Expected credit losses on Reclassification date 5. An entity reclassifies a portfolio of bonds on Jan. 1, 20x3. Information on the portfolio is as follows: Carrying amount under previous classification Fair value on reclassification date (Jan. 1, 20x3) 500,000 490,000 Case 1: Amortized cost to FVPL - Cessation of impairment portfolio is reclassified from Amortized cost to FVPL. The P500,000 carrying amount is the portfolio's gross carrying amount. A loss allowance of P6,000 (equal to lifetime expected credit losses) was recognized during the period the asset was held as amortized cost. Provide the reclassification journal entry. Case 2: FVPL to AC - Commencement of impairment The portfolio is reclassified from FVPL to Amortized cost. On reclassification date, the entity estimates 12-month expected credit losses of P4,000. Provide the journal entries. Case 3: Amortized cost to FVOCI – Retention of impairment The portfolio is reclassified from Amortized cost to FVOCI. The P500,000 carrying amount is the portfolio's gross carrying amount. A loss allowance of P6,000 (equal to lifetime expected credit losses) was recognized during the period the asset was held as amortized cost. On reclassification date, the 12- month expected credit losses are P3,000. Provide the reclassification journal entry. Case 4: FVOCI to Amortized cost – Retention of impairment The portfolio is reclassified from FVOCI to Amortized cost. The cumulative balance of gains and losses in equity as of Dec. 31, 20x2 is zero. On reclassification date, the entity estimates lifetime expected credit losses of P6,000. Provide the reclassification journal entry. Case 5: FVPL to FVOCI – Commencement of impairment The portfolio is reclassified from FVPL to FVOCI. On reclassification date, the entity estimates 12-month expected credit losses of P4,000. Provide the reclassification journal entry.
Expected credit losses on Reclassification date 5. An entity reclassifies a portfolio of bonds on Jan. 1, 20x3. Information on the portfolio is as follows: Carrying amount under previous classification Fair value on reclassification date (Jan. 1, 20x3) 500,000 490,000 Case 1: Amortized cost to FVPL - Cessation of impairment portfolio is reclassified from Amortized cost to FVPL. The P500,000 carrying amount is the portfolio's gross carrying amount. A loss allowance of P6,000 (equal to lifetime expected credit losses) was recognized during the period the asset was held as amortized cost. Provide the reclassification journal entry. Case 2: FVPL to AC - Commencement of impairment The portfolio is reclassified from FVPL to Amortized cost. On reclassification date, the entity estimates 12-month expected credit losses of P4,000. Provide the journal entries. Case 3: Amortized cost to FVOCI – Retention of impairment The portfolio is reclassified from Amortized cost to FVOCI. The P500,000 carrying amount is the portfolio's gross carrying amount. A loss allowance of P6,000 (equal to lifetime expected credit losses) was recognized during the period the asset was held as amortized cost. On reclassification date, the 12- month expected credit losses are P3,000. Provide the reclassification journal entry. Case 4: FVOCI to Amortized cost – Retention of impairment The portfolio is reclassified from FVOCI to Amortized cost. The cumulative balance of gains and losses in equity as of Dec. 31, 20x2 is zero. On reclassification date, the entity estimates lifetime expected credit losses of P6,000. Provide the reclassification journal entry. Case 5: FVPL to FVOCI – Commencement of impairment The portfolio is reclassified from FVPL to FVOCI. On reclassification date, the entity estimates 12-month expected credit losses of P4,000. Provide the reclassification journal entry.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Expected credit losses on Reclassification date
5. An entity reclassifies a portfolio of bonds on Jan. 1, 20x3.
Information on the portfolio is as follows:
Carrying amount under previous classification
Fair value on reclassification date (Jan. 1, 20x3)
500,000
490,000
Case 1: Amortized cost to FVPL - Cessation of impairment portfolio is
reclassified from Amortized cost to FVPL. The P500,000 carrying amount is
the portfolio's gross carrying amount. A loss allowance of P6,000 (equal to
lifetime expected credit losses) was recognized during the period the asset
was held as amortized cost. Provide the reclassification journal entry.
Case 2: FVPL to AC - Commencement of impairment
The portfolio is reclassified from FVPL to Amortized cost. On reclassification
date, the entity estimates 12-month expected credit losses of P4,000.
Provide the journal entries.
Case 3: Amortized cost to FVOCI – Retention of impairment
The portfolio is reclassified from Amortized cost to FVOCI. The P500,000
carrying amount is the portfolio's gross carrying amount. A loss allowance of
P6,000 (equal to lifetime expected credit losses) was recognized during the
period the asset was held as amortized cost. On reclassification date, the 12-
month expected credit losses are P3,000. Provide the reclassification journal
entry.
Case 4: FVOCI to Amortized cost – Retention of impairment
The portfolio is reclassified from FVOCI to Amortized cost. The cumulative
balance of gains and losses in equity as of Dec. 31, 20x2 is zero. On
reclassification date, the entity estimates lifetime expected credit losses of
P6,000. Provide the reclassification journal entry.
Case 5: FVPL to FVOCI – Commencement of impairment
The portfolio is reclassified from FVPL to FVOCI. On reclassification date,
the entity estimates 12-month expected credit losses of P4,000. Provide the
reclassification journal entry.
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