The fair value method of accounting for stock
Q: When share options issued to employees are exercised, the entity shall: a. recognize a loss for…
A: The stock options are type of equity compensation given to employees in form of stock. These stock…
Q: Increases in the fair value of unexercised share options after the vesting period shall be…
A: Share options are the rights provided to the employees for purchasing or acquiring shares of the…
Q: an initial recognition an entity may make an irrevocable election to present in other comprehensive…
A: According to the accounting stantdard if an entity makes an investment and shows it in in other…
Q: Which of the following is/are true about accounting for business combinations when stock is issued…
A: Accounting treatment for expenses in business combinations: When a company acquires…
Q: For fi nancial assets classifi ed as available for sale, how are unrealized gains and losses refl…
A: Shareholder's equity: It is the amount of the money that can be returned to the shareholders and it…
Q: Which of the following accounting treatments for costs related to business combination is incorrect?…
A: Costs associated to the establishment of the newly created corporation, also known as…
Q: At initial recognition, an entity may make an irrevocable election to present in other comprehensive…
A: At initial recognition, an entity may make an irrevocable election to present in other comprehensive…
Q: IFRS 9, the cumulative balance of equity as a result of measuring the investment at fair value…
A: Under IFRS 9, an investment can be measured at fair value or amortized cost. If the investment is…
Q: 37. When an entity reduces its interest in an investment in equity securities accounted for by the…
A: Introduction: If an investor company invests and acquires between 20 to 50% stake in the investee…
Q: Secondary market trading of a company’s previously issued shares directly affects the company’s real…
A: Primary market is the market where securities are dealt for the first time. Secondary market is the…
Q: All of the following statements are true regarding available-for-sale securities except a.changes…
A: The financial instruments that are tradable and can be used to raise capital in private and public…
Q: Whichever of the below offers the most potential for allowing the investor to use off-balance-sheet…
A: Balance sheet: The balance sheet shows the financial position of the company by recording all the…
Q: Analyze the following: I – An entity shall classify a noncurrent asset as held for sale when the…
A: Non-Current Asset: Non-Current Asset is an asset which is acquired by a company in hoping to get…
Q: hen an investor uses the cost method to account for investments in subsidiary, cash dividends…
A: Solution Concept Cost method to account for investments in subsidiary This method is used…
Q: An unrealized holding gain or loss on a company’s equity investment at fair value through other…
A: Solution: Unrealized holding gain or loss on a company’s equity investment is just the virtual…
Q: How shall an acquirer in a business combination account for the changes in fair value contingent…
A: Business combination is a form of arrangement or agreement between two or more than two entities in…
Q: Which of the following is most likely true regarding payment of dividends? a. Dividends may be paid…
A: The question is a multiple choice question. Required to identify the most likely true in regarding…
Q: Please concisely explain how the excess investment cost over book value is allocated. When is the…
A: 1. The excess cost of investment over book value can be allocated through the process of…
Q: When share options issued to employees are vested prior to the predetermined vesting date, the…
A: According to the accounting standard if options are vested before the date then company wil…
Q: n stock appreciation right, decline in fair value of share shall be accounted as A. Loss and…
A: The prices of shares goes up and down and adjustment are to be done for that.
Q: Which of the following should be presented in the statement of changes in equity? A. Distributions…
A: The financial statements of the business include the income statement, balance sheet and statement…
Q: Unrealized holding gain/loss which are taken to profit or loss are from securities that are…
A: Answer:- Unrealized gain meaning:- A notional profit that exists on paper as a consequence of an…
Q: Required Prepare the consolidated statement of profit or loss and extract from the statement of…
A: Consolidated Statement: It is a Financial Statement, which shows the entire activity of the…
Q: Equity Investment classified at Fair Through Profit or loss (choose which of the following is false)…
A: Solution: Security held for trading classified at fair value through profit or loss and equity…
Q: Which of the following statements is true about conting consideration under the revised PFRS 3? O…
A: Contingent consideration is defined as the obligation or liability of the buyer or acquirer to…
Q: When share options issued to employees are vested prior to the predetermined vesting date, the…
A: Solution: As per IFRS, fair value of the share-based payment, determined at the grant date, should…
Q: What is the inherent justification underlying the concept of potential ordinary shares or diluters…
A: Introduction:- The following Qualitative characteristics of accounting information as follows…
Q: For downstream sales the total amount of unrealized gains and losses are allocated between…
A: Downstream sales is the sales made by parent company to subsidiary company. Parent company is the…
Q: An entity need not disclose... a. A description of the nature and purpose of each reserve within…
A: This question deals with the which things entity does not needs to disclose. As per para 79 of the…
Q: Statement I. Book value per share is tantamount to earnings per share Statement II. Dividends…
A: Book value per share is ratio of shareholders equity less preferred equity to number of shares…
Q: Dividends are recognized in profit or loss only when: Group of answer choices: The entity’s right…
A: Solution: Dividends are recognized in profit or loss only when: 1. The entity’s right to receive…
Q: Choose the correct. Under fair-value accounting for an equity investment, which of the following…
A: Under fair value accounting change in the value of investment will be recognized as the change in…
Q: The statement of shareholders' equity reports the effects from the recognition or valuation of…
A: Other comprehensive Income includes all gains and losses, revenue and expenditures which have not…
Q: Directions: Please select the appropriate answer on the statement below; B - If the statement is…
A: Shareholder's Equity:- It is the amount which the company accumulated from the investment made by…
Q: How shall an acquirer in a business combination account for the changes in fair value contingent…
A: The answer for the multiple choice question and relevant explanation are presented hereunder : What…
Q: Which statement is true in relation to business combination achieved in stages? a. The pre-existing…
A: A business combination achieved in stages is called as a step acquisition
Q: The following independent statements may be true or false. Discuss the circumstances whereby the…
A: DIVIDEND IS THE AMOUNT OF MONEY A COMPANY PAY TO IT'S SHAREHOLDER REGULARLY OUT OF ITS PROFIT .
