1. When reclassification is made from owner occupied property to investment property that will be carried at fair value, any excess of the fair value over the carrying amount at the date of transfer is a. ignored. b. recognized as a gain in profit or loss, c. credited to asset revaluation surplus. d. recorded as a credit to a liability account
1. When reclassification is made from owner occupied property to investment property that will be carried at fair value, any excess of the fair value over the carrying amount at the date of transfer is a. ignored. b. recognized as a gain in profit or loss, c. credited to asset revaluation surplus. d. recorded as a credit to a liability account
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1. When reclassification is made from owner occupied property to investment property that will be carried at fair value, any excess of the fair value over the carrying amount at the date of transfer is
a. ignored.
b. recognized as a gain in profit or loss,
c. credited to asset revaluation surplus.
d. recorded as a credit to a liability account
2. Which of the following are valid statements regarding measurement of investment property?
I. The best evidence of fair value is current price in an active market for similar property in the same location and condition.
II. When items of investment property are measured at fair values, any movement in fair value is credited to other comprehensive income under the heading revaluation surplus.
III. An entity shall continue to measure an investment property at fair value until its disposal if it has previously valued the property at fair value.
IV. Transaction costs directly attributable to acquisition of investment property are capitalized as part of the cost of the asset.
a. I, II, III and IV
2. Which of the following are valid statements regarding measurement of investment property?
I. The best evidence of fair value is current price in an active market for similar property in the same location and condition.
II. When items of investment property are measured at fair values, any movement in fair value is credited to other comprehensive income under the heading revaluation surplus.
III. An entity shall continue to measure an investment property at fair value until its disposal if it has previously valued the property at fair value.
IV. Transaction costs directly attributable to acquisition of investment property are capitalized as part of the cost of the asset.
a. I, II, III and IV
b. I, III and IV
c. I, II, and IV
d. II and III only
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