ĐỀ 4

1. Permanent differences require:

a. None of these

b. Provision

C. Deferred tax liability (or deferred tax asset)

d. Contingent liability

2. Deferred tax assets are the taxes recoverable, in future periods, in respect
of: (i) Deductible temporary differences; (ii) Unused tax losses; (iii)Unused tax
credits. (iv)Taxable temporary differences.

a. (i)-(iii)

b. (i)-(ii).

c. (i)-(iv)

d. (i)

3. Deferred tax should be accounted for in relation to certain differences

between taxable profit and accounting profit. The differences which require
an entity to account for deferred tax are:

a. Permanent differences

b. Temporary differences.

c. Neither temporary differences nor permanent differences

d. Both temporary differences and permanent differences

4. The carrying amount of a deferred tax asset should be reviewed for: (i)
Changes in tax rates; (ii) Changes in the expected manner of recovery of an
asset; (iii) Changes in future profits.

a. (iii)

b. (i).
c. (i)-(ii).

d. (i)-(iii).

5. Taxable temporary differences occur when tax is charged in a period:

a. Either a or b.

b. After the accounting period benefits from the income in the financial accounts.

c. Before the accounting period benefits from the income in the financial accounts.

d. A and B.

6. The use of deferred tax:

a. Does not change the dates of payment of any tax.

b. May change the dates of payment of tax.

c. A & B

d. Change the dates of payment of tax.

7. A tax base of an asset or a liability is:

a. The amount attributed to that asset or liability for tax purposes.

b. Difference between the temporary difference of that asset of liability and the
present value of future cash flows derived from that asset or liability.

c. Difference between the temporary difference of that asset or liability and its fair
value.

d. The amount that can be deductible in the future tax return with respect to that
asset or liability

8. Deferred tax shall be measured at the tax rates that are:

a. Enacted or substantively enacted by the end of the reporting period and expected
to apply when the related asset/liability is realised.
b. Enacted or substantively enacted by the end of the reporting period; expected to
apply when the related asset/liability is realised and adjusted for the time value of
money (discounting).

c. Enacted and apply in the current reporting period.

d. Enacted by the end of the reporting period and expected to apply in the future.
These tax rate shall be adjusted by the inflation.

1. On 1 July 2013 Pearl Pty Ltd granted 800 share options with an exercise
price of $35 to the CFO, conditional on the CFO remaining in employment
with the company until 30 June 2016. The fair value of Pearl's shares at that
time was assessed to be $40. The exercise price will drop to $30 if Pearl's
earnings increase by an average of 8% per year over the three year period.
On 1 July 2013 the estimated fair value of the share options with an exercise
price of $35 is $10 per option, and if the exercise price is $30, the estimated
fair value of the options is $12 per option. During the year ended 30 June 2014
Pearl's earnings increased by 10% and they are expected to continue to
increase at this rate over the next two years. During the year ended 30 June
2015 Peart's earnings increased by 9% and Pearl management continued to
expect that the earnings target would be achieved. During the year ended 30
June 2016 Pearl's earnings increased by only 2%. At 30 June 2016 the share
price is $23. Assuming that the CFO decides NOT to exercise his options at 30
June 2016, the following entry would be recorded:

a. Dr Options issued (equity) and Cr Retained earnings

b. Dr Wages expense and Cr Options issued (equity)

c. Dr Options issued (equity) and Cr Lapsed options reserve

d. Dr Options issued (equity) and Cr Wages expense

2. On 1 July 2013 Diamond Ltd granted 800 share options with an exercise
price of €35 to the CFO, conditional on the CFO remaining in employment
with the company until 30 June 2016. The exercise price will drop to €30 if
Diamond's earnings increase by an average of 8% per year over the three
year period. On 1 July 2013 the estimated fair value of the share options with
an exercise price of €35 is €10 per option, and if the exercise price is €30, the
estimated fair value of the options is €12 per option. During the year ended 30
June 2014 Diamond's earnings increased by 10% and they are expected to
continue to increase at this rate over the next two years. During the year
ended 30 June 2015 Diamond's earnings increased by 5% and Diamond
management expected that the earnings target would be achieved. During the
year ended 30 June 2016 Diamond's earnings increased by 11%. When
calculating the remuneration expense to be recognised for the year ended 30
June 2015 which of the following dollar values should be included in the
calculation?

