Which of the Following Statements Is Not in Accordance with AAS

question 47

Multiple Choice

Which of the following statements is not in accordance with AAS 25 "Financial Reporting by Superannuation Plans" with respect to asset of superannuation plans?

• A) Requirement to include changes in net market values of assets realised during the reporting period in revenue means that a gain or loss on the disposal of non-current assets will always be zero.
• B) Requirement to include changes in the net market value of assets as a component of revenue means that revaluation of assets is not permitted.
• C) Smoothing techniques are to be applied to the measurement of assets as it is necessary to ensure that assets included in financial reports, and changes in the net market values of those assets, are measured on a basis which is both consistent and verifiable.
• D) Where a market does not exist for long-term monetary assets, the calculation of net market value will require the determination of a present value by application of a current, market-determined, risk-adjusted discount rate.
• E) All of the given answers.

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Definitions:

Working Capital

A measure of a company's liquidity, operational efficiency, and short-term financial health, calculated as current assets minus current liabilities.

Revenues

The total income generated from normal business operations and includes discounts and deductions for returned merchandise.

Incremental Cash Flow

The additional cash flow generated by a company from a new project or investment, used for analysis of its viability.

Capital Budgeting Analysis

A process that involves evaluating and comparing the financial impacts of long-term investments to choose the most profitable ones.