Value-in-use is O a. The discounted present value of future cash flows arising from use of the asset and from its disposal. O b. The amount at which an asset is recognized in the statement of financial position. O C. The higher of amasset's fair value less cost to sell and its market value. O d. The market value.
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- Under IFRS, value-in-use is defined as: a. net realizable value. b. fair value. c. future cash flows discounted to present value. d. total future undiscounted cash flows.11. Which type of financial assets are purchased only with the intent of selling them in the near future? DAFVTPL financial assets ⒸBFVTOCI Financial assets C. Amortized Cost financial assets OD. Investment accounted for using the equity methodUnder IFRS, value-in-use is defined as:(a) net realizable value.(b) fair value.(c) future cash fl ows discounted to present value.(d) total future undiscounted cash fl ows.
- In a theoretical sense, the financial value of any asset is the present value of: Select one: A. Its past dividends B. Its expected cash flows C. Its expected sales price D. Its operating earnings1. Inventory should be stated at (a) Lower of cost and fair value. (b) Lower of cost and net realizable value. (c) Lower of cost and nominal value. (d) Lower of cost and net selling price. 2. Which of the following costs of conversion cannot be included in cost of inventory? (a) Cost of direct labor. (b) Factory rent and utilities. (c) Salaries of sales staff (sales department shares the building with factory supervisor). (d) Factory overheads based on normal capacity. 3. Inventories are assets (a) Used in the production or supply of goods and services for administrative purposes. (b) Held for sale in the ordinary course of business. (c) Held for long-term capital appreciation. (d) In the process of production for such sale. (e) In the form of materials or supplies to be consumed in the production process or the rendering of services. (f) Choices b and d. (g) Choices b, d, and e. 4. The cost of inventory should not include (a) Purchase price. (b) Import duties and other taxes. (c)…The basic principle of valuation states that the value of any asset is: O The sum of the present value of all cash flows generated by the assetO The sum of all future cash flows generated by the assetO The present value of next year's cash flow onlyO The degree of cash flow riskiness is not a relevant factor in valuation
- In terms of future value (FV) which of the following considerations is correct? Select one: O A. Consider only future cash flows as relevant factors O B. Consider only past cash flows as relevant factors O C. Consider past sales revenues and cost of sales as relevant factors O D. Consider future gross profit and net profits as relevant factorsQuestion 3.Match the following terms with the appropriate definition.Future ValueTime value of moneyMonetary AssetPresent value of a single amountSimple interestA.Claim to a fixed amount of cash.B.A dollar now is worth more than a dollar later.C.Based on initial investment only.D.Amount today equivalent to a specified future amount.E.Accumulation of an amount with interest.1. IAS 36 applies to which of the following assets? (a) Inventories. (b) Financial assets. (c) Assets held for sale. (d) Property, plant, and equipment. 2. Value-in-use is (a) The market value. (b) The discounted present value of future cash flows arising from use of the asset and from its disposal. (c) The higher of an asset’s fair value less cost to sell and its market value. (d) The amount at which the asset is recognized in the balance sheet. 3. If the fair value less costs to sell cannot be determined (a) The asset is not impaired. (b) The recoverable amount is the value-in-use. (c) The net realizable value is used. (d) The carrying value of the asset remains the same. 4. If assets are to be disposed of (a) The recoverable amount is the fair value less costs to sell. (b) The recoverable amount is the value-in-use. (c) The asset is not impaired. (d) The recoverable amount is the carrying value. 5. Estimates of future cash flows normally would cover projections over a maximum…
- Which of the following statements is true for historical cost valuations? (Select one or more) a. Present value of cash flows using historical interest rates is an item in which cash receipts or cash payments will occur over time, these future cash flows are then discounted at the interest rate in effect at the time of the initial transaction. Balance sheet examples include notes receivable and notes payable. b. Acquisition cost is the amount paid initially to acquire the asset, examples include prepayments, land, and intangibles with indefinite lives. c. Acquisition cost is the amount paid initially to acquire the asset, examples include amounts invested in research and development for intellectual property. d. Adjusted acquisition cost is the amount paid initially to acquire an asset less accumulated depreciation and amortization, examples include equipment and intangible assets with limited lives.Which of the following is the correct definition for present value (PV)? Select one: a. The current value of the sum of all the past cash flows given a specified rate of return. b. The current value of the sum of all the future profits made by the company with a specified rate of return. c. The current value of a future sum of money or stream of cash flows given a specified rate of return. d. The future value of the sum of all the future cash flows without a specified rate of return.,Match the following terms with the appropriate definition.Effective yield or interest rateMonetary liabilityCompound interestPresent ValueFuture value of a single amountA.Fixed obligation to pay an amount in cash.B.The rate at which money will actually grow.C.Interest accumulates on interest.D.Current worth of future cash flows.E.The money to which an amount invested will grow over time.