Advanced Accounting
12th Edition
ISBN: 9781305084858
Author: Paul M. Fischer, William J. Tayler, Rita H. Cheng
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 1, Problem 10UTI
To determine
IFRS:
International Financial Reporting Standards are issued by the International Financial Standard Board. These standards provide common standards so that the financial statements of various entities can be compared.
U.S GAAP:
These are the generally accepted accounting standards which are issued by the US Securities and Exchange Commission.
Fair value of the asset:
Fair value of the asset is the amount at which two parties may enter into an agreement with open hand.
:
The ways in which the recording of the given transaction under IFRS differs from US GAAP.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Huling Associates plans to transfer $300,000 of accounts receivable to Mitchell Inc. in exchange for cash. Huling has structured the arrangement so that it retains substantially all the risks and rewards of ownership but shifts control over the receivables to Mitchell. Assuming all other criteria are met for recognizing the transfer as a sale, how would Huling account for this transaction under IFRS? Under U.S. GAAP?
FAITH Inc and HOPE Co. have an exchange with no commercial substance.
The asset given up by FAITH Inc has a carrying amount of P12,000 and a fair
market value of P15,000. The asset given up by HOPE Co. has a carrying
amount of P20,000 and a fair market value of P19,000. P4,000 is received by
HOPE Co. What amount should FAITH Inc record for the asset received?
ABC Inc. and XYZ Co. have an exchange with no commercial substance. The asset given up by ABC Inc. has a book
value of P48,000 and a fair value of P60,000. The asset given up by XYZ Co. has a book value of P80,000 and a fair
value of P76,000. Boot of P16,000 is received by XYZ Co.
What amount should ABC Inc. record for the asset received?
What amount should XYCZ Co. record for the asset received?
Chapter 1 Solutions
Advanced Accounting
Ch. 1 - Prob. 1UTICh. 1 - Prob. 3UTICh. 1 - Prob. 4UTICh. 1 - Prob. 5UTICh. 1 - Prob. 6UTICh. 1 - Prob. 7UTICh. 1 - Prob. 8UTICh. 1 - Prob. 9UTICh. 1 - Prob. 10UTICh. 1 - Prob. 1.1E
Ch. 1 - Prob. 1.2ECh. 1 - Prob. 1.3ECh. 1 - Prob. 2ECh. 1 - Prob. 5.1ECh. 1 - Prob. 5.2ECh. 1 - Prob. 6ECh. 1 - Lake craft Company has the following balance...Ch. 1 - Prob. 8.2ECh. 1 - Prob. 8.3ECh. 1 - Prob. 9.1ECh. 1 - Prob. 9.2ECh. 1 - Prob. 1A.1.1AECh. 1 - Prob. 1A.1.2AECh. 1 - Prob. 1.2PCh. 1 - Prob. 1.3.1PCh. 1 - Prob. 1.4PCh. 1 - Jack Company is a Corporation that was organized...Ch. 1 - Prob. 1.6PCh. 1 - Prob. 1.7.1PCh. 1 - Prob. 1.7.2PCh. 1 - Prob. 1.8PCh. 1 - Prob. 1.10.A1PCh. 1 - Prob. 1.11PCh. 1 - Prob. 1.12PCh. 1 - Prob. 1.13.2PCh. 1 - Prob. 1A.1.1APCh. 1 - Prob. 1A.1.2APCh. 1 - (Note: The use 01 a financial calculator or Excel...Ch. 1 - Frontier does not have publicly traded stock. You...Ch. 1 - Frontier does not have publicly traded stock. You...Ch. 1 - Prob. 1.1B.3CCh. 1 - Prob. 1.1CCCh. 1 - Prob. 1.2.1CCh. 1 - Prob. 1.2.2CCh. 1 - Case 1-2 Disney Acquires Marvel Entertainment On...
