A company is most likely to:A. use a fair value model for some investment property and a cost model for other investment property.B. change from the fair value model when transactions on comparable properties becomeless frequent.C. change from the fair value model when the company transfers investment property toproperty, plant, and equipment.
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A company is most likely to:
A. use a fair value model for some investment property and a cost model for other investment property.
B. change from the fair value model when transactions on comparable properties become
less frequent.
C. change from the fair value model when the company transfers investment property to
property, plant, and equipment.
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- If a company uses the fair value model to value investment property, changes in the fairvalue of the asset are least likely to aff ect:A. net income.B. net operating income.C. other comprehensive income.If the asset or disposal group is acquired as part of a business combination, it shall be measured at: A. The lower of “Cost” and “Fair value, less costs to sell’ B. Fair value, less costs to sell C. Cost D. The higher of “Cost” and “Fair value, less costs to sell’If a newly acquired asset is ‘held for sale’, the asset or disposal group will be measured at: A. Cost B. The lower of “Cost” and “Fair value, less costs to sell’ C. The higher of “Cost” and “Fair value, less costs to sell’ D. Fair value, less costs to sell
- 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…Choose the correct. In which of the following areas does the IASB not allow firms to choose between two acceptable treatments?a. Measuring property, plant, and equipment subsequent to acquisition.b. Measuring noncontrolling interest in a business combination.c. Recognizing development costs that meet criteria for capitalization as an asset.d. Classifying interest paid in the statement of cash flows.If an entity wishes to change from a cost model to fair value model under IAS 40 – Investment Property, when may it do so? Select one: a. When the market for these properties is fluctuation b. When the board of directors approves a change c. When the value of the assets will improve with a revised model d. When a change will result in a more appropriate presentation
- A company is considering replacing one of its old assets with a new one. The original purchase price of the old asset represents – Group of answer choices Relevant cost Differential cost Sunk cost Opportunity costMCQ: Choose only the correct answer Which of the following statements is false? (a) Financial Instruments are intangible assets (b) Goodwill is not amortizable (c) Goodwill can be identified only in business combination situation (d) Straightline method is generally used to calculate amortazation Which of the following will not be considered while calculating the depletion base? (a) Acquisition costs (b) Tangible development costs (c) Restoration Costs (d) Intangible development costs Which of the following will not be included into the the original cost of a land? (a) Legal fees (b) Brokers' commision (c) Property taxes (D) Accrued property taxes of previous owner The journal entry to record the transportation cost paid by the purchaser under periodic inventory system is- (a) Inventory Dr. and Cash Cr. (b) Transportation-in Dr. & Cash Cr. (c) Delivery Expense Dr. & Cash Cr. (d) Transportation-Out Dr. & Cash Cr. In case of change in estimate of useful life for a tangible…A company should immediately recognize: A) any gain when it constructs a piece of equipment at a cost savings. B) any gain when it makes a bargain purchase. C) any gain when a company receives no cash for an asset received in an exchange. D) any loss when it ignorantly pays too much for an asset originally.
- Which among the sentences below is incorrect?A. An entity shall measure a current asset or disposal group classified as held for sale at the lower of carrying amount or fair value less cost of disposal.B. One of the conditions that exists if the sale is highly probable is that there is an active program to locate a buyer and complete the plan must have been initiated.C. Impairment loss is the writedown to fair value less cost of disposal.D. An entity can recognize a gain if there is a subsequent increase in fair value less cost of disposal but only up to the impairment loss previously recognized.IFRS GAAP and U.S. GAAP agree most of the time. In which instance might their disagreement have a big impact on an investment decision? A. revenue recognition B. goodwill C. plant, property and equipment D. accelerated depreciation1. 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…