if a company incurs legal obligations associated with the retirement of a tangible long-lived asset as a result of acquiring the asset: The company recognizes the obligation at fair value when the asset is retired. The company recognizes the obligation at fair value when the asset is acquired. The company records the difference between the fair value of the asset and the obligation when the asset is acquired. None of these answer choices are correct.

if a company incurs legal obligations associated with the retirement of a tangible long-lived asset as a result of acquiring the asset: The company recognizes the obligation at fair value when the asset is retired. The company recognizes the obligation at fair value when the asset is acquired. The company records the difference between the fair value of the asset and the obligation when the asset is acquired. None of these answer choices are correct.

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

Which of the following is / are external indicator/s of impairment loss? Impact of legal environment that affects the entity Changes in the market interest rates Technological changes in the industry that entity operates All of them
A contingent liability assumed in a business combination: a. Is not accounted for by the acquirer if the contingent liability has an improbable outflow of economic resources. b. Is recognized even if it has an improbable outflow of economic resources for as long as there is present obligation and the fair value of the obligation can be measured reliably c. Is recognized only if there is present obligation, probable outflow of economic resources, and can be measured reliably. d. Are not accounted for by the acquirer if the contingent liability has an improbable outflow of economic resources and recognized only if there is present obligation, probable outflow of economic resources, and can be measured reliably.
If a company develops in-house a highly profitable treatment and secures a patent for it, the asset will most likely appear on its balance sheet as an intangible asset (goodwill). True O False
Which statement is incorrect regarding reclassification of financial assets? a) Reclassifications to FVTPL measurement category result to amounts recognized in profit or loss. b.)The effective interest rate is determined on the basis of the fair value of the asset at the reclassification date when an entity reclassifies a financial asset out of FVTPL measurement category. c.) The effective interest rate and the measurement of expected credit losses are not adjusted as a result of the reclassification from AC measurement category to FVTOCI and vice versa. d.) All reclassifications out of FVTOCI measurement category result in ‘reclassification adjustm
Which of the following statements is true? Question 2 options: a The capitalizable costs of patents are legal fees and other registration costs. b An identifiable tangible asset developed internally is never recognized in the accounts as an asset. c Intangible assets usually have a residual value that must be considered in the amortization of cost. d An intangible asset is usually amortized by a credit to an income account.
The sale and distribution of the assets of a business on its termination is Group of answer choices a takeover. a breach of fiduciary duty. liquidation. dissolution.
Reporting an investment at its fair value means adjusting its carrying amount for changes in fair value afterits acquisition (or since the last reporting date if it was held at that time). Such changes are called unrealizedholding gains and losses because they haven’t yet been realized through the sale of the security. If the security isclassified as available-for-sale, how are unrealized holding gains and losses typically reported?
If a trademark is developed internally, it cannot be recognized as an intangible asset on the statement of financial position. True or False
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.
The main objective of IAS 36 Impairment of Assets is to prescribe the procedures that should ensure that an entity's assets are included in its statement of financial position at no more than their recoverable amounts. Where an asset is carried at an amount in excess of its recoverable amount, it is said to be impaired and IAS 36 requires an impairment loss to be recognized. Required: Define an impairment loss explaining the relevance of fair value less costs to sell and value in use and state how frequently assets should be tested for impairment. 2. Describe the possible incators of impairment. 3. Explain how an impairment loss is accounted for after it has been calculated.
THe depreciation recapture provisions are designed to prevent taxpayers from converting capial gains into ordinary income.
Statement I: In case of doubt, a contract purporting to be a sale with right of repurchase is construed as an assignment of rights. Statement II: The creditors of the vendor cannot make use of the right of redemption against the vendee until after exhausting the property of the vendor. Only Statement I is true. Only Statement II is true. Both statements are true. Both statements are false.