a. €12

b. €35

c. €10

d. €30

3. Which of the following statements in relation to modifications to the terms

and conditions on which equity instruments were granted as part of an
employee share scheme is correct?

a. a reduction in the exercise price of options will reduce the fair value of the share
options

b. a reduction in a performance hurdle relating to profitability targets will reduce

the fair value of the options

c. an increase in the number of equity instruments granted is not an example of a

modification

d. a shortening of the vesting period will increase the fair value of the share options

4. In a share based payment transaction where the entity has settlement

choice:

a. where a present obligation does not exist the entity has a choice of classification
as an equity or cash settled share based payment transaction

b. the entity has a present obligation to settle in cash where it has a past practice or
stated policy of settling in cash

c. if an entity elects to settle in cash the settlement is accounted for as an expense

d. the entity must settle in equity unless there is no commercial substance to the
transaction

5. In situations where an option-pricing model is required to be used to

determine the fair value of equity instruments granted IFRS 2 Share-based
Payment:

a. requires the use of a binominal option-pricing model

b. requires expected dividends to be taken into account when measuring the shares
or options granted

c. allows the entity to choose the option-pricing model it wishes to use, but
contains a number of factors that the option-pricing model selected must take into
account as a minimum

d. requires the use of the Black-Scholes-Merton formula

6. On 1 July 2014 Luca Ltd grants 200 options to each of its 75 employees
conditional on the employee remaining in service over the next two years. The
fair value of each option is estimated to be $7. Luca estimates that 8 employees
will leave over the two year vesting period. By 30 June 2015 four employees
have left and the entity estimates that a further five employees will leave over
the next year. On 30 June 2015 Luca decided to reprice its share options, due
to a fall in its share price over the last 12 months. The repriced share options
will vest on 30 June 2016. At the date of repricing Luca estimates that the fair
value of each original option is $1.50 and the fair value of each repriced option
is $3. During the year ended 30 June 2016 four employees left. The
remuneration expense for the year ended 30 June 2015 is:

a. $35 175

b. $46 900

C. $46 200

d. $34 650

7. On 1 July 2013 Poggio Ltd grants 300 options to each of its 100 employees
conditional on the employee remaining in service over the next three years.
The fair value of each option is estimated to be $12. Poggio estimates that 15
employees will leave over the three year vesting period. By 30 June 2014 four
employees have left and the entity estimates that a further ten employees will
leave over the next two years. On 30 June 2014 Poggio decided to reprice its
share options, due to a fall in its share price over the last 12 months. The
repriced share options will vest on 30 June 2016. At the date of repricing
Poggio estimates that the fair value of each original option is $3 and the fair
value of each repriced option is $5. During the year ended 30 June 2015 a
further 6 employees leave and Poggio estimates that another 3 employees will
leave during the year ended 30 June 2016. During the year ended 30 June
2016 four employees left. The entry at 30 June 2015 to account for the share
based payment transaction is:

a Dr Wages expense and Cr Share capital

b. Dr Wages expense and Cr Liability to employee

c. Dr Wages expense and Cr Cash

d. Dr Wages expense and Cr Options issued (equity)

8. Reload features are accounted for as follows:

a. separately from the initial options granted

b. included in the fair value of the initial options granted at measurement date

c. as a modification to the initial terms and conditions of the initial options granted

d. as a market condition

9. On 1 July 2015 Pepper Limited granted 500 share options to each of its 100
employees. Each grant is conditional on the employee working for the
company for the next two years. The fair value of each option is estimated to
be €3.00. Pepper estimates that 8% of its employees will leave during the two
year period and therefore forfeit their rights to the share options. During the
year ended 30 June 2016 five employees left. At this time the company revised
its estimate of total employee departures over the full two-year period to 10%.
During the year ended 30 June 2017 a further 4 employees left. The amount to
be recognised as an expense by Pepper for the year ended 30 June 2016 is
a €135.000

