Question

In week 6 case, What standard do you use for non-monetary transactions? Wgen Catherine traded with the local magazine, What was the effect on taxable income?

A) A: IFRS 15, B: IFRS 9; C: IAS 16, D: IAS 20
B) A: IAS 20, B: IFRS 15; C: IFRS 9, D: IAS 16
C) A: IFRS 9, B: IAS 16; C: IAS 20, D: IFRS 15
D) A: IAS 16, B: IAS 20; C: IFRS 15, D: IFRS 9

Answer 1

The correct standard for non-monetary transactions is A: IFRS 15.

Step-by-step explanation:

When Catherine traded with the local magazine, the effect on taxable income was not directly impacted as taxable income is determined based on the fair value of goods or services exchanged, which may differ from accounting standards.

In accounting for non-monetary transactions, IFRS 15 governs the recognition, measurement, and disclosure of revenue arising from contracts with customers, including exchanges of goods or services. When Catherine engaged in a trade with the local magazine, under IFRS 15, the transaction would be recorded at the fair value of the goods or services exchanged. However, for tax purposes, the taxable income might not be affected directly by this accounting treatment. Taxable income is typically computed based on tax laws and regulations, which might not align precisely with accounting standards such as IFRS 15. Thus, while the exchange would impact financial reporting under IFRS 15, its direct effect on taxable income might be subject to tax laws and other regulations specific to the jurisdiction.

Correct answer: A) IFRS 15