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Free F2 Exam Braindumps
Advanced Financial Reporting Questions 66–70 (page: 15)

Updated On: 10-Feb-2026
Page 15 of 55
PDF with 268 Questions

On 1 January 20X4 EF grants each of its 125 employees 500 share options on the condition that they remain in employment for 3 years. During the year to 31 December 20X4 10 employees left and It is expected that a further 25 will leave before the end of the vesting period. The fair value of each share option is $30 on 1 January 20X4 and $45 on 31 December 20X4.
What is the journal entry in respect of these share options in EF's financial statements for the year ended 31 December 20X4?

  1. Option A
  2. Option B
  3. Option C
  4. Option D

Answer(s): A



When accounting for a finance lease under IAS 17 Leases, which TWO of the following are recognised in the statement of profit or loss?

  1. Finance cost element of the lease payments
  2. Depreciation of the leased asset
  3. Lease payments paid
  4. Lease payments payable
  5. Capital repayment element of the lease payments

Answer(s): A,B



Which TWO of the following are true in relation to IAS21 The Effects of Changes in Foreign Exchange Rates when consolidating an overseas subsidiary?

  1. A current period exchange gain or loss is shown within the consolidated statement of comprehensive income within other comprehensive income.
  2. Goodwill is re-translated at the end of each reporting period and reflected at the period end exchange rate in the consolidated statement of financial position.
  3. Assets and liabilities of the subsidiary are translated at each reporting date using the average exchange rate for the period.
  4. Goodwill is reflected in the consolidated statement of financial position translated at the exchange rate on the date of acquisition.
  5. The statement of profit or loss of the subsidiary is translated for the reporting period using the closing exchange rate.

Answer(s): A,B



Which of the following is a related party according to the definition of a related party in IAS24 Related Party Disclosures?

  1. Major customer
  2. Provider of finance
  3. Managing Director
  4. Major supplier

Answer(s): C



The dividend yield of ST has fallen in the year to 31 May 20X5, compared to the previous year. The share price on 31 May 20X4 was $4.50 and on 31 May 20X5 was $4.00. There were no issues of share capital during the year.
Which of the following should explain the reduction in the dividend yield for the year to 31 May 20X5 compared to the previous year?

  1. The dividend paid in the year was reduced in order to pay for new assets.
  2. Surplus cash was used to pay a special dividend in addition to the normal dividend in the year.
  3. The profit for the year fell significantly and the dividend per share stayed the same.
  4. To compensate investors for the reduction in share price a higher dividend per share was paid.

Answer(s): A



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