Question bank — IAS 8 — Accounting Policies, Changes in Accounting Estimates and Errors
328 questions in FR/EN/ES, scored by the real scoring engine.
Objective of the standard4 questions
- The objective of IAS 8 is limited to the relevance of financial statements: comparability over time and with other entities is not part of it.True / falseL1
- Apart from changes in accounting policies, the disclosure of an entity's accounting policies is required not by IAS 8 but by IAS 1 (wording before IFRS 18).True / falseL1
- Which qualities of financial statements does IAS 8 seek to enhance?Single choiceL1
- Claudore is preparing its notes. Under the applicable text, which standard requires it to describe its accounting policies when none of them changed during the year?Single choiceL1
Scope and tax effects of retrospective adjustments17 questions
- The correction of prior period errors falls within the scope of IAS 8.True / falseL1
- IAS 8 sets its own method for accounting for the tax effects of a retrospective restatement, independently of IAS 12.True / falseL1
- The initial selection of an accounting policy for a class of transactions falls under IAS 8, just like accounting for a later change in that policy.True / falseL2
- The Fairnelle group restates its accounts for a prior period error. Which of the following questions is not settled by IAS 8 itself?Single choiceL1
- In 2025, Gastia corrects an error made in 2024 by retrospective restatement. How does it treat the tax consequence of this correction?Single choiceL2
- Which of the following questions is settled by IAS 8?Single choiceL1
- Which of the following topics fall within the scope of IAS 8?Multiple choiceL1
- Which statements about the tax effects of retrospective adjustments are correct?Multiple choiceL2
- Mirvia voluntarily changes its inventory cost formula. Retrospective application increases the carrying amount of opening inventories by …, without changing their tax base (case data). The applicable tax rate is … (case data). Compute the tax effect and the net adjustment to opening equity.CalculationL2Variant
- When finalising its 2025 accounts, Quoline discovers that a liability of …, which arose in 2023, was never recognised; the related expense will be deductible when paid and the deferred tax asset is recoverable (case data), at a rate of …. Compute the tax effect and the net decrease in opening equity of the earliest period presented.CalculationL2Variant
- A change in accounting policy at Sostia, applied retrospectively, increases opening inventories by … and an opening provision by …. Tax bases do not change, at a rate of … (case data). Compute the net tax effect (liability) and the net adjustment to opening equity.CalculationL3
- In Truvian's notes, the retrospective adjustment to opening equity, net of tax, amounts to …. The case tax rate is …. Work back to the pre-tax adjustment and the related tax effect.CalculationL3
- Nandane's published retained earnings at 1 January 2024 (opening of the earliest period presented) amount to …. An asset overstated by … since 2022 is discovered; the correction gives rise to a deferred tax asset at a rate of … (case data). Compute the restated opening retained earnings.CalculationL2
- Lyrelle presents 2025 and 2024. It discovers that depreciation of … for 2023 and of … for 2024 was not recognised; the correction gives rise to a deferred tax effect at a rate of … (case data). Compute the net decrease in equity at 1 January 2024 and in restated 2024 profit.CalculationL3
- Zétine applies a new inventory cost policy retrospectively: opening inventories of the earliest period presented increase by …. The tax base does not change and the tax rate is … (case data). Record the entries adjusting the opening balances.Journal entryL2
- Vadane discovers a supplier invoice of … relating to 2023 that was never recognised, while 2024 is the earliest period presented. The expense will be deductible when paid, at a rate of …, and the deferred tax asset is recoverable (case data). Record the entries correcting the opening balances.Journal entryL2
- A batch of goods worth … was left out of Kairia's inventory count at 31 December 2023; 2024 is the earliest period presented. The correction creates a taxable difference at a rate of … (case data). Record the entries correcting the 2024 opening balances.Journal entryL3
Policy, estimate, error, retrospective, prospective, impracticable15 questions
- Under IAS 8, an accounting estimate is a monetary amount in the financial statements that is subject to measurement uncertainty.True / falseL1
- Retrospective restatement means applying a new accounting policy as if it had always been applied.True / falseL1
- For a change in estimate, prospective application means recognising its effect in the current period and in the future periods affected.True / falseL1
- Information that became available only after the financial statements of a year were authorised for issue is enough to make those financial statements erroneous.True / falseL2
- Which wording matches accounting policies as defined in IAS 8?Single choiceL1
- When Kevois finalises its 2025 accounts, which of these situations is a prior period error?Single choiceL2
- When is applying a requirement impracticable under IAS 8?Single choiceL1
- Molore applies a new policy prospectively. What does it actually do?Single choiceL2
- Which of the following situations are among the examples of prior period errors?Multiple choiceL1
- For a prior period, which of these situations make applying a requirement impracticable?Multiple choiceL2
- A trainee at Zylian uses 'retrospective application' and 'retrospective restatement' interchangeably. Write a short explanation distinguishing the two notions, with an example of each.JudgmentL2
- In 2025, Sergore increases a warranty provision set up at the end of 2024, because the return rate observed in 2025 exceeds the statistics known when the 2024 accounts were finalised. The finance director wants to 'correct the 2024 error'. Write a reasoned reply.JudgmentL2
- Note by Gridine's accountant: 'In 2025, after observing the actual wear of our trucks, we are reducing their useful life from 8 to 6 years. The 8-year life used in 2024 was therefore an error, which we are correcting retrospectively.' Where is the flaw in the reasoning?Single choiceL2
- A contractor's invoice for work in December 2024, received on 20 January 2025, was mislaid; Mamenne's 2024 accounts were authorised on 15 March 2025. An assistant concludes: 'The invoice arrived after the reporting date, so its omission is not an error.' What is wrong?Single choiceL2
- Jaumac's 2024 accounts were authorised on 10 March 2025. In June 2025, a customer that had been solvent is put into liquidation after a fire in May 2025. The controller writes: 'We must restate 2024 to recognise this loss.' What is the mistake?Single choiceL2
Applying the specific IFRS and the materiality threshold16 questions
- When an IFRS specifically applies to a transaction, the entity may nevertheless select another policy if it considers it more relevant.True / falseL1
- An accounting policy set out in IFRSs need not be applied when the effect of applying it is immaterial.True / falseL2
- An immaterial departure from IFRSs remains acceptable even when it is deliberately kept to smooth profit.True / falseL2
- Laivot leases a warehouse and wonders which policy to apply to this lease. What does IAS 8 require?Single choiceL1
- For simplicity, Leudane expenses small tools whose unit value is below an internal threshold; the cumulative effect is immaterial (case data) and no presentation objective is pursued. Is this practice compatible with IAS 8?Single choiceL2
- Which of these practices does IAS 8 describe as inappropriate?Single choiceL2
- In which case must management use its judgement to develop an accounting policy itself?Single choiceL1
- Which statements about applying IFRSs are correct?Multiple choiceL2
- Notelle is considering several practices whose effect, taken individually, is immaterial (case data). Which ones comply with IAS 8?Multiple choiceL2
- Gautia sells machines with installation. Its manager proposes to recognise all revenue when cash is received, as it is 'easier to track', whereas the standard on revenue from contracts with customers applies to these sales (case data). What should be done?Single choiceL2
