Question bank — IFRS 9 — Financial Instruments
124 questions in FR/EN/ES, scored by the real scoring engine.
Scope of IFRS 9 and main exclusions3 questions
- Gamma SA applies IFRS 9 to its financial instruments. Which of these items is excluded from the scope of IFRS 9?Single choiceL1Variant
- When a loan commitment remains outside the scope of IFRS 9, the issuer nevertheless applies the impairment requirements of the standard to that commitment.True / falseL1
- Delta SA holds (1) a subsidiary whose interest is accounted for under IFRS 10, (2) a lease contract under IFRS 16 that includes an embedded derivative, and (3) government bonds acquired to receive the interest. Which analysis of the scope of IFRS 9 is consistent?Single choiceL1Variant
Loan commitments inside or outside scope2 questions
Contracts on non-financial items and own use1 question
Credit loss, expected credit loss and credit-impaired asset3 questions
- A financial asset acquired with a high credit risk is, for that reason, a credit-impaired financial asset.True / falseL1
- According to the defined terms of IFRS 9, what does the 12-month expected credit loss represent?Single choiceL1
- An employee summarises in a memo the credit risk terms defined by IFRS 9. Which of these sentences is wrong?Single choiceL2
Held for trading2 questions
- A derivative is classified among the instruments held for trading, unless it is a financial guarantee or a designated and effective hedging instrument.True / falseL1
- Tau SA manages a portfolio of bonds that it buys and resells within the year to generate short-term profits. The managers are monitored on that pattern, which has repeated in recent months. How should this portfolio be characterised against the definition of held for trading?Single choiceL2
Initial recognition of a financial instrument3 questions
- An entity recognises a financial asset when, and only when, it becomes party to the contractual provisions of the instrument.True / falseL1
- On 30 December, a customer of Sigma SA orders the transfer that settles a trade receivable; the cash is credited to Sigma's bank account only on 2 January. Sigma wishes to recognise the cash from 31 December by invoking the regime for regular way purchases and sales of financial assets. Which analysis is consistent with IFRS 9?Single choiceL1
- Epsilon SA grants a partner a loan of …, which it disburses on the day the contract is signed. Case assumptions: the loan is measured at amortised cost and its initial fair value equals the amount disbursed. Record the initial recognition of the loan.Journal entryL1
Regular way purchases and sales2 questions
- On 28 December, Tau SA enters into a regular way purchase of bonds whose fair value at the trade date is …. Settlement and delivery take place on 3 January, when the fair value of the bonds is …. Calculate the change in fair value between the trade date and the settlement date. The accounting treatment of this change is not asked.CalculationL2
- On 28 December, Orion SA enters into a regular way purchase of bonds at the agreed price of …; settlement and delivery take place on 3 January. Orion applies trade date accounting. Case assumption: the agreed price is the fair value at the trade date. Record the entry of 28 December.Journal entryL2
Expiry or transfer of the rights to cash flows3 questions
- To derecognise a financial asset, the first question is whether the contractual rights to its cash flows have expired.True / falseL1
- Omega SA holds a receivable that it does not legally assign. It nevertheless undertakes to pass on to a third party the cash flows it collects, under an arrangement that meets the three pass-through conditions. Which analysis should be retained?Single choiceL2
- Which situations constitute a transfer of a financial asset in the derecognition analysis? Several answers are possible.Multiple choiceL3
Pass-through transfer arrangements1 question
Transfer of risks and rewards3 questions
- IFRS 9 sets a numerical threshold beyond which the entity is deemed to have transferred substantially all the risks and rewards of a financial asset.True / falseL2Variant
- Lambda SA sells a loan portfolio but remains exposed, after the sale, to the same variability in the amounts and timing of net cash flows as before. The rights have indeed been transferred. Which conclusion should be drawn?Single choiceL2Variant
- A file summarises the analysis of risks and rewards after a transfer of rights. Which sentence is wrong?Single choiceL3
Retained control and continuing involvement1 question
Decision tree for derecognising an asset3 questions
- In what order does the entity carry out the derecognition analysis of a financial asset?Single choiceL3
