solve within 30 mins. Which exchange has commercial substance?Select the correct responseexchange of assets with difference in future cash flowsexchange by entities in the same line of businessexchange of assets with no difference in future cashflowsexchange of assets that causes the entities to remain in essentially the same economic position

Lets understand the basics. When there is change in future cashflow of the business due to…

Answered: Which exchange has commercial…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter3: Analyzing And Recording Transactions

Section: Chapter Questions

Problem 4MC: Which of the following terms is used when assuming a business will continue to operate in the...

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PAS 16 states that if an exchange transaction causes a significant change in cash flows, the transaction has commercial substance. In transactions of this type, at what amount should the entity record the asset received? Book Value plus Boot Book Value Fair Value inminsic value
Which of the following nonmonetary exchange transactions may result in recorded gains or losses? A) Exchange of assets with a difference in future cash flows. B) Exchange of assets with no difference in future cash flows. C) Exchange of an equivalent interest in similar productive assets that causes the companies involved to remain in essentially the same economic position. D) Exchange of products by companies in the same line of business with no difference in future cash flows.
Under what cisrcumstances under PFRS 9 can an entity classify financial assets that meet the amortized cost criteria as at FVTPL? A. where the business model approach is adopted B. where the financial asset passes the contractual cash flow characteristics test C. where the instrument is held to maturity D. if doing so eliminates or reduces an accounting mismatch
Which statement is incorrect regarding contractual cash flows that are solely payments of principal and interest (SPPI)? a.Contractual cash flows that are SPPI on the principal amount outstanding are consistent with a basic lending arrangement. b.Principal is the fair value of the financial asset at initial recognition. c.An entity shall assesswhether contractual cash flows are SPPI on the principal amount outstanding for the currency in which the financial asset is denominated. d.An originated or a purchased financial asset can be a basic lending arrangement only if it is a loan in its legal form.
An entity has financial assets held under a business model with the objective of holding financial assets in order to collect contractual cash flows. Prior to maturity date, the entity sells a significant portion of the financial assets. Which of the following statements is correct? The remaining financial assets within the "hold to collect" business model need not be reclassified. However, the change in circumstance may be relevant in assessing the business model for new financial assets that have been acquired or originated. The change in circumstance is a prior period error. Under the "hold to collect" business model, the entity needs to hold financial assets until their maturity dates. A significant sale of financial assets before their maturity date evidences an inability to hold and collect cash flows. Therefore, the remaining financial assets shall be reclassified to either FVPL or FVOCI. The entity shall change its business model because of the change in circumstance. The…
Which statement is incorrect regarding contractual cash flows that are solely payments of principal and interest (SPPI)? Group of answer choices Contractual cash flows that are SPPI on the principal amount outstanding are consistent with a basic lending arrangement. An originated or a purchased financial asset can be a basic lending arrangement only if it is a loan in its legal form. Principal is the fair value of the financial asset at initial recognition. An entity shall assess whether contractual cash flows are SPPI on the principal amount outstanding for the currency in which the financial asset is denominated.
Which statement is incorrect regarding contractual cash flows that are solely payments of principal and interest (SPPI)? a. principal is the fair value of the financial asset at initial recognition b. contractual cash flows that are SPPI on the principal amount outstanding are consistent with a basic lending engagement c. an originated or a purchased financial asset can be a basic lending arrangement only if it is a loan in its legal form d. an entity shall assess whether contractual cash flows are SPPI on the principal amount outstanding for the currency in which the financial asset is denominated
1. Once determined, the functional currency is * A. No answer B. Changed every time new PFRS is issued. C.Changed at the discretion of the entity’s management D. Not changed unless there is a change in underlying transactions, events, and conditions. 2. Which of the following is least relevant in determining an entity’s functional currency? A. The currency in which cash flows from operating activities are retained. B. The currency that influences the entity’s sale prices and costs. C. The currency in which the entity generates financing cash flows. D. The currency of the country in which the entity is located. 3. According to PAS 21, exchange differences arising from the translation of financial statements to a presentation currency are recognized in * A. Any of these B. Other comprehensive income C. Directly in equity D. Profit or loss
Answer in detail
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?
Conceptual Framework and Reporting Standard: Small and Medium Sized Enterprise 1. In SME, borrowing costs are interest and other costs that an entity incurs in connection with the borrowing of funds. True or False? 2. Provision, in SME, shall be recognized if an entity has an obligation at the reporting date as a result of a past event and it is possible that the entity will be required to transfer economic benefits in settlement. True or False? 3. An entity can compute post-employment benefit by using either defined benefit plan or defined contribution plan. True or False?
Which of the following considerations would not be relevant in determining the entity's functional currency? The currency that influences the costs of entity O The currency that is most internationally acceptable for trading The currency in which receipts from operating activities are retained O The currency in which finance or fund is generated

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