Disclosure Standards Very Short Answer Type Questions

Question 1.
Who are the related parties?
Answer:
A related party is a person or entity that is related to the entity that is preparing its financial statements (in this Standard referred to as the ‘reporting entity’).
(a) A person or a close member of that person’s family is related to a reporting entity if that person:

  • Has control or joint control over the reporting entity.
  • Has significant influence over the reporting entity.

Question 2.
What are the relater party transactions?
Answer:
A related party transaction is a transfer of resources, services or obligations between a reporting entity and a related party, regardless of whether a price is charged. Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the entity and include:

  • that person’s children and spouse or domestic partner.
  • children of that person’s spouse or domestic partner.
  • dependants of that person or that person’s spouse or domestic partner.

Question 3.
What is EPS as per IAS 33?
Answer:
Earnings per share sets out how to calculate both basic earnings per share and diluted EPS. The calculation of basic EPS is based on the weighted average number of ordinary shares outstanding during the period, whereas diluted EPS also includes dilutive potential ordinary shares if they meet certain criteria.

Question 4.
What is Antidilution?
Answer:
Antidilution is an increase in earnings per share or a reduction in loss per share resulting from the assumption that convertible instruments are converted, that options or warrants are exercised, or that ordinary shares are issued upon the satisfaction of specified conditions.

Question 5.
Give the meaning of contingent share agreement.
Answer:
A contingent share agreement is an agreement to issue shares that is dependent on the satisfaction of specified conditions. Contingently issuable ordinary shares are ordinary shares issuabie for little or no cash or other consideration upon the satisfaction of specified conditions in a contingent share agreement.

Question 6.
What do you mean by dilution.
Answer:
Dilution is a reduction in earnings per share or an increase in loss per share resulting from the assumption that convertible instruments are converted, that options or warrants are exercised, or that ordinary shares are issued upon the satisfaction of specified conditions.

Question 7.
What is options?
Answer:
Options, warrants and their equivalents are financial instruments that give the holder the right to purchase ordinary shares.

Question 8.
What do you mean by ordinary share?
Answer:
An ordinary share is an equity instrument that is subordinate to all other classes of equity instruments.

Question 9.
What is potential ordinary share?
Answer:
A potential ordinary share is a financial instrument or other contract that may entitle its holder to ordinary shares.

Question 10.
What is Interim financial report?
Answer:
Interim financial report means a financial report containing either a complete set of financial statements (as described in Ind AS 1 Presentation of Financial Statements or a set of condensed financial statements (as described in this Standard) for an interim period.

Question 11.
What is insurance contract?
Answer:
An insurance contract is a “contract under which one party (the insurer) accepts significant insurance risk from another party (the policyholder) by agreeing to compensate the policyholder if a specified uncertain future event (the insured event) adversely affects the policyholder.”

Question 12.
What is operating segment?
Answer:
An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity) whose operating results are. reviewed regularly by the entity’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available.

Question 13.
Give the meaning of events after the reporting period.
Answer:
Events after the reporting period and those events favourable and unfavourable that occur between the end of the reporting period and the date what the financial statements are authorised for issue.