b. €67 500

c. €69 000

d. €71 250

10. On 1 July 2013 Fantasy Ltd granted 200 options to each of its 100
employees. The share options will vest on 30 June 2015 if the employees
remain employed with the company on that date. The share options have a life
of four years. The exercise price is $5, which is also Fantasy's share price at
the grant date. Fantasy is unable to reliably estimate the fair value of the
share options at the grant date. Fantasy's share price and the number of
options exercised are set out below. Share options may only be exercised at
year end. Year ended 30 June 2014: Share price at year end is $6; Year ended
30 June 2015: Share price at year end is $7; Year ended 30 June 2016: Share
price at year end is $6 and the number of options exercised at year end is 7
800; Year ended 30 June 2017: Share price at year end is $9 and the number
of options exercised at year end is 10 000. The formula to calculate the
remuneration expense for the year ended 30 June 2016 is:

a. 7800 x ($8-$7)

b. (7800+ 10 000) x ($8-$5)

C. 7800 x $8

d. (7800 + 10 000) x ($8-$7)

11. On 1 July 2013, Nelson Pty Ltd granted 250 options to each of its 50
employees. The options are conditional on the employees remaining with the
company for the 3 year vesting period. The options have a fair value of €7.50
at vesting date. In addition, the shares will vest as follows: On 30 June 2014 if
the company's earnings have increased by more than 12%; On 30 June 2015 if
the company's earnings have increased by more than 10% averaged across
the 2 year period; On 30 June 2016 if the company's earnings have increased
by more than 8% averaged across the 3 year period. At 30 June 2014 Nelson's
earnings have increased by 11% and 3 employees have left. The company
expects that earnings will continue to increase at a similar rate during the
year to 30 June 2015 and that the shares will vest at that time. It also expects
that a further 4 employees will leave during the year. The remuneration
expense for the year ended 30 June 2014 for Nelson is:

a €88 125.00

b. €40 312.50

c. €26 875.00

d. €29 375.00

12. On 1 July 2013 Watson Pty Ltd granted 100 share appreciation rights
(SARS) to each of its 50 employees, conditional on the employee not leaving
the company in the next three years. The company estimates the fair value of
the SARS at the end of each year in which a liability exists as shown in the
table below. The intrinsic values of the SARS at the date of exercise at 30 June
2016, 2017 and 2018 are also shown. All SARS held by employees at 30 June
2016 vest. Year ended 2014, 2015, 2016, 2017, 2018 Fair values are $14.4;
$15.5, $18.2; $21.4 respectively. Year ended 2016, 2017, 2018: Intrinsic values
are $15; $20; $25 respectively. By 30 June 2016 nine employees have left and
15 employees have exercised their SARS. The amount recognised as an
expense for the year ended 30 June 2016 is:

a. $5987

b. $47 320

c. $28 487

d. $22 500

13. On 1 July 2013 Watson Pty Ltd granted 100 share appreciation rights
(SARS) to each of its 50 employees, conditional on the employee not leaving
the company in the next three years. The company estimates the fair value of
the SARS at the end of each year in which a liability exists as shown in the
table below. The intrinsic values of the SARS at the date of exercise at 30 June
2016, 2017 and 2018 are also shown. All SARS held by employees at 30 June
2016 vest. Year ended 2014, 2015, 2016, 2017, 2018: Fair values are $14.4;
$15.5; $18.2; $21.4 respectively. Year ended 2016, 2017, 2018: Intrinsic values
are $15, $20, $25 respectively. By 30 June 2016 nine employees have left and
15 employees have exercised their SARS. The liability recorded at 30 June
2015 is:

a. $41 333

b. $47 320

C. $21 653

d. $19 680

14. Viola Ltd has granted each of its 10 senior executives a choice between
receiving a cash payment equivalent to 1000 shares or receiving 1200 share.
The grant is conditional on the completion of three years' service with the
company. If the share alternative is chosen, the shares must be held for two
years after vesting date. At grant date the company's share price is £25 per
share. At the end of years 1, 2 and 3 the share price is £27, £28 and £30
respectively. The company does not expect to pay dividends in the next three
years. After taking into account the effect of post-vesting transfer restrictions
the company estimates the grant- date fair value of the share alternative is £24
per share. What is the liability component at the end of year 1?

