A global manufacturing firm, operating under IFRS, grants 1,000 share appreciation rights (SARs) to its CFO. The SARs are cash-settled and vest after three years of service. The fair value of each SAR is re-evaluated at the end of each reporting period. At the end of Year 1, the fair value is €15. At the end of Year 2, it is €18. What is the cumulative expense and liability recognized in the statement of financial position at the end of Year 2?
A company is accounting for its defined benefit pension plan under IAS 19. At the start of the year, the plan had a surplus of $2 million, but the asset ceiling was $1.5 million, limiting the net defined benefit asset. During the year, the company made contributions of $1 million, and benefits paid were $0.8 million. The current service cost was $1.2 million, and the net interest on the net defined benefit asset was $0.15 million (based on the $1.5M asset). At year-end, the plan surplus increased to $2.5 million, and the asset ceiling rose to $2.2 million. How is the effect of the change in the asset ceiling recognized?
A European logistics company identifies its operating segments based on the reports reviewed by its Chief Operating Decision Maker (CODM). The company has three main divisions: Road Freight, Sea Freight, and Air Freight. The CODM also reviews financial data for a fourth division, 'Warehousing Services,' but its revenue, profit, and assets are each only 8% of the company's total. However, the Road, Sea, and Air Freight divisions all rely heavily on the Warehousing Services division. Under IFRS 8, which of the following statements is most accurate?
A consultant is advising a company on aligning its new global long-term incentive plan (LTIP) with IFRS principles. The plan will be offered in jurisdictions using IFRS and others using local GAAP. Which of the following considerations are critical for ensuring proper accounting and strategic alignment under IFRS? (Select TWO)
True or False: Under IAS 19, past service costs arising from a plan amendment that reduces a defined benefit obligation (a negative past service cost) are recognized immediately in profit or loss in the period of the amendment.
A company grants 100 restricted stock units (RSUs) to an executive. The RSUs are equity-settled. The grant is contingent upon two independent conditions: the executive must remain with the company for three years (a service condition), and the company's share price must increase by 20% from the grant date (a market condition). If the executive completes the service period but the share price target is not met, how should the compensation expense be treated under IFRS 2?
A multinational corporation has a defined benefit plan with the following characteristics at the beginning of the year: - Present Value of Defined Benefit Obligation (DBO): $500 million - Fair Value of Plan Assets: $450 million - Discount Rate: 5% During the year, the actuary reports an actuarial loss of $20 million due to changes in demographic assumptions. What is the immediate accounting impact of this actuarial loss under IAS 19?
When comparing IFRS and U.S. GAAP for employee benefits accounting, a key difference lies in the presentation of pension costs. Under IFRS (IAS 19), the components of net defined benefit cost are disaggregated. Which component is explicitly presented under IFRS but is typically aggregated with other components under U.S. GAAP?
A pharmaceutical company decides to close a research facility in one country and offers termination benefits to the 100 affected employees. The company communicates the detailed plan to the employees on November 1, 20X1, with the closure scheduled for February 1, 20X2. The benefits are a lump sum payment equivalent to six months' salary. To receive the benefit, employees must continue working until the closure date. How should this arrangement be accounted for under IAS 19?
A company modifies the terms of its equity-settled share option plan. The modification increases the fair value of the options. According to IFRS 2, how should the incremental fair value be treated?