All investments in equity instruments and contracts on those instruments must be measured at fair value. Cost may be an appropriate estimate of fair value in which of the following? Insufficient more recent information is available to measure fair value. There is a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range. Investments in quoted equity instruments. Group of answer choices None of these 2 only 1 only Either 1 or 2

All investments in equity instruments and contracts on those instruments must be measured at fair value. Cost may be an appropriate estimate of fair value in which of the following? Insufficient more recent information is available to measure fair value. There is a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range. Investments in quoted equity instruments. Group of answer choices None of these 2 only 1 only Either 1 or 2

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA1: International Financial Reporting Standards

Section: Chapter Questions

Problem 5MCQ

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All investments in equity instruments and contracts on those instruments must be measured at fair value. Cost may be an appropriate estimate of fair value in which of the following? Insufficient more recent information is available to measure fair value. There is a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range. Investments in quoted equity instruments. a. 2 only b. 1 only c. Either 1 or 2 d. None of these
All investments in equity instruments and contracts on those instruments must be measured at fair value. Cost may be an appropriate estimate of fair value in which of the following? 1. Insufficient more recent information is available to measure fair value. 2. There is a wide range of possible fair value measurements and cost represents best estimate of fair value within that range. 3. Investments in quoted equity instruments. 1 only None of these 2 only Either 1 or 2
14. All investments in equity instruments and contracts on those instruments must be measured at fair value. Cost may be an appropriate estimate of fair value in which of the following? Insufficient more recent information is available to measure fair value. There is a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range. Investments in quoted equity instruments. Group of answer choices Either 1 or 2 None of these 1 only 2 only
1. How are passive investments accounted for under ASPE? a) Cost of amortized cost. b) FVTPL for equity securities with fair value prices c) Neither is correct. d) Both treatments are acceptable.
All of the following are key similarities between GAAP and IFRS with respect to accounting for investments except: a. IFRS and GAAP require the same accounting for equity securities. b. IFRS and GAAP apply the equity method to significant influence equity investments. c. IFRS and GAAP have a fair value option for financial instruments. d. the accounting for impairment of investments is similar, although IFRS allows recovery of impairment losses. 2. Which of the following statements is correct?
1.) The valuation of an investment can be defined in numerous ways. Which is FALSE? A.) It is dependent on the perceptions of the investor. B.) It is the value determined by demand and supply. C.) It is the present value of the cashflows on the investment D.) It is an objective estimate wherein the risk preference of the investor is considered. 2.) The best valuation method for a non-traded convertible preference share is? A.) Intrinsic valuation only B.) Relative valuation only C.) Intrinsic valuation and contingent claim valuation D.) Relative valuation and contingent claim valuation
All of the following are key similarities between GAAP and IFRS with respect to accounting for investments except:(a) IFRS and GAAP require the same accounting for equity securities.(b) IFRS and GAAP apply the equity method to significant influence equity investments.(c) IFRS and GAAP have a fair value option for financial instruments.(d) the accounting for impairment of investments is similar, although IFRS allows recovery of impairment losses.
Which of the following statements is not true of the fair-value method of accounting for marketable securities? Select one: A. The investment account is recorded at current fair value on the balance sheet. B. Interim changes in the investments’ fair value may or may not affect income depending on the securities’ classification. C. This method is used when the reporting company generally owns less than 20% of the investee company. D. Dividends are treated as a return of the capital invested. E. None of the above
Choose the correct answer: Under IFRS 9, the cumulative balance of equity as a result of measuring the investment at fair value through OCI a. shall be reversed to profit or loss once security has been sold. b. shall be reversed to profit or loss once security has been impaired. c. shall not be reversed to profit or loss but can be transferred to another equity account. d. shall not be reversed to profit or loss nor transferred to another equity account. .
How are derivatives valued on the balance sheet? How is the adjustment to fair value recorded differently for a cash flow hedge versus a fair value hedge? That is, how does the fair value adjustment of each type of hedge affect current period net income and the accounting equation? What are the three criteria that must be met for a derivative to be classified as a hedge? Once entities decide to buy or sell derivatives to hedge economic risks, they then need to decide whether they want to use hedge accounting; it is an election, not a requirement, even when the derivatives are for the economic purpose of hedging. This election is reminiscent of inventory accounting. Just like when a company selects an inventory method, a company is not required to select the accounting method (LIFO, FIFO, weighted average, specific unit) that most closely corresponds with the physical movement of inventory, although they are free to do so. If entities decide to elect hedge accounting, the following…
Which of the following is NOT an assumption used in deriving the Capital Asset Pricing Model (CAPM)? Investors can buy and sell all securities at competitive market prices without incurring taxes or transactions cost and can borrow and lend at the risk-free interest rate Investors hold only efficient portfolios of traded securities. Investors have homogeneous expectations regarding the volatilities, correlation, and expected returns of securities. Investors have homogeneous risk averse preferences toward taking on risk.
Which of the following is correct regarding the classification of investment in debt instruments as financial asset at fair value through OCI? Group of answer choices A. An entity may make an irrevocable election to classify investment in a debt instrument that is not ‘held for trading’ as such. B. All of these. C. This classification is not allowed for investment in debt instruments. D. In order to be classified as such, a debt instrument needs to both have simple principal and interest cash flows and be held in a business model in which both holding and selling financial assets are integral to meeting management’s objectives.