- Pi SA has sold a portfolio of loans to a fund. It has neither transferred nor kept substantially all the risks and rewards, but the fund can sell the whole portfolio to an unrelated third party, on its own initiative and without additional restrictions. What is the conclusion?Single choiceL3
- Rho SA has sold a portfolio of receivables to a vehicle. Facts of the case: the contractual rights have been transferred; Rho remains exposed to part of the variability of net cash flows, with substantially all the risks and rewards neither transferred nor kept; the vehicle can resell the portfolio to unrelated third parties, but with Rho's consent. Write a short note that concludes on derecognition, distinguishing the facts of the case, the rule and professional judgement.JudgmentL4
Gain or loss on derecognising an asset2 questions
- Sigma SA sells for … a portfolio of loans measured at amortised cost, whose carrying amount is …. The rights are transferred and derecognition of the asset in its entirety is established. Calculate the gain or loss on derecognition.CalculationL2
- Gamma SA holds a debt security measured at FVOCI, whose carrying amount (fair value at the last measurement) is …. The cumulative gain in OCI is …. Gamma sells the security for …. Calculate the difference between the consideration and the carrying amount, then the total effect of derecognition on profit or loss after recycling the cumulative amount in OCI.CalculationL3
Extinguishment of a financial liability3 questions
- In which case is a financial liability removed from the statement of financial position under IFRS 9?Single choiceL1
- Kappa SA repays a loan early; its carrying amount is …. It pays the lender … to extinguish the debt. Calculate the gain on extinguishment to be recognised in profit or loss (give it as a positive amount).CalculationL2Variant
- Lambda SA issued a bond whose total carrying amount is …. It buys back … of it on the market for … in cash, which extinguishes that part of the liability. Record the buy-back entry.Journal entryL3Variant
Modification of a financial liability and the 10% test4 questions
- A colleague summarises the treatment of the modification of a financial liability. Which of these sentences is wrong?Single choiceL2
- Mu SA has a loan whose only remaining cash flow is a repayment of … in 2 years; its original effective interest rate is …. The parties modify the terms: the only cash flow becomes … in 3 years, and Mu pays … of fees to the lender and receives …. Pedagogical assumption: a single final cash flow, no coupon. Calculate the present value of the new terms (fees net, original rate), the difference from the present value of the original cash flows and the 10% threshold.CalculationL3
- Nu SA's debt to a bank has a carrying amount of …. The parties modify the terms and Nu concludes that the new terms are substantially different. The fair value of the new liability is …; Nu pays the bank fees of … in cash on the occasion of the modification. Record the entry for the modification.Journal entryL4
- Fiora SA renegotiates with its bank a borrowing with a carrying amount of 2,000,000 and incurs 40,000 of legal costs and fees. Case data: the 10 per cent test concludes that the new terms are not substantially different; the modification is therefore not accounted for as an extinguishment. How are the 40,000 treated?Single choiceL3
The three categories of financial assets3 questions
- Which two elements determine the subsequent measurement category of a financial asset (amortised cost, FVOCI or FVTPL)?Single choiceL1
- An equity instrument held as an investment is measured at fair value through profit or loss by default.True / falseL1
- Kappa SA manages a portfolio of bonds whose performance is evaluated and monitored on a fair value basis. The contractual cash flows of these bonds are payments of principal and interest. Which measurement category applies?Single choiceL2
Business model: collect, collect and sell, other3 questions
- A business model of collecting contractual cash flows requires the entity to hold each asset in the portfolio until maturity.True / falseL1Variant
- Banque Sud holds a loan portfolio within a collection business model. During the year it sold a few loans whose credit risk had deteriorated. Do these sales call the collection model into question?Single choiceL2Variant
- Which elements inform the assessment of the business model of a portfolio of financial assets? Several answers are possible.Multiple choiceL3
The contractual cash flow test (SPPI)3 questions
- For the contractual cash flow test, what does the principal of a financial asset represent?Single choiceL1
