Question bank — IAS 34 — Interim Financial Reporting
52 questions in FR/EN/ES, scored by the real scoring engine.
The standard does not make publication mandatory2 questions
The statement of compliance with IAS 341 question
Complete or condensed set1 question
The minimum components of a condensed report3 questions
- The minimum content of a condensed interim report comprises a condensed statement of financial position, a condensed statement of comprehensive income, a condensed statement of changes in equity and a condensed statement of cash flows, together with selected explanatory notes.True / falseL1
- Which of the following form part of the minimum content of a condensed interim report under IAS 34? More than one answer is possible.Multiple choiceL1
- Ostelle SA's half-year report contains a condensed statement of financial position, a condensed statement of comprehensive income and selected notes. Management considers the statement of changes in equity and the statement of cash flows unnecessary, because equity and cash have not changed significantly (case data). What is the error?Single choiceL2
Headings and subtotals of condensed statements2 questions
- What must the condensed statements of an interim report include at a minimum, in addition to the selected notes?Single choiceL1
- Tavira SA's annual statements present an "operating profit" subtotal between gross margin and finance result. For the half-year report, the preparer deletes this subtotal "to lighten the condensed statement" and goes directly from gross margin to profit before tax. What must Tavira SA do?Single choiceL2
Interim earnings per share2 questions
- An entity within the scope of IAS 33 may omit earnings per share from the statement presenting profit or loss of its interim period, provided that it publishes it in its annual financial statements.True / falseL1
- Alba SA's half-year report, which is within the scope of IAS 33, presents basic earnings per share in the condensed statement presenting profit or loss. According to the case, share options are outstanding, but diluted earnings per share are omitted. What is the error?Single choiceL2
The selected explanatory notes2 questions
- What must the selected explanatory notes of an interim report explain?Single choiceL1
- Halden SA is preparing its half-year report. Its annual notes comprise 38 notes. During the half-year: acquisition of a subsidiary for EUR 12,400,000 (judged significant to an understanding of the changes, case assumption); a bank loan of EUR 6,000,000 (judged significant, case assumption); pension obligations with no notable change (case data). Write a short justification of what the notes to the report must contain, distinguishing rule, case facts and professional judgement.JudgmentL2
Significant events and transactions2 questions
- During the half-year, Merkan SA experienced the following events; whether each is significant to an understanding of the changes since the last annual report is indicated (case judgement). Which must the notes to the interim report explain? More than one answer is possible.Multiple choiceL2
- Lumet SA, a listed company, is preparing its half-year report. Case data: profit for the interim period of EUR 4,100,000; an impairment loss of EUR 3,600,000 on a plant, recognised in the half-year; the settlement of a commercial dispute for EUR 85,000, with no other known consequence. Write a short note stating which of these events the notes must explain, distinguishing rule, case facts and professional judgement (the Standard sets no numerical threshold).JudgmentL2
The further minimum disclosures1 question
The statement of financial position and its comparative2 questions
- In the interim report at 30 June 20X5 of an entity whose financial year is the calendar year, the statement of financial position is compared with that at the end of the preceding financial year, that is 31 December 20X4.True / falseL1
- In its quarterly report at 30 September 20X5, Sorvil SA (financial year = calendar year) compares its statement of financial position with that at 30 September 20X4. What is the error?Single choiceL1
Comprehensive income: period, year to date and comparatives3 questions
- Which periods must the statement of comprehensive income in Brasel SA's interim report at 30 September 20X5 (third quarter; financial year = calendar year) present, with their comparatives?Single choiceL1
- Vallon SA (financial year = calendar year) published, in its half-year report at 30 June, a year-to-date profit of …. In its report at 30 September, the year-to-date profit is …. Calculate the profit of the third quarter to be shown in the column of the current interim period.CalculationL2
