Pfrs 14: Regulatory Deferral Accounts

PFRS 14: REGULATORY DEFERRAL ACCOUNTS
1. PRFRS 14 applies
a. To all entities that use PFRS.

b. Only to entities that choose to apply it
c. Only to first-time adopters that choose to apply it
d. Only to government-regulated entities
2. Regulatory deferral account balances arise from
a. Government accounting
b. Rate-regulated activities
c. US GAAP
d. SEC accounting
3. When a first time adopter chooses to apply PFRS 14, it is required to
a. Derecognizing the regulatory deferral account balances that it has recognized under its previous
GAAP
b. Change its accounting policy and account for regulatory deferral account balances in accordance
with the recognition and measurement principles of PFRS 14
c. Continue to apply its previous GAAP to account for its regulatory deferral account balances.
d. Change its accounting policy to start recognizing regulatory deferral account balances
4. According to PFRS 14, regulatory deferral accounts are classified in the statement of financial position
as
a. Current items
b. Non-current items
c. a or b
d. Neither a nor b
5. According to PFRS 14, rate-regulation is
a. a framework for establishing the prices that can be charged to customers for goods or services
and that framework is subject to oversight and/or approval by a rate regulator.
b. the balance of any expense (or income) account that would not be recognized as an asset or a
liability in accordance with other Standards, but that qualifies for deferral because it is included,
or is expected to be included, by the rate regulator in establishing the rate(s) that can be
charged to customers.
c. an authorized body that is empowered by statute or regulation to establish the rate or a range
of rates that bind an entity. The rate regulator may be a third-party body or a related party of
the entity, including the entity’s own governing board, if that body is required by statute or
regulation to set rates both in the interest of the customers and to ensure the overall financial
viability of the entity.
d. all of these
6. According to PFRS 14, an entity presents regulatory deferral accounts in the statement of financial
position
a. showing those with debit balances separately from those with credit balances
b. showing only the net debit or the net credit balance of the accounts
c. a or b, as a matter of accounting policy choice
d. An entity shall not present regulatory deferral accounts in the statement of financial position,
but only disclose them in the notes
7. What standard is applied to the impairment testing of regulatory account balances that are included
in CGUs?
a. PAS 10
b. PAS 12
c. PAS 33
d. PAS 36
PFRS 15
1. What is a Contract in accordance with PFRS 15?
a) An agreement between two or more parties that must be written out in a legal document.
b) An agreement between two or more parties that creates enforceable rights and obligations.
c) An agreement between two or more parties that must have a fixed duration
d) An agreement between two or more parties that cannot be modified by either party.
Answer: B
2. What is the difference between income and revenue?
Answer: Income is the entity’s total earnings. It is the increase in economic benefits during the
accounting period in the form of an enhancement of asset or decreases of liabilities that result in an
increase in equity. While revenue is the income arising in the course of an entity’s ordinary activities. It
is the total amount of income generated by the sale of goods or services related to the company's
primary operations. (explain eme)
3. Sequence the steps in recognizing revenue in the right order.
I. Determine the transaction price
II. Recognize revenue when (or as) the entity satisfies a performance obligation
III. Identify the contract with the customer
IV. Identify the performance obligations in the contract

V. Allocate the transaction price to the performance obligations in the contract
Answer: III, IV, I, V, II
4. When would you recognize a revenue according to PFRS 15?
Answer: Revenue is recognized when (or as) the entity satisfies a performance obligation.
5. True or False: In some scenarios, a contract with a customer may be partially within the scope of IFRS
15 and partially within the scope of another standard.
Answer: True
*In that scenario: [IFRS 15:7]
• If other standards specify how to separate and/or initially measure one or more parts of the
contract, then those separation and measurement requirements are applied first. The transaction price
is then reduced by the amounts that are initially measured under other standards;
• If no other standard provides guidance on how to separate and/or initially measure one or more
parts of the contract, then IFRS 15 will be applied.
6. True of False: The total contract assets and total contract liabilities are netted in the statement of
financial position.
Answer: False
*an entity must disclose the balances of each balance sheet item separately, an entity should not
combine total contract assets with total contract liabilities to present a net position; rather, both
balances should be presented separately.
PFRS 16
1. What is the difference between a finance lease and an operating lease?
- If all the rewards and risks of the asset is transferred from the lessor to the lessee, then, it is a finance
lease. If it is not transferred, then, it is an operating lease.
2. It is an agreement/contract wherby two parties agreed so the one can have a use of the certain asset
for a fixed eriod of time in return for a payment or a series of payment.
- Lease
3. Who are the two parties to a lease contract?
- lessee and lessor

4. What are the 4 criteria in determining whether the contract is or contains a lease?
- Identified Asset
- Substantive substitution right
- The right to obtain substantially all of the economic benefits from the use of the asset.
- The right to direct the use of the asset.
5. It is the non cancellable period of a lease, together with periods covered by an option to extend or
terminate the lease if the lessee is reasonably certain not to exercise that option
-Lease term
IFRS 17 Q&A
1. What is an onerous lease provision?
- A lease is onerous if the expected benefits (net cash inflows) from using the leased asset are less. than
the unavoidable costs.
2. How do you implement IFRS 17? (GIve atleast 3 implementation)
* Perform gap analysis (using pre-populated templates where possible)
* Conduct impact assessments around architecture, data, systems and processes.
*Conduct business and technology briefing sessions.
*Report findings and implementation approach to Board, executive team and key stakeholders.
3. Policy holder is also under a reinsurance contract called.
Answer: Cedant
4. Other beneficiaries against loss or liability from specified events and circumstances.
Answer: Indemnification and losses.
True or False
5. the insurer directly accepts risk and assume sole obligation to compensate the insured.
Answer: False
6. Give 2 types of Insurance Contracts
• Direct Insurance Contracts

• Reinsurance Contracts
7. What is the aim of IFRS 17?
The aim of IFRS 17 is to standardise insurance accounting globally to improve comparability and increase
transparency, and to provide users of accounts with the information they need to meaningfully
understand the insurer's financial position, performance and risk exposure.

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PFRS 14: REGULATORY DEFERRAL ACCOUNTS

a. To all entities that use PFRS.

2. Regulatory deferral account balances arise from

3. When a first time adopter chooses to apply PFRS 14, it is required to

5. According to PFRS 14, rate-regulation is

1. What is a Contract in accordance with PFRS 15?

2. What is the difference between income and revenue?

3. Sequence the steps in recognizing revenue in the right order.

I. Determine the transaction price

III. Identify the contract with the customer

IV. Identify the performance obligations in the contract

Answer: III, IV, I, V, II

4. When would you recognize a revenue according to PFRS 15?

*In that scenario: [IFRS 15:7]

1. What is the difference between a finance lease and an operating lease?

3. Who are the two parties to a lease contract?

- lessee and lessor

- Substantive substitution right

- The right to direct the use of the asset.

1. What is an onerous lease provision?

2. How do you implement IFRS 17? (GIve atleast 3 implementation)

* Perform gap analysis (using pre-populated templates where possible)

* Conduct impact assessments around architecture, data, systems and processes.

*Conduct business and technology briefing sessions.

3. Policy holder is also under a reinsurance contract called.

Answer: Indemnification and losses.

6. Give 2 types of Insurance Contracts

• Direct Insurance Contracts

7. What is the aim of IFRS 17?

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