Which of the following statements is correct? a. IFRS permits the fair value option for the equity method of accounting. b. GAAP permits recovery of impairment losses. c. Under IFRS, non-trading equity investments are accounted for at amortized cost. d. IFRS and GAAP both have a trading investment classification.
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Which of the following statements is correct?
a. IFRS permits the fair value option for the equity method of accounting.
b. GAAP permits recovery of impairment losses.
c. Under IFRS, non-trading equity investments are accounted for at amortized cost.
d. IFRS and GAAP both have a trading investment classification.
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- An unrealized holding gain or loss on a trading debt investment is the difference between the investments Select one: a. fair value and original cost. b. fair value and amortized cost. c. face value and amortized cost. d. face value and original cost.Marketable securities are accounted for at their current fair value using mark-to-market accounting. Discuss why mark-to-market accounting is superior to accounting for mar- ketable securities at their historical cost. Should mark-to-market accounting be adopted to account for all assets on the balance sheet? Why or why not?Choose the correct answer: Under IFRS 9, the cumulative balance of equity as a result of measuring the investment at fair value through OCI a. shall be reversed to profit or loss once security has been sold. b. shall be reversed to profit or loss once security has been impaired. c. shall not be reversed to profit or loss but can be transferred to another equity account. d. shall not be reversed to profit or loss nor transferred to another equity account. .
- 1. A bond investment that satisfies the amortized cost measurement may be designated a. Revocably at fair value through profit or loss b. Irrevocably at fair value through profit or loss c. Irrevocably at fair value through OCI d. Irrevocably at amortized costWhich of the following may be classified as a financial asset at fair value through profit or loss a. a non derivative equity instrument b. all of these' c. a derivative d. a non-derivative debt instrumentWhen the market value of a companys available-for-sale securities is lower than its cost, the difference should be: a. shown as a liability. b. shown as a valuation allowance added to the historical cost of the investments. c. shown as a valuation allowance subtracted from the historical cost of the investments. d. No entry is made, the securities are shown at historical cost.
- Explain the adjustments made in the equity method when the fair value of the net assets underlying an investment exceeds their book value at acquisition.(i). Debt investments not plan to sell reported at a. amortized cost. b. fair value. c. the lower of amortized cost of fair value. d. net realizable value. (ii). which of the following caa be reported at fair value? a. Debt investments. b. Equity investments. c. Both debt and equity investments: d None of these answers' choices are correct.A bond investment that satisfy the amortized cost measurement may be designated a. irrevocably at either fair value through other comprehensive income or fair valiue through profit or loss. b. irrevocably at fair value through other comprehensive income c. revocably at fair valiue through profit or loss. d. irrevocably at fair value through profit or loss
- Which of the following statements is correct in regard to trading bond investment? a. Trading bond investments are held with the intention of selling them in a short period of time b. Unralized gains and losses are reported as part of income c. both are correct d. both are incorrectan investment in equity instrument may not be classified as a financial asset subsequently measured at a) Fair value through profit or loss b) Amortized cost c) Fair value through other comprehensive income d) none of these1. Which of the following may be measured subsequently at amortized cost?a. None of theseb. A non-derivative equity instrumentc. A derivalived. A non-derivative debt instrument 2. An investment in equity instrument may not be classified as a financial asset subsequently measured ata. Fair value through other comprehensive incomeb. Amortized costc. Fair value through proft or lossd. None of these 3. Significant influence isa. The contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.b. The power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.c. The power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.d. Deemed to exist when the investor is exposed, or has rights, to variable returns from its involvement with the…