S1 Bond investments classified and accounted for as financial asset at amortized cost are recognized initially at fair value plus transaction costs that are directly attributable to the acquisition. S2: Transaction costs attributable to the acquisition of bond investments held for trading or at "air value through profit or loss are expensed immediately.

S1 Bond investments classified and accounted for as financial asset at amortized cost are recognized initially at fair value plus transaction costs that are directly attributable to the acquisition. S2: Transaction costs attributable to the acquisition of bond investments held for trading or at "air value through profit or loss are expensed immediately.

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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Demonstrate how to identify and account for debt investments classified forreporting purposes as trading securities
Which of the following is correct regarding the classification of investment in debt instruments as financial asset at fair value through OCI? A. All of these. B. An entity may make an irrevocable election to classify investment in a debt instrument that is not held for trading' as such. C. In order to be classified as such, a debt instrument needs to both have simple principal and interest cash flows and be held in a business model in which both holding and selling financial i assets are integral to meeting management's objectives. D. This classification is not allowed for investment in debt instruments.
question 53
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Which of the following assets are initially and subsequently measured at Fair Value? Biological assets Available for sale securities Inventories Property and Equipment Held for trading securities Intangible assets I and II only I, II, III and V only I, II and III only I, II, IV, and V only
Why are unrealized gains and losses on available-for-sale securities not reported in theincome statement, but instead are reported in other comprehensive income, and thenshown in accumulated other comprehensive income (AOCI) in the balance sheet?
In investment in debt securities accounted for at fair value through other comprehensive income, the difference between the fair value and the accumulated unrealized gain or loss - OCI presented in the statement of financial position would normally equal to: * A. The unrealized gain or loss - OCI presented as part of other comprehensive income B. The amortized cost of the debt securities C. The interest income for the period D. The fair value of the debt securities in the previous period
The balance in Unamortized Discount on Bonds Payable should be Oa. reported separately in the Current Liabilities section of the balance sheef Ob. added to the face amount of the related bonds payable on the balance sheet. O C. reported in the Paid-In Capital section of the balance sheet. Od. reported on the balance sheet as a deduction from the face amount of the related bonds payable.
The share premium recognized on a convertible bond O A. remains in equity only if the bonds are actually converted В. reclassified out of equity to profit or loss if the bonds are not converted O c. remains in equity whether the bonds are actually converted or not O D. recognized as gain or loss on conversion E. becomes part of the bonds payable account
2. The value of the warrants attached to a debt security (detachable) is accounted as: a) Liability b) A part of share capital c)An appropriation of retained earnings d) A separate portion of share premium
For investment in equity securities carried as FVOCI under PFRS 9, the difference between the carrying value of the investment and its related cumulative unrealized gain or loss-OCI is * A. its unrealized gain or loss reported as a component of OCI for the period B. Its amortized cost C. its initial cost D. its unrealized gain or loss reported under profit or loss for the period A gain or loss arising on the initial recognition of biological assets and from a change in the fair value less costs to sell of a biological asset shall be included in: * A. Profit or loss for the period B. Other comprehensive income C. A separate revaluation reserve D. Either in the profit or loss or the other comprehensive income for the period The following items are generally classified as plant assets, except: a. Improvements to leased facilities b. Property held for future plant sites c.…
Statement 1. Bonds held for the purpose of accruing profit due to changes in fair value are classified as fair value asset. The changes in fair value of bonds are recognized in the income statement. Statement 2: Bonds held for the purpose of collecting contractual cash flows are classified as financial assets at amortized cost. The changes in fair value of bonds are ignored. Both statements are trueBoth statements are falseStatement 1 only is trueStatement 2 only is true Statement 1: Under the equity method of accounting, the maximum investor’s share in the loss of the investee is the carrying amount of investment balance. Statement 2: An investor shall discontinue to use the equity method from the date that the investor ceases to have significant influence over the investee. Both statements are true Both statements are falseStatement 1 only is trueStatement 2 only is true