Question 1
S1: If an entity presents a separate statement of profit or loss, it does present the profit or loss
section in the statement presenting comprehensive income.
S2: An entity shall not present additional line items, headings, and subtotals in the statement(s)
presenting profit or loss and other comprehensive income when such presentation is relevant to
an understanding of the entity's financial performance.
Choices:
a) Both Statements are false.
b) Both Statements are true.
c) Only Statement 1 is true.
d) Only Statement 2 is true.
Answer: C (Only Statement 1 is true)
Explanation: Statement 1 aligns with IFRS rules, but Statement 2 is false because additional
line items and subtotals can be presented if relevant.
Question 2
S1: An entity shall present the line items in the statement(s) presenting profit or loss and other
comprehensive income that reconcile any subtotals presented in accordance with paragraph 85
with the subtotals or totals required in IFRS for such statement(s).
S2: An entity shall present any items of income or expense as extraordinary items, in the
statement(s) presenting profit or loss and other comprehensive income or in the notes.
Choices:
a) Both Statements are false.
b) Both Statements are true.
c) Only Statement 1 is true.
d) Only Statement 2 is true.
Answer: C (Only Statement 1 is true)
Explanation: IFRS does not allow the presentation of "extraordinary items," making Statement 2
incorrect.
Question 3
S1: An entity shall disclose reclassification adjustments relating to components of other
comprehensive income either in the statement(s) presenting profit or loss and other
comprehensive income or in the notes.
S2: An entity may present components of other comprehensive income either net of related tax
effects or before related tax effects with one amount shown for the aggregate amount of income
tax relating to those components.
Choices:
a) Both Statements are false.
b) Both Statements are true.
c) Only Statement 1 is true.
d) Only Statement 2 is true.
Answer: B (Both Statements are true)
Explanation: Both statements align with IFRS guidelines on comprehensive income
presentation.
Question 4
S1: An entity may disclose the nature and amount of material items of income and expense
separately.
S2: The analysis of expenses recognized in profit or loss shall be presented in the statement(s)
presenting profit or loss and other comprehensive income.
Choices:
a) Both Statements are false.
b) Both Statements are true.
c) Only Statement 1 is true.
d) Only Statement 2 is true.
Answer: C (Only Statement 1 is true)
Explanation: Statement 1 is correct since material items of income and expense should be
disclosed separately. Statement 2 is incorrect because the analysis of expenses can be
presented either in the statement or in the notes.
Question 5
S1: An entity shall present a statement of financial position as at the beginning of the earliest
comparative period when it applies an accounting policy retrospectively or makes a
retrospective restatement of items.
S2: An entity is required to present a statement of financial position as at the beginning of the
earliest comparative period when it reclassifies items in its financial statements.
Choices:
a) Both Statements are false.
b) Both Statements are true.
c) Only Statement 1 is true.
d) Only Statement 2 is true.
Answer: C (Only Statement 1 is true)
Explanation: A statement of financial position is required when there is a retrospective change in
accounting policy or restatement. However, a reclassification alone does not always require a
full restatement.