PROBLEother financial assets.associates and joint ventures.delivering cash or another financial asset. However, Entity A'snot sufficient to justify offsetting because the rights andd. An intention to settle a financial asset and a financial2 A contract that evidences a residual interest in the entity'sassets after deducting all of its liabilities is classified as4. Entity A issues an instrument that is re-purchasable byd. Liabilities arising from constructive obligations.Physical assets, such as inventories and PPE.and financial liability remain unaltered.Which of the following is within the scope of PAS 32?b. Contracts for the delivery or receipt of commodity andother non-financial items that can be settled net in cash orFinancial assets in the form of investments in subsidiaries,1.a.b.Co non-financial items that can be settled net in cash orPhysical assets, such as inventories and PPEC.ssets after deducting all of its liabilities is classified asa. a financial liability.b. an equity instrument.С. а or bd. neither a nor b: Which of the following statements is incorrect?a. The PAS 32 definition of "equity" reflects the basicaccounting equation of "Assets – Liabilities = Equity."b. According to PAS 32, a contract is an equity instrument if|it may result in the receipt or delivery of the entity's ownequity instruments.C. Entity A issues a compound financial instrument for P1M.If the fair value of the liability component without theequity feature is P.8M, the value to be assigned to theequity component is P.2M.* An intention to settle a financial asset and a financialnability on a net basis without the legal right to do so ishot sufficient to justify offsetting because the rights andOongations associated with the individual financial assetand financial liability remain unaltered.Cntity A issues an instrument uhatre-purchasable by right to redeem. Which of the following statements is correctc. Entity A initially classifies the instrument as and. The settlement of a liability at an amount below or aboveholder exercises its redemption right, Entity A does notconditional on the holder (the counterparty) exercising itsto the extent of the probability that the holder will exercisecontractual obligation to repurchase the instrumentredemption right, the instrument is reclassified to financialinstrument. However, when the holder exercises itsasset is conditional on the holder exercising its right tocontractual obligation to deliver cash or another financialhave the unconditional right to avoid making thed. The instrument is classified as a financial liability only upb. The instrument is an equity instrument because Entify A'sa. The instrument is a financiai liability because when thecontractual obligation toisholder exercises its redemption right, Entih. whenmakinga. The instrument is anotthepayment.b. The instrument is anрayment.C. Entity A initially classifies the instrument asequityredemption right, the instrument is reclassified to fi Isliability.d. The instrument is classified as a financial liability only.to the extent of the probability that the holder will exersits right to redeem the instrument.5. A gain or loss may arise from which of the following?a. The initial recognition of the debt and equity componentsof a compound financial instrument.b. The purchase, sale, issue or cancellation of the entity'sown equity instruments.c. The conversion of bonds into the entity's own equityinstrument.d. The settlement of a liability at an amount below or aboits carrying amount.

PAS 32 covers Contracts for delivery or receipt of commodity and other non financial assets that can…

PRO Which of the 1. Financial assets in the form of investments in subsidiaries, associates and joint ventures. b. Contracts for the delivery or receipt of commodity and the scope of PAS 32? a. other non-financial items that can be settled net in cash or other financial assets. Physical assets, such as inventories and PPE. d. Liabilities arising from constructive obligations. 2 A contract that evidences a residual interest in the entity's rcets after deducting all of its liabilities is classified as a a financial liability. b. an equity instrument. C. a or b d. neither a nor b = Which of the following statements is incorrect? a. The PAS 32 definition of "equity" reflects the basic accounting equation of "Assets – Liabilities = Equity." b. According to PAS 32, a contract is an equity instrument if it may result in the receipt or delivery of the entity's own equity instruments. C Entity A issues a compound financial instrument for P1M. If the fair value of the liability component without the equity feature is P.8M, the value to be assigned to the equity component is P.2M. d. An intention to settle a financial asset and a financial nability on a net basis without the legal right to do so is not sufficient to justify offsetting because the rights and obligations associated with the individual financial asset

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q