- A training handout presents four statements about the contractual cash flow (SPPI) test. Which one is wrong?Single choiceL2
- Vega SA has acquired a bond whose redemption is indexed to the price of an equity index. It holds this portfolio to collect its contractual cash flows. Which measurement category applies?Single choiceL3
Modified time value, prepayment and contingent features1 question
Non-recourse assets and contractually linked instruments1 question
Fair value option for assets2 questions
- The entity may designate a financial asset at fair value through profit or loss after initial recognition, at the time the accounting mismatch arises.True / falseL2Variant
- Rhône SA acquires bonds that would be measured at amortised cost. It funds them with a borrowing measured at fair value through profit or loss, which would create an accounting mismatch. Which course of action is possible for the bonds?Single choiceL2Variant
The other comprehensive income election for equity instruments3 questions
- For an investment in shares for which the FVOCI election has been made, the amounts accumulated in OCI are not reclassified to profit or loss when the investment is disposed of.True / falseL1Variant
- Alpha SA acquires 5% of the shares of a listed company, not held for trading, and elects to measure them at FVOCI. A year later, it sells these shares with accumulated gains of 12,000 in OCI. How should this accumulated amount be treated?Single choiceL2Variant
- Béta SA holds an investment in shares for which it has made the FVOCI election. At the reporting date, its fair value moves from … to …. Record the remeasurement entry.Journal entryL2
Liabilities at amortised cost and exceptions3 questions
- A financial liability is subsequently measured at fair value through profit or loss, with some exceptions.True / falseL1
- Among these financial liabilities, which one is an exception to subsequent measurement at amortised cost?Single choiceL1
- Which situations are an exception to the subsequent measurement of a financial liability at amortised cost? Several answers are possible.Multiple choiceL1
Fair value option for liabilities2 questions
- Pelsa SA issues a loan whose rate is indexed to an index. It holds assets measured at fair value through profit or loss (FVTPL) whose fair value changes largely offset those of the debt. Measured at amortised cost, the debt would create an accounting mismatch. Nu is considering designating the debt at FVTPL. Which analysis is consistent with IFRS 9?Single choiceL2
- Xi SA issues a loan whose repayment is indexed to a stock index; it uses the proceeds to acquire a portfolio of securities measured at fair value through profit or loss. Measured at amortised cost, the loan would create a mismatch with the portfolio. Management is considering designating it at fair value through profit or loss. Write a short note concluding on this designation, separating case facts, rule and judgement.JudgmentL2
Own credit risk of a designated liability2 questions
- Éta SA has designated a borrowing at FVTPL. Over the year, the fair value change of the liability is …, of which … is attributable to the change in own credit risk (case datum). No accounting mismatch results from the presentation in OCI. Calculate the part of the change presented in profit or loss and the part presented in OCI.CalculationL3Variant
- Ypsilon SA has designated a borrowing at FVTPL. At the reporting date, the fair value of the liability increases by …, of which … is attributable to the change in own credit risk (case datum). No accounting mismatch results from the presentation in OCI. Record the remeasurement entry.Journal entryL3Variant
Initial measurement and transaction costs3 questions
- Omega SA acquires bonds that it will subsequently measure at amortised cost (case assumption). The fair value at acquisition is …; Omega also pays … of brokerage fees directly attributable to the acquisition. Calculate the initial carrying amount of the bonds.CalculationL1
- Pi SA buys listed shares, held for trading and measured at fair value through profit or loss (case assumption). The fair value at acquisition is …; Pi pays … of directly attributable brokerage fees. Case convention: brokerage fees on an asset measured at FVTPL are expensed in the period. Record the acquisition entry.Journal entryL2
- Rhô SA issues a bond that it will subsequently measure at amortised cost. The fair value at issue is 5,000,000; the nominal amount to be repaid is 5,150,000; Rhô pays 60,000 of directly attributable issue costs. What is the initial carrying amount of the liability?Single choiceL2
