Question bank — IFRS 18 — Presentation and Disclosure in Financial Statements
73 questions in FR/EN/ES, scored by the real scoring engine.
IFRS 18 replaces IAS 13 questions
- IFRS 18 replaces IAS 1 and restructures the presentation requirements for the statement of profit or loss.True / falseL1
- What does IFRS 18 replace, and where is its main change?Single choiceL1
- A colleague presents the new standard to the accounting team of Alpha SA. Which of the colleague's statements about the content of IFRS 18 are correct? More than one answer is possible.Multiple choiceL1
The other primary statements3 questions
- Which statement correctly describes the structure of the primary statements under IFRS 18?Single choiceL1
- A trainee summarises the effects of IFRS 18 on the primary statements of Equinoxe SA. Which of the trainee's sentences is wrong?Single choiceL1
- Which items make up a complete set of financial statements under IFRS 18? (Several answers.)Multiple choiceL1
The five categories3 questions
- What are the five categories into which IFRS 18 classifies the income and expenses of the statement of profit or loss?Single choiceL1
- All the income and expenses in the statement of profit or loss are classified in one of the five IFRS 18 categories.True / falseL1
- Flore SA, an industrial entity with no specified main business activity (case convention), records three items: (a) interest on a bank loan taken out to raise finance, (b) the proceeds from the sale of its goods, (c) an income tax expense. Which classification by category is correct?Single choiceL2
The operating category as the default3 questions
- The operating category comprises the income and expenses that are not classified in any of the other four categories.True / falseL1
- Mélèze SA pays EUR 90,000 to settle a commercial dispute with a customer. The item is non-recurring but arises from its operating activities (case facts; entity with no specified main business activity). In which category of the statement of profit or loss is this expense classified?Single choiceL2
- Orion SA, an industrial entity with no specified main business activity (case convention), reports for the year: sales revenue …; cost of sales …; distribution costs …; administrative expenses …; a payment to settle a commercial dispute, a non-recurring item arising from its operating activities, …; interest on a bank loan taken out to raise finance, …; share of profit of an equity-accounted joint venture, …. Classify each item in its category, then calculate the total of the operating category.CalculationL3
The investing category3 questions
- In which IFRS 18 category are the income and expenses of equity-accounted entities classified?Single choiceL1
- Tiare SA, an industrial entity with no specified main business activity (case convention), places its cash and cash equivalents in interest-bearing accounts and receives EUR 24,000 of interest. In which category is this interest classified?Single choiceL2
- Atlas SA, an industrial entity with no specified main business activity, had classified in the investing category income of … from the sale of by-products of its own manufacturing. The year-end review concludes that this income arises from its operating activities and belongs in the operating category (case facts). Record the presentation entry that reclassifies this income.Journal entryL2
The financing category3 questions
- Interest on a bank loan taken out to raise finance falls in the operating category, like the other expenses of the period.True / falseL1
- Hélios SA, an industrial entity with no specified main business activity (case convention), operates a site for which it has recognised a decommissioning provision. The unwinding of the discount on that provision for the year is EUR 18,000. In which category is it classified?Single choiceL2
- Rivage SA, an entity with no specified main business activity, presented in the operating category an interest expense of … on a bank loan taken out solely to raise finance (classification error found at the year end, case fact). Record the presentation entry that reclassifies it to the financing category.Journal entryL2
Income taxes and discontinued operations3 questions
- The IFRS 18 discontinued operations category groups the income and expenses of any activity sold during the year, whether or not it meets the definition in IFRS 5.True / falseL1
- Which standard defines the income taxes whose expense is classified in the IFRS 18 income taxes category?Single choiceL1
- Pavot SA applies IFRS 18. Which statements about the classification of its income and expenses are correct? More than one answer is possible.Multiple choiceL2
Classification of foreign exchange differences2 questions
- Cyprès SA, whose functional currency is the euro, has borrowed USD 2,000,000 from a bank, a transaction of pure financing (case facts). At the closing date, the change in the exchange rate gives rise to an exchange loss of EUR 35,000 on this loan. In which category is this loss classified?Single choiceL2
- Marée SA has three dollar positions at the closing date: a trade receivable (exchange loss of EUR 22,000), a bank loan of pure financing (exchange loss of EUR 40,000) and a cash balance (exchange gain of EUR 8,000). Management proposes to classify all three differences in the operating category, citing undue cost or effort to trace their origin. The accounting system already identifies the originating item for each difference (case facts). Write a short note concluding on the proposed classification, distinguishing rule, case facts and professional judgement.JudgmentL3
Derivatives and hedging instruments1 question
Operating profit3 questions
- Operating profit includes the share of the result of equity-accounted joint ventures.True / falseL1
