A Look at IFRS 4-61

IFRS Practice

IFRS Self-Test Questions
1. A company has purchased a tract of land and expects to build a
production plant on the land in approximately 5 years. During the
5 years before construction, the land will be idle. Under IFRS, the
land should be reported as:
b. may offset assets against liabilities and show net assets and
net liabilities on their statements of financial position, rather
than the underlying detailed line items.
c. may report non-current assets before current assets on the
statement of financial position.

a. land expense. d. do not have any guidelines as to what should be reported on

the statement of financial position.
b. property, plant, and equipment.
4. Companies that follow IFRS to prepare a statement of financial
c. an intangible asset. position generally use the following order of classification:
d. a long-term investment. a. current assets, current liabilities, non-current assets, non-
2. Current assets under IFRS are listed generally: current liabilities, equity.
a. by importance. b. non-current assets, non-current liabilities, current assets, cur-
b. in the reverse order of their expected conversion to cash. rent liabilities, equity.
c. by longevity. c. non-current assets, current assets, equity, non-current liabili-
ties, current liabilities.
d. alphabetically.
d. equity, non-current assets, current assets, non-current liabili-
3. Companies that use IFRS:
ties, current liabilities.
a. may report all their assets on the statement of financial posi-
tion at fair value.

IFRS Exercises
IFRS4.1 In what ways does the format of a statement of financial of position under IFRS often differ
from a balance sheet presented under GAAP?
IFRS4.2 What term is commonly used under IFRS in reference to the balance sheet?
IFRS4.3 The statement of financial position for Wallby Company includes the following accounts
(in British pounds): Accounts Receivable £12,500, Prepaid Insurance £3,600, Cash £15,400, Supplies
£5,200, and Debt Investments (short-term) £6,700. Prepare the current assets section of the statement of
financial position, listing the accounts in proper sequence.
IFRS4.4 The following information is available for Sutter Bowling Alley at December 31, 2020.

Buildings $128,800 Owner’s Capital $115,000

Accounts Receivable 14,520 Accumulated Depreciation—Buildings 42,600
Prepaid Insurance 4,680 Accounts Payable 12,300
Cash 18,040 Notes Payable 97,780
Equipment 62,400 Accumulated Depreciation—Equipment 18,720
Land 64,000 Interest Payable 2,600
Insurance Expense 780 Bowling Revenues 14,180
Depreciation Expense 7,360
Interest Expense 2,600

Prepare a classified statement of financial position. Assume that $13,900 of the notes payable will be
paid in 2021.