Trade receivables at the transaction price2 questions
- Sigma SA delivers goods to a customer with payment in 30 days. The trade receivable has no significant financing component. The transaction price under IFRS 15 is 36,000; the fair value of the receivable, estimated by discounting that amount, would be 35,400. At what amount does Sigma initially measure the receivable?Single choiceL2
- Upsilon SA delivers goods to a customer and grants it 30 days to pay. The trade receivable has no significant financing component. The transaction price under IFRS 15 is …. Case assumption: revenue is recognised on delivery. Record the entry for the receivable and the revenue.Journal entryL2
Effective interest rate, fees and costs3 questions
- A bank grants a loan measured at amortised cost. Which of these fees is an integral part of the effective interest rate?Single choiceL2
- Nova SA grants a loan measured at amortised cost, whose fair value at origination is …. It receives from the borrower origination fees of …, which are an integral part of the effective interest rate, and incurs direct transaction costs of …. Calculate the net initial amount used to compute the effective interest rate.CalculationL2
- Zéta SA acquires a zero-coupon security repayable in two years for …, with no other cash flow. The annual effective interest rate, given by the case, is …, and the security is measured at amortised cost. Calculate the initial amount of the security (present value of the cash flows at the effective rate), then the interest income for the first year.CalculationL3
The amortised cost schedule3 questions
- Nord SA granted a loan of … on 1 January, measured at amortised cost; its initial fair value equals the amount lent. The annual effective interest rate given by the case is …. The annual coupon of … is received on 31 December. The two-year loan is repaid on 31 December of the second year for …, in addition to the last coupon. Calculate the interest income for the first year and the carrying amount at 31 December.CalculationL2Variant
- Boréal SA acquired bonds on 1 January N for …, an amount equal to their fair value, and measures them at amortised cost. The annual effective interest rate given by the case is …; a coupon of … is received every 31 December. The three-year bonds are redeemed on 31 December N+2 for …, in addition to the last coupon. Calculate the interest income for year N+1 and the carrying amount at 31 December N+1.CalculationL3Variant
- Zeta SA granted a loan of …, measured at amortised cost; the annual effective interest rate given by the case is … and the annual coupon of … is received at the end of the year. The two-year loan is repaid at the end of the second year for …, in addition to the last coupon. Record the entries for the first year: first the interest at the effective rate, then the receipt of the coupon.Journal entryL2
Modification of the cash flows of a financial asset1 question
Write-off of an uncollectable financial asset2 questions
- Orion SA finds that there is no longer a reasonable expectation of recovering a loan measured at amortised cost, whose gross carrying amount is … and which is fully covered by a loss allowance of …. Record the write-off entry.Journal entryL2
- Over the year, the loss allowance of a portfolio of loans of Lune SA moves from … to …. During the year, loans were written off for …, charged against the loss allowance. Calculate the impairment expense for the year.CalculationL2
Debt instruments at FVOCI and recycling3 questions
- For a debt security measured at FVOCI, which component is recognised in other comprehensive income?Single choiceL2
- Delta SA holds a debt security measured at FVOCI. At 31 December, its fair value is … and its amortised cost is …. Calculate the cumulative amount to present in OCI (before any loss allowance).CalculationL2
- Delta SA sells the debt security it measured at FVOCI. The cumulative gain in OCI at the date of sale is …. Record the entry recycling the cumulative amount to profit or loss (excluding the sale entry itself).Journal entryL3
Gains and losses on assets at FVTPL2 questions
- Rhéa SA holds an investment measured at fair value through profit or loss. Its fair value moves from … to … at the reporting date. Record the remeasurement entry.Journal entryL1
- The fair value changes of a financial asset measured at fair value through profit or loss are presented in other comprehensive income.True / falseL1
Reclassifying financial assets3 questions
- Banque Est manages a portfolio of bonds under a collection model. The market for some of these securities temporarily disappears, and management considers selling a few of them soon, without changing the portfolio's strategy. Should the portfolio be reclassified?Single choiceL2
