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FR CPA exam practice question 1

 

Financial Reporting CPA exam practice question

Select the answer you believe is correct then scroll down to see the correct answer and explanation.

 

Which of the following is not considered ‘offsetting’?

 

Presenting only the net gain or loss on foreign currency transactions.
Presenting only the net gain or loss arising from financial instruments held for trading.
Presenting the expenditure for a provision net of related reimbursements with a third party.
Presenting only the final balance of inventory after deducting obsolescence allowances.

 

[SCROLL DOWN TO SEE THE ANSWER TO THE CPA EXAM PRACTICE QUESTION]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The correct answer is the fourth option.

Explanation.

Option 4 refers to ‘measuring assets net of valuation allowances’ IAS 1, para. 33. In terms of this paragraph, this is not considered offsetting and is permitted. All other options relate to offsetting practices. Refer to IAS 1, para. 34 and 35.

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November 11, 2016

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