Financial Accounting and Reporting (IFRS and Armenian Standards)
Framework and the measurement mindset
Candidates must be fluent in the conceptual framework (recognition, derecognition, measurement bases) and in the standards that generate the most exam arithmetic: IAS 16 (cost model vs revaluation, component depreciation, residual value), IAS 36 (recoverable amount as the higher of fair value less costs of disposal and value in use), IAS 38 (research expensed, development capitalised once criteria are met), IFRS 15 (five-step model, distinct performance obligations, variable consideration constrained), IFRS 16 (right-of-use asset and lease liability at present value), IAS 37 (provisions vs contingent liabilities), and IAS 12 (deferred tax from temporary differences). Armenia applies IFRS as adopted for public-interest entities, while smaller entities may use national standards aligned with IFRS for SMEs; know which framework a scenario implies.
Traps
Questions love the revaluation surplus recycling rule (never through profit or loss on derecognition - transfer to retained earnings), the distinction between recoverable amount and carrying amount, and impairment reversal limits (goodwill never reversed). Watch for borrowing costs (IAS 23) capitalised only on qualifying assets, and for the treatment of government grants (IAS 20) under the income vs asset approach.
Worked rule of thumb
For impairment: compare carrying amount with recoverable amount; write down to the higher of the two measurement bases, allocate first to goodwill, then pro rata to other assets, and never below individual fair value less costs of disposal. For leases: measure the liability at the incremental borrowing rate if the implicit rate is not readily determinable.