- Tivane omitted a small accrued expense (immaterial according to the case data). Without it, profit just exceeds the threshold that triggers management bonuses. The finance director proposes not to record it 'since it is immaterial'. What is your conclusion?Single choiceL3Variant
- Cherine does not discount very short-term trade payables; the effect is immaterial (case data) and the practice is applied every year, with no link to a profit objective. How should it be described?Single choiceL2
- The finance director of the Dremine group, used to a foreign GAAP, wants to apply that GAAP's practice to its property, plant and equipment, although an IFRS specifically deals with these assets. What is the answer?Single choiceL2
- Kastia accumulates five small departures from IFRSs, each immaterial (case data). Together, they bring the gearing ratio just below the ceiling of a bank covenant. Management refuses to correct them. Which analysis is right?Single choiceL3Variant
- Zosenne wants to adopt a threshold below which equipment purchases are expensed rather than capitalised. Management control provides the estimated cumulative effect and confirms that no remuneration indicator or covenant is affected (case data). Write a position paper.JudgmentL3
- When reviewing Pomède's accounts, you note that an immaterial charge was delayed by one year. The minutes of the management committee mention the objective of showing 'continuous profit growth'. Write your analysis for the audit committee.JudgmentL3
In the absence of an IFRS: the hierarchy of sources20 questions
- When no IFRS applies, which quality must the information produced by a policy developed by management have?Single choiceL2
- To develop a policy when no IFRS applies, which source does management consult first?Single choiceL2
- Which of the following characteristics is part of the reliability required of a policy developed by management?Single choiceL3
- What role does IAS 8 give to pronouncements of other standard-setters?Single choiceL3
- After IFRSs dealing with similar and related issues, which source does management consider?Single choiceL2
- Under IAS 8, which characteristics must reliable information resulting from a policy developed by management have?Multiple choiceL3
- Which sources may management also consider, provided they do not conflict with the higher sources?Multiple choiceL3
- For a transaction that no IFRS specifically addresses (case data), which steps taken by Bromia comply with IAS 8?Multiple choiceL3
- The Stélia group is choosing between two policies developed for a transaction not covered by IFRSs (case data). Policy X follows the legal form of an arrangement; policy Y reflects the actual economic exposure and relies on an industry practice consistent with the Conceptual Framework. Which conclusions are justified?Multiple choiceL4
- A director of Raumois asks why the accounting team did not simply adopt a foreign standard-setter's rule for a transaction not covered by IFRSs. Explain the order of the sources to be consulted.JudgmentL3
- Sidard enters into an unusual arrangement not covered by IFRSs (case data): legally it transfers an asset, but it keeps most of its benefits and risks. Explain why the policy developed cannot rely on legal form alone.JudgmentL3
- Braunal receives tradable rights free of charge from a public authority; no IFRS specifically deals with these rights (case data). The accountant proposes to apply a national GAAP rule straight away. Which approach should be followed?Single choiceL3Variant
- The Fétède group enters into a new kind of capacity-sharing contract that no IFRS addresses (case data). A consultant recommends a foreign standard-setter's pronouncement, which the team has compared neither with neighbouring IFRSs nor with the Conceptual Framework. How should this be assessed?Single choiceL3Variant
- Plaline is developing a policy for an arrangement not covered by IFRSs (case data). The draft policy follows the legal form (a sale) although Plaline keeps, in substance, the use and risks of the asset. What is the conclusion?Single choiceL3
- In Quavence's industry, a widespread practice is to recognise no obligation for a commitment that nevertheless meets the Conceptual Framework definition of a liability. No IFRS specifically addresses this commitment (case data). May Quavence follow this practice?Single choiceL4
- Semard developed a policy for a transaction not covered by IFRSs (case data). The closing file contains only the policy adopted, with neither the sources examined nor the reasoning. What is the main risk?Single choiceL3
- For a transaction not covered by IFRSs (case data), Gerède's management picks, out of two defensible policies, the one that spreads a large income item to 'smooth' profit over three years, with no other justification. Which requirement of the standard is at stake?Single choiceL4
- Vergac holds a new kind of asset that no IFRS specifically addresses (case data). Two IFRSs deal with neighbouring assets, with different measurement models. Write the policy paper for the audit committee.JudgmentL4
- The Nimède group proposes to adopt, for a transaction not covered by IFRSs (case data), the standard of a foreign GAAP whose conceptual framework is similar. Write an opinion on the conditions for doing so.JudgmentL3
- Sylbède entered into an unusual arrangement (case data): its legal form is a securities loan, but Sylbède bears all changes in the value of the securities lent. No IFRS specifically addresses this arrangement (case data). Write an analysis of the policy to be developed.JudgmentL4
Consistency of policies and categories9 questions
- Without a category provided by an IFRS, an entity may apply different policies to inventories of the same nature depending on the warehouse holding them.True / falseL1
- When an IFRS permits categories, the policy chosen for a category may vary from one transaction to another within that category.True / falseL2
- What principle does IAS 8 set for similar transactions?Single choiceL1
- In which case may an entity apply different policies to items within the same line item?Single choiceL2
- The Drusax group measures identical spare parts using FIFO in its northern warehouse and weighted average cost in its southern one, 'out of local habit'. There is no difference in nature or use (case data). What is the error?Single choiceL2
- The standard applicable to Fairia's fixed assets allows a measurement model to be chosen by class of assets (context data). Fairia applies the revaluation model to some of its land and the cost model to the rest, depending on price movements. What is the error?Single choiceL2
- The Jilval group holds two families of inventories of different nature and use; the applicable standard allows different cost formulas in that case (context data). Jilval applies FIFO to the first family and weighted average cost to the second, every year. How should this practice be described?Single choiceL2
- Quiline has just acquired a subsidiary that depreciates its trucks on a diminishing balance basis, whereas Quiline depreciates trucks with the same use on a straight-line basis. For the consolidated accounts, the controller proposes keeping both methods. What is the conclusion?Single choiceL2
- Fauscot has always included freight on purchases of goods in the cost of inventories. For a new supplier with similar deliveries, the accountant proposes expensing these costs directly. What should be done?Single choiceL1
When may a policy change?19 questions
- A change in accounting policy is permitted as soon as it is documented and approved by the board of directors.True / falseL1
- Because users compare financial statements over time, the same policies are applied from one period to the next, unless a change meets the criteria of the standard.True / falseL1
- Applying a policy to transactions that differ in substance from those that occurred previously is not a change in accounting policy.True / falseL2
- In which cases may an entity change an accounting policy?Single choiceL1
- Mundac adopts the revaluation model for its property, plant and equipment for the first time. How is this change treated?Single choiceL2
