes have the right
to convert the notes into shares only in Dec 20X3. At the date of issue, the fair value of the note
without a similar conversion right was $ 90.000. The company considered that is was probable
taht all holders of the notes would convert their notes into shares.
Under IAS 32, how shouls the convertible notes be recognised in the issuers’s statement of the
financial position on the date of issue? Select which one of the following is correct:
a.$ 100.000 liability
b.$ 90.000 liability and $ 10.000 equity
c.$ 10.000 liability and $ 90.000 equity
d.$ 90.000 liability

10.On 1 March 20Z2, ABC ordered 3 tons of steel with the delivery on 30 June 20Z2 for the
fixed price. In line with IAS 32 and IFRS 9, this contract should be accounted for as:
a. ABC should recognize the contractual obligation to purchase inventory on 1 March 20Z2.
b. Normal trading contract, because although the delivery is postponed to the future, the price is
fixed and the contract will be settled by physical delivery
c. A financial instrument – commodity derivative, because the delivery occurs almost 4 months
after the contract date.
d. A derivative, because the investment in the beginning is almost zero and the settlement is in
the future

11. Example of level 2 input according to IFRS 13 is:

a. Unadjusted quoted market price in an active market.
b. Unadjusted quoted market price in an active market for a similar asset.
c. Historical volatility for the shares derived from the shares’ historical prices
d. Financial forecast developed by using entity’s own data

12.What 3 valuation approaches does IFRS 13 identify?

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a. Discounted cash flow approach, market approach and yield approach
b. Discounted cash flow approach, cost approach and market approach
c. Income approach, market approach and cost approach
d. Income approach, discounted cash flow approach and market approach

13. ABC Corp. issued 2% preference shares and in 20Z3, dividend in total amount of 200 000
was paid on these shares to their holders. How shall ABC recognize these dividends in its
financial statements?
a. As a financial income (interest), because IAS 1 requires presenting dividends in profit or
loss.
b. As a deduction from equity, because dividends are paid from the net profit after tax and
represent a distribution to shareholders
c. As an addition to equity, because dividends are paid from the net profit after tax
d. As a financial expense (interest), because preference shares are normally classified as a
financial liability and associated expenses are presented accordingly

14. What types of hedges does IFRS 9 recognize?

a. Effective hedge and ineffective hedge.
b. Cash flow hedge, fair value hedge and business portfolio hedge
c. Cash flow hedge, fair value hedge and hedge of a net investment in a foreign operation.
d. Cash flow hedge, fair value hedge and credit risk hedge

16. What are treasury shares and how should they be recognized in the financial statements?
a. Quoted shares of another entity held for trading purposes and they shall be shown as
financial assets at fair value through profit or loss.
b. Shares of another entity held by the treasury department and they shall be shown as financial
assets at fair value through profit or loss.
c. Unquoted shares of another entity and they shall be recognized at cost.
d. Own entity’s shares and they shall be recognized as a deduction from equity

17. Example of level 1 input according to IFRS 13 is:

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a. Unadjusted quoted market price in an active market
b. Historical volatility for the shares derived from the shares’ historical prices.
c. Unadjusted quoted market price in an active market for a similar asset.
d. Valuation multiple derived from observable market data (e.g. multiple of EPS)

18. ABC issued preference shares paying the dividend of 5% p.a. After 5 years, ABC can decide
whether shares will be redeemed or not. ABC plans to redeem the shares. How are these shares
classified in line with IAS 32?
a. As a compound financial instrument, because it has both components: liability component =
obligation to pay dividends, equity component = voluntary redemption feature that does not
need to be exercised
b. As a financial liability, because ABC has the obligation to pay 5% dividend
c. As an equity, because the shares are NOT mandatorily redeemable, but ABC can decide on
their redemption.
d. As a financial asset available for sale, because these shares are not quoted in the stock
exchange

19. The following is characteristics of a derivative:

a. It is settled in the future date
b. Its value changes in response to change in value of an underlying variable
c. All of the other options are true
d. It requires no initial investment

20. How should a cash flow hedge be accounted for?

a.The gain or loss from remeasuring the hedging instrument at fair value shall be recognized in
profit or loss and the gain or loss on the hedged item attributable to hedged risk shall adjust the
carrying amount of the hedged item and be recognized in profit or loss
b.The gain or loss on the hedging instrument shall be recognized in other comprehensive income
and the gain or loss on the hedged item in profit or loss.

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c.The gain or loss from remeasuring the hedged item at fair value shall be netted off with the
gain or loss from remeasuring the hedging instrument and the net amount shall be recognized in
profit or loss
d.The effective portion of the gain or loss on hedging instrument shall be recognized in other
comprehensive income and the ineffective portion shall be recognized to profit or loss

21.What are the examples of derivatives?

a. Futures, forward contracts, swaps, options.
b. Futures, forward contracts, options, treasury shares, swaps
c. Futures, forward contracts, swaps, written warrants
d. Futures, preference shares, options, swaps

22.Company ABC provided an interest-free loan to its subsidiary amounting to CU 100 000. The
loan is repayable after 3 years and the current market interest rate is 1.5%. How shall ABC
initially recognize this loan in its financial statements? Note: the discount factor for 3 years at
1.5% is 0.956.
a. Debit Financial Assets (Loan): CU 100 000, Credit Cash : CU 100 000
b. Debit Financial Assets (Loan): CU 104 603, Credit Cash: CU 100 000, Credit P/L (Profit
from loan provided): CU 4 603.
c. Debit Cash: CU 100 000, Credit Financial Liability (Loan): CU 100 000
d. Debit Financial Assets (Loan): CU 95 600, Debit P/L (Loss from loan provided): CU 4 400,
Credit Cash: 100 000

