S1: For reclassification from FVPL to amortized cost, a new effectiveinterest rate must be determined based on the new carrying amount orfair value at reclassification date. S2: For reclassification from FVOCI toamortized cost, a new effective interest rate must be determined basedon the new carrying amount or fair value at reclassification date.Only S1 is TRUEO Only S2 is TRUEBoth statements are TRUEBoth statements are FALSE

Answered: Image /qna-images/answer/437b8a27-edaf-4bc4-8fbf-d4ae89c4dfb0.jpg

Answered: St: For reclassification interest rate…

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

[S1] An investor should buy an asset when it is undervalued and sell the asset when it is overvalued. [S2] An investor should hold onto an investment when it is expected to appreciate in value.a. Only S1 is true.b. Only S2 is true.c. Both are true.d. Both are false.
The forward contract value today is denoted as a.Vo(0,T) b.Fo(0,T) c.So(1 + r)^T d.Fo(0,T)/(1 + r)^(T – t)
t29
1) Impairment affects the historical cost of a liability over time. 2) Inflation affects the historical cost of a liability over time. a. both statements are true b. both statements are false c. 1st statement is true, 2nd is false d. 1st statement is false, 2nd is true
34. The following statements are correct, except a. A liability will be reported at less than its maturity amount prior to the maturity date if the stated rate of interest on the liability is higher than the market rate of interest. b. A liability is created because of the acquisition of an asset, payment of another liability, incurrence of an expense, declaration of cash or property dividend, a loss, or a revenue collected in advance. In all cases, each of these “causes” usually provides the basis for measuring the liability. c. Accounts payable with customary term of 18 months is classified as current liability. d. Most liabilities have stated and effective interest rates that are the same; in such a situation the principal, face, and maturity amounts are all the same.
10. Theoretically, unearned items (deferred revenues) should not be classified as a. deferred creditsb. contra to certain assetsc. long-term liabilitiesd. current liabilities
15.1 Liabilities liquidated is measured at: Group of answer choices None of the choices Realizable value Actual settlement amount Book value
On the balance sheet date, the book value (or carrying value) of an asset should always equal the asset's fair value. Select one: True False
4. The order of the 'fair value hierarchy' nominated by the FASB's SFAS 157 is: i. Quoted prices for similar assets or liabilities in active markets, adjusted ii. Quoted prices for identical assets and liabilities in active reference markets, unadjusted iii. Multiple valuation techniques consistent with the market, income and cost approaches a. Levels ii, i, iii b. b. Levels i, ii, iii c. Levels iii, ii, i d. Levels ii, iii, it
18. Which of the following statements is false? Select one: a. Simple interest relates to present value whereas compound interest relates to future value b. Simple interest relates to future value whereas compound interest relates to present value c. Simple interest applies when an investor receives payments and compound interest applies when an investor makes payments d. All of the above
Vikrambahi
(;). » - ( ) Consider two assets: rı = 3 If the asset prices are q1 = 1, q2 = 2 () 1+ a respectively, does the price of an asset with returns 1 in the two states - a. = 1 - a satisfy the no arbitrage property? (Record your answer as respectively, q 'True' (=yes) or 'False' (=no).

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