- Which of the following situations is not a change in accounting policy?Single choiceL2
- Which of the following situations are not dealt with as changes in policy under paragraphs 19 to 31 of IAS 8?Multiple choiceL2
- Which statements about the conditions for a voluntary change in policy are correct?Multiple choiceL2
- Girvac, with no opening inventory, bought … units at …, then … units at …, then … units at …, and sold … units. It is considering a move from weighted average cost (computed over the period, teaching assumption) to FIFO. Compute closing inventory under each formula and the difference.CalculationL2Variant
- To support a possible change of cost formula, Paimane's controller quantifies the measurement difference. Data for the year, with no opening inventory: purchase of … items at a unit cost of …, then of … items at …; … items sold. Weighted average cost computed over the period (teaching assumption). What is closing inventory under each formula?CalculationL3Variant
- Plirgois voluntarily moves to a cost formula that values its inventories higher: by … at the beginning of the comparative year and by … at its end. By how much does restated comparative profit before tax increase?CalculationL3
- Extract from Brorois's file: 'We are moving from weighted average cost to FIFO, because this choice increases this year's reported margin. The board approved it and the decision is documented.' What is the weakness of the file?Single choiceL2
- Jeumac adopts the revaluation model for its land for the first time. Its accountant restates comparatives and opening equity of the earliest period presented 'as for any voluntary change'. What is the error?Single choiceL3
- Nondot is considering changing the policy for presenting a line item. Three justifications are put forward. Which one can support a voluntary change?Single choiceL2
- A new IFRS, effective from this year, changes the accounting for a class of Gelbenne's contracts. Must Gelbenne show that the change provides more relevant information?Single choiceL2
- Kindouël, until now only an occupier of its premises, leases a building to a third party for the first time and adopts a policy for this type of property. The controller wants to restate comparatives 'for the change in policy'. What is the answer?Single choiceL3
- The Vaulvot group used to sell standard equipment delivered within a few days. It now enters into multi-year design contracts, different in substance (case data), and applies a separate policy to them. Should this choice be treated as a change in policy?Single choiceL3
- Vrédax's management wishes to move its inventories from weighted average cost to FIFO. It cites the fast turnover of products and alignment with how lenders analyse its margins (case data). Write the position paper for the audit committee.JudgmentL2
- During the year, Taulouël: (1) adopts a policy for royalties it receives for the first time; (2) adopts the revaluation model for its land; (3) voluntarily changes the cost formula for unchanged inventories. Write an analysis classifying each situation and stating its treatment.JudgmentL3
Transitional provisions, voluntary change, early application14 questions
- A change in policy resulting from the initial application of an IFRS is accounted for under the specific transitional provisions of that IFRS, if any.True / falseL1
- A voluntary change in accounting policy is applied prospectively, from the date of the change.True / falseL1
- Early application of an IFRS, before its mandatory effective date, is a voluntary change in accounting policy.True / falseL2
- A new IFRS applied for the first time by Neumine has no specific transitional provisions. How is the change applied?Single choiceL1
- Gulbore voluntarily moves from one accounting policy to another, more relevant one. How does it apply the change?Single choiceL1
- A new IFRS allows, in its transitional provisions, the cumulative effect to be recognised at the date of initial application without restating comparatives. Fargenne's finance director nevertheless wants to apply the general retrospective treatment of IAS 8. What should be done?Single choiceL2
- Taudède early-applies an amendment to a standard that has been issued but is not yet mandatory. How should this application be described?Single choiceL2
- Which of the following changes are applied under the retrospective treatment of IAS 8?Multiple choiceL2
- Which statements about the initial application of an IFRS and its early application are correct?Multiple choiceL3
- The Zilvane group applies for the first time an IFRS whose transitional provisions require an adjustment to equity at the date of initial application, without restating comparatives. The team has prepared a full restatement of the two years presented. What is the conclusion?Single choiceL2
- Gernax early-applies a new IFRS. Its finance director is preparing a note justifying this choice as a voluntary change 'providing more relevant information'. How should this approach be analysed?Single choiceL2
- Fylvac decides to move from FIFO to weighted average cost, which it considers more representative of its flows. No new IFRS is involved. What must Fylvac do?Single choiceL1
- A new IFRS, with no specific transitional provisions, applies for the first time to the 2025 accounts of Vélbian, which presents 2025 and 2024. Which treatment should be used?Single choiceL2
- In the same year, Pailbix (1) early-applies an IFRS that has transitional provisions and (2) voluntarily changes its inventory cost formula. Which combination of treatments is correct?Single choiceL3
Retrospective application: opening equity and comparatives28 questions
- What does an entity actually do when it applies a new accounting policy retrospectively?Single choiceL2
- Keundade voluntarily changes a policy in 2025 and presents 2025 and 2024. At what date does it adjust opening equity?Single choiceL2
- Morgorn, subject to local regulation, presents three years (2025, 2024, 2023) and voluntarily changes a policy in 2025. Which equity balance is adjusted?Single choiceL3
- Rurnard's change in policy affects both retained earnings and another component of equity. What does IAS 8 require for the opening of the earliest period presented?Single choiceL3
- Laurvorn changes policy in 2025 and presents 2025 and 2024. The new policy would have increased profit before tax by … in 2022 and by … in 2023 (tax effect ignored, case assumption). What adjustment should be made to equity at 1 January 2024?CalculationL2
- Lelvade's published 2024 cost of sales amounts to …. Applied to 2024, the new policy adopted in 2025 would have reduced it by …. What 2024 cost of sales should be presented as the comparative?CalculationL2
- At 1 January 2024, the opening of the earliest period presented, Stainine's published retained earnings amount to …. The cumulative pre-tax effect of the new policy on prior years is an increase of …; deferred tax rate of … (case data). Compute restated opening retained earnings.CalculationL3
- After restatement, Stomence's retained earnings at 1 January 2024 amount to …. Published 2024 profit is …; the new policy increases it by … before tax (rate of …, case data). Dividends of … were paid in 2024. Compute restated 2024 profit and restated retained earnings at 31 December 2024.CalculationL3
- The pre-tax effects of a new policy adopted in 2025 by Flinade would have been a decrease in profit of … in 2021, … in 2022 and … in 2023. Flinade presents 2025 and 2024 (tax effect ignored, case assumption). What decrease should be made to opening equity of the earliest period presented?CalculationL2
- Taimenne presents 2025 and 2024. Its inventories are worth, under the old and the new policy: … and … at 1 January 2024; … and … at 31 December 2024 (tax effect ignored, case assumption). Compute the adjustment to opening equity and the increase in restated 2024 profit.CalculationL3Variant
- Kymorn's new policy increases a provision. Provision amounts under the old and new policy: … and … at 1 January 2024, … and … at 31 December 2024. Kymorn presents 2025 and 2024 (tax effect ignored). What decreases should be used for opening equity and for 2024 profit?CalculationL3Variant