Q: How is the Non-Controlling Interest displayed in a consolidated balance sheet? a. As a separate…
A: Introduction:- Non-controlling interest occurred in business combination. The parent acquires less…
Q: ow will retained earnings be affected by purchase of treasury shares and subsequent sale of treasury…
A: Treasury shares means the share which has been buy back by the company . It will be shown as…
Q: Because of the acquisition of additional investee shares, an investor will now change from the…
A: Equity method: Equity method is the method used for accounting equity investments which claim a…
Q: The cost method of accounting for stock Group of answer choices recognizes dividends as income…
A: Cost method of accounting of stock means where the investment i.e. stock is carry forward in…
Q: Which of the following items affect equity without going through the income statement? Group of…
A: A) Purchase of treasury stock decreases equity and assets and not dealt in income statement. B)…
Q: Under IFRS 9, the cumulative balance of equity as a result of measuring the equity investment at…
A: As per IFRS 9, Financial instruments, The unrealized gain on changes in fair value of the financial…
Q: When share options issued to employees are exercised, the entity shall make a transfer among…
A: Following journal entry will be passed on exercise of share options issued to employees : Share…
Q: Comprehensive income consists of O operating income + other income and losses net income + other…
A: please like the answer your response matters comprehensive income consists of other comprehensive…
Q: method, an investment in associate or joint venture is initially and subsequently measured at…
A: Answer - Option B Initial measurement - Cost Subsequent measurement- Cost, adjusted for the investor…
Q: When a contingent consideration arising from a business combination is classifled as equity, how is…
A: Contingent Consideration Contingent consideration is the amount which was promised by the buyer to…
Q: 3. Under the equity method, which of the following decreases the carrying amount of an investment in…
A: Equity method is one of the method which is usee for accounting for investment in some associate or…
The fair value method of accounting for stock
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- Which of the following statements concerning the different types of hedging transactions is incorrect? a. In hedging transaction designated as fair value hedge, unrealized holding gain or loss on hedged item will be recognized in profit or loss. b. In hedging transaction designated as cash flow hedge, unrealized holding gain or loss on hedged item will be recognized in other comprehensive income with reclassifications adjustment to profit or loss if realized. c. In hedging transaction which is undesignated, unrealized holding gain or loss on hedging instrument will be recognized in profit or loss. d. In hedging transaction designated as hedge of net investment in foreign operation, unrealized holding gain or loss on hedging instrument which is considered effective portion will be recognized in other comprehensive income with reclassification adjustment to profit or loss if realized.An appropriation of accumulated profits for possible contingencies should be a. Transferred to income as losses are realized b. Shown within shareholders’ equity in the statement of financial position c. Charged with all losses related to that contingency d. Classified in the liability section of the statement of financial positionFor fi nancial assets classifi ed as available for sale, how are unrealized gains and losses refl ected in shareholders’ equity? C . Th ey are a component of accumulated other comprehensive income.
- If an associate incurs losses, the investor is required to________. Select one: a. recognise the losses only to the point where the carrying amount of the investment is equal to zero b. reclassify the investment as current assets c. recognise the losses only to the point where the carrying amount of the investment is equal to the initial investment d. ignore the losses for the purposes of equity accounting adjustmentsDiscuss the appropriate treatment in the income statement for the following items: a. Loss on discontinued operations. b. Non-controlling interest allocation.4. Which of the following is not a component of other comprehensive income?a. Unrealized gain on equity investment measured at fair value through other comprehensive incomeb. Revaluation lossc. Unrealized gain from derivative contracts designated as cash flow hedged. Loss from translation of the financial statements of a domestic operation 5. Which of the following is a component of other comprehensive income?a. Unrealized loss from derivative contracts designated as fair value hedge.b. Unrealized loss on debt investment measured at fair value through other comprehensive incomec. Gain from translation of the financial statement of a domestic operation.d. Remeasurements of defined obligation plan, including accrual gain 6. Statement of comprehensive income can be presented asa. Two statements or single statement of comprehensive incomeb. Single statement of comprehensive income onlyc. Two statement of income statement or statement of comprehensive income onlyd. Statement of…
- If it loses significant influence over the associate, the balance of the investment in the associate is recorded at:A. Fair valueB. Identifiable net asset propertyC. Cost methodD. Keep the equity methodWhich of the following statements best describes the term "liability"? *a. An excess of equity over current assetsb. Resources to meet financial commitments as they fall duec. The residual interest in the assets of the entity after deducting all of its equityd. A present obligation of the entity arising from past eventsAccounting: type question:, Which of the following items is not taken in profit and loss appropriation account? A. Transfer to dividend equalisation reserve B. Transfer to general reserve C. Provision for taxation D. Proposed dividend
- Any gain or loss on the restatement of non-monetary items is included: In the profit or loss, without separate disclosure. O In the profit or loss, with separate disclosure. In the other comprehensive income. As part of the equity section in the balance sheet.For fi nancial assets classifi ed as available for sale, how are unrealized gains and losses refl ected in shareholders’ equity?A . Th ey are not recognizedsome examples of items that would be adjusted directly against equity, rather than beingincluded as part of profit or loss.
