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 the best estimate of fair value within that range. 3. Investments in quoted equity instruments. A.1 only B.Either 1 or 2 C.None of these D. 2 only

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 the best estimate of fair value within that range. 3. Investments in quoted equity instruments. A.1 only B.Either 1 or 2 C.None of these D. 2 only

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 12MCQ: When the market value of a companys available-for-sale securities is lower than its cost, the...

See similar textbooks

Similar questions

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
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. 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.
Which of the following statements is correct? a. IFRS permits the fair value option for the equity method of accounting. b. GAAP permits recovery of impairment losses. c. Under IFRS, non-trading equity investments are accounted for at amortized cost. d. IFRS and GAAP both have a trading investment classification.
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.
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
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
(i). Debt investments not plan to sell reported at a. amortized cost. b. fair value. c. the lower of amortized cost of fair value. d. net realizable value. (ii). which of the following caa be reported at fair value? a. Debt investments. b. Equity investments. c. Both debt and equity investments: d None of these answers' choices are correct.
an investment in equity instrument may not be classified as a financial asset subsequently measured at a) Fair value through profit or loss b) Amortized cost c) Fair value through other comprehensive income d) none of these
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. .
Which of the following statements is true?(a) The fair value option requires that some types of financial instruments be recorded at fair value.(b) The fair value option requires that all concurrent financial instruments be recorded at amortized cost.(c) The fair value option allows, but does not require, that some types of financial instruments be recorded at fair value.(d) The FASB and IASB would like to reduce the reliance on fair value accounting for financial instruments in the future.