- Paulouël's restatement table (comparative year 2024, published amounts): inventories at 31 December …, retained earnings at 31 December …, profit …. The new policy increases inventories by … at 1 January 2024 and by … at 31 December 2024; deferred tax rate … (case data). Compute the three restated amounts.CalculationL4
- For Neulbax (presenting 2025 and 2024), the new policy would have increased equity by … for years before 2024 and 2024 profit by … (tax effect ignored). Compute the adjustment to equity at 1 January 2024 and the total equity difference at 1 January 2025 between the two policies.CalculationL3
- Jeulbence's published deferred tax liability at 31 December 2024 is …. The new policy, applied retrospectively, increases inventories at that date by …, without changing their tax base; rate of … (case data). What deferred tax liability should be presented as the comparative?CalculationL2
- Pyrgouël voluntarily changes a policy in 2025; the cumulative effect on prior years is a gain of 70,000. The accountant records it in 2025 profit as 'exceptional income'. What is the error?Single choiceL2
- Rirenne applies a new policy retrospectively: it adjusts equity at 1 January 2024 but presents the 2024 income statement as originally published. What is the error?Single choiceL2
- Sailard, which presents 2025 and 2024, changes policy in 2025. It charges the effect of years before 2025 to equity at 1 January 2025 and leaves the 2024 balance sheet and profit unchanged. What is the error?Single choiceL3
- In Stescade's restatement table, the new policy changes 2024 closing inventories, but the 2024 cost of sales presented as comparative is the published one. What inconsistency do you note?Single choiceL3
- Tergot voluntarily changes its cost formula; its inventories at 1 January 2024, the opening of the earliest period presented, increase by …. The tax effect is dealt with separately (outside this question). Record the opening adjustment entry.Journal entryL2Variant
- For Grélal, retrospective application of a new policy for including production overheads increases inventories at 1 January 2024 by …. The tax base of inventories does not change; rate of … (case data). Record the opening entries, including the tax effect.Journal entryL3Variant
- Chovore's new policy leads to recognising, at 1 January 2024 (opening of the earliest period presented), a liability of … that was not recognised under the old policy. The expense will be deductible when paid, at a rate of …, and the deferred tax asset is recoverable (case data). Record the opening entries.Journal entryL3
- Under Vrostède's new policy, the expense of the comparative year 2024 would have been higher by …, with a liability at 31 December 2024 as the other side. The tax effect is dealt with separately. Record the entry restating the 2024 comparative.Journal entryL3
- Mérnane: the new policy increases inventories by … at 1 January 2024 and reduces 2024 cost of sales by …. Tax effect outside the question. Record the entries restating the opening balance and the 2024 comparative.Journal entryL3
- The new cost formula adopted by Kailbian reduces inventories at 1 January 2024, the opening of the earliest period presented, by …. The tax base does not change; rate of …; the deferred tax asset is recoverable (case data). Record the entries.Journal entryL2
- Zeumard, which presents 2025 and 2024, voluntarily adopts a new policy in 2025. Its controller proposes three treatments. Which should be used?Single choiceL2
- The Vraiscot group presents a five-year historical summary in addition to the two years of its financial statements. It voluntarily changes policy in 2025. For the financial statements themselves, what is the minimum IAS 8 requirement?Single choiceL3
- Brylbal is hesitant to apply its new policy retrospectively: the finance director prefers to 'show the catch-up in 2025 profit so investors see it'. Retrospective application is practicable (case data). What should he be told?Single choiceL3
- The Quodac group applies a new policy retrospectively that increases assets whose tax base does not change (case data). The draft restatement table adjusts the asset line items and retained earnings, but neither deferred tax nor comparative profit. How should it be assessed?Single choiceL4
Limitations on retrospective application17 questions
- Notine cannot determine the period-specific effects of a change in policy for the comparative period. What does IAS 8 require?Single choiceL3
- At the beginning of the current period, Dresac cannot determine the cumulative effect of its new policy on all prior periods. What does it do?Single choiceL3
- When retrospective application of a new policy is required, to what extent may the entity depart from it?Single choiceL3
- When applying a new policy to 2024, Nyrède could use a price index published in 2025 showing how a market actually moved. Is this allowed?Single choiceL4
- Which statements about the limits of retrospective application are correct?Multiple choiceL3
- Of the arguments put forward by Fosia for not applying its new policy retrospectively, which can support impracticability?Multiple choiceL4
- To estimate in 2025 an amount relating to 2023 as part of retrospective application, which information may Sylbix use?Multiple choiceL4
- After every reasonable effort, Grytore cannot determine any effect of its new policy for the comparative period; the earliest practicable period is the current period, which began on 1 January 2025. At that date, the assets concerned are worth … under the new policy and … under the old one (tax effect ignored). What adjustment should be made to 2025 opening equity?CalculationL3Variant
- Puscouël's 2023 records were destroyed and cannot be rebuilt; the earliest practicable period is 2024, the earliest period presented. Carrying amounts of inventories, new and old policy: … and … at 1 January 2024; … and … at 31 December 2024 (tax effect ignored). Compute the 2024 opening adjustment and the effect on 2024 profit.CalculationL3Variant
- For Kirvore, the earliest practicable period is the current period. At the beginning of that period, the new policy increases carrying amounts by …, without changing tax bases; rate of … (case data). Compute the net adjustment to opening equity.CalculationL4
- Chudence cannot determine the cumulative effect of its new policy at the beginning of the current period; the earliest date practicable is 1 October 2024. The new policy changes the result of transactions after that date by … a month (case data), i.e. … months in 2024. What is the effect on the 2024 comparative?CalculationL3
- To apply a new policy to 2024, Chesax must estimate an amount at the end of 2024. According to the file prepared at the time (estimation method provided by the case): a … chance of an amount of … and … of an amount of …. The outcome known in 2025 is …. What amount should be used for 2024?CalculationL4
- An IT failure permanently erased Clurnade's 2023 data; the 2024 data are complete. Clurnade presents 2025 and 2024 and changes policy in 2025. Which treatment applies?Single choiceL3
- Cléstal cannot determine the cumulative effect of its new policy for any prior period, for lack of data, except for transactions entered into from 1 July 2024, when a new system started collecting the necessary information. Which treatment applies?Single choiceL4
- Fyscot's finance director claims that retrospective application of the new policy is 'impracticable': the data exist in the archives, but extracting them would be costly and take two months. What is the conclusion?Single choiceL4
- Vrédine changes policy in 2025. The 2023 data are incomplete; the 2024 data can be partly rebuilt. Write the note justifying the treatment adopted and the earliest practicable period.JudgmentL4
- Gaulax's audit committee has doubts: management proposes to apply the new policy prospectively from a 2024 date rather than retrospectively. Write a critical analysis of the proposal.JudgmentL4
Disclosures on changes in policies10 questions
- When initial application of an IFRS has an effect on the current period or a prior period, the entity discloses, among other things, the title of that IFRS.True / falseL2
- For a voluntary change in policy, the entity explains why the new policy provides reliable and more relevant information.True / falseL2
