Chapter 11, Problem 11.29E

Which of the following statements about the recoverable amount used in the IFRS impairment test of a long-lived asset is false? Group of answer choices The recoverable amount is the lesser of the fair value of the asset less costs to sell or the asset's value in use. If an asset's recoverable amount is higher than the carrying amount, no impairment loss will be reported. After recognizing an impairment of an asset, the firm carries the asset at its recoverable amount. The recoverable amount may be calculated as the discounted value of expected future cash flows from the asset.

6.) In reference to the determination of goodwill impairment, which of the following statements is correct? The goodwill impairment test is a three-step process. b. If the reporting unit's fair value exceeds its carrying value, goodwill is unimpaired. Firms must first compare carrying values (book values) at the headquarter level. d. a. с. Firms can reverse previously recognized impairment losses.

11. In recording exchanges of assets, which statement is not true? a. When boot is received for a similar asset, a loss is recognized in full while a gain is recognized in proportion to the boot received. b. When the fair market value of a dissimilar asset being surrendered is less than its book value, the cost of the asset acquired is equal to the fair market value of the asset surrendered less boot received. c. When the fair market value of a dissimilar asset being surrendered is greater than the book value, the cost of the asset acquired is equal to the book value of the asset surrendered plus boot received less gain recognized. d. When boot is paid for a similar asset, a gain is not recognized and a loss is recognized in full.

If an entity capitalized transaction costs to a financial asset at fair value through profit or loss, then subsequently adjusted the initial cost to fair value at year-end, what is the overall effect on the current year net income? *   A. Current year net income will be understated     B. Current year net income will be overstated     C. Current year net income will either be overstated or understated, depending on whether the fair value at year end is more than, less than, or equal to the initial cost     D. No effect

If an entity has elected to use the fair value option for a financial liability; a. It is measured at fair value through other comprehensive income. b. It is measured at fair value through profit or loss. c. It is measured at amortized cost. d. Fair value op don is prohibited for financial liabilities.

Which of the following statements is correct regarding reporting of “Extraordinary gains and losses” as a separate category on the income statement?   It is no longer permitted under U.S. GAAP.   It is permitted under U.S. GAAP, if the related event is both unusual in nature and infrequent in occurrence.   Is permitted under IFRS, but not U.S. GAAP.   It is permitted under U.S. GAAP, but not IFRS.

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When using the fair value method, we adjust the reported amount of the investment for changes in fair value after its acquisition. How is the change in fair value reflected in the income statement?

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