How does the fair value model differ from the revaluation model?
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How does the fair value model differ from the revaluation model?
Question 4 options:
| a |
Increases in carrying amount above a cost-based measure are recognized in equity |
| b |
Changes in fair value are recognized in profit or loss |
| c |
a and b |
| d |
neither a or b |
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- What is the default classification for an equity investment? A Fair value through profit or loss B Fair value through other comprehensive income C Amortised cost D Net proceedsAccording to the fair value principle, assets and liabilities should be reported Select answer from the options below 1.at their fair market value. 2.at their historical cost. 3.at a value agreed upon by interested parties. 4.at cost plus inflation.Which of the following methods does not consider the investment’s profitability? a. ARR b. Payback c. NPV d. IRR
- Which of the following will cause owner's capital to decrease?Select one:a. Capitalb. Profitc. Drawingsd. LiabilitySelect the investment accounting approach with the correct valuation approach: Not Held-for-Collection Held-for-Collection a. Amortized cost Amortized cost b. Fair value Fair value c. Fair value Amortized cost d. Amortized cost Fair valueThe third step for making a capital investment decision is to establish baseline criteria for alternatives. Which of the following would not be an acceptable baseline criterion? A. payback method B. accounting rate of return C. internal rate of return D. inventory turnover
- A situation in which one focuses on individual decisions rather than looking at them in the context of related decisions. Please match the description with the corresponding term below. A.Equity Premium B.Statistically Independent C.Equity Premium Puzzle D.Narrow FramingThe required rate of return on equity is the most appropriate discount rate to use when applying a ______ valuation model. A. FCFE B. DDM C. FCEF or DDM D. P/E E. FCEF97 Concpteal Fram The economic resource can be distributed to the owners. d. The resource has no use in the entity's operations and has no resale value 12. Which of the following does not meet the definition of an asset? a. Equipment that the entity intends, and is very certain, to acquire in the future. b. Inventories purchased and received but not yet paid. c Land received from a donation. d. A publishing title for a college textbook. The publishing title has no physical substance, meaning you cannot see or touch it. 13. Entity A determined that an asset exists. However, the asset's low probability of inflows of economic benefits and its very high level of measurement uncertainty affected Entity A's recognition decisions about the asset, as these raised doubt on whether the asset's recognition would result in useful information. Consequently, Entity A did not recognize the asset, but because Entity A deemed it relevant, information about the asset was nonetheless provided in the…
- choose the correct answer: Equity security acquired for trading should be measured at reporting date a. cost, being the purchase price b. cost, being the purchase price plus transaction costs c. fair value, with change in FV taken through profit or loss. d. fair value, with change in FV taken through other comprehensive income.What is Fair Value Accounting? 2. What are the factors contributing toward the trend of fair value accounting?Capitalizing a cost involves increasing what type of account?a. Liabilityb. Expensec. Stockholders’ equityd. Asset
