Which statement is incorrect regarding contractual cash flows that are solely payments of principal and interest (SPPI)? Group of answer choices Contractual cash flows that are SPPI on the principal amount outstanding are consistent with a basic lending arrangement.   An originated or a purchased financial asset can be a basic lending arrangement only if it is a loan in its legal form.   Principal is the fair value of the financial asset at initial recognition.   An entity shall assess whether contractual cash flows are SPPI on the principal amount outstanding for the currency in which the financial asset is denominated.

Which statement is incorrect regarding classification of financial assets?   a. An entity can classify financial assets that meet the amortized cost criteria as at FVPL if doing so eliminates or reduces an accounting mismatch.   B. In order to be classified at fair value through OCI, a debt instrument needs to have either simple principal and interest cash flows or be held in a business model in which both holding and selling financial assets are integral to meeting management’s objectives.   C. An investment in equity instrument may not be classified as financial asset subsequently measured at amortized cost.   D. Reclassifications of financial assets are only permitted on the change of an entity’s business model and are expected to occur only infrequently.

Which of the following returns is consistent with contractual cash flows that are solely payments of principal and interest or SPPI? I. Return of passage of time II. Return for the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation III. Return for the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset IV. Return for amounts to cover expenses and a profit margin   a. I, II, III, and IV b. I, II, and III c. I and IV only d. II and III only

4. Financial liabilities other than FVPL liabilities are initiallymeasured at fair value plus transaction costs.5. Amortized cost financial liabilities are subsequently measuredat the present value of the cash outflows from the instrument.6. Financial liabilities may be subsequently reclassified betweenthe amortized cost and fair value measurement categories.7. Trade payables and other liabilities that are part of an entity'sworking capital may be presented as current liabilities even ifthey are expected to be settled beyond one year.8. According to PAS 1, a currently maturing debt that the entity'smanagement intends to refinance is presented as noncurrent.9. According to PFRS 15, if an entity expects that a portion of giftcertificates sold will not be redeemed, the entity recognizes theexpected breakage amount as revenue in proportion to thepattern of rights exercised by customers.10. Unearned revenue is revenue that is earned but not yet collected   Please answer this all. Thank you

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Use IFRS 9 to determine how to subsequently measure the following financial assets.  Three choices of measurement basis are amortized cost, fair value through other comprehensive income, and fair value through profit or loss.  Provide justification for your choice. Long-term loans that are held for collecting contractual cash flows till their maturities, but may be subsequently sold if the loans’ credit risk substantially increases. Investments in bonds that are held for collecting contractual cash flows, and may be subsequently sold to re-invest the cash in financial assets with a higher return. Subprime (high risk) mortgage loans that were originated by a mortgage-broker firm that always sell these loans to banks right after their origination. Forward contracts that an EU bank purchased to hedge the exposure to changes in fair value of US$-denominated loans. Investment in bonds that are convertible into common stock of the bond issuer. Investment in bonds that pay a variable market…

If the value of an item can be measured and reasonably determined, this item can be recognized in the financial statements as long as it O involves an exchange of cash and/or credit is granted. O provides some future economic benefit. meets the definition of an element of the financial statements. O has already occurred.

Which of the following assertions is relevant to whether the cash balances reflect the true underlying economic value of those assets? a. Existence/occurrence. b. Completeness. c. Rights and obligations. d. Valuation or allocation. e. All of the above.

Fair value is used to value which of the following balance sheet accounts? a. Prepaid expenses; patents; property, plant, and equipment b. Capital lease obligations, bonds payable c. Receivables net of allowance for doubtful accounts d. Debtsecurities available for sale, trading securities

How shall an entity subsequently measure financial liabilities?  Is IFRS measurement of financial liabilities similar to that of U.S. GAAP? Also briefly describe the requirements regarding an option to designate a financial liability at fair value through profit and loss. Q: Does U.S. GAAP allow fair value option for financial assets and liabilities? Q; What is “own credit” issue related to financial liabilities measured at fair value through profit and loss? Q: How does IFRS 9 address this “own credit” issue?