If the entity uses the fair value model for investment property, which statement is true?   a. The entity should value the property at cost less accumulated depreciation and impairment. b. The entity does not record depreciation on the investment property. c. The entity depreciates the equipment using normal depreciation method d. The entity should report the increase in fair value in other comprehensive income for the period.

Which statement is correct regarding derecognition of financial assets?   A. Transfer of risks and rewards is evaluated by determining the transferee’s ability to sell the asset.   B. A sale and repurchase transaction where the repurchase price is a fixed price is a transfer of financial asset that qualifies for derecognition.   C. The entity shall continue to recognize the transferred asset in its entirety if the transfer does not qualify for derecognition because the entity has retained substantially all the risks and rewards of ownership of the transferred asset.    D. If an entity neither transfers nor retains substantially all the risks and rewards of ownership of a transferred asset, the entity shall continue to recognize the transferred asset to the extent of its continuing involvement.

Transfers from investment property to property, plant and equipment are appropriate   a. The entity can never transfer property into another classification on the balance sheet Once it is classified as investment property.   b. When there is change of use.   c. Only when the entity adopts the fair value model under IAS 38.   d. Based on the entity’s discretion.

If an entity capitalized transaction costs to a financial asset at fair value through profit or loss, then subsequently adjusted the initial cost to fair value at year-end, what is the overall effect on the current year net income? *   A. Current year net income will be understated     B. Current year net income will be overstated     C. Current year net income will either be overstated or understated, depending on whether the fair value at year end is more than, less than, or equal to the initial cost     D. No effect

Evaluate the following statements:S1. The borrowing cost is capitalized when the entity undertakes activities that are necessary to prepare the asset for the intended use or sale.S2. Borrowing cost incurred while land acquired for building purposes is held without any associated development activity does not qualify for capitalization.   a.False, False b.True, True c.False, True d.True, False

Under IFRS, disclosure for an investment property must include which of the following?   Question 11 options:   a)  For investment properties measured using the fair value model: additions during the period, net gains or losses, and transfers to and from inventories.   b)  For investment properties measured using the fair value model: whether fair values used were based on valuations by an independent valuator, useful lives of properties, and transfers to and from inventories.   c)  For investment properties measured using the cost model: the depreciation method used, the useful lives of the properties, depreciation, and net gains or losses from fair value adjustments.   d)  For investment properties measured using the fair value model: amounts recognized in profit or loss for rental income and direct operating expenses, useful lives of investment properties.

Depreciation is a valuation process that results in the report-ing of the fair value of the asset.” Do you agree? Explain.

Which of the following is INCORRECT regarding depreciation? Select one: O a. It is not a matter of valuation. O b. It is a means of cost allocation. Oc. O d. It is an attempt to reflect the fair market values of the related assets. It is part of the matching of revenues and expenses.

The “excess of the acquirer’s interest in the net fair value of acquiree’sidentifiable assets, liabilities, and contingent liabilities over cost” (formerly knownas negative goodwill) should be A. Reassessed as to the accuracy of its measurement and then recognized immediately in profit or loss.B. Amortized over the life of the assets acquired.C. Carried as a capital reserve indefinitely.D. Reassessed as to the accuracy of its measurement and then recognized in retained earnings.

Under IFRS, when a company chooses the revaluation model as its accounting policy for measuring property, plant, and equipment, which of the following statements is correct? a. When an asset is revalued, the entire class of property, plant, and equipment to which the asset belongs must be revalued. b. When an asset is revalued, individual assets within a class of property, plant, and equipment to which that asset belongs can be revalued. c. Revaluations of property, plant, and equipment must be made every three years. d. An increase in an asset’s book value as a result of the first revaluation must be recognized as a component of profit and loss.