23.Which standard sets the rules for presentation of financial instruments in the financial
statements?
a.IAS 32 b.IFRS 9 c.IFRS7 d.IFRS 13

24.An entity should derecognize a financial liability when (please select the most appropriate
answer):
a. The contractual provisions no longer apply
b. It is transferred to another entity

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c. It is paid by the entity
d. It is extinguished, cancelled or expired

25.Which market should you look at when determining the fair value of an asset or liability in
line with IFRS 13?
a. The most advantageous market, because that’s where any entity would go to buy or sell an
asset or liability.
b. The principal market, because in this case, the fair value of the same asset (e.g. share) held
by different entities is the same and comparable.
c. Any market that is the most economical and the closest to the entity.
d. The principal market, or in the absence of principal market in the most advantageous market.

26.What is the basic rule related to inputs to valuation techniques stated in IFRS 13?
a.Entities should maximise the use of Level 1 inputs and minimize the use of Level 3 inputs
b.Entities should maximise the use of Level 3 inputs and minimize the use of Level 1 inputs.
c.Entities should use the Level 1, Level 2 or Level 3 inputs according to their specific situation
and circumstances.
d. Entities have to change the valuation techniques and their input period from period to provide
true and fair view about their financial situation

27.What is a compound financial instrument?

a. Non-derivative financial instrument with both liability and equity element.
b. Financial instrument that contains both non-derivative host contract and embedded
derivative.
c. Financial instrument that contains 2 or more derivative financial instruments.
d. Bonds or other instruments issued by another entity with optional equity conversion feature

28.An entity shall derecognize the financial asset when:

a. Contractual rights to the cash flows from the financial asset expire.
b. The entity transfers the financial asset to another party and the transfer qualifies for
derecognition.

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 c. The entity transfers substantially all risks and rewards of the ownership of the financial asset
to another party and the transfer qualifies for derecognition.
d. All the other options are true.

29.An equity instrument is:

a. Written option to deliver 1 000 own shares.
b. Purchased option to deliver 1 000 shares of another company.
c. Written option to deliver 1 000 shares of another company.
d. Written option to deliver own shares for total amount of 100 000.

30.ABC acquired bond issued by DEF with the following terms:

 Maturity after 5 years at par;
 Annual coupon 5% p.a.,
 Face value CU 100 000,
 Purchase price: 109 150.
The bond was classified at amortized cost and the original effective interest rate was 3%.
After 3 years, DEF announced that due to financial difficulties, the future coupon payments will
not be repaid and at maturity, only 75% of principal will be repaid.
The carrying amount of the bond in ABC’s accounts at the date of this announcement was 103
823.
Market interest rate for similar bonds at the time of announcement was 2%. How should ABC
recognize the impairment loss related to this asset? (Discount factor for 2% and 2 years is 0.961
and discount factor for 3% and 2 years is 0.943.)
a. Recoverable amount is calculated as revised future estimated cash flows discounted by
the current market rate of 2%: 75%*100 000*0.961 = 72 075. The impairment loss is
therefore a difference between carrying amount of 103 823 and recoverable amount of 72
075 = 31 748 and it is recognized in profit or loss.
b. Recoverable amount is calculated as revised future estimated cash flows discounted by
the original effective interest rate: 75%*100 000*0.943 = 70 725. The impairment loss is
therefore a difference between carrying amount of 103 823 and recoverable amount of 70
725 = 33 098 and it is recognized in profit or loss.

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 c. Recoverable amount is calculated as revised future estimated cash flows discounted by
the original effective interest rate: 75%*100 000*0.943 = 70 725. The impairment loss is
therefore a difference between purchase price of 109 150 and recoverable amount of 70
725 = 38 425 and it is recognized in profit or loss
d. Recoverable amount is calculated as revised future estimated cash flows discounted by
the current market rate of 2%: 75%*100 000*0.961 = 72 075. The impairment loss is
therefore a difference between purchase price of 109 150 and recoverable amount of 72
075 = 37 075 and it is recognized in profit or loss

31.Financial instruments are:

a. Financial assets, financial liabilities and equity instruments if none of the contractual parties is
an unincorporated entity.
b. Financial assets, financial liabilities, equity instruments, transactions in own equity and
leasehold property.
c. Financial assets, financial liabilities and equity instruments.
d. Assets, liabilities, derivatives and transactions in own equity

32.When should the financial instrument be recognized in the financial statements?

a. When it is probable that future economic benefits associated with the instrument will flow to
the entity and the cost of the instrument can be measured reliably.
b.When the entity becomes a party to the contractual provisions of the instrument.
c. On the trade date or the settlement date, based on the accounting model applied by the entity.
d. On the date when the financial instrument is delivered to the entity and the entity formally
accepts and confirms delivery.

33.According to IFRS 9, an entity should recognize a loss allowance equal to:

a. Expected credit loss
b. Incurred credit loss for impaired assets
c. Incurred credit loss.
c. Incurred credit loss for impaired assets.
d. Expected credit loss for impaired assets

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34.Which of the following financial instruments does NOT pass the contractual cash flows test in
line with IFRS 9 in order to be classified at amortized cost?
a. Zero-coupon bond issued at deep discount
b. A loan that pays a floating interest rate (e.g. LIBOR 3m+0.4%).
c.A bond with 4% coupon convertible into the issuer’s shares.
d. A government bond linked to an inflation index in the country of issuer.
35.Which of the following item is a financial instrument?
a. Trading contract with physical settlement
b. Prepaid expenses
c. Taxi license
d. Trading contract with net cash settlement based on the future market values

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