Which of the following statements is false as per the International Financial Reporting Standards? Multiple Choice...

Which of the following statements is false as per the International Financial Reporting Standards?

Multiple Choice

Interests received and dividends received are classified as either the operating cash flows or investing cash flows.
Bank overdrafts are treated as liabilities.
The reversal of impairments is permitted.
PP&E can be carried at either historical cost or revalued amount less accumulated depreciation and impairment.

Solutions

Expert Solution

Answer: Bank overdrafts are treated as liabilities.

The statement 'Bank overdrafts are treated as liabilities' is wrong because IFRS requires the Bank overdraft to be treated as Cash and Cash equivalant and will be offeset from the current cash balances

All other statements are correct.

Interests received and dividends received are classified as either the operating cash flows or investing cash flows according to the nature of security or investment out of which such income is being earned. If such principal amount is in the nature of Investment, then the income derived out of it also can be treated as Investing activity. if such principal is in the ordinary course of business, then income will be treated as cash flow from operating activities.

The reversal of impairments is permitted if there is any change in the estimates used to determine the asset's recoverable amount.

PP&E can be carried at either historical cost or revalued amount less accumulated depreciation and impairment in the balance sheet

ekkarill92 answered 1 year ago

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