Why is IAS 36 Impairment of Asset not applied to an investment property measured under the fair value model in accordance with IAS 40 Investment Properties?
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A:
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A: Hi student Since there are multiple questions, we will answer only first question. If you want…
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A: Answer: Option d.
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A: Ans. Impairment testing is an important part for correctly valuing the asset. It is carried out…
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A: Fair value of investment property means value at which property can be exchanged in open market.…
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Q: Which one of the following is not true concerning the treatment of investment properties under LKAS…
A: Solution: As per LKAS 40. the investment property is measured at cost including…
Q: Which of the following should form part of the cost of investment property?
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Why is IAS 36 Impairment of Asset not applied to an investment property measured under the fair value model in accordance with IAS 40 Investment Properties?
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- Outline the accounting treatment of financial asset impairments according to IFRS 9 Financial Instruments and discuss the potential benefits and drawbacks of this approach.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.The objective of the HRA is to______ a. provide a determination of asset control as to whether human assets are conserved, developed or depreciated b. aid in the development of management principles by classifying the assets and liabilities of the organization for tax purpose c. None of the given options are correct d. Both the given options are correct
- Which statement is correct regarding derecognition of financial assets? A. Transfer of risks and rewards is evaluated by determining the transferee’s ability to sell the asset. B. A sale and repurchase transaction where the repurchase price is a fixed price is a transfer of financial asset that qualifies for derecognition. C. The entity shall continue to recognize the transferred asset in its entirety if the transfer does not qualify for derecognition because the entity has retained substantially all the risks and rewards of ownership of the transferred asset. D. If an entity neither transfers nor retains substantially all the risks and rewards of ownership of a transferred asset, the entity shall continue to recognize the transferred asset to the extent of its continuing involvement.q24 Which of the following is NOT a step in impairment testing? Select one: a. Calculate the asset’s carrying amount in the books of the entity b. Sell the asset after if the fair value is greater than the recoverable amount c. Calculate the recoverable amount of the asset d. Assess whether there are circumstances that may indicate that the asset should be impaired.The main objective of IAS 36 Impairment of Assets is to prescribe the procedures that should ensure that an entity's assets are included in its statement of financial position at no more than their recoverable amounts. Where an asset is carried at an amount in excess of its recoverable amount, it is said to be impaired and IAS 36 requires an impairment loss to be recognized. Required: Define an impairment loss explaining the relevance of fair value less costs to sell and value in use and state how frequently assets should be tested for impairment. 2. Describe the possible incators of impairment. 3. Explain how an impairment loss is accounted for after it has been calculated.
- 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.In accordance with IAS 36 Impairment of Assets, which one of the following is an indicator that an asset may be impaired? a. evidence that the asset is physically damaged b. a fall in interest rates that materially affects the asset’s value in use c. the market capitalisation of the entity is greater than the carrying amount of its net assets d. a decline in the asset’s market value, as would be expected from normal use17. Which of the following amounts shall not be recognized in profit or loss with respect to investment property under the fair value model? Rental income from investment property Net gains or losses from fair value adjustments Direct operating expenses arising from investmer O property that generated rental income during the period Depreciation
- 1. When an item of asset is transferred to and from the classification investment property, carried using the cost model, the measurement basis at the date of transfer is the a. original cost. b. fair value. c. carrying amount. d. recoverable amount.2. What could be a valid reason for transfers from investment property to property, plant and equipment? a. When there is a change in use b. based on the accountant's discretion c. When the entity adopts the fair value model d. when there is change in asset's life3. An entity has an investment property that is held for rental income. The entity uses the fair value model for reporting the investment property. Which of the following statement is true? a. changes in fair value are reported in profit or loss in the current period b. changes in fair value are reported as an extraordinary gain c. changes in fair value are reported in other comprehensive income for the period d. changes in fair value are…1. When reclassification is made from owner occupied property to investment property that will be carried at fair value, any excess of the fair value over the carrying amount at the date of transfer is a. ignored. b. recognized as a gain in profit or loss, c. credited to asset revaluation surplus. d. recorded as a credit to a liability account2. Which of the following are valid statements regarding measurement of investment property? I. The best evidence of fair value is current price in an active market for similar property in the same location and condition.II. When items of investment property are measured at fair values, any movement in fair value is credited to other comprehensive income under the heading revaluation surplus.III. An entity shall continue to measure an investment property at fair value until its disposal if it has previously valued the property at fair value.IV. Transaction costs directly attributable to acquisition of investment property are capitalized as…A The objective of IAS 36 Impairment of assets is to prescribe the procedures that an entity applies to ensure that its assets are not impaired. Required Explain what is meant by an impairment review. Your answer should include reference to assets that may form a cash generating unit. Note You are not required to describe the indicators of an impairment or how impairment losses are allocated against assets