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Supplementary objective test questions

13 Which THREE of the following are the general objectives of regulatory
bodies?

A The promotion of competition

B The protection of customers from monopoly power

C The identification of fraudulent activity

D The generation of an operating surplus

E The promotion of social and macroeconomic objectives

14 Which of the following statements regarding fair value hedge accounting
is correct, according to the provisions of IAS 39?

A The changes in fair value of both the hedged item and the hedging
instrument are recognised in profit or loss each year.

B The change in fair value of the hedged item is recognised in profit or loss
and that of the hedging instrument is recognised in other comprehensive
income each year.

C The change in fair value of the hedged item is recognised in other
comprehensive income and that of the hedging instrument is recognised in
profit or loss each year.

D The changes in fair value of both the hedged item and the hedging
instrument are recognised in other comprehensive income each year.

15 Grief Co has been following the provisions of IAS 39 over the last few months.
At the most recent reporting date, Grief Co’s hedged item had risen in value by
$10.8 million while the hedging instrument had fallen in value by $9.6 million.

Which one of the following statements is correct (all percentages are
rounded to the nearest whole percentage point)?

A Hedge efficiency is 113% – hedge is deemed to be inefficient

B Hedge efficiency is 104% – hedge is deemed to be inefficient

C Hedge efficiency is 104% – hedge is deemed to be efficient

D Hedge efficiency is 113% – hedge is deemed to be efficient

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