- Following a change in business model, a portfolio of bonds of Fort SA, carried at amortised cost for …, is reclassified. At the reclassification date, the fair value of the portfolio is …. Calculate the difference between fair value and carrying amount. The accounting treatment of that difference is not asked.CalculationL2
- Gamma Assurance kept bonds within a collection model. Facts of the case: after a reorganisation decided by senior management following a significant external change, demonstrable to third parties, the management of the portfolio is entrusted to a trading team whose objective is to benefit from fair value movements; a manager also wishes to sell two particular securities. Write a short note that concludes on reclassification, distinguishing the facts of the case, the rule and professional judgement.JudgmentL3
No reclassification of financial liabilities2 questions
- When its funding strategy changes, the entity reclassifies its financial liabilities in the same way as its financial assets.True / falseL1Variant
- After a change in its funding policy, Nu SA now manages its debt with a short-term trading purpose. It wonders whether it must reclassify its borrowing, measured at amortised cost, to fair value through profit or loss. Which answer applies?Single choiceL1Variant
Instruments within the impairment model2 questions
The general approach: three stages3 questions
- Quartz SA holds a loan granted to a customer. At the reporting date, the credit risk has increased significantly since initial recognition, without the loan being credit-impaired. What loss allowance does Quartz recognise?Single choiceL2
- Zircon SA holds a loan whose credit risk has increased significantly since initial recognition; its loss allowance is therefore equal to the lifetime expected credit losses. Case convention: expected loss = exposure × probability of default × loss given default, without discounting. Exposure at default: …; lifetime probability of default: …; loss given default: …. Calculate the lifetime expected credit loss.CalculationL3
- Béryl SA held a loan at 31 December N-1 with a loss allowance of … (12-month expected losses). At 31 December N, the credit risk has increased significantly; the lifetime expected losses are estimated at …. Record the entry adjusting the loss allowance at 31 December N.Journal entryL3
Significant increase in credit risk3 questions
- The presumption that credit risk has increased significantly when contractual payments are more than 30 days past due cannot be rebutted.True / falseL2
- A working file describes the assessment of a significant increase in credit risk. Which of these statements is wrong?Single choiceL3
- At 31 December, a loan granted to an SME has a contractual payment 35 days past due. The file manager argues that the delay comes from a transfer error by the customer, since corrected, and proposes not to consider credit risk as having increased significantly. Write a note concluding on the assessment of the significant increase in credit risk, separating case facts, rule and judgement.JudgmentL4
The low credit risk simplification2 questions
Credit-impaired assets and interest on the net amount4 questions
- Which statements about a credit-impaired financial asset are accurate? More than one answer is possible.Multiple choiceL2
- Alba SA holds a credit-impaired loan (stage 3) whose gross carrying amount is … and whose loss allowance is …. The annual effective interest rate given by the case is …. Calculate the net amortised cost and the interest income for the period.CalculationL3
- Cobalt SA holds a credit-impaired loan (stage 3), measured at amortised cost, whose gross carrying amount is … and whose loss allowance is …. The annual effective interest rate given by the case is …. Case convention: the interest of the period is added to the carrying amount of the loan. Record the entry for the interest income of the period.Journal entryL3
- Tilia SA holds a loan measured at amortised cost that became credit-impaired after origination (it was not credit-impaired at origination). Which statements are correct? Several answers are possible.Multiple choiceL3
Return to 12-month losses2 questions
- At 31 December N-1, Ion SA measured the loss allowance of a loan on a lifetime basis, after a significant increase in credit risk. At 31 December N, the condition of a significant increase is no longer met. How should the loss allowance be measured at 31 December N?Single choiceL3Variant
