Classification1. An entity invests in a pool of assets that is managed by aninvestment house. In accordance with the entity's businessmodel, the investment will be held until it matures in 10 years'time, at which date the entity will collect the principal amountin the investment together with the interest earned. Inaccordance with the principles of PFRS 9, the entity will mostlikely measure the investment atc. FVOCI (Mandatory).d. FVOCI (Election).a. Amortized cost.b. FVPL.2. An entity plans to purchase a new machine in a few years'time. The cost of the new machine is significant. To addressthis, the entity invests in debt securities. The entity'sinvestment management strategy is to hold the investmentand collect the investment income in the form of interest.However, when opportunity arises, the entity sells theinvestment in order to realize fair value gain. The entityreinvests any proceeds from sales until the date of purchase ofthe new machine. In accordance with the principles of PFRS 9,the entity will most likely classify the investment assubsequently measured ata. Amortized cost.b. FVPL.c. FVOCI (Mandatory).d. FVOCI (Election).

Classificati 1 An entity invests in a pool of assets that is managed by an investment house. In accordance with the entity's business model, the investment will be held until it matures in 10 years' time, at which date the entity will collect the principal amount in the investment together with the interest earned. In accordance with the principles of PFRS 9, the entity will most likely measure the investment at a. Amortized cost. c. FVOCI (Mandatory). d. FVOCI (Election). b. FVPL.

Classificati 1 An entity invests in a pool of assets that is managed by an investment house. In accordance with the entity's business model, the investment will be held until it matures in 10 years' time, at which date the entity will collect the principal amount in the investment together with the interest earned. In accordance with the principles of PFRS 9, the entity will most likely measure the investment at a. Amortized cost. c. FVOCI (Mandatory). d. FVOCI (Election). b. FVPL.

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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Under PFRS 9, a financial asset shall be measured subsequently at amortized cost when: I. The business model of the entity is to hold the financial asset in order to collect contractual cash flows on specifies dates. II. The contractual cash flows are solely payment of principal and interest on the principal amount outstanding. O Il only Both I anf II O Either I orll O lonly Next
8. Statement 1: An entity shall begin capitalizing borrowing costs as part of the cost of qualifying asset on the date of recognition. Statement 2: Expenditures of a qualifying asset include only those expenditures that have resulted in payment of cash, transfers of other assets, or the assumption of interest- bearing liabilities. а. Only the first statement is correct. b. Only the second statement is correct. С. Both statements are correct. d. Neither of the statements is correct.
The following data were taken from the statement of affairs of ROBINSONSCorp.:Assets pledged for fully secured liabilities (current fairvalue, P75,000)Assets pledged for partially secured liabilities (currentfair value P52,000)Free assets (current fair value, P40,000)Unsecured liabilities with priorityFully secured liabilitiesPartially secured liabilitiesUnsecured liabilities without priority P90,00074,00070,0007,00030,00060,000112,000 1. The amount that will be paid to creditors with priority is:a. P7,000 b. P6,000 c. P7,500 d. P6,2002. The amount to be paid fully secured creditors is:a. P30,000 b. P32,000 c. P20,000 d. P35,0003. The amount to be paid to partially secured creditors is:a. P52,700 b. P57,200 c. P56,200 d. P 57,0004. The amount to be paid to unsecured creditors:a. P78,200 b. P70,800 c. P72,000 d. P72,800
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Entity A issues an instrument that is re-purchasable by delivering cash or another financial asset. FHo 4. However, Entity A's All rights belongs to respective author Downloaded by era 2020 ean cszmoeaton@gma.com) buving the original co 338 PAS 32 contractual obligation to repurchase the instrument is conditional on the holder (the counterparty) exercising its right to redeem. Which of the following statements is correct from the perspective of Entity A? a. The instrument is a financial liability because when the holder exercises its redemption right, Entity A does not have the unconditional right to avoid making the payment. b. The instrument is an equity instrument because Entity A's contractual obligation to deliver cash or another financial asset is conditional on the holder exercising its right to payment. c. Entity A initially classifies the instrument as an equity instrument. However, when the holder exercises its redemption right, the instrument is reclassified to financial…
Under what cisrcumstances under PFRS 9 can an entity classify financial assets that meet the amortized cost criteria as at FVTPL? A. where the business model approach is adopted B. where the financial asset passes the contractual cash flow characteristics test C. where the instrument is held to maturity D. if doing so eliminates or reduces an accounting mismatch
1. Assuming the investment is appropriately recognized as financial assets at amortized cost: What is the carrying value of the investment on December 31, 2020? 2. Assuming the investment is appropriately recognized as financial assets at amortized cost: Determine the gain or (loss) to be recorded upon the sale of the investment. 3. Assuming the investment is appropriately recognized as financial assets at amortized cost: How much interest income is to be recognized in 2021?
25. A parent company’s investment account would include an element which is representative of : Multiple Choice the unrecorded difference between fair value and book value of the investee’s assets. the unrecorded book value of the investor’s assets. the goodwill accrued since the purchase of the investee. the recorded current value of the investee’s assets.
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In the statement of financial position, investment of a specific entity OA Can be classited as curent assets OAe classifed as curent labilties OC. Nane of the abeve O Are dlassifedaanget Batection
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