What is the principle for recognition of a financial asset in PFRS 9? A. A financial asset is recognized when, and only when, the entity obtains control of the instrument and has the ability to dispose of the financial asset independent of the actions of others. B.A financial asset is recognized when, and only when, the entity becomes a party to the contractual provisions of the instrument. C. A financial asset is recognized when, and only when, the entity obtains the risks and rewards of ownership of the financial asset and has the ability to dispose of the financial asset. D. A financial asset is recognized when, and only when, it is probable that future economic benefits will flow to the entity and the cost or value of the instrument can be measured reliably.

What is the principle for recognition of a financial asset in PFRS 9? A. A financial asset is recognized when, and only when, the entity obtains control of the instrument and has the ability to dispose of the financial asset independent of the actions of others. B.A financial asset is recognized when, and only when, the entity becomes a party to the contractual provisions of the instrument. C. A financial asset is recognized when, and only when, the entity obtains the risks and rewards of ownership of the financial asset and has the ability to dispose of the financial asset. D. A financial asset is recognized when, and only when, it is probable that future economic benefits will flow to the entity and the cost or value of the instrument can be measured reliably.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 26GI

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What is the principle for recognition of a financial asset in PFRS 9? Group of answer choices: A financial asset is recognized when, and only when, the entity obtains the risks and rewards of ownership of the financial asset and has the ability to dispose of the financial asset. A financial asset is recognized when, and only when, the entity obtains control of the instrument and has the ability to dispose of the financial asset independent of the actions of others. A financial asset is recognized when, and only when, it is probable that future economic benefits will flow to the entity and the cost or value of the instrument can be measured reliably. A financial asset is recognized when, and only when, the entity becomes a party to the contractual provisions of the instrument.
In accordance with AASB 9, the recognition of a financial asset or financial liability will be influenced by considerations as to whether there is a contractual right to exchange financial assets or financial liabilities with another entity under conditions that are potentially favourable, or potentially unfavourable, to the entity. Explain what this requirement means.
PROBLE other financial assets. associates and joint ventures. delivering cash or another financial asset. However, Entity A's not sufficient to justify offsetting because the rights and d. An intention to settle a financial asset and a financial 2 A contract that evidences a residual interest in the entity's assets after deducting all of its liabilities is classified as 4. Entity A issues an instrument that is re-purchasable by d. 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 and other non-financial items that can be settled net in cash or Financial assets in the form of investments in subsidiaries, 1. a. b. Co non-financial items that can be settled net in cash or Physical assets, such as inventories and PPE C. ssets after deducting all of its liabilities is classified as a. a financial…
1. PAS 28 defines an ‘associate’ as Choices An entity that controls one or more entities. An entity over which the investor has significant influence. A joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. An entity that is controlled by another entity. 2. In accordance with PAS 1, which of the following gains or losses from reclassification of financial assets need not be presented separately in the profit or loss section or the statement of profit or loss? Choices None of these. Reclassification of financial assets out of the FVTOCI measurement category to FVTPL. Reclassification of financial assets out of the amortized cost measurement category to FVTPL. Reclassification of financial assets out of the FVTPL measurement category.
How shall an entity subsequently measure financial liabilities? Is IFRS measurement of financial liabilities similar to that of U.S. GAAP? Also briefly describe the requirements regarding an option to designate a financial liability at fair value through profit and loss. Q: Does U.S. GAAP allow fair value option for financial assets and liabilities? Q; What is “own credit” issue related to financial liabilities measured at fair value through profit and loss? Q: How does IFRS 9 address this “own credit” issue?
In order for an asset to be recognized in the financial statements, which of the following definition is consistent with the IASB framework? Select one: a. Asset is a resource controlled by the entity from which future economic benefits are expected to flow to the entity. b. Asset is a resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity. c. Asset is a resource controlled by the entity as a result of future events and from which future economic benefits are expected to flow to the entity. d. Asset is a resource controlled by the entity as a result of present events and from which future economic benefits are expected to flow to the entity.
Which of the following is correct about subsequent measurement of financial asset at fair value? a. the financial asset shall be measured at fair value if the business model is not to collect contractual cash flows on specified dates and the contractual cash flow ae not solely payment of principal and interest. b. An entity may designate a finacncial asset as measured at fair value through profit or loss even if the financial asset satisfies the amortized cost measurement. c. both are correct d. both are incorrect
What does the Conceptual Framework state about derecognition?
Which of the following statements is TRUE? a. The acquirer shall measure the identifiable assets acquired and the liabilities assumed at their acquisition-date fair value. b. Transaction costs directly related to the issue of debt instruments are deducted from the fair value of the debt on initial recognition and are amortized over the life of the debt as part of the effective interest rate. Directly attributable transaction costs incurred issuing equity instruments are deducted from revenue. c. In net asset acquisition, gain on bargain purchase is recognized in the Profit or Loss of the acquirer (after reassessment) if the consideration transferred is more than the fair value of net assets acquired. d. According to IFRS #3: Revised, cost directly attributable in effecting the business combination (e.g., finders’ fee and other direct cost) must be charged to share premium.
The disclosure of a line item for Other current assets in the Statement of financial position would be justified according to which of the following? O Comparability Materiality o Consistency Neutrality o Verifiability
Question 20 What is the principle for recognition of a financial asset in PFRS 9? Group of answer choices A financial asset is recognized when, and only when, it is probable that future economic benefits will flow to the entity and the cost or value of the instrument can be measured reliably. A financial asset is recognized when, and only when, the entity becomes a party to the contractual provisions of the instrument. A financial asset is recognized when, and only when, the entity obtains control of the instrument and has the ability to dispose of the financial asset independent of the actions of others. A financial asset is recognized when, and only when, the entity obtains the risks and rewards of ownership of the financial asset and has the ability to dispose of the financial asset. Question 19 Investments in equity instruments are financial assets because they are Group of answer choices Cash equivalents. Contractual rights to receive cash or another financial…
When the contractual cash flows of a financial asset are renegotiated or otherwise modified and the renegotiation or modification does not result in the derecognition of that financial asset in accordance with PFRS 9, an entity shall I. Recalculate the gross carrying amount of the financial asset as the present value of the renegotiated or modified contractual cash flows that are discounted at the financial asset's original effective interest rate. II. Recognize a modification gain or loss in profit or loss. A. I only. B. Neither I nor II. C. ll only. D. Both I and II.