1.a.3. Fair valueb.1.I onlyC.1. Which is correct concerning capitalization of borrowing cost?If the borrowing is directly attributable to a qualifying asset, the borrowing cost is required to becapitalized as cost of the asset.If the borrowing is not attributable to a qualifying asset, the borrowing cost is required to beexpensed as incurred.ll onlyBoth I and IId. Neither I and II2. An investor shall discontinue the use of the equity method from the date?The investor ceases to have significant influence over an associate.The associate operates under severe long-term restrictions that significantly impair its ability totransfer funds to the investor.The price that would be received to sell an asset in an orderly transaction between marketparticipants at the measurement date.The present value or discounted value of future net cash flows expected to be derived from anasset.

Introduction:- Borrowing costs are capitalized as a part of the cost of the qualifying asset only…

Answered: 1. Which is correct concerning…

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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Which is the proper way to report a contingent asset? a. As an asset b. No disclosure and no accrua c. An unrealized revenue d. As a disclosure only
8. Income is: a. An amount for payment of services, interest, or profit from investment b. The gain derived from capital or labor c. Any material gain, not otherwise excluded by law, realized out of a closed and completed transaction, where there is an exchange of economic value for economic value, with a specified taxable period, under the method of accounting employed. d. A flow of service rendered by capital by the payment of money from it or any other benefit rendered by a fund of capital in relation to such fund through a period of time.
1. All of the following are components of the defined benefit cost except * unvested past service cost interest on the effect of the asset ceiling loss on settlement return on plan assets 2. Which of the following are recognized in other comprehensive income? service cost net interest in net defined benefit liability (asset) amortization of actuarial gains or losses difference between interest income on plan assets and return on plan assets 3. The balance of the present value of defined benefit obligation is affected by all of the following except * actuarial gains or losses interest cost current service cost contributions to the fund 4. If the present value of the defined benefit obligation exceeds the fair value of the plan assets, there is * deficit surplus expense prepaid accrued benefit cost
__________ is defined in the Conceptual Framework as ‘a present obligation of the entity to transfer an economic resource as a result of past events’. Select one alternative: Expense Income Asset Liability
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
The amortization process is like what other process?A. depreciationB. valuationC. recognizing revenueD. capitalization
What costs are included when capitalizing an asset on the balance sheet?
Which of the following is not a criterion that must be met for an item to be classified as a liability? A certain cash payment will occur in the future. A sacrifice will require the entity’s assets or services. There is a probable future sacrifice. There is a present obligation that results from a past transaction.
All financial assets are initially measured at fair value plus transaction costs, except A. Amortized cost C.None of these C. Fair value through profit and loss D. Fair value through OCI
Section 1221(a) of the Internal Revenue Code defines what: a. is a capital asset. b. is not a capital asset. c. is a ordinary gain. d. is capital gain
Statement 1: Measurement period is relevant if Fair Value of Net Assets of acquiree includes the recognition of the contingent asset, contingent liability, and assets/liabilities with provisional amounts. Statement 2: Measurement period is relevant for the remeasurement fo all contingent considerations. A. Both Statetements are Correct B. Both Statements are Incorrect C. Only Statement 1 is Correct D. Only Statement 2 is Correct
1) All interest paid on a construction loan should be capitalized as part of the cost of the constructed asset. A) True B) False

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