Knowledge Booster
Similar questions
- Sparrow Ltd owns a building, currently carried in its accounting records at GHS 800,000. It has agreed to exchange this building for a building owned by Turner Ltd. The building currently owned by Sparrow Ltd has a fair value of GHS 1 million. The building currently owned by Turner Ltd has a fair value of GHS 1.1 million. Sparrow Ltd has agreed to pay the legal costs of the transfer which amount to GHS 10,000. According to IAS 16 Property, Plant and Equipment, at what value should the building currently owned by Turner Ltd be recorded at initially in Sparrow Ltds accounting records?arrow_forwardJersey Inc. and Texas Co. have an exchange with no commercial substance. The asset given up by Jersey Inc. has a book value of $160,000 and a fair value of $200,000. The asset given up by Texas Co. has a book value of $260,000 and a fair value of $280,000. Boot of $80,000 is received by Texas Co. What amount should Jersey Inc. record for the asset received?arrow_forwardYA Inc. wishes to transfer its equity investments initially classified as fair value through other comprehensive income to profit or loss. On December 31, 2020, the fair value of the investment is P100,000 while on January 1, 2021 which is the date of reclassification, the fair value is P110,000. Assuming that the entity will make the reclassification, how much is the gain to be reported on January 1, 2021 related to the reclassification? A.POB.P110,000C.P100,000D.P10,000arrow_forward
- Payor Inc. and Recipient Co. have an exchange with no commercial substance. The asset given up by Payor Inc. has a book value of P12,000 and a fair value of P15,00O. The asset given up by Recipient Co. has a book value of P20,000 and a fair value of P19,000. Boot of P4,000 is received by Recipient Co. Payor Inc. should record the asset received at O P19,000 O P20,000 O P15,000 O P16,000arrow_forwardYour client, Lewison International, has informed you that it has reached an agreement with Herro Company to acquire all of Herro’s assets. This transaction will be accomplished through the issue of Lewison’s common stock. After your examination of the financial statements and the acquisition agreement, you have discovered the following important facts. The Lewison common stock issued has a fair value of $800,000. The fair value of Herro’s assets, net of all liabilities, is $700,000. All asset book values equal their fair values except for one machine valued at $200,000. This machine was originally purchased two years ago by Herro for $180,000. This machine has been depreciated using the straight-line method with an assumed useful life of 10 years and no salvage value. The acquisition is to be considered a taxfree exchange for tax purposes. Assuming a 30% tax rate, what amounts will be recorded for the machine, deferred tax liability, and goodwill?arrow_forwardJourney Company entered into agreement with its creditor to exchange its equity instrument and land in place of the financial liability with principal of P5,000,000 and accrued interest of P400,000. The terms of the exchange were 300,000 ordinary shares with P5 par value and P10 fair value. The land transfer has book value of P1,000,000 and fair value of P1,500,000. How much is the gain (or loss) from the extinguishment of the financial liability?arrow_forward
- Puncho Company is acquiring the net assets of Semos Company in exchange for common stock valued at $900,000. The Semos identifiable net assets have book and fair values of $400,000 and $800,000, respectively. Compare accounting for the acquisition (including assignment of the price paid) by Puncho with accounting for the sale by Semos.arrow_forwardOn January 1, 2021, an entity purchased marketable equity securities for P5,000,000. The equity securities did not qualify as a financial asset held for trading, and the entity made an irrevocable election to present unrealized gain and loss in other comprehensive income. The entity also paid P50,000 as commission to the broker. The entry to record this purchase would include a.A debit to commission expense, P50,000 b.A debit to Financial asset - FVOCI, P5,000,000 c.A debit to Financial asset - FVOCI, P4,950,000 d.A debit to Financial asset - FVOCI, P5,050,000arrow_forwardOn December 29, 20x1, an entity commits itself to purchase a financial asset for ₱10,000, which is its fair value on commitment date (trade date). Transaction costs are immaterial. On December 31, 20x1 and on January 4, 20x2 (settlement date), the fair values of the asset are ₱12,000 and ₱15,000, respectively. If the entity uses the trade date accounting and that the investment is classified as held for trading, how much is the carrying amount of the investment in the December 31, 20x1 statement of financial position? 10,000 12,000 c. 2,000 d. 0arrow_forward
- Use the following to answer questions 8 through 10: On May 1, 2021, Jazzie Co. agreed to sell the assets of its Mister Division to Shawna Inc. for $80 million. The sale was completed on December 31, 2021. Jazzie’s year ends on December 31st. The following additional facts pertain to the transaction: The Mister Division qualifies as a component of an entity as defined by GAAP. Mister's net assets totaled $48 million on Jazzie's books at the time of the sale. Mister incurred a pre-tax operating loss of $10 million in 2021. Jazzie’s income tax rate is 40%. In the 2021 income statement for Jazzie Co., they would report after tax income from discontinued operations of: Group of answer choices $9.2 million. $13.2 million. $22 million. $26 million.arrow_forwardOn December 29, 20x1, an entity commits itself to purchase a financial asset for ₱10,000, whichis its fair value on commitment date (trade date). Transaction costs are immaterial. OnDecember 31, 20x1 and on January 4, 20x2 (settlement date) the fair values of the asset are₱12,000 and ₱15,000, respectively. If the entity uses the settlement date accounting and that theinvestment is classified as held for trading, how much is the carrying amount of the investment inthe December 31, 20x1 statement of financial position?arrow_forwardDel Luna Corporation concluded that the fair value of Scarlet Company was P160,000 and paid that amount to acquire all of its net assets. Scarlet reported assets with a book value of P120,000 and a fair value of 196,000 and liabilities with a book value and fair value of P46,000 on the date of combination. Del Luna also paid P6,000 to a search firm for finder’s fees related to acquisition. What amount will be recorded as goodwill by Del Luna Corporation? a. 10,000 b. 26,000 c. 16,000 d. 0arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning