If in subsequent period, there is objective evidence of recovery in impairment previously recognized for debt investments measured at amortized cost, the amount of the reversal: shall not be recognized. shall be recognized in profit or loss. shall be recognized in equity. shall be recognized when the asset is derecognized.

If in subsequent period, there is objective evidence of recovery in impairment previously recognized for debt investments measured at amortized cost, the amount of the reversal: shall not be recognized. shall be recognized in profit or loss. shall be recognized in equity. shall be recognized when the asset is derecognized.

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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A basic difference between loss contingencies and “real”liabilities is: a. Liabilities stem from past transactions; loss contingen-cies stem from future events. b. Liabilities always are recorded in the accountingrecords, whereas loss contingencies never are.c. The extent of uncertainty involved. d. Liabilities can be large in amount, whereas loss contin-gencies are immaterial.
The accrual of a contingent liability and the related loss should be recorded when the a. Loss resulting from a future event may be material in relation to income. b. Future event that gives rise to the liability is unusual in nature and nonrecurring. c. Amount of the loss resulting from the event is reasonably estimated and the occurrence of the loss is probable. d. Event that gives rise to the liability is unusual and its occurrence is probable.
Financial liabilities that are classified as amortized cost are subsequently measured at A. Partly at profit or loss and partly at other comprehensive income depending on the risk. B. Fair value with changes in value recognized in other comprehensive income. (FVPL) C. Fair value which changes in value recognized in profit or loss. (held for trading) D. The present value of the remaining cash flows of the instrument discounted at the original effective interest rate.
What are the general rules for measuring and recognizinggain or loss by both the debtor and the creditor in atroubled-debt restructuring involving a modification ofterms?
Which of the following will be affected by an increase in the provision for doubtful debts? Gross profit Operating profit Closing inventory Net book value of non-current assets
Which of the following are examples of changes in the gross carrying amount of financial instruments (PFRS 7) that contributed to the changes in the loss allowance? * Changes because of financial instruments originated or acquired during the reporting period The modification of contractual cash flows on financial assets that do not result in a derecognition of those financial assets in accordance with IFRS 9 Changes because of financial instruments that were derecognised (including those that were written-off) during the reporting period Changes arising from whether the loss allowance is measured at an amount equal to 12-month or lifetime expected credit losses
Gem Company classifies a portion of its retained earnings as appropriated for loss contingencies. Consequently, the company Group of answer choices A.) May transfer to income a part of said retained earnings so appropriated. B.)Should not identify said appropriation as an appropriation of retained earnings. C.) Should show the said appropriation of retained earnings within the stockholders' equity section of the balance sheet D.)Could charge costs or losses to the said appropriated retained earnings.
17. When a debt investment at FVOCI is reclassified to FVPL, an entity willa. Remeasure the investment to the original cost and eliminate the cumulative unrealized gain or loss in OCI.b. Transfer the cumulative unrealized gain or loss to retained earningsc. The cumulative gain or loss previously recognized in OCI is reclassified to profit or loss.d. The effective rate at the date of reclassification shall be the basis for interest income to be recognized in subsequent periods.
A statement of affairs measures a deficiency – traceable to unsecured creditors without priority – as the difference between the estimated net realizable value of the assets and the amount due those creditors True or False
Derecognition is the removal of all or part of a recognised asset or liability from an entity’s statement of financial position in accordance with the Conceptual Framework 2018. The above aim is to normally achieve derecognising via the following below statements: Which of the statements as mentioned below is NOT correct to achieve the above aim? 1) Derecognizing any assets or liabilities transferred, consumed, collected, fulfilled or expired 2) Derecognizing any resultant income or expense 3) Recognizing any resultant income or expense 4) Continuing to recognize assets or liabilities retained (2)
The following are disclosed when there are related party transactions during the periods covered by the financial statements: Select the correct response: Doubtful debts recognized on the outstanding balances All of these Nature, terms and amount of the transaction and outstanding balances Nature of the related party relationship Which of the following cost formulas is not allowed under PAS 2? Select the correct response: Weighted average LIFO Specific identification FIFO