How does the fair value model differ from the revaluation model?Question 4 options:aIncreases in carrying amount above a cost-based measure are recognized in equitybChanges in fair value are recognized in profit or lossca and bdneither a or b

The difference between fair value and revaluation method arises when there is gain in the value of…

Answered: How does the fair value model differ…

Business

Accounting

How does the fair value model differ from the revaluation model?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: - explain what would you take to compare the worthness of two different fianancial investments? how…

A: Solution- Meaning of economic Investment A Financial Investment is AN plus or instrument purchased…

Q: What is the proper treatment for noncash asset received from a non-stockholder? Group of answer…

A: Accounting entry to be made for noncash asset received from a non-stockholder: Debit Noncash Assets…

Q: Which of the following is reported in profit or loss in accordance with PAS 1? I. Sales revenue…

A: PAS 1: Presentation of financial statement prescribes the basis of presentation of general purpose…

Q: Gains and losses from asset sales are considered an operating activity. Group of answer choices True…

A: False.Gains and losses from asset sales are not considered as operating activities but are…

Q: Explain the concept of “buy term and invest the difference (BTID).” a. Include in your explanation…

A: The buy term and invest the difference (BTID) refers to the actual amount that is needed to buy the…

Q: How is the Accumulated Benefit Obligation (ABO) different from the Projected Benefit Obligation…

A: Accumulated Benefit Obligation and Projected Benefit Obligation both are terms used in the pension…

Q: Statement 1: When the residual value is guaranteed by the lessee, the lessor shall include the same…

A: sale and lease back is a simple financial transaction which allows a person to leave the Asset to…

Q: What is the most likely impact on return on equity of an increase in operating expense margin, all…

A: Operating expenses are required to run the business. AN increase in operating expenses reduces the…

Q: The majority of financial instruments are valued using: Group of answer choices fair value…

A: Financial instruments are the assets that can be traded. Most of the financial instruments provide…

Q: St: For reclassification interest rate must be determined based on the new carrying amount or fair…

Q: 14. Using fundamental analysis, if intrinsic value is greater than the market price per share…

A: If intrinsic value is greater than market price per share, then it means shares are undervalued.

Q: 1. Which of the following may be measured subsequently at amortized cost? a. None of these b. A…

A: solution note: dear student as per the bartleby guideline we are required to solve the first…

Q: In general terms, how would a change ininvestment opportunities affect the payoutratio under the…

A: Answer: In the residual dividend policy, the distribution is calculated after the company’s spending…

Q: 6. A liability is recognized in the statement of comprehensive income when it is probable that an…

A: As per IASC framework, the liability is recognized in the financial statement when two conditions…

Q: The W.A.C.C. is a : a Composite opportunity cost metric b Simple opportunity cost metric c…

A: The overall cost of capital, also known as the Weighted average cost of capital (WACC), is the…

Q: When market value of an asset is higher than book value, depreciation is not charged. A) True B)…

A: Meaning of depression. Depreciation is a reduction in the value of asset due to wear and tear,…

Q: 4. How the Stock valuation is normally made? Cost or net realizable value whichever is more Cost and…

A: Stock valuation is the process of analyzing the intrinsic worth of the stock possessed by the entity…

Q: some examples of items that would be adjusted directly against equity, rather than being included as…

A: The items included in other comprehensive incomes are not considered under profit or loss account…

Q: Elements of gross income

A: Option B is wrong because realized income is an element of gross income. Option C is wrong because…

Q: Which of the following is not a discounted technique Select one: a. Net present value b. Discounted…

A: Discounted technique is a technique to determine the present value of future cash flows.

Q: Transaction costs incurred the effective interest rate to be used for amortization of an investment…

A: Costs incurred during buying and selling any good or a service are generally referred to as…

Q: 1. Which is correct concerning capitalization of borrowing cost? If the borrowing is directly…

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

Q: then these assets vary in

A: The constant growth model is a method for valuing the share price of a stock. It calculates the…

Q: NU Corporation declares and distributes dividend that is a result of current earnings. How will the…

A: Solution Note : As per the Q&A guideline we are required to answer the first question only…

Q: Provide some examples of items that would be adjusted directly against equity, rather than…

A: There are certain items that are directly adjusted to equity rather than recognized in the profit…

Q: 6

A: A counterbalancing error happens when an error is happen and that cancels out another error. It is…

Q: 14.The loss of available-for-sale investment credit (AFS) cannot exceed the amount by which the fair…

A: Answer: The loss of available for investment credit cannot exceed the amount by which the fair value…

Q: Money market does not have any role in the development of capital market

A: Money market is a market which deals in short term securities like treasury bills, bills of…

Q: Which market variable is determined within the capital markets? C a. Property value c b. Market rent…

A: A capital market is a market where financial securities are traded. It channelizes surplus funds…

Q: Determine if this shall result in recognition of liabilities 14.Violation of the terms of a…

A: As per IAS 37 of IFRS Provisions, contingent liabilities and continent assets A contingent liability…

Q: An important inherent risk related to revenue transactions and revenue recognition: A. Timing of…

A: inherent risk means risk that exist when there is no proper controls in the organisation. This risk…

Q: Is it true that All else being equal, an increase in profit margin raise ROE?

A: According to DUPONT Analysis, ROE is the function of three ratios. ROE =profit margin × asset…

Question

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

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

14-The amount for which an asset could be exchanged, a liability settled , or an equity instrument could be exchanged between knowledgeable parties is referred to as a. Historical cost principle b. Futuristic cost principle c. Replacement cost Principle d. Fair value cost principle
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.
5. BAC Co. and YXZ Co. are identical firms in all respects except for their capital structure. BAC is all equity financed with $800,000 in stock. YXZ uses both stock and perpetual debt; its stock is worth $400,000 and the interest rate on its debt is 10 percent. Both firms expect EBIT to be $95,000. Ignore taxes.
15.1 Liabilities liquidated is measured at: Group of answer choices None of the choices Realizable value Actual settlement amount Book value
Which of the following(s) is (are) proposed as a reason to contribute to a non-participation puzzle? I. Downside risk II. Exchange rate risk II. Participation costs IV. Political activism O , II, and II O Il and II O Il and IV O , II, and IV O I, II, II, and IV
Which of the following statements true? I. All else equal, an increase in storage costs, decreases the value of the forward on an asset All else equal, an increase in convenience yield, decreases the value of the forward on an asset I. A) I. and II. are true B) I. is true and II. is false C) II. is true and I. is false D) I. and II. are false Win Win
nagative externality can be internalized by a. taxation b. reqard c. subsidy d. none of the above
Refers to the capital recovery factor O (F/A,i,n) O (P/A,i,n) O (A/F,i,n) O (A/Pi,n)
Provide some examples of items that would be adjusted directly against equity, rather than being included as a part of proft and loss
Provide some example of items which would be adjusted directly against equity rather than being as part of profit or loss
Q2: What is meant by discounting? By way of example explain why critics of discounting regard the practice to run counter to the principle of inter- generational equity.