- At 31 December N-1, the loss allowance of a loan of Ion SA was … (lifetime losses). At 31 December N, the condition of a significant increase in credit risk is no longer met, and the 12-month expected losses amount to …. Record the entry adjusting the loss allowance.Journal entryL3Variant
The simplified approach3 questions
- Tellur SA sells products to customers with payment in 30 days. Its trade receivables have no significant financing component. Which impairment approach does Tellur apply to these receivables?Single choiceL2
- Dorvane SA applies the simplified approach to its trade receivables, without a significant financing component. Pedagogical assumption: the matrix below gives the loss rates, which are case data. Receivables not yet due: … at a rate of …; 1 to 30 days past due: … at a rate of …; 31 to 60 days past due: … at a rate of …; more than 60 days past due: … at a rate of …. Calculate the total loss allowance.CalculationL3
- Rome SA applies the simplified approach to its trade receivables, without a significant financing component. The opening loss allowance is …; at the reporting date, the lifetime expected losses are estimated at …. Record the entry adjusting the loss allowance.Journal entryL2
The provision matrix3 questions
- Teta SA applies a provision matrix to its trade receivables without a significant financing component. The loss rates by ageing bucket, established from history and adjusted for forward-looking information, are given by the case. Balances and rates: not yet due … at …; 1 to 30 days … at …; 31 to 90 days … at …; over 90 days … at …. Calculate the loss allowance of the 31 to 90 days bucket, then the total loss allowance.CalculationL2
- How are the loss rates of a provision matrix established?Single choiceL2
- At the reporting date, Teta SA's provision matrix gives a total loss allowance of … for its trade receivables. The loss allowance recognised at the start is …, and no write-off took place during the year. Record the adjusting entry.Journal entryL3
Measuring expected credit losses3 questions
- Mer SA estimates the expected credit loss of a loan portfolio under three economic scenarios. The losses, already expressed in present value, and the probabilities are case data: stable scenario … at …; slowdown … at …; recession … at …. Calculate the probability-weighted expected credit loss.CalculationL3
- What must the estimate of an expected credit loss reflect?Single choiceL3
- Mer SA must estimate the expected credit loss of a portfolio of corporate loans. Facts of the case: three economic scenarios (stable, slowdown, recession) have been built, with probabilities and losses per scenario; management is considering retaining only the slowdown scenario, judged the most likely, to simplify the calculation. Write a short note that concludes on the estimation method, distinguishing the facts of the case, the rule and professional judgement.JudgmentL4
Maximum period of exposure1 question
Purchased or originated credit-impaired assets1 question
Modified assets and credit risk assessment1 question
Loan commitments and financial guarantees1 question
Presenting impairment2 questions
- The loss allowance of a loan portfolio of Aube SA is … at the start of the year. Over the year, the charge is … and reversals and write-offs amount to …. Calculate the closing loss allowance (reconciliation of movements).CalculationL2
- For a debt security measured at FVOCI, how is the loss allowance for expected credit losses presented?Single choiceL3
Hybrid contracts with a financial asset host3 questions
- A derivative embedded in a host contract that is a financial asset within the scope of IFRS 9 is not separated.True / falseL2Variant
- Océan SA holds as an investment a bond convertible into shares of the issuer. How does it treat the conversion derivative embedded in this financial asset?Single choiceL2Variant
- A trainee summarises the treatment of embedded derivatives in a financial asset host. Which sentence is wrong?Single choiceL2
Separating an embedded derivative2 questions
- A hybrid contract has as its host a contract that is not a financial asset within the scope of IFRS 9. Which conditions must be met for the embedded derivative to be separated and accounted for as a derivative? More than one answer is possible.Multiple choiceL3
- Iota SA issues a hybrid instrument whose host is a financial liability. It includes an embedded derivative whose economic characteristics and risks are not closely related to those of the host, and a separate instrument with the same terms would meet the definition of a derivative. Iota measures the whole hybrid contract at fair value through profit or loss. Is the embedded derivative separated from the host?Single choiceL4