a. £83 333

b. £90 000

c. £108 000

d. £100 000

15. Which of the following is NOT within the scope of IFRS 2?

a. Equity instruments granted to employees of the acquiree in a business

combination in their capacity as an employee

b. Transactions in which the entity receives or acquires goods or services as part of

the net assets acquired in a business combination to which IFRS 3 Business
Combinations applies

c. Cancellation, replacement or other modification of share-based payment

arrangements because of other equity restructuring
d. Cancellation, replacement or other modification of share-based payment
arrangements because of a business combination

16. A share-based payment transaction in which the entity acquires goods or

services by incurring liabilities to the supplier for amounts that are based on
the value of the entity's shares or other equity instruments of the entity is
classified in IFRS 2 as:

a. a liability-settled share-based payment transaction

b. a cash-settled share-based payment transaction

c. an "other" share-based payment transaction

d. an equity-settled share-based payment transaction

17. On 1 July 2013 Fantasy Ltd granted 200 options to each of its 100
employees. The share options will vest on 30 June 2015 if the employees
remain employed with the company on that date. The share options have a life
of four years. The exercise price is $5, which is also Fantasy's share price at
the grant date. Fantasy is unable to reliably estimate the fair value of the
share options at the grant date. Fantasy's share price and the number of
options exercised are set out below. Share options may only be exercised at
year end. Year ended 30 June 2014: Share price at year end is $6; Year ended
30 June 2015: Share price at year end is $7; Year ended 30 June 2016: Share
price at year end is $6 and the number of options exercised at year end is 7
800; Year ended 30 June 2017: Share price at year end is $9 and the number
of options exercised at year end is 10 000. The cumulative remuneration
expense to be recognised by Fantasy as at 30 June 2015 is:

a. $124 600

b. $17 800

c. $35 600

d. $7800

18. Salt Limited grants 1000 share options to each of its 100 employees. Each
grant is conditional on the employee working for the company for the next
two years. The fair value of each option is estimated to be €5.00 at grant date
and €7.50 at vesting date. The amount to be recognised as an expense by Salt
in year 2 is:

a. €250 000

b. €375 000

c. €750 000

d. €500 000

19. On 1 July 2013 Pearl Pty Ltd granted 800 share options with an exercise
price of €35 to the CFO, conditional on the CFO remaining in employment
with the company until 30 June 2016. The fair value of Pearl's shares at that
time was assessed to be €40. The exercise price will drop to €30 if Pearl's
earnings increase by an average of 8% per year over the three year period.
On 1 July 2013 the estimated fair value of the share options with an exercise
price of €35 is €10 per option, and if the exercise price is €30, the estimated
fair value of the options is €12 per option. During the year ended 30 June 2014
Pearl's earnings increased by 10% and they are expected to continue to
increase at this rate over the next two years. During the year ended 30 June
2015 Pearl's earnings increased by 9% and Pearl management continued to
expect that the earnings target would be achieved. During the year ended 30
June 2016 Pearl's earnings increased by only 2%. At 30 June 2016 the share
price is €23. The remuneration expense to be recognised for the year ended 30
June 2014 is:

a. €3200

b. €8000

c. €2667

d. €9600

20. On 1 July 2013 Watson Pty Ltd granted 100 share appreciation rights
(SARS) to each of its 50 employees, conditional on the employee not leaving
the company in the next three years. The company estimates the fair value of
the SARS at the end of each year in which a liability exists as shown in the
table below. The intrinsic values of the SARS at the date of exercise at 30 June
2016, 2017 and 2018 are also shown. All SARS held by employees at 30 June
2016 vest. Year ended 2014, 2015, 2016, 2017, 2018: Fair values are $14.4;
$15.5; $18.2; $21.4 respectively. Year ended 2016, 2017, 2018: Intrinsic values
are $15; $20; $25 respectively. By 30 June 2016 nine employees have left and
15 employees have exercised their SARS. This is an example of:

a. a share-based payment transaction where the entity has the settlement choice

b. a share-based payment transaction where the counterparty has the settlement

choice

c. a cash-settled share-based payment transaction

d. an equity-settled share-based payment transaction