- An entity has nothing to disclose about a new IFRS that has been issued but is not yet effective, as long as it does not apply it.True / falseL2
- Which of the following disclosures is specific to a voluntary change in accounting policy?Single choiceL2
- Gridal, listed and subject to IAS 33, applies for the first time an IFRS that changes several line items. What amount must it disclose for the current period and each prior period presented, to the extent practicable?Single choiceL3
- An issued IFRS will become effective in two years; Raitard does not yet apply it. What does it disclose in its notes?Single choiceL2
- To meet the disclosure on an issued IFRS not yet applied, which items does the entity consider disclosing?Multiple choiceL2
- On initial application of an IFRS affecting the period, which disclosures are among those required?Multiple choiceL3
- Pomenne's note on its voluntary change in policy discloses the nature of the change, its reasons and the total effect on 2024 profit. What gap do you note?Single choiceL3
- An IFRS issued during the year will significantly change the presentation of Lotine's income statement from 2027. The 2025 notes say nothing about it, 'since it is not yet applicable'. What is the error?Single choiceL2
Accounting estimate: definition, techniques, inputs17 questions
- The use of reasonable estimates is an essential part of preparing financial statements and does not undermine their reliability.True / falseL1
- An entity develops an accounting estimate to achieve the objective set by an accounting policy when the amount required cannot be observed directly.True / falseL1
- The word 'estimate' used in an IFRS always means an accounting estimate as defined in IAS 8.True / falseL2
- The measurement techniques used to develop an accounting estimate include estimation techniques and valuation techniques.True / falseL2
- Which of the following is an accounting estimate?Single choiceL1
- What characteristic defines an accounting estimate?Single choiceL1
- On what basis does an entity form the judgements and assumptions underlying an accounting estimate?Single choiceL2
- Bruscois measures an investment at fair value using discounted future cash flows. How should this discounted cash flow model be described?Single choiceL2
- To measure a provision, Fosore uses a discount rate that a standard calls an 'estimate'. How should this rate be described under IAS 8?Single choiceL2
- Which of the following items at Gaulbard is not an accounting estimate?Single choiceL2
- Which of the following amounts does IAS 8 give as examples of accounting estimates?Multiple choiceL1
- For the loss allowance on its receivables, Jirvine uses a provision matrix fed by historical default rates and economic forecasts. Which descriptions are correct?Multiple choiceL2
- Which statements about accounting estimates are correct?Multiple choiceL2
- In Kedian's closing file, several items are called 'estimates'. Which of them are actually inputs rather than accounting estimates?Multiple choiceL3
- At the reporting date, Kevois reviews the net realisable value of its inventories. Which steps are consistent with IAS 8?Multiple choiceL3
- A director of Myrgence is worried: 'Our accounts contain so many estimates that they cannot be reliable.' Write a short, reasoned reply.JudgmentL2
- To train Nairvia's new accountants, explain, using the fair value of a building as an example, how the accounting policy, the accounting estimate, the measurement technique and the inputs fit together.JudgmentL3
Policy, estimate or error?26 questions
- Laivot moves from the cost model to the fair value model for its investment property. How should this change be described?Single choiceL2
- With no recent comparable transactions, Mundac moves from a market approach to an income approach to measure the fair value of an asset. How should the effect of this change be treated?Single choiceL2
- After analysis, Nimède's accounting team cannot tell whether a change is a change in policy or a change in estimate. What does IAS 8 require?Single choiceL3
- Gautia replaces the straight-line method with a units-of-production method to depreciate its presses, to better reflect their consumption. How should this change be treated?Single choiceL3
- Sostia had provided 250,000 for a lawsuit on the basis of the best information of the time. The lawsuit is settled in 2025 for 340,000. How should the difference of 90,000 be described?Single choiceL2
- Which of Laurvorn's following changes are changes in accounting estimates?Multiple choiceL3
- Which statements about revising an accounting estimate are correct?Multiple choiceL2
- The Paulouël group reviews five changes made during the year. Which ones are dealt with prospectively, as changes in estimates?Multiple choiceL4
- Note by Lotine's controller: 'We are moving to the fair value model for our investment property; since fair value is an estimate, we are treating this move prospectively.' Where is the error?Single choiceL2
- Kirvore replaces its receivables provision matrix with a more granular model fed by recent data. Its accountant restates comparatives 'for the change in policy'. What is the error?Single choiceL3
- After long debates, Plairgence's technical committee concludes that a change cannot be classified with certainty as either a policy or an estimate. It decides to treat it retrospectively, 'for prudence'. What is the error?Single choiceL3
- Ruvane's file: 'Move from diminishing balance to straight-line depreciation for vehicles: change in accounting policy, applied retrospectively with 2024 restated.' What is the error?Single choiceL3
- Arvane acquired a machine for … on 1 January 2023, depreciated on a straight-line basis over … years with no residual value. At 1 January 2025, the total useful life is reduced to … years. Compute 2025 depreciation under the prospective treatment, the amount an erroneous retrospective restatement would give (new life applied from the start) and the gap.CalculationL3Variant
- To measure what a misclassification would cost, Velbor's controller compares two computations: equipment costing … brought into use on 1 January 2022, expected to last … years (straight-line, no residual value), has its total life revised to … years at 1 January 2025. What is 2025 depreciation under each approach, and what is the gap?CalculationL3Variant
- Laivot updates the discount rate of a provision at the 2025 reporting date: at the previous rate, the provision would be …; at the new rate, …. What amount is recognised as a 2025 expense for this change?CalculationL3
- Pomède acquired a press for … on 1 January 2024, depreciated on a straight-line basis over 5 years with no residual value. At 1 January 2025, it adopts units-of-production depreciation: … units expected over the remaining life, of which … produced in 2025. Compute 2025 depreciation and its increase compared with keeping straight-line.CalculationL3
- Quoline measures unlisted shares at fair value. This year, observable transactions in comparable shares appear and the company replaces its discounted cash flow model with a market approach. How is the effect treated?Single choiceL2
- The Fosore group used to measure its agricultural raw material inventories at cost; it decides to measure them from now on at fair value less costs to sell, as allowed by the standard applicable in its industry (context data). The finance director calls this a 'new estimate'. What do you think?Single choiceL3
- At the end of 2024, Jilval provided 180,000 for a commercial dispute, based on its lawyers' advice. In 2025, a settlement ends the dispute for 120,000. The internal auditor proposes to 'correct the 2024 error'. What should be done?Single choiceL3
- Vaindorn changes the way it allocates certain costs between inventories and expenses. The experts consulted disagree: for some, it is a new policy; for others, a revision of estimation assumptions. No analysis can settle it (case data). Which treatment should be used?Single choiceL4
- At the end of 2025, Puscanne revises the discount rate of its decommissioning provision to reflect market conditions at the reporting date. Last year's rate had been properly determined at the time. How is the effect treated?Single choiceL3
