At initial recognition, an entity may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value of an investment in an equity instrument that is A. Acquired principally for the purpose of selling it in the near term. B. A derivative. C.None of these. D. On initial recognition is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit taking.

At initial recognition, an entity may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value of an investment in an equity instrument that is A. Acquired principally for the purpose of selling it in the near term. B. A derivative. C.None of these. D. On initial recognition is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit taking.

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...

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When the market value of a companys available-for-sale securities is lower than its cost, the difference should be: a. shown as a liability. b. shown as a valuation allowance added to the historical cost of the investments. c. shown as a valuation allowance subtracted from the historical cost of the investments. d. No entry is made, the securities are shown at historical cost.
At initial recognition, an entity may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value of an investment in an equity instrument that is Group of answer choices Acquired principally for the purpose of selling it in the near term. On initial recognition is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking. A derivative. None of these.
an initial recognition an entity may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value of an investment in an equity instrument that is a) on initial recognition is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit taking b) a derivative c) acquired principally for the purpose of selling it in the near term d) none of these
Question 18 At initial recognition, an entity may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value of an investment in an equity instrument that is Group of answer choices Acquired principally for the purpose of selling it in the near term. A derivative. None of these. On initial recognition is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking.
Equity Investment classified at Fair Through Other Comprehensive Income (choose which of the following is true) Securities not held for trading for which the enterprise elects to recognize change in fair value through other comprehensive income Initially measured at Fair value minus transaction costs Measured after initial recognition at Cost Which dividends are taken to Other Comprehensive Income
Choose the correct. Under fair-value accounting for an equity investment, which of the following affects the income the investor recognizes from its ownership of the investee?a. The investee’s reported income adjusted for excess cost over book value amortizations.b. Changes in the fair value of the investor’s ownership shares of the investee.c. Intra-entity profits from upstream sales.d. Other comprehensive income reported by the investee.
Under fair-value accounting for an equity investment, which of the following affects the income the investor recognizes from its ownership of the investee? The investee’s reported income adjusted for excess cost over book value amortizations. Changes in the fair value of the investor’s ownership shares of the investee. Intra-entity profits from upstream sales. Other comprehensive income reported by the investee.
Why are unrealized gains and losses from available-for-sale securities not reported as a component of net income? Select one: a. Because goodwill exists that must be separately accounted for b. Because the investor has the ability to exercise significant influence over the investee c. Because consolidated financial statements must be prepared d. Because large swings in market value over which management has no control may distort current period performance as measured by net income
How shall an acquirer in a business combination account for the changes in fair value contingent consideration classified as equity instrument if the changes result from events after the acquisition date? a. The changes in fair value of contingent consideration classified as equity shall be recognized as gain or loss in profit or loss because they are not measurement period adjustments. b. Contingent consideration classified as equity shall not be re-measured and its subsequent settlement shall be accounted for within equity. c. The changes in fair value of contingent consideration classified as equity shell be retrospectively restated to beginning retained earnings because they are prior period error. d. The change in fair value of contingent consideration classified as equity shall be retroactively adjusted to goodwill/gain on bargain purchase because they are measurement period adjustments.
Which of the following statements is TRUE regarding the equity method? A. The equity method is used for reporting gains or losses for non-strategic investments. B. The investor's share of the associate's dividends declared is reported as revenue. C. The investor's investment in the associate changes in direct relation to the changes taking place in the associate's equity accounts. D. The equity method reports unrealized gains and losses on revaluations to fair value in net income.
In subsequent periods after purchase, investments in available-for-sale securities will be reported at fair value. cost. face value. par value. 2. For investments in available-for-sale securities, a debit balance in the Unrealized Holding Gain/Loss account reflects a cumulative unrealized gain. is reported as a negative element in the accumulated other comprehensive income section of shareholders' equity. is reported as a positive element in the accumulated other comprehensive income section of shareholders' equity. is reported as a positive element in the assets section of the balance sheet.
If a company has elected the fair value option, where are gains and losses resulting from adjusting these accounts to fair value reported? Group of answer choices Unrealized Gains are reported as part of Other Comprehensive Income while Unrealized losses are reported as part of Net Income. Unrealized Gains and Losses are both reported as part of Net Income. Unrealized Gains are reported as part of Net Income, while Unrealized Losses are reported as part of Other Comprehensive Income. Unrealized Gains and Losses are both reported as part of Other Comprehensive Income.