- Sapin SA classifies the following items for the year in the operating category: sales revenue …; cost of sales …; selling and administrative expenses …; research and development …; other operating income …. It classifies outside that category the interest on a loan, …, in financing, and the share of profit of an associate, …, in investing (classification provided by the case). Calculate operating profit.CalculationL2
- A management controller describes operating profit of Tilleul SA under IFRS 18. Which of the controller's sentences is wrong?Single choiceL2
Profit before financing and income taxes3 questions
- Profit before financing and income taxes equals operating profit less the expenses of the financing category.True / falseL2
- Sorbier SA has operating profit of …. Its other income and expenses for the year are: share of profit of an equity-accounted joint venture, …; interest received on cash and cash equivalents, …; loss on an unconsolidated subsidiary, …; interest on a bank loan taken out to raise finance, … (entity with no specified main business activity, case convention). Calculate profit before financing and income taxes.CalculationL2
- Genêt SA, with no specified main business activity (case convention), reports: operating profit EUR 640,000; share of profit of an equity-accounted associate EUR 55,000; interest expense on a loan raised to obtain finance EUR 120,000; income tax expense EUR 90,000; profit from a discontinued operation EUR 25,000. What is its profit before financing and income taxes?Single choiceL3
From the subtotals to profit for the period3 questions
- Cèdre SA reports profit before financing and income taxes of …. The financing category comprises a net expense of …, the income tax expense is … and the discontinued operations category shows a profit of …. Calculate profit before income taxes, then profit for the year.CalculationL2
- In the IFRS 18 statement of profit or loss, profit for the year is obtained after the financing category, income taxes and discontinued operations.True / falseL2
- A junior auditor reviews the bridge from profit before financing and income taxes to profit for the year at Aulne SA. Which of the auditor's remarks is wrong?Single choiceL3
Assessing a specified main business activity1 question
The effects on classification2 questions
- Crédit du Lac SA has as its main business activity providing financing to customers, which it discloses in its financial statements (case facts: specified main business activity). In which category does it classify the interest received on loans granted to its customers?Single choiceL2
- Pierre-Rente SA has as its main business activity investing in investment property, which it discloses in its financial statements (case facts: specified main business activity). Its draft statement of profit or loss classified in the investing category rental income of …. Record the presentation entry that reclassifies this rental income to the operating category.Journal entryL2
Principles of aggregation and disaggregation2 questions
- Cobalt SA presents a line "Service revenue" of EUR 3,000,000. It comprises recurring maintenance contracts, which share common characteristics, and one-off training sales, which share none with them and whose amount is material (case facts). What must Cobalt do with this line?Single choiceL2
- A reporting manager summarises the aggregation and disaggregation principles of IFRS 18 for Tamaris SA. Which of the manager's sentences is wrong?Single choiceL3
Roles of the primary statements and the notes1 question
The label "other"2 questions
- Under IFRS 18, on what condition is the label "other" acceptable in the financial statements?Single choiceL1
- Fjord SA presents its operating expenses by function and a line "Other expenses" of EUR 410,000. It is made up of losses on trade receivables of EUR 250,000, identified and followed by users, and various small amounts of EUR 160,000, which are immaterial (case facts). How must Fjord treat this line?Single choiceL2
Expenses by nature, by function or both3 questions
- Brio SA presents its operating expenses in a mix: the lines "Cost of sales" and "Distribution costs" are classified by function, while the line "Depreciation and amortisation" is classified by nature (case facts). What additional information must Brio provide?Single choiceL3
- Which statements about the presentation of operating expenses under IFRS 18 are correct? More than one answer is possible.Multiple choiceL2
- How does IFRS 18 require operating expenses to be presented in the statement of profit or loss?Single choiceL2
The note on expenses by nature3 questions
- Fjord SA presents a line of operating expenses by function. Which of the following items enter the single note of information by nature that the standard requires? More than one answer is possible.Multiple choiceL2
- Algue SA presents its operating expenses by function and provides the note by nature. For the year, employee benefits recognised in operating expenses are … and those included in the cost of a self-constructed asset …; depreciation of property, plant and equipment recognised in expenses is … and that included in the cost of assets …. Case convention: Algue includes in the note the amounts included in the cost of assets, which the standard permits. Calculate the employee benefits and depreciation amounts disclosed in the note.CalculationL3
- In the note on expenses by nature required when it presents its expenses by function, Orbis SA may disclose only amounts recognised as expenses in the period: an amount of salaries included in the carrying amount of inventories can never be included in it.True / falseL2
Definition of a management-defined performance measure2 questions