- In Corvane SA's report at 30 September 20X5, the "third quarter 20X5" column of the statement of comprehensive income shows EUR 2,075,000, which is the nine-month year-to-date profit. The year-to-date profit published at 30 June 20X5 was EUR 1,390,000. What is the error?Single choiceL2
Equity and cash flows on the year to date1 question
Materiality in interim reporting2 questions
- In an interim report, in relation to what is the significance of an item assessed when deciding how to recognise, measure, classify or present it?Single choiceL2
- Fenwick SA forecasts an annual profit of EUR 12,000,000 (case data). Its profit for the half-year is EUR 1,800,000. In the half-year it paid an exceptional termination payment of EUR 400,000, an unusual item (case data). The finance director considers the item not significant "because it represents 3% of forecast annual profit". Write a short note on the significance of the item in the half-year report, distinguishing rule, case facts and professional judgement (the Standard sets no numerical threshold).JudgmentL2
The change in estimate in the final interim period2 questions
- Halden SA (financial year = calendar year) had estimated its annual customer rebates at EUR 500,000 at the start of the year; it recognised … of expense for this in the first three quarters. In the fourth quarter, it revises the annual amount of the rebates to … (case data). It does not publish a separate interim report for the fourth quarter. Calculate the amount to be recognised in the fourth quarter.CalculationL3
- In the second quarter, Corvane SA recognised a warranty provision of EUR 300,000. In the fourth quarter, it revises this estimate significantly, to EUR 520,000 (case data); the adjustment is recognised in the fourth quarter. No separate interim report is published for that quarter. What must it do in addition to recognising the adjustment?Single choiceL2
The same policies as annually2 questions
- To lighten the preparation of its half-year report, an entity may apply simplified accounting policies, different from those of its latest annual financial statements.True / falseL1
- Which statements about the accounting policies of an interim report are correct? More than one answer is possible.Multiple choiceL2
Year-to-date measurement4 questions
- Why are the measurements in an interim report made on a year-to-date basis from the beginning of the year?Single choiceL2
- Corvane SA (financial year = calendar year) published a year-to-date profit of … at 30 June. According to its accounts, the profit of the third quarter is … (case data). The draft report at 30 September shows a year-to-date profit of …. Calculate the year-to-date profit at 30 September by adding the quarter to the figure at 30 June, then the control difference with the draft (draft year-to-date figure less recalculated figure).CalculationL3
- Ostelle SA publishes quarterly results. In the third quarter, the accountant measured accrued income and expenses as if the quarter were an isolated three-month year, without starting from the nine-month year-to-date figure measured as at an annual closing or deducting the amount already recognised. The nine-month figure obtained differs from the one an annual closing at that date would have given. What is the error?Single choiceL3
- In the third quarter, year-to-date measurement leads Polaris SA to revise an estimate used in its interim financial statements for the first half-year (case facts). An analyst concludes that each interim period is a stand-alone period whose published estimates can no longer change. What should be retained under IAS 34?Single choiceL2
No deferral of a cost that is not an asset1 question
Seasonal revenue2 questions
- Caldrin SA sells ski equipment; according to the case, more than 60% of its annual revenue is earned in the fourth and first quarters. In the second quarter, the finance director proposes to recognise as revenue a quarter of the estimated annual revenue, that is EUR 2,500,000 out of EUR 10,000,000, "so that the quarter looks like an average year". Sales actually made in the quarter are EUR 900,000 (case data). What must Caldrin SA do?Single choiceL2
- Arvon SA runs a seaside hotel. Case data: estimated annual revenue of EUR 9,600,000, of which EUR 6,100,000 in the third quarter; case assumption: revenue is earned during guests' stays. An analyst asks for each quarter to recognise EUR 2,400,000 "for comparability between quarters". Write a short note on the treatment of seasonal revenue in the interim reports of the year, distinguishing rule, case facts and professional judgement.JudgmentL2
Costs incurred unevenly2 questions
- Which statements about the treatment, in an interim report, of a cost incurred unevenly during the year are correct? More than one answer is possible.Multiple choiceL2
