Which of the following case would allow the capitalization of  Interest Expense     No Case allows this transaction Borrowing Cost Provided the interest is immaterial Only if Management Allows

Q: Which of the following statements is true regarding capitalization of interest? O When excess…

A: The cost of borrowing to acquire or build a long-term asset is referred to as capitalized interest.…

Q: When the fair value of plan assets is multiplied with a discount rate, an interest expense arise.…

A: Interest expense is determined by multiplying the discount rate with the start of the period by the…

Q: an investment in equity instrument may not be classified as a financial asset subsequently measured…

A: Solution: An investment in equity instrument may not be classified as a financial asset subsequently…

Q: Which of the following is not a primary function of Money? a. All the options are correct b.…

A: Money is any item or verifiable record that is generally accepted as payment for goods and services

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

A: As per IFRS 16, Leases A Gross investment in the lease is  = lease payments receivable by lessor in…

Q: Which of the following is NOT true about capitalizing interest under U.S. GAAP? (A 24) Group of…

A: Introduction: The Financial Accounting Standards Board issues a set of accounting rules, standards,…

Q: If the borrowing is not directly attributable to a qualifying asset, the borrowing cost is expensed…

A: Assets that take a significant amount of time so that they can be used in business by the entity are…

Q: Borrowing costs on borrowings obtained for the purpose of acquiring or constructing a qualifying…

A: Following is the answer to the given question

Q: Which of the following statements is true? a. Borrowing costs are generally expensed except when…

A: Accounting principles are general rules and guidelines that the company follows while recording and…

Q: are payments and receipts of interest classified as operating activities rather than as financing or…

A:

Q: What is the arrangement that an SMSF must use for borrowing?

A: Self Managed Super funds (SMSF) are the superannuation trusts. These trust provides benefits to the…

Q: The amount for which an asset could be exchanged, a liability settled , or an equity instrument…

A: The amount for which an asset could be exchanged, a liability settled , or an equity instrument…

Q: Which of the following is not a category of financial assets under GAM? Group of answer choices…

A: Financial Assets are to be classified in the following four categories: 1. Financial Assets at fair…

Q: Which of the following is not a pervasive expense recognition principle? a. immediate recognition…

A: Option C - Cash Payment is not a pervasive expense recognition principle.

Q: Which of the following statements concerning the different types of hedging transactions is…

A: The Correct Answer is Option "C"  i.e. In hedging transaction which is undesignated, unrealized…

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: Which statement is incorrect regarding contractual cash flows that are solely payments of principal…

A: IFRS 9 talks about solely payments of principal and interest (SPPI).

Q: Which of the following expenses apply to or may be claimed by cash basis taxpayers?  a. Depreciation…

A: Under a cash basis, the cash received and cash paid is considered for calculating the income and…

Q: under the conceptual framework for internationai financial reporting a non-contraling interest fits…

A: Non-controlling interest Non-controlling interest is also referred to as the minority interest…

Q: the event of difficulty in recovering the funds advanced, claim the monies back from the borrower,…

A: A loan is an instrument which is used to raise money. So a borrower can raise money at a defined…

Q: When accounting for self-constructed PPE and computing the amount of interest cost to be…

A: Self constructed PPE are those Property, Plant and Equipment which is constructed by the business on…

Q: When intially recognizing the cash surrender value, what is the reason behind the allocation between…

A: Matching Principle Concept-:Matching precept is the accounting belief that compels that the…

Q: The means by which individuals hold their claims on real assets in a well-developed economy are A)…

A: A financial asset is a liquid asset which, from either a legal right or ownership assertion,…

Q: loses significant influence over the associate, the balance of the investment in the associate is…

A: When the company has significant influence over the associate, then equity method should be used for…

Q: Where the payment of an investment property is deferred beyond normal credit terms, how should the…

A: Property, plant, and equipment are tangible fixed assets. These are depreciable assets which mean…

Q: Which of the following are reported at fair value? Debt investments. Equity investments. Both debt…

A: Debts investments are actually classified as available for sale and reported at fair value. Equity…

Q: Access the glossary (“Master Glossary”) to answer the ­following. a.    What does it mean to…

A: Answer: To capitalize an item means to use the item for the long term in the business and disclose…

Q: nvestment in debt instruments classified as FA@FVTOCI recognizes which of the following in OCI? A.…

A: For debt instruments measured at FVOCI, only the changes in Fair value is recognised in OCI.…

Q: Debt investment are initially recorded at: Cost Cost plus accrued interest Fair value None of the…

A: Debt investment: Debt investment is investment in any firm or project in which you expect to receive…

Q: Question 14 Which statement is incorrect regarding contractual cash flows that are solely payments…

A: Question 14 Which statement is incorrect regarding contractual cash flows that are solely payments…

Q: explain the main different between acquisition method, interest pooling g method and the purchase…

A: Acquisition is one type of mergers and acquisitions, where pooling-of-interest method and purchase…

Q: When the contractual cash flows of a financial asset are renegotiated or otherwise modified and the…

A: IFRS:   It stands for International Financial Reporting Standards. It is responsible set standards…

Q: What factors should be consi

A: Debenture   A debenture is a type of debt instrument unsecured by collateral. Since debentures…

Q: Essay: (Answer must be technical, with examples if necessary.) When initially recognizing the cash…

A: The coordinating with rule is a bookkeeping idea that directs that organizations report expenses…

Q: Which statement is incorrect regarding contractual cash flows that are solely payments of principal…

A: Contractual cash flows are the exchanges of cash either cash inflows or cash outflows between two…

Q: Which of the following is classified as nonmonetary? a. Cash surrender value b. Long-term receivable…

A: Nonmonetary item is an asset or liability that does not have a fixed exchange cash value, but whose…

Q: Transfers of investments between categories   a. Should always affect net income b. Are accounted…

A: Transfer of an Investment:- It is a procedure where one company or entity sells its investment to…

Q: Borrowing costs that are acquisition, construction or production of a qualifying asset are a…

A: IAS 23 borrowing cost says that if any interest is paid on a loan, which is taken to construct a…

Q: With reference to IAS 37, identify the correct statements from the following: I A contingent asset…

A: Contingent assets refer to the assets that are a result of past event and inflow from those assets…

Q: Select the investment accounting approach with the ­correct valuation approach:     Not…

A: Fair value: Fair value is the price at which, both seller and buyer agree to exchange the asset. So,…

Q: transaction costs

A: All financial assets are initially measured at fair value plus transaction costs, except C :- Fair…

Q: Under what circumstances under PFRS 9 can an entity classify financial assets that meet the…

A: PFRS 9 includes 3 main components. (1) Requirements  for recognition, Classification of Financial…

Q: 6. When computing the amount of interest cost to be capitalized, the concept of "avoidable interest"…

A: Capitalized interest represents the interest cost incurred to finance the construction of a…

Q: Is the following statement is true or false? Amortization is not a payment process.

A: Amortization refers to the process of paying off a debt through scheduled, pre-determined…

Q: 2. Which of the following correctly matches the classification of the debt investment with its…

A: IAS 32 and IAS 39, the previous IFRS financial instruments accounting standards, classified debt…

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.