- Which of the following descriptions corresponds to a management-defined performance measure under IFRS 18?Single choiceL1
- Sylve SA publishes in its annual press release a "profit before exceptional items", a subtotal of income and expenses that conveys management's view of the performance of the entity as a whole. This subtotal is not required by IFRS 18 nor listed among the specified subtotals (case facts). How should it be characterised?Single choiceL2
Subtotals excluded from the definition2 questions
- Operating profit, a subtotal specified by IFRS 18, is not a management-defined performance measure.True / falseL1
- Vigne SA reports several subtotals outside its financial statements. Which one is a subtotal required by IFRS 18, which the standard distinguishes from management-defined performance measures?Single choiceL2
Disclosures and reconciliation3 questions
- The information about management-defined performance measures is given in the notes and includes a reconciliation to the most directly comparable specified subtotal or total.True / falseL2
- Lisière SA publishes outside its financial statements an "operating profit before restructuring and brand impairment", which it regards as a management-defined performance measure (management's choice, case data). Its operating profit, the most directly comparable specified subtotal, is …. The reconciling items are restructuring costs of … and a brand impairment of …, both included in operating profit. Calculate the measure.CalculationL2
- Ormeau SA publishes in its financial report an "operating profit before restructuring costs", which it regards as a management-defined performance measure (case data). What information must appear in the notes for this measure?Single choiceL3
Income tax and non-controlling interests effects1 question
Effective date and early application3 questions
- IFRS 18 applies to annual periods beginning on or after 1 January 2026.True / falseL1
- Zénith SA closes its books on 30 June and does not early adopt IFRS 18. What is the first period for which it must apply IFRS 18?Single choiceL1
- A trainee summarises the effective date of IFRS 18 for the audit committee of Onyx SA. Which of the trainee's sentences is wrong?Single choiceL1
EU endorsement2 questions
Retrospective application and restated comparative3 questions
- Hydra SA, which closes on 31 December, applies IFRS 18 for 2027 and restates its 2026 comparative. In that comparative, it reclassifies EUR 120,000 of interest income on cash from the operating category to the investing category (case facts). What follows for the 2026 comparative?Single choiceL2
- In its 2026 comparative presented under IAS 1, Delta SA showed an "operating result" of …, which included interest received on cash of … and the share of profit of a joint venture of …. When IFRS 18 is applied retrospectively, those two items fall in the investing category (entity with no specified main business activity). Calculate the restated operating profit of the comparative, then the difference from the subtotal presented under IAS 1.CalculationL3
- Quai SA prepared its 2026 comparative under IAS 1 by showing in operating expenses … of interest on bonds issued solely to raise finance. For its first IFRS 18 year (2027), it restates the 2026 comparative and classifies that expense in the financing category (case facts: entity with no specified main business activity). Record the presentation entry for the restatement of the comparative.Journal entryL2
Reconciliation of restated amounts2 questions
- On transition, Colza SA reconciles line by line the restated amounts of its 2026 comparative period with those presented under IAS 1. On the financing expenses line, the amount restated under IFRS 18 is … and the amount presented under IAS 1 is … (case data). Calculate the difference for this line.CalculationL2
- Vega SA applies IFRS 18 for the first time in its annual financial statements for the year beginning on 1 January 2027; its immediately preceding comparative period is 2026, so far presented under IAS 1 (case facts). Which reconciliation does IFRS 18 require on transition?Single choiceL2
IAS 7: the new starting point3 questions
- With the indirect method, the starting point of the reconciliation of operating cash flows remains profit for the year under IFRS 18.True / falseL2
- Nacre SA prepares its statement of cash flows using the indirect method, under IFRS 18. Its operating profit is …. It includes non-cash depreciation of …. Inventories increased by … and trade payables by … during the year. Case convention: no other adjustment, interest and tax paid being dealt with separately. Calculate operating cash flow before interest and tax.CalculationL3
- Brume SA, which used to start from profit before tax (EUR 840,000) to reconcile its operating cash flows under the indirect method, moves to IFRS 18. What is its new starting point?Single choiceL2
IAS 7: interest and dividends2 questions
- Éolienne SA, an industrial entity with no specified main business activity (case convention), paid EUR 300,000 of dividends and EUR 80,000 of interest on a bank loan. Under IFRS 18, in which category of its statement of cash flows are these two payments classified?Single choiceL2
- Prêt-Lac SA has as its main business activity providing financing to customers (specified main business activity, case fact); in its statement of profit or loss, it classifies in the operating category the interest it pays on funds raised to finance its loans (case data). It paid EUR 410,000 of that interest and EUR 150,000 of dividends. Its management proposes to classify both payments in financing in the statement of cash flows, "like other entities". Write a short note concluding on the classification of interest paid, distinguishing rule, case facts and professional judgement.JudgmentL3