What has to be reported?

Chapter 23 – Interim Reporting Page 337 9 Self Test Questions Chapter 23 1. Are the following statements in relation to an interim financial report true or false, according to IAS34 Interim financial reporting? 1 An interim financial report may consist of a complete set of financial statements. 2 An interim financial report may consist of a condensed set of financial statements. Statement 1Statement 2 A False False B False True C True False D True True 2. Are the following statements with respect to interim reporting true or false, according to IAS34 Interim financial reporting? 1 It is necessary to count inventories in full at the end of each interim accounting period. 2 The net realisable value of inventories is determined by reference to selling prices at the interim date. Statement 1 Statement 2 A False False B False True C True False D True True 3. The Aconite Company is preparing interim financial statements for the six months to 30 June 20X7 in accordance with the minimum requirements of IAS34 Interim financial reporting. Its accounting year ends on 31 December each year. In the interim financial statements for the six months to 30 June 20X7, a statement of financial position at 30 June 20X7 and a statement of comprehensive income for the six months to 30 June 20X7 will be presented. In addition, which TWO of the following should be presented? A Statement of financial position at 30 June 20X6 B Statement of financial position at 31 December 20X6 C Statement of comprehensive income for the half year to 30 June 20X6 D Statement of comprehensive income for the half year to 31 December 20X6 Chapter 23 – Interim Reporting Page 338 4. The terms and conditions of employment with The Pleasing Company include entitlement to share in the staff bonus system, under which 5 of the profits for the year before charging the bonus are allocated to the bonus pool, provided the annual profits exceed CU50 million. The profits before accrual of any bonus for the first half of 20X7 amount to CU40 million and the latest estimate of the profits before accrual of any bonus for the year as a whole is CU60 million. How much should be recognised in profit or loss in respect of the staff bonus for the half year to 30 June 20X7, according to IAS34 Interim financial reporting? A Nil B CU3.0 million C CU2.0 million D CU1.5 million 5. The Virdi Companys profit before tax for the six months to 30 September 20X7 was CU5 million. However, the business is seasonal and profit before tax for the six months to 31 March 20X8 is almost certain to be CU9 million. Profit before tax equals taxable profit for this company. Virdi operates in a country where income tax on companies is at a rate of 30 if annual profits are below CU11 million and a rate of 35 where annual profits exceed CU11 million. These tax rates apply to the entire profit for the year. Under IAS34 Interim financial reporting, what should be the income tax expense in Virdis interim financial statements for the half year to 30 September 20X7? A CU1.75 million B CU2.10 million C CU1.50 million D CU2.45 million