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IIA CIA Exam
Certified Internal Auditor Exam (Page 52 )

Updated On: 12-Jan-2026
Page 52 of 342
PDF with 1702 Questions

IFPS 2, Share-Based payment, normally requires entities to a account for their share- based employee compensation plans in accordance with which of the following methods?

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

Answer(s): B

Explanation:

Entities must account for share-based employee compensation plans in accordance with the fair-value-based method except in the rare cases in which the fair value of the
equity instruments is not reliably measurable at the measurement date the grant date for transactions with employees and those providing similar services). In these rare cases. IFRS 2 requires entities to account for these plans in accordance with the intrinsic- value-based method.



The present value of future benefits payable as a result of work done before the introduction of, or amendment to, postemployment benefits is the

  1. Additional minimum liability.
  2. Fair value of plan assets.
  3. Defined benefit obligation.
  4. Past service e cost

Answer(s): D

Explanation:

Past service cost is the increase in the present value of the defined benefit obligationDBO) related to prior employee service that ans., in the current period from the introduction of. or an amendments to postemployment benefits. Past service cost is expensed on a straight-line basis over the average period until vesting. To the extent it is vested upon introduction of, or amendments to, a plan, past service cost is immediately recognized.



Under a difined contribution pension plan<list A> is reported on the balance sheet only if the amount organization has contributed to the pention trust is<list B> the amount required.

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

Answer(s): B

Explanation:

Under a defined contribution plan, the entity reports on the balance sheet only contribution to the pension trust is greater than the defined, required contribution



For an entity with a defined postemployment benefit plan, the fair value of plan assets at the beginning of the year was US $500, 000. No unrecognized net cumulative actuarial gain or loss existed. On the last day of the fiscal year. the fair value of plan assets was US $620.000. Benefits paid equaled US $100, 000. and the entity made US $120.000 in contributions. The discount rate was 10%. and the expected long-term rate of return on plan assets was 12%. The actual return on plan assets was

  1. US $50, 000
  2. US $60, 000
  3. US $75, 000
  4. US 100, 000

Answer(s): D

Explanation:

The actual return on plan assets is equal to the difference between the fair value of plan assets at the beginning and the end of the year adjusted for contributions and benefits paid. Thus, the actual return is US $100, 000.



At the start of its current fiscal year, Emper Corporation amended its defined postemployment benefit plan. resulting in an increase in the present value of the defined benefit obligationDBO). The benefits become vested after 6 years of service. Past service cost arising from the plan amendment includes US $400, 000 of benefits that are already vested and US $200, 000 of nonvested benefits. If the average period until vesting is 4 years. the minimum past service cost to be recognized in the first year is

  1. US $50, 000
  2. US $200, 000
  3. US $450, 000
  4. US $600, 000

Answer(s): C

Explanation:

Past service cost is the increase in the present value of the DBO related to prior employee service that arises in the current period from the introduction of or an amendment to. postemployment benefits. Accordingly. US $400, 000 should be recognized immediately to reflect the vested benefits and amortization of the nonvested benefits equals US $50.111 II]$200, 000 - 4), a total of US $450, 000



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