19. When the entity uses the IFRS for SMEs, investments in jointly controlled entities must be tested for impairment, if the entity uses Group of answer choices The cost model or the fair value model The equity method or the fair value model The equity method or the cost model The cost method, the equity method or the fair value model

19. When the entity uses the IFRS for SMEs, investments in jointly controlled entities must be tested for impairment, if the entity uses Group of answer choices The cost model or the fair value model The equity method or the fair value model The equity method or the cost model The cost method, the equity method or the fair value model

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 7DQ

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60 When the entity uses the IFRS for SMEs, investments in jointly controlled entities must be tested for impairment, if the entity uses Group of answer choices The cost method, the equity method or the fair value model The cost model or the fair value model The equity method or the cost model The equity method or the fair value model
If it loses significant influence over the associate, the balance of the investment in the associate is recorded at:A. Fair valueB. Identifiable net asset propertyC. Cost methodD. Keep the equity method
When an entity uses the fair value model, changes in the fair values of investment property are recognized in profit or loss directly in equity recognized in other comprehensive income not recognized
Choose the correct. Under fair-value accounting for an equity investment, which of the following affects the income the investor recognizes from its ownership of the investee?a. The investee’s reported income adjusted for excess cost over book value amortizations.b. Changes in the fair value of the investor’s ownership shares of the investee.c. Intra-entity profits from upstream sales.d. Other comprehensive income reported by the investee.
If an entity has elected to use the fair value option for a financial liability; a. It is measured at fair value through other comprehensive income. b. It is measured at fair value through profit or loss. c. It is measured at amortized cost. d. Fair value op don is prohibited for financial liabilities.
Under fair-value accounting for an equity investment, which of the following affects the income the investor recognizes from its ownership of the investee? The investee’s reported income adjusted for excess cost over book value amortizations. Changes in the fair value of the investor’s ownership shares of the investee. Intra-entity profits from upstream sales. Other comprehensive income reported by the investee.
According to PAS 28, investments in associates are accounted for at fair value. using the equity method. using the asset method. at cost.
What is the meaning of the following:- IAS 40 paragraph 32A, An entity may: (a) choose either the fair value model or the cost model for all investment property backing liabilities that pay a return linked directly to the fair value of, or returns from, specified assets including that investment property; and (b) choose either the fair value model or the cost model for all other investment property, regardless of the choice made in (a).
18. What is the proper treatment for noncash asset received from a stockholder? Group of answer choices a. The share premium shall be credited for the fair value of the noncash asset. b. The share premium shall be credited for the book value of the noncash asset. c. The income account shall be credited for the fair value of the noncash asset. d. The income account shall be credited for the book value of the noncash asset.
6. What is the proper treatment for noncash asset received from a non-stockholder? Group of answer choices a. The share premium shall be credited for the fair value of the noncash asset. b. The share premium shall be credited for the book value of the noncash asset. c. The income account shall be credited for the fair value of the noncash asset. d. The income account shall be credited for the book value of the noncash asset.
Explain how electing the fair value option and how impairment recognition affectaccounting for investments
If an entity wishes to change from a cost model to fair value model under IAS 40 – Investment Property, when may it do so? Select one: a. When the market for these properties is fluctuation b. When the board of directors approves a change c. When the value of the assets will improve with a revised model d. When a change will result in a more appropriate presentation