Which statement is incorrect regarding reclassification of financial assets? A. Reclassifications are only permitted on the change of an entity's business model and are expected to occur only infrequently. B. None of these. C. An entity shall restate any previously recognized gains, losses (including impairment gains or losses) or interest. D. An entity shall account for transfers between categories prospectively, at the beginning of the period after the change in the business model
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Which statement is incorrect regarding reclassification of financial assets?
A. Reclassifications are only permitted on the change of an entity's business model and are expected to occur only infrequently.
B. None of these.
C. An entity shall restate any previously recognized gains, losses (including impairment gains or losses) or interest.
D. An entity shall account for transfers between categories prospectively, at the beginning of the period after the change in the business model.
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- Which statement is incorrect regarding reclassification of financial assets? An entity shall restate any previously recognized gains, losses (including impairment gains or losses) or interest. Reclassifications are only permitted on the change of an entity's business model and are expected to occur only infrequently. None of these. An entity shall account for transfers between categories prospectively, at the beginning of the period after the change in the business model.Which statement is incorrect regarding reclassification of financial assets? a) Reclassifications to FVTPL measurement category result to amounts recognized in profit or loss. b.)The effective interest rate is determined on the basis of the fair value of the asset at the reclassification date when an entity reclassifies a financial asset out of FVTPL measurement category. c.) The effective interest rate and the measurement of expected credit losses are not adjusted as a result of the reclassification from AC measurement category to FVTOCI and vice versa. d.) All reclassifications out of FVTOCI measurement category result in ‘reclassification adjustmWhich statement is incorrect regarding reclassification of financial assets? Group of answer choices None of these. Reclassifications are only permitted on the change of an entity's business model and are expected to occur only infrequently. An entity shall restate any previously recognized gains, losses (including impairment gains or losses) or interest. An entity shall account for transfers between categories prospectively, at the beginning of the period after the change in the business model.
- Which of the following is incorrect regarding measurement period? a. If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the acquirer shall report in its financial statements provisional amounts for the items for which the accounting is incomplete. b. During the measurement period, the acquirer shall also recognise additional assets or liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date and, if known, would have resulted in the recognition of those assets and liabilities as of that date. c. The measurement period ends as soon as the acquirer receives the information it was seeking about facts and circumstances that existed as of the acquisition date or learns that more information is not obtainable. d. During the measurement period, the acquirer shall prospectively adjust the provisional amounts recognised at the acquisition date…During the current year, an entity acquires another entity in a transaction properly accounted for as a business acquisition. At the time of the acquisition, some of the information for valuing assets was incomplete. How should the acquirer account for the incomplete information in preparing its financial statements immediately after the acquisition? a. Record the uncertain items at a provisional amount measured at the date of acquisition. b. Record a contra account to the investment account for the amount involved c. Do not record the uncertain items until complete information is available d. Record the uncertain items at the carrying amount of the acquireWhat does the Conceptual Framework state about derecognition?
- Derecognition is the removal of all or part of a recognised asset or liability from an entity’s statement of financial position in accordance with the Conceptual Framework 2018. The above aim is to normally achieve derecognising via the following below statements: Which of the statements as mentioned below is NOT correct to achieve the above aim? 1) Derecognizing any assets or liabilities transferred, consumed, collected, fulfilled or expired 2) Derecognizing any resultant income or expense 3) Recognizing any resultant income or expense 4) Continuing to recognize assets or liabilities retained (2)Which statement is incorrect regarding reclassification of financial assets? Group of answer choices The effective interest rate and the measurement of expected credit losses are not adjusted as a result of the reclassification from AC measurement category to FVTOCI and vice versa. The effective interest rate is determined on the basis of the fair value of the asset at the reclassification date when an entity reclassifies a financial asset out of FVTPL measurement category. All reclassifications out of FVTOCI measurement category result in ‘reclassification adjustment’. Reclassifications to FVTPL measurement category result to amounts recognized in profit or loss.In reference to the downstream or upstream sale of depreciable assets, which of the following statements is correct? A. Gains and losses appear in the parent-company accounts in the year of sale and must be eliminated by the parent company determining its investment income under equity method of accounting. B. The initial effect of unrealized gains and losses from downstream sales of depreciable asset is different from the sale of non-depreciable assets. C. Gains, but not losses, appear in the parent-company accounts in the year of sale and must be eliminated by the parent company in determining its investment income under the equity method of accounting. D. Upstream sales from the subsidiary to the parent company always result in unrealized gains or losses.
- An entity has financial assets held under a business model with the objective of holding financial assets in order to collect contractual cash flows. Prior to maturity date, the entity sells a significant portion of the financial assets. Which of the following statements is correct? The remaining financial assets within the "hold to collect" business model need not be reclassified. However, the change in circumstance may be relevant in assessing the business model for new financial assets that have been acquired or originated. The change in circumstance is a prior period error. Under the "hold to collect" business model, the entity needs to hold financial assets until their maturity dates. A significant sale of financial assets before their maturity date evidences an inability to hold and collect cash flows. Therefore, the remaining financial assets shall be reclassified to either FVPL or FVOCI. The entity shall change its business model because of the change in circumstance. The…TRUE OR FALSE? The prior period will be affected if during the current year the management of an entity decides to classify a non currrent asset as held for sale.Transfers of investments between categories a. Should always affect net income b. Are accounted for at fair value for all transfers c. Result in omitting recognition of fair value in the year of the transfer. d. Are not recognized if investments are transferred from held for collection to fair value