- Merkan SA carries out in September the annual scheduled maintenance of its production lines, for EUR 240,000 (case data). Case assumptions: the maintenance is performed and invoiced in the third quarter; before it is performed, Merkan SA has no obligation to carry it out, and the cost does not meet the definition of an asset at the annual closing. Management proposes to recognise EUR 60,000 per quarter "to smooth the quarters". What must Merkan SA do?Single choiceL2
The use of estimates1 question
Tax at the estimated annual effective rate3 questions
- At 30 June, Lumet SA has a year-to-date profit before tax of …. It estimates that the weighted average annual effective tax rate for the year will be … (estimated rate: case data, not imposed by the Standard). In the first quarter, it recognised … of income tax expense. Calculate the year-to-date income tax expense at 30 June and the income tax expense of the second quarter (deferred tax excluded: case convention).CalculationL2
- In the third quarter, Sorvil SA reports a profit before tax of …. Its estimated annual effective tax rate remains unchanged at … (case data, not imposed by the Standard). Case convention: deferred tax excluded; the expense has not yet been paid. Record the entry for the income tax expense of the period.Journal entryL2
- Vallon SA has a statutory tax rate of 30%. It estimates that its weighted average annual effective tax rate for the year will be 26%, taking permanent items into account (case data). Its profit before tax for the half-year is EUR 1,500,000 and it recognised EUR 450,000 of income tax expense in the half-year (30% × EUR 1,500,000). What is the error?Single choiceL2
The components of the estimated rate1 question
Revising the estimated rate during the year2 questions
- In the first quarter, Ostelle SA (financial year = calendar year) earned a profit before tax of EUR 900,000 and recognised … of income tax expense, at the estimated annual effective rate of 23% (case data). At 30 June, year-to-date profit before tax is … and management revises the estimated annual effective rate to … (case data, judgement). Calculate the year-to-date income tax expense at the revised rate and the income tax expense to be recognised in the second quarter (deferred tax excluded: case convention).CalculationL3
- At the end of the second quarter, Fenwick SA had recognised … of income tax expense (26% of EUR 2,000,000 of year-to-date profit before tax). In the third quarter, it records a loss before tax of EUR 300,000, so that year-to-date profit before tax at 30 September is …, and it revises the estimated annual effective rate to … (case data, judgement). Case convention: deferred tax excluded. Record the entry for the income tax expense of the third quarter.Journal entryL3
Change in policy and restatement2 questions
- In the third quarter of 20X5, Cortane SA voluntarily changes its accounting policy for measuring inventories, with effect on the year 20X5 (a change within IAS 8, with no transitional provision of a new standard: case assumption). The reports of the first two quarters were published under the old policy. The cumulative effect at the beginning of the year can be determined (case data). What must Cortane SA do?Single choiceL2
- Alba SA published a profit of … for the first half-year of 20X5. In the third quarter, it voluntarily changes its accounting policy (IAS 8), the cumulative effect at the beginning of the year being determinable (case assumption). Applied to the first half-year, the new policy reduces profit by … (case data). Calculate the restated profit of the first half-year to be shown in the third-quarter report.CalculationL3
Goodwill: no reversal of an interim loss2 questions
- At the beginning of the year, the goodwill of Tavira SA's North cash-generating unit has a carrying amount of …. At 30 June, an impairment loss of … is recognised on that goodwill. At 30 September, the recoverable amount of the unit exceeds its carrying amount (case data) and the draft report shows goodwill of …, the loss having been "cancelled". No other movement (case assumption). Calculate the carrying amount of goodwill at 30 September with no reversal of the loss, then the difference with the draft (draft less recalculated amount).CalculationL3
- At 30 June 20X5, Tavira SA recognised an impairment loss on the goodwill of the North cash-generating unit. At 30 September 20X5, the recoverable amount of that unit exceeds its carrying amount (case data). A preparer considers that, since measurement is year-to-date, the 30 June loss may be cancelled in the third quarter. What treatment is appropriate?Single choiceL2