1.a.3. Fair valueb.1.I onlyC.1. Which is correct concerning capitalization of borrowing cost?If the borrowing is directly attributable to a qualifying asset, the borrowing cost is required to becapitalized as cost of the asset.If the borrowing is not attributable to a qualifying asset, the borrowing cost is required to beexpensed as incurred.ll onlyBoth I and IId. Neither I and II2. An investor shall discontinue the use of the equity method from the date?The investor ceases to have significant influence over an associate.The associate operates under severe long-term restrictions that significantly impair its ability totransfer funds to the investor.The price that would be received to sell an asset in an orderly transaction between marketparticipants at the measurement date.The present value or discounted value of future net cash flows expected to be derived from anasset.

Introduction:- Borrowing costs are capitalized as a part of the cost of the qualifying asset only…

Answered: 1. Which is correct concerning…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Similar questions

Que 2 Evaluate in terms of the framework, why it is appropriate to capitalize borrowing costs under certain circumstances?
explain the main different between acquisition method, interest pooling g method and the purchase method
What factors should be considered in determining the issue price of a debenture. and Provide some examples of items that would be adjusted directly against equity, rather than beingincluded as part of profit or loss.
Which is the proper way to report a contingent asset? a. As an asset b. No disclosure and no accrua c. An unrealized revenue d. As a disclosure only
1. All of the following are components of the defined benefit cost except * unvested past service cost interest on the effect of the asset ceiling loss on settlement return on plan assets 2. Which of the following are recognized in other comprehensive income? service cost net interest in net defined benefit liability (asset) amortization of actuarial gains or losses difference between interest income on plan assets and return on plan assets 3. The balance of the present value of defined benefit obligation is affected by all of the following except * actuarial gains or losses interest cost current service cost contributions to the fund 4. If the present value of the defined benefit obligation exceeds the fair value of the plan assets, there is * deficit surplus expense prepaid accrued benefit cost
Which of the following case would allow the capitalization of Interest Expense No Case allows this transaction Borrowing Cost Provided the interest is immaterial Only if Management Allows
II. When the cárrying amount or the expected ultimate cost of the qualifying asset exceeds its recoverable amount or net realizable period shall not exceed the amount of borrowing costs it incurred I. The amount of borrowing costs that an entity capitalizes during a Which of the following statements is correct? in that period. value, the carrying amount is written down or written off i accordance with the requirements of other Standards. a. Ionly C. Both I and II b. II only d. Neither I nor II
Under IFRS, income includes increases in economic benefi ts from: B . enhancements of assets not related to owners’ contributions
Suppose the analysis of a loss contingency indicates that an obligation is not probable. What accounting treatment if any is warranted?
All financial assets are initially measured at fair value plus transaction costs, except A. Amortized cost C.None of these C. Fair value through profit and loss D. Fair value through OCI
Statement 1: Measurement period is relevant if Fair Value of Net Assets of acquiree includes the recognition of the contingent asset, contingent liability, and assets/liabilities with provisional amounts. Statement 2: Measurement period is relevant for the remeasurement fo all contingent considerations. A. Both Statetements are Correct B. Both Statements are Incorrect C. Only Statement 1 is Correct D. Only Statement 2 is Correct
2. Which of the following correctly matches the classification of the debt investment with its initial measurement? Classification Initial measurement A. Fair value through other comprehensive income B. Amortized cost C. Fair value through profit or loss Fair value Fair value plus transaction costs Fair value minus transaction costs D. None of the above

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