When a contingent consideration arising from a business combination is classified as equity, how is any change in its fair valueaccounted for if the difference arises due to a change in circumstances?Multiple ChoiceAs a memorandum entry indicating that additional shares hed been isued,As an edjustment to an estimate included in the determination of net income.As an adjustment to consolidated contributed surplus.As an adiustment to the consideration naid for the subsidiarv

Contingent Consideration Contingent consideration is the amount which was promised by the buyer to…

Answered: When a contingent consideration arising…

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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13. Investments in equity instruments are financial assets because they are Group of answer choices Contractual rights to receive cash or another financial asset from another entity. Cash equivalents. Contractual rights to exchange financial assets or financial liabilities with another entity under conditions that are potentially favorable to the entity. Equity instruments of another entity.
An entity shall present, either in the statement of comprehensive The following statements are correct, except: а. income or in the notes, the amount of dividends recognized as distribution to owners during the period. The notes shall present information about the basis of preparation of the financial statements and the specific accounting policies b. used. An entity shall disclose in the summary of significant accounting policies the measurement basis used in the preparation of С. financial statements. d. For each component of equity, a reconciliation is made between the carrying amount at the beginning and the end of the period separately disclosing changes from profit or loss. 5.
Can a stockholder exercise his/her appraisal right to instances not written in the Code?
For fi nancial assets classifi ed as held to maturity, how are unrealized gains and losses refl ected in shareholders’ equity?B . Th ey fl ow through retained earnings.
Which of the following is the second option in measuring the equity instrument issued to extinguish a financial liability A.fair value of the equity instrument B.carrying amount of the equity instrument Cfair value of the financial liability D.carrying amount of the financial liability
The statement of shareholders' equity reports the effects from the recognition or valuation of certain asset or liability transactions that change Accumulated Other Comprehensive Income. True False
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.
When an investor has significant influence over an investee, the investor must use the equity method of accounting to recognise the investee in its consolidated financial statements. Select one: True False
Which statement is true in relation to business combination achieved in stages? a. The pre-existing equity interest shall be remeasured at fair value with any resulting gain or loss included in profit or loss. b. The pre-existing interest shall be remeasured at fair value with any resulting gain or loss recognized in retained earnings. c. The pre-existing equity interest shall be remeasured at fair value with any resulting gain or loss included in other comprehensive income. d. The pre-existing interest shall not be remeasured.
Under IFRS 9, the cumulative balance of equity as a result of measuring financial assets at fair value through other comprehensive income shall be reversed to profit or loss at the date the security is sold shall be reversed to profit or loss when there is objective evidence of impairment shall not be reversed to profit or loss but may be transferred to another equity account shall not be reversed to profit or loss and may not be transferred to another equity account
Statement I: The equity securities issued as part of the consideration transferred shall be measured at the fair value of the shares at the date of acquisition.Statement II: The goodwill in the books of the acquiree shall be measured at its fair value at the date of acquisition. a. True, False b. False, True c. True, True d. False, False
Which of the following is an assumption made in the preparation of the financial statements? Select one: a. The current market value is assumed to be less relevant than the original cost paid. b. Financial statements are prepared for a specific entity that is distinct from the entity's owners. c. The preparation of financial statements for a specific time period assumes that the balance sheet covers a designated period of time. d. Financial statements are prepared assuming that inflation

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