If the difference between the carrying value of the old obligation at the date of restructure and the discounted present value of cash flows of modified obligation is at least 10% of the carrying value of the original obligation, the transaction is accounted for as derecognition of the original obligation and recognition of a new obligation. A. The statement is true B. The statement is false
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If the difference between the carrying value of the old obligation at the date of restructure and the discounted present value of cash flows of modified obligation is at least 10% of the carrying value of the original obligation, the transaction is accounted for as derecognition of the original obligation and recognition of a new obligation.
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- (Based on Appendix 14B) The way a debtor accounts for the restructuring depends on the extent of the reductionin cash payments called for by the restructured arrangement. Describe, in general, the accounting procedure forthe two basic cases: when, under the new agreement, total cash payments (a) are less than the book value of thedebt or (b) still exceed the book value of the debt.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.When the contractual cash flows of a financial asset are renegotiated or otherwise modified and the renegotiation or modification does not result in the derecognition of that financial asset in accordance with PFRS 9, an entity shall I. Recalculate the gross carrying amount of the financial asset as the present value of the renegotiated or modified contractual cash flows that are discounted at the financial asset's original effective interest rate. II. Recognize a modification gain or loss in profit or loss. A. I only. B. Neither I nor II. C. ll only. D. Both I and II.
- Under IFRS, value-in-use is defined as:(a) net realizable value.(b) fair value.(c) future cash fl ows discounted to present value.(d) total future undiscounted cash fl ows.1. According to PFRS 9, The amortized cost of a financial instrument is calculated using. A. The effective interest method. B. The straight line method C. A or b D. Choice a however, the straight line method can be used in some circumstances. 2. The amortization of a discount on an investment in bonds measured at amortized cost A. Increases the carrying amount of the investment B. Is the excess of interest income over interest received or receivable. C. Is recorded directly to the invesment account D. All of these 3. Which of the following statements is correct for an investment in term bonds that was acquired at a premium? A. The amortized cost of the bonds increases annually. B. The current and non current portions of the bonds as of the reporting date are reported separately. C. The interest income recognized each year is higher than the amount of interest received/ receivable. D. The effective interest rate is lower than the stated rate of the bonds. 4. The rate…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.
- Which of the following usual modification of terms least likely affects the present value of future cash flows? forgiveness of accrued interest reduction in principal reduction in interest deferral of maturity1. Which statement is incorrect? a. PFRS mandates the use of projected unit credit method of determining the present value of the defined benefit obligation. b. The discount rate used in making actuarial assumptions shall be determined by reference to the market yield on high quality bonds at the end of reporting period. c. Current service cost is the increase in the present value of the defined benefit obligation resulting from employee service in the previous period. d. In accounting for other long-term employee benefits, Current service cost, past service cost and any gain or loss on settlement are fully recognized through profit or loss. e. none of the above 2.Which statement is incorrect? a. Share options are equity settled share based payment transaction and should be reported as expense using the fair value method on the date of grant. b. Compensation expense is immediately recognized under PFRS 2 in circumstances when options are granted for prior service, and the options are…4. Financial liabilities other than FVPL liabilities are initiallymeasured at fair value plus transaction costs.5. Amortized cost financial liabilities are subsequently measuredat the present value of the cash outflows from the instrument.6. Financial liabilities may be subsequently reclassified betweenthe amortized cost and fair value measurement categories.7. Trade payables and other liabilities that are part of an entity'sworking capital may be presented as current liabilities even ifthey are expected to be settled beyond one year.8. According to PAS 1, a currently maturing debt that the entity'smanagement intends to refinance is presented as noncurrent.9. According to PFRS 15, if an entity expects that a portion of giftcertificates sold will not be redeemed, the entity recognizes theexpected breakage amount as revenue in proportion to thepattern of rights exercised by customers.10. Unearned revenue is revenue that is earned but not yet collected Please answer this all. Thank you
- A provision should never be discounted to the present value of the expected cash outflows needed to settle the obligation t or f?True/False IFRS does not intend to issue detailed guidance on the selection of a discount rate when the time value of money is required to determine cash flows. Under IAS 37 and the establishment of estimate provisions, discounting is required where the time value of money is material. Under IFRS, the rate implicit in the lease is generally used to discount minimum lease Under IFRS, the discount rate should reflect risks for which future cash flow estimates have been adjusted.1. Assuming the investment is appropriately recognized as a financial asset intended to collect contractual cash flows and also to sell the bonds in open market: How much unrealized gain (loss) is to be reflected in the statement of changes in equity and statement of comprehensive income at yearend 2020? 2. Assuming the investment is appropriately recognized as a financial asset intended to collect contractual cash flows and also to sell the bonds in open market: What is the carrying value of the investment on December 31, 2020? 3. Assuming the investment is appropriately recognized as a financial asset intended to collect contractual cash flows and also to sell the bonds in open market: Determine the gain or (loss) to be recorded upon the sale of the investment.