An asset shall be classified as current whenit satisfies any of the following criteria(choose the incorrect one).It is expected to be realized in or isintended for sale or consumption in theentity's normal operating cycle.It is held primarily for the purpose of beingtraded.It is expected to be realized in more thantwelve months after the balance sheet date.It is cash or a cash equivalent which isunrestricted from being exchanged or usedto settle a liability for at least twelvemonths after the balance sheet date.

Current assets - Current assets are the assets of the company which are expected to be used up or…

Answered: An asset shall be classified as current…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

How would a property dividend declared before end of reporting period and to be distributed in the next accounting period affect the retained earnings balance on the date of declaration, end of reporting period and date of payment? Retained earnings balance is only decreased on the date of declaration equivalent to the fair value of the non-cash asset to be distributed and no change at the end of reporting period and date of payment. Retained earnings balance is decreased at the date of declaration equal to the fair value of the non-cash asset and any changes in the fair value of the non- cash asset is reflected also to the retained earnings balance at the end of reporting period and on the date of payment. Retained earnings balance is only increased on the date of declaration equivalent to the fair value of the non-cash asset to be distributed and no change at the end of reporting period and date of payment. Retained earnings balance is decreased at the date of…
Companies following international accounting standards are permitted to revalue fixed assets above the assets’ historical costs. Such revaluations are allowed under various countries’ standards and the standards issued by the IASB. Liberty International, a real estate company headquartered in the United Kingdom (U.K.), follows U.K. standards. In a recent year, Liberty disclosed the following information on revaluations of its tangible fixed assets. The revaluation reserve measures the amount by which tangible fixed assets are recorded above historical cost and is reported in Liberty’s stockholders’ equity.Liberty InternationalCompleted Investment PropertiesCompleted investment properties are professionally valued on a market value basis by external valuers at the balance sheet date. Surpluses and deficits arising during the year are reflected in the revaluation reserve.Liberty reported the following additional data. Amounts for Kimco Realty (which follows GAAP) in the same year are…
How do amortization methods differ for intangible assets with finite useful lives versus those with indefinite useful lives, and what impact do these methods have on a company's financial statements?
(33) Amortization expense is recorded for: A. A franchise established with a contract that allows for unlimited extensions. B. Intangible assets with a finite life. C. Intangible assets with an indefinite life. D. Goodwill
Long-term operating assets can be reported on the balance sheet at fair value instead of historical cost. Does this statement apply to IFRS and U.S. GAAP? Group of answer choices It does not apply to IFRS and U.S. GAAP. It applies to U.S. GAAP only. It applies to both IFRS and U.S. GAAP. It applies to IFRS only.
In determining the value in use, which of the following cash flow is excluded from the computation? I. Income tax receipts or payments. II. Net cash flows received or paid on the disposal of the asset at the end of its useful life in an arm's length transaction which is after using the asset. III. Future costs of improving or enhancing the asset's performance.
Fair value as a method of asset measurement is defined as: Multiple Choice O O the cost of an asset adjusted for the depreciation or amortization accumulated over its lifetime. price that would be received to sell assets in an orderly transaction between market participants on a given date. the net amount of cash into which an asset could be converted in the ordinary course of business. the value of what is given in exchange for the asset at its initial acquisition.
The undiscounted future net cash flow is used as a benchmark to determine any impairment loss on which of the following types of intangible assets? O Limited life intangibles. O Indefinite life intangibles other than goodwill. O Goodwill. O Indefinite life intangibles.
3. S1: An entity shall measure a noncurrent asset or disposal group classified as held for sale at the lower of carrying amount and recoverable amount.S2: A noncurrent asset that is to be abandoned shall not be classified as held for sale because it is unlikely that the noncurrent asset will be sold within twelve months. A. Both statements are true B. Both statements are false C. Only statement 1 is true D. Only statement 2 is true 4. In order for a noncurrent asset to be classified as held for sale, the sale must be highly probable, which requires the following, except * A. The asset must be actively marketed at a sales price that is reasonable in relation to the fair value. B. Presence of an active marketing program C. Marketing program or plan is unlikely to be significantly changed or withdrawn D. Commitment to a plan to sell the asset O E. None of them
TRUE OR FALSE Amortization of intangibles is usually done over the asset’s legal life.
One of the main differences between U.S. GAAP and IAS/IFRS is the measurement of property, plant & equipment subsequent to initial recognition. Read IAS 16 and answer the following questions. Provide a list of the references you have used to search this topic. 1) What are the accounting models accepted under IFRS for the measurement of property, plant & equipment subsequent to initial recognition? 2) How often should the company revalue its property, plant & equipment under the revaluation model? 3) How should the revaluation gains and losses be accounted for and reported in the financial statements? 4) How should any claim for compensation from third parties for impairment be accounted for? 5) How should the recoverability of the carrying amount of property, plant & equipment be accounted for?
IFRS requires annual reviews of long-lived assets (other than goodwill) for reversal indicators. A loss may be reversed up to the newly estimated recoverable amount, not to exceed the initial carrying amount adjusted for depreciation. This is a significant departure from GAAP, so what are the financial statement implications? Is it a good thing or bad?

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS