How should NEFRARIOUS account for the fixed consideration and the contract costs, respectively?
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On Nov. 1, 20x1, NEFARIOUS Co. enters into a contract to transfer a license to EVIL Co. The license provides EVIL the right to use NEFARIOUS' intellectual property over a four year period. In exchange, EVIL pays a fixed consideration, which is due at contract inception. The intellectual property does not change over the license period. NEFARIOUS effectively transfers the license to EVIL on Jan. 31, 20x2. NEFARIOUS incurred direct contract costs in 20x1. How should NEFRARIOUS account for the fixed consideration and the contract costs, respectively?
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- Prior (Past) service cost is included among OCI items in the statement of comprehensive income and thus subsequently becomes part of AOCI where it is amortized over the average remaining service period using a. U.S. GAAP. b. IFRS. c. Both U.S. GAAP and IFRS. d. Neither U.S. GAAP nor IFRS.PAS 16 requires that revaluation surplus resulting from initial revaluation property, plant and equipment should be treated in one of the following ways. Which of the four options mirrors the requirements of PAS 16? a. Released to the income statement an amount equal to the difference between the depreciation calculated on historical cost vis-à-vis revalued amount. b. Debited to the class of property, plant and equipment that is being revalued and credited to a reserve captioned “revaluation surplus” which is presented under “equity”. c. Deducted from current assets and added to the property, plant, and equipment. d. Credited to retained earnings as this is an unrealized gain.Statement I: IFRS 15 prescribes specific estimation techniques for variable consideration and only permits variable amounts to be included to the extent that it is probable that the revenue will not reverse.Statement Il: Transaction price (at inception) should be allocated to all the performance obligations in the contract in proportion to the cost of each performance obligation. • True, True • True, False • False, False • False, True
- In computing DD&A for a full cost company: Group of answer choices A. Leasehold cost is amortized over proved reserves and IDC and lease and well equipment are amortized over proved reserves. B. Leasehold cost is amortized over proved reserves and IDC and lease and well equipment are amortized over proved developed reserves. C. Leasehold cost is amortized over proved developed reserves and IDC and lease and well equipment are amortized over proved reserves. D. Leasehold cost is amortized over proved developed reserves and IDC and lease and well equipment are amortized over proved developed reserves.The allocation of the cost of a tangible asset to expense in the periods in which the asset is used is termed as: Select one: a. Depreciation b. None of the given options c. Appreciation d. Fluctuation1. All of the following are components of the defined benefit cost except * unvested past service cost interest on the effect of the asset ceiling loss on settlement return on plan assets 2. Which of the following are recognized in other comprehensive income? service cost net interest in net defined benefit liability (asset) amortization of actuarial gains or losses difference between interest income on plan assets and return on plan assets 3. The balance of the present value of defined benefit obligation is affected by all of the following except * actuarial gains or losses interest cost current service cost contributions to the fund 4. If the present value of the defined benefit obligation exceeds the fair value of the plan assets, there is * deficit surplus expense prepaid accrued benefit cost
- Depreciated replacement cost is equal to the * a. Sound Value b. Net appreciation c. Depreciable amount d. Carrying amountIf the Construction in Progress account is greater than the Contract Billings, the excess is treated as * A. current liability B. current asset C. loss D.incomeAll of the following are components of the defined benefit cost except unvested past service cost interest on the effect of the asset ceiling loss on settlement return on plan assets
- Any anticipated loss should be recognized * A.on a percentage basis during the contract period B. when all costs are recognized C.in the future D.in the period it is determinedS1: Two methods of allocating joint costs to main products are physical measure allocation and market-based allocation.S2: If an intercompany sale of a depreciable asset occurs on the last day of the year and results in a gain to the seller, the asset must be shown on the consolidated balance sheet at its original book value. a. True; False b. False; False c. False; True d. True; TrueFair value of plan assets 6,000,000 9,000,000Projected benefit obligation 4,500,000 5,000,000Prepaid/accrued benefit cost – surplus 1,500,000 4,000,000Asset ceiling 1,000,000 2,500,000Effect of asset ceiling 500,000 1,500,000During the year, the entity recognized current service cost P2,000,000, actual return on plan assets P400,000,and contribution to the plan P4,550,000 and benefits paid P1,950,000. The discount rate is 10%REQUIRED:6. Compute the employee benefit expense for the current year7. Compute the net remeasurement loss for the current year8. Compute the defined benefit cost9. Compute the amount of prepaid benefit cost that should be reported on December 31