- In 2025, Zainois discovers that the discount rate of its decommissioning provision had been keyed in wrongly at the end of 2024 (4% instead of 2.5%), whereas the right rate was in the file at the time. How should the correction be described?Single choiceL3
- In 2025, Cardane refines its expected credit loss model thanks to a longer default history that became available this year. The loss allowance increases significantly. The finance director wants to split the effect between 2024 (restated) and 2025. What should he be told?Single choiceL4
- Brissane changes, for its maintenance contracts, the way it measures progress on costs incurred. The finance director sees a change in technique; the auditor suggests a change in policy. Write a classification note for the audit committee.JudgmentL4
- In 2025, Lavrine increases a warranty provision and, in the same year, settles a lawsuit for less than the provision set up. The finance director wants to treat both differences as corrections of 2024 errors. Write a reasoned reply.JudgmentL3
- The Orsevane group is preparing an internal manual for classifying accounting changes. Write the section explaining how to distinguish a change in policy from a change in estimate, with two examples of each.JudgmentL4
Prospective recognition of a change in estimate25 questions
- Apart from specific cases, the effect of a change in accounting estimate is recognised prospectively in profit or loss.True / falseL1
- A change in accounting estimate requires comparatives and opening equity to be restated.True / falseL1
- Revising the useful life of a depreciable asset changes depreciation for the current period and for each future period of its remaining useful life.True / falseL2
- A change in estimate at Gandot affects only the current period. Where is its effect recognised?Single choiceL1
- Leusot's change in estimate changes a liability recognised in the statement of financial position. How is it recognised?Single choiceL2
- At 1 January 2025, Traindore reduces the remaining useful life of its servers. Which periods does the effect of this change affect?Single choiceL2
- At 1 January 2025, a van of Jilvane has a carrying amount of …; its remaining useful life is revised to … years, with no residual value. What is the annual straight-line depreciation from 2025?CalculationL1
- Zylbane acquired a production line for … on 1 January 2021, depreciated on a straight-line basis over … years, with no residual value. At 1 January 2025, its remaining useful life is reduced to … years. Compute the carrying amount at the date of change and 2025 depreciation.CalculationL2Variant
- A forklift of Taulbine, brought into use on 1 January 2022 for … and expected to last … years (straight-line, no residual value), wears out faster than expected: at 1 January 2025, only … years of use remain. What is its carrying amount at that date and what depreciation should be recognised for 2025?CalculationL2Variant
- Merlane acquired a machine for … on 1 January 2023, depreciated on a straight-line basis over … years with no residual value. At 1 January 2025, the remaining life is unchanged but a residual value of … is now expected. What is 2025 depreciation?CalculationL2
- Quernys acquired equipment for … on 1 January 2022, depreciated on a straight-line basis over … years with no residual value. On 1 July 2025, its remaining useful life is revised to … years from that date. Compute the carrying amount at 1 July 2025 and total 2025 depreciation.CalculationL3
- At the 2025 reporting date, Pilade increases its warranty provision from … to …, in light of new claims. What amount is recognised as a 2025 expense?CalculationL2
- Navarelle holds … of receivables, with a loss allowance of …. New default data lead to an expected loss rate of … per thousand (case data). Compute the revised loss allowance and the additional 2025 loss.CalculationL3
- An industrial building of Quélix, acquired on 1 January 2020 for … and depreciated on a straight-line basis over 10 years with no residual value, will in fact have a residual value of … (estimate revised at 1 January 2025, life unchanged). Compute the revised depreciation and the decrease in annual depreciation.CalculationL3
- At 1 January 2025, the carrying amount of a furnace of Bramelle is …; its remaining useful life is revised to … years, with no residual value. Record the 2025 depreciation entry.Journal entryL2
- At the 2025 reporting date, Doulane raises by … the estimate of its provision for cleaning up land contaminated by its past operations, following a new quotation (the provision is not included in the cost of any asset, case data). Record the entry.Journal entryL2Variant
- As the return rate of its products has fallen, Saulvois reduces its warranty provision by … in 2025. Record the revision.Journal entryL2Variant
- Updated default data lead Plaudard to increase the loss allowance on its receivables by … in 2025. Record the entry.Journal entryL3
- In 2025, Silvarne revises two estimates: the year's depreciation of an item of equipment, recomputed over its revised remaining life, is …; a litigation provision increases by …. Record the 2025 entries.Journal entryL3
- For a machine acquired 2 years ago for 120,000 (initial life 10 years), whose total life is revised to 6 years, Gandine's accountant computes the year's depreciation as follows: 120,000 ÷ 6 = 20,000. What is the error?Single choiceL2
- Vrynois increases a warranty provision following new claims. Its accountant charges the increase to opening retained earnings 'so as not to penalise the year'. What is the error?Single choiceL1
- Chausia reduces the estimate of a provision by 20,000. Its accountant recognises income of 20,000 but, as the other side, records a sundry receivable instead of reducing the provision. What is the error?Single choiceL2
- In 2025, Galvorne finds that its trucks are wearing out faster than expected and reduces their remaining useful life. Its finance director proposes three treatments. Which one should be used?Single choiceL2
- The loss allowance on Vrimane's receivables must increase by 45,000 at the 2025 reporting date, based on the latest default data. The finance director proposes to spread the increase over three years 'to smooth the effect'. What is the conclusion?Single choiceL3
- Ravelline finds that the economic benefits of its packaging machines are now consumed faster early in the remaining life. It revises the expected pattern of consumption at 1 January 2025. Which depreciation charges are affected?Single choiceL3
Disclosures on changes in estimates10 questions
- An entity discloses the nature and amount of a change in accounting estimate that has an effect in the current period.True / falseL2
- When the future effect of a change in estimate cannot be estimated, the entity has nothing to disclose about it.True / falseL2
- Vadorne revises the useful life of its vehicles in 2025. What must it disclose in its notes?Single choiceL2
- Geuline cannot estimate the effect of a change in estimate on future years, for lack of reliable data. What must it do?Single choiceL3
- After revising the useful life, the 2025 depreciation of an item of equipment at Faudane rises from 24,000 to 32,000. Which amount is the effect of the change in estimate to be disclosed for 2025?Single choiceL2
- Following a revision of useful life, the annual depreciation of an asset at Tarnaise rises from … to … from 2025; the difference will recur over the following … years. Compute the effect on 2025 to be disclosed and the expected cumulative effect on those future years.CalculationL2
- At 1 January 2025, an item of equipment at Brevaine has a carrying amount of …. Its remaining useful life, so far estimated at … years, is revised to … years (straight-line, no residual value). What amount of the effect of the change on 2025 must be disclosed?CalculationL3
- In 2025, Selvorne increases its restoration provision from … to …, following a revision of expected costs. What amount of the change in estimate should be disclosed in the notes?CalculationL2
- Zorlane's note on revising the useful life of its machines says: 'Effect on 2025: additional charge of 40,000.' The future effect could be estimated. What is missing?Single choiceL2
- Grenvale revised the residual value of its aircraft, which reduces 2025 depreciation from 300,000 to 260,000. The note says: 'Change in estimate: depreciation of 260,000.' What is the error?Single choiceL3
