Question：Which of the following statements about discounting liabilities is true?

　　A IAS 12 allows, but does not require, discounting of deferred tax liabilities.

　　B IAS 37 requires discounting of provisions, if the time value of money is material.

　　C IAS 19 requires discounting of defined benefit pension plan liabilities.

　　D IAS 12 requires discounting of deferred tax liabilities.

　　A. A, B and C.

　　B. B and C.

　　C. A and C.

　　D. B, C and D.

　　The correct answer is: B and C.

　　IAS 12 prohibits discounting of deferred tax liabilities.

　　IAS 37 and IAS 19 require discounting (assuming the effect of discounting is material).

　　Question：A company issues 1000 shares with a par value of $0.50. Issue costs of $25 are incurred.

　　Which of the following are correct treatments of the issue costs?

　　A. Always deduct the costs from the carrying value of the financial instrument.

　　B. Always charge the costs to the income statement.

　　C. If the company has a share premium account, the issue costs should be offset against this.

　　D. If the company has no share premium account, by deducting the costs from another reserve, such as the retained profits reserve.

　　The correct answer is:

　　Always deduct the costs from the carrying value of the financial instrument.

　　Issue costs should always be added/deducted to/from the carrying value of the financial instrument.