t7 A gain or loss from debt restructuring should be *treated as increase or decrease in Paid-in Capitalrecognized in income of the period of restructuringallocated between the portion that is an increase (decrease) in Paid-in Capital and a portion that isrecognized in the current incomeamortized over the remaining original life of the restructured loan

Earlier gain or loss from debt restructuring was transferred to capital reserve but now it is…

Answered: A gain or loss from debt restructuring…

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter16: Financially Troubled Ventures: Turnaround Opportunities?

Section: Chapter Questions

Problem 12DQ

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A gain or loss from debt restructuring should be A. treated as increase or decrease in Paid-in Capital B. recognized in income of the period of restructuring C. amortized over the remaining original life of the restructured loan D. allocated between the portion that is an increase (decrease) in Paid-in Capital and a portion that is recognized in the current income
When convertible debt is retired by the issuer, any material difference between the cash acquisition price and the carrying amount of the debt should be ________. treated as a prior period adjustment treated as an adjustment of additional paid-in-capital reflected currently in income
Under IFRS, a company: a. should evaluate only equity investments for impairment. b. accounts for an impairment as an unrealized loss, and includes it as a part of other comprehensive income and as a component of other accumulated comprehensive income until realized. c. calculates the impairment loss on debt investments as the difference between the carrying amount plus accrued interest and the expected future cash flows discounted at the investment's historical effective-interest rate. d. All of the above.
What does the term "composition" refer to when discussing the debt restructuring process? Multiple Choice Cancellation of specific debt. Issuance of new debt. Reduction in debt payments. Issuance of new equity to pay off debt. Postponement of debt payments.
Short-term debt expected to be refinanced may be classified as long-term if off-statement of financial position financing is to be obtained after the statement of financial position date but before the issue date of the financial statements. TRUE or FALSE
When is a gain recognized in a debt restructuring?
Which one of the following is the best indicator of long-term debt paying ability? A)Working capital turnover. B)Asset turnover. C)Current ratio. D)Debt to total assets ratio.
Interest revenue for debt investments at fair value through other comprehensive income is computed based on the instruments’ a. face value using the effective interest rate. b. face value using the nominal interest rate. c. carrying amount using the effective interest rate. d. carrying amount using the nominal interest rate.
Which statement is true when a debt investment at amortized cost is reclassified to FVOCI? a. All these statements are true. b. The difference between the previous carrying amount and fair value at reclassification date is recognized in other comprehensive income. c. The original effective rate is not adjusted d. The debt investment is measured at fair value at reclassification date.
What are the general rules for measuring and recognizinggain or loss by both the debtor and the creditor in atroubled-debt restructuring involving a modification ofterms?
An unrealized holding gain or loss on a trading debt investment is the difference between the investments Select one: a. fair value and original cost. b. fair value and amortized cost. c. face value and amortized cost. d. face value and original cost.
In investment in debt securities accounted for at fair value through other comprehensive income, the difference between the fair value and the accumulated unrealized gain or loss - OCI presented in the statement of financial position would normally equal to: * A. The unrealized gain or loss - OCI presented as part of other comprehensive income B. The amortized cost of the debt securities C. The interest income for the period D. The fair value of the debt securities in the previous period

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