Nature of errors and contingencies23 questions
- An error may affect the recognition, measurement, presentation or disclosure of elements of financial statements.True / falseL1
- Financial statements containing immaterial errors made intentionally to achieve a particular presentation still comply with IFRSs.True / falseL1
- A current period error discovered during that same period is corrected before the financial statements are authorised for issue.True / falseL2
- The gain recognised on the favourable outcome of a lawsuit, which the entity had provided for using the best information of the time, is the correction of an error.True / falseL2
- Is classifying a long-term loan as a current liability in Kaistane's 2024 financial statements, the amounts being right, an error within IAS 8?Single choiceL1
- A material error in Nyrnade's 2024 financial statements is discovered in June 2025, after they were issued. Where is it corrected?Single choiceL2
- In which case do financial statements fail to comply with IFRSs because of errors?Single choiceL2
- Why is revising an accounting estimate not, in itself, the correction of an error?Single choiceL2
- In which areas can an error arise under IAS 8?Multiple choiceL1
- When finalising Clirvane's 2025 accounts, which of these situations are prior period errors?Multiple choiceL2
- Which statements about the treatment of errors are correct?Multiple choiceL2
- On 10 February 2026, before the 2025 accounts are finalised, Drolbane discovers a computation error in its 2025 provisions. The accountant writes: 'We will correct it next year in the comparatives.' What is wrong with this reasoning?Single choiceL2
- Internal note at Gandore: 'The deliberate error of 8,000 on accrued expenses lets us report a profit; it is immaterial, so it has no consequence for compliance.' Where is the mistake?Single choiceL2
- At the end of 2024, Kelvorne provided 400,000 for a lawsuit, based on its advisers' opinion. The lawsuit ends in 2025 with an award of 520,000 against it. The controller restates 2024 'to correct the provision error'. Where is the mistake?Single choiceL3
- Kyrnine's 2024 accounts presented significant finance costs within operating expenses; net profit was right. The finance director says: 'Since profit is right, this is not an error.' What is the flaw?Single choiceL2
- In March 2025, Pomvane realises that an entire warehouse was left out of the physical count at the end of 2024; the stock lists for that warehouse existed. How should this be described?Single choiceL1Variant
- In 2025, Brelvane's legal department rereads a contract signed in 2024: a clause, misread when the 2024 accounts were finalised, required Brelvane to pay a rebate back to the customer. The contract text was available. How should the situation be described?Single choiceL2Variant
- In 2025, Fargane discovers that an employee had recorded material fictitious receivables in 2024 to hide a misappropriation. Which treatment applies in the 2025 financial statements?Single choiceL2
- In October 2025, Quivane finds that a May 2025 invoice was recorded twice. The 2025 accounts have not yet been finalised. The controller wants to treat the difference as a prior period error in the 2026 accounts. What should be done?Single choiceL2
- At the end of 2024, Drurgade had estimated, with reliable data, a warranty liability of 75,000. In 2025, actual claims lead it to increase it to 95,000. The finance director hesitates between error and estimate. What should be concluded?Single choiceL3
- In 2025, Gelvane discovers a 2024 error whose amount is small relative to its aggregates, but which took 2024 profit above the threshold of a bonus plan (case data). How should it be approached?Single choiceL2
- In 2025, Vrayane discovers three anomalies in its 2024 accounts: a classification error in the balance sheet, an omitted expense of a small amount, and an overstatement of inventories by a site manager to meet targets. Write a note classifying each anomaly and proposing its treatment.JudgmentL3
- Tarnevane's audit committee must decide: does the 2024 litigation provision, settled in 2025 for twice the amount, reveal an error? The 2024 file contains the lawyers' opinion and an internal note mentioning an unfavourable document not passed on to the lawyers. Write your analysis.JudgmentL3
Retrospective restatement of an error32 questions
- In which financial statements is a material prior period error corrected?Single choiceL2
- Braidax, which presents 2025 and 2024, discovers in 2025 an error made in 2022. How does it correct it?Single choiceL2
- Trivane's finance director wants the correction of a 2023 error to appear in 2025 profit, the year of discovery. What does IAS 8 require?Single choiceL3
- Pirvane's annual report presents, outside the financial statements, a ten-year historical summary of key figures. A 2021 error is corrected in 2025. What happens to the summary?Single choiceL3
- What limit does IAS 8 place on the retrospective restatement of a prior period error?Single choiceL3
- Chasenne presents 2025 and 2024. A computation error repeated every year since 2021 overstated its profit: cumulative effect of … at 1 January 2024 and of … at 31 December 2024 (tax effect ignored). Allocate the correction.CalculationL2Variant
- At Brairvot, a maintenance expense has been wrongly capitalised since 2022. The overstated asset amounts to … at 1 January 2024 and to … at 31 December 2024. Brairvot presents 2025 and 2024 (tax effect ignored). What corrections apply to the opening balances and to 2024?CalculationL2Variant
- Lindane's published 2024 profit is …. A 2024 expense of … was omitted; its correction gives rise to a deferred tax effect at a rate of … (case data). What 2024 profit should be presented as the comparative?CalculationL2
- Malvane overstated its 2023 revenue by … (sale recognised early). It presents 2025 and 2024; its published retained earnings at 1 January 2024 are …. The correction gives rise to a tax effect at a rate of … (case data). Compute restated retained earnings at 1 January 2024.CalculationL3
- At 31 December 2024, Draivane's assets are overstated by … because of an error concerning 2023 and 2024. Its published retained earnings at that date are …; the correction gives rise to a deferred tax asset at a rate of … (case data). What retained earnings should be presented at 31 December 2024 as the comparative?CalculationL3
- Tornelle's published trade receivables at 31 December 2024 amount to …, including … of fictitious receivables created by an employee. What receivables amount should be presented as the comparative in the 2025 financial statements?CalculationL2
- A machine costing …, brought into use on 1 January 2023 and depreciable on a straight-line basis over … years with no residual value, was never depreciated by Quarvane, which presents 2025 and 2024 (tax effect ignored). Compute the correction to equity at 1 January 2024 and restated accumulated depreciation at 31 December 2024.CalculationL3
- Velvorne never recognised a provision that should have amounted to … at the end of 2023 and … at the end of 2024. It presents 2025 and 2024; the correction gives rise to a deferred tax asset at a rate of … (case data). Compute, net of tax, the 2024 opening correction, the decrease in 2024 profit and the decrease in equity at 31 December 2024.CalculationL4
- In its count at the end of 2024, Chaurgède counted a batch of … twice. Its published 2024 profit is … and its published inventories … (tax effect ignored). What amounts should be presented as comparatives?CalculationL3
- Braurnade discovers an old error whose specific effects on 2024 cannot practicably be determined, but whose cumulative effect at 1 January 2025 is known: …. It presents 2025 and 2024 (tax effect ignored). What correction of opening balances, and at what date?CalculationL4
- At the end of 2024, Chailbence omitted any loss allowance on receivables of …, although a loss rate of … emerged from the data available at the time (case data). Losses finally incurred in 2025 amount to …. What amount should be used to restate the 2024 comparative?CalculationL4
- In 2025, Ponvane discovers that a 2023 liability was never recognised. The accountant records 'Exceptional expense 2025 / Liability'. What is the error?Single choiceL2
- Kelbane presents 2025 and 2024. An error made in 2021 and 2022 is discovered in 2025; the accountant charges the whole effect to comparative 2024 profit. What is the error?Single choiceL3
- To correct a provision of 100,000 omitted in 2023, Silbane reduces its opening retained earnings by 100,000. The expense will be deductible when paid and the deferred tax asset is recoverable at a rate of 25% (case data). What is the error?Single choiceL3
- In 2025, Garnelle corrects a material 2024 error by adjusting its equity at 1 January 2025, but presents the 2024 comparatives as published, with a mere note. What is the error?Single choiceL3
- In 2025, Ruvelle discovers 2022 expenses of …, never recognised and still owed; it presents 2025 and 2024 (tax effect dealt with separately). Record the entry correcting the opening balances.Journal entryL2Variant
- A litigation provision of …, required as early as the end of 2023 given the information available, was omitted by Grenvale; the earliest period presented is 2024. The expense will be deductible when paid and the deferred tax asset is recoverable at a rate of … (case data). Record the opening entries.Journal entryL3Variant
- A fictitious receivable of …, recorded in 2023 by Tauvane, is discovered in 2025; the earliest period presented is 2024 (tax effect dealt with separately). Record the entry correcting the opening balances.Journal entryL2
- In 2023, Braudia omitted compensation of … definitively granted by its insurer and still receivable. The earliest period presented is 2024 (tax effect dealt with separately). Record the entry correcting the opening balances.Journal entryL2
- A 2024 services invoice of …, received before the 2024 accounts were finalised, was not recorded by Brérgia. Record the entry restating the 2024 comparative (tax effect dealt with separately).Journal entryL3
- At the end of 2023, Kirvelle's inventories were overstated by … through a unit price error; the earliest period presented is 2024. The correction creates a deductible difference at a rate of …, the deferred tax asset being recoverable (case data). Record the opening entries.Journal entryL3
- Morvelune omitted a required provision of … at 1 January 2024, increased to … + … at the end of 2024 given the information of the time. It presents 2025 and 2024 (tax effect dealt with separately). Record the restatement entries.Journal entryL3
- In April 2025, Nelvane discovers a material error in its 2024 accounts, issued in March. It presents 2025 and 2024. Which treatment applies?Single choiceL2
- Durvane, which presents 2025 and 2024, discovers that a non-current asset was overstated in 2022. The error had no effect on 2023 or 2024 profit. Where is the correction made?Single choiceL3
- So as 'not to touch accounts already issued', Fenvane's finance director proposes recognising in 2025 an exceptional expense correcting a material 2024 error. What should he be told?Single choiceL3
- In 2025, Ganvelle discovers an old error. After every reasonable effort, its specific effects on 2024 remain indeterminable, but the cumulative effect at 1 January 2025 can be measured. Which treatment applies?Single choiceL4
- Brastois cannot determine the cumulative effect of an error on all prior periods at the beginning of 2025, for lack of data; reliable data exist only from 1 April 2024. Which treatment applies?Single choiceL4
Disclosures on the correction of an error9 questions
- When a prior period error is corrected, the entity discloses the nature of the error.True / falseL2
- Disclosures about the correction of a prior period error must be repeated in the financial statements of all subsequent periods.True / falseL2
- Sorgane, listed and subject to IAS 33, corrects a 2024 error. Which disclosure, specific to entities subject to IAS 33, must appear in its notes, to the extent practicable?Single choiceL2
- Tauscard corrects an error dating back to 2022 in its 2025 financial statements (2024 comparative). What amount must it disclose, in addition to the 2024 corrections by line item?Single choiceL2
- For a given prior period, Faldane cannot restate an error retrospectively, for lack of data. What must it disclose about this?Single choiceL3
- Which of these disclosures are required when a prior period error is corrected?Multiple choiceL2
- Which statements about disclosures on error corrections are correct?Multiple choiceL3
- Vellane's note on correcting an error dating back to 2022 discloses the nature of the error and the 2024 corrections by line item (comparative). Which disclosure is missing?Single choiceL2
- In 2024, Vrévelle corrected a 2023 error and described it in its 2024 notes. For its 2026 financial statements, the controller repeats this note in full 'as required'. What do you think?Single choiceL3
Assessing impracticability17 questions
- In which situation may adjusting the comparative information of a prior period be impracticable?Single choiceL3
- Does the fact that a restatement requires estimates make it impracticable?Single choiceL3
- In which case does IAS 8 regard retrospective application as impracticable with regard to significant estimates?Single choiceL3
- Despite every effort, Clailvard cannot determine the specific effects of an error on 2024, but it can measure their cumulative amount at the beginning of 2025. Which principle of the standard applies?Single choiceL4
- To estimate in 2025 an amount at the end of 2023 as part of a restatement, which information may Cludelle use?Multiple choiceL3
- Which statements about estimating in a restatement are correct?Multiple choiceL3
- Drarvian claims impracticability for four restatements. Which of its arguments are admissible, after every reasonable effort?Multiple choiceL4
- Dremède omitted any warranty provision at the end of 2024. Statistics available at the time indicated a claim rate of … of 2024 sales, which amounted to … (case data). Actual 2025 claims reach …. What amount should be used to restate 2024?CalculationL3Variant
- When restating 2024, Flairval must determine the write-down of … items at a unit cost of …. The price list in force at the end of 2024 and known when the accounts were finalised was … per item, less … of selling costs. In 2025, they were sold off at …. What write-down should be used for 2024?CalculationL4Variant
- To restate a prior period, Girvois must estimate a liability at the relevant date. The file of the time used two scenarios (method provided by the case): … for … and … for …. It is now known that the outcome was …. What amount should be used for the prior period?CalculationL4
- Jaundore cannot determine the cumulative effect of an error at the beginning of 2025; reliable data exist only from 1 July 2024. The error has overstated profit by … a month since then (case data), i.e. … months in 2024. What restatement of the 2024 comparative is needed?CalculationL3
- To restate 2022, Jirvard would need to know whether its management at the time intended to keep or sell a plot of land. No document establishes this and the managers have changed. What should be concluded?Single choiceL3
- In 2024 a fire destroyed Jivorn's paper archives, the only source of the 2022 production data needed for a restatement; no backup exists. What should be concluded for 2022?Single choiceL3
- To restate 2023, Julborn would need to estimate the fair value of a complex instrument at the end of 2023. The only data available today mix 2023 parameters with later adjustments that cannot be separated. The estimate would be significant. What should be concluded?Single choiceL4
- Kymorne claims that restating 2024 is impracticable 'because the useful life that would have been used at the time would have to be estimated'. Yet the 2024 technical data are available. What should be concluded?Single choiceL3
- Kyrnelle must correct a measurement error dating back to 2021. Data for 2021 and 2022 are partial, those for 2023 complete; some 2022 estimates would depend on later information. Write the note justifying, period by period, what is practicable.JudgmentL4
- Lérède's audit committee questions the estimate used to restate a 2024 provision: management used the amount of the judgment handed down